THE IMPACT OF ENTREPRENEURIAL ORIENTATION AND SOCIAL CAPITAL ON BUSINESS PERFORMANCE OF SMALL AND MEDIUM ENTERPRISES OF SINDH

Abstract

In today’s competitive market, performance of small and medium enterprises has significant value towards the economy. The impact of Entrepreneurial orientation and Social Capital on business performance has been observed and has been acknowledged in the developed economies.. The relationship of Entrepreneurial Orientation, Social Capital and SMEs Performance in Pakistan is investigated to contribute towards entrepreneurial studies and entrepreneurship literature.  In order to attain the objectives of the study, quantitative research method has been used to gauge relationship of both Entrepreneurial Orientation and Social Capital on Business Performance of Small and Medium Enterprises of Sindh. The target population is owners and managers of SMEs working in Sindh Province and primary data has been collected from them through questionnaire. The sampling has been made through method of non-probability judgmental sampling. For extracting results from data, Smart PLS research analysis software has been employed to generate results and analyze them. Path Analysis has been made to evaluate hypotheses. The research suggests 58.8% variance in business performance is due to entrepreneurial orientation and social capital constructs altogether. The research concludes positive relationship of both variables with business performance. The study recommends that adopting all components of Entrepreneurial orientation would results in resource inadequacies because all dimensions are not equally significant and valuable for firms. It is important that Entrepreneurs build social capital network and maintain relationships with trade partners, volunteer associations and with institutional stakeholders to generate value for firms and to enhance business performance.