| ABSTRACT |
Small and medium-sized enterprises (SMEs) possess a vital role in both developed and developing economies. SMEs have often been acknowledged as productive and efficient job creators, large-scale seed companies, and national economic engines. However, since the current economic and social landscape changed with the emergence of the COVID-19 pandemic, traditional business practices that focus on profit in a highly competitive environment can no longer be relied upon by SMEs. In today¿s world, profit is not the only element influencing a business¿s survival and success. Consequently, SMEs should implement a value-creation strategy and seek a sustainable competitive advantage. Thus, the research framework for this study is built upon the Resource-Based View (RBV) theory and Dynamic Capabilities Theory (DCT), which consist of two independent variables (Entrepreneurial Orientation (EO) and Total Quality Management (TQM)), one main dependent variable, SME Performance, and one mediating variable, Innovation Practices (IPs). In addition, Government Support (GS) is proposed as a moderator. The conceptual model for this study was developed based on the literature review of EO, TQM, IPs, GS, and SME Performance. Data were collected using a self-administered online questionnaire from owners/managers of manufacturing SMEs listed in the 51st business directory from the Federation of Malaysian Manufacturers (FMM) as respondents. Stratified sampling was chosen as the sampling technique, where the population was divided into different subgroups (strata) based on specific criteria, and samples were randomly selected from each stratum. The sample size, determined through G*Power analysis, was 119, satisfying the analysis requirements. The validity and reliability of the instrument were evaluated, and a structural equation model was used to analyze the relationships using Smart-PLS 3.3.9. Data was collected in 2022 through an online-based survey. Prior to the main survey, a pre-test was conducted to enhance the questionnaire¿s content validity. The questionnaire was revised based on feedback from pre-test respondents and used for data collection in the main survey. The survey was distributed to 500 manufacturing SMEs, and the final clean dataset comprised 196 cases. In addition, the results of the dependent variable, SMEs¿ performance, illustrate a moderate predictive power and a large predictive relevance. The prediction constructs (EO, TQM, and IPs) can explain more than 57% of the SMEs¿ performance variance. For the dependent variable, two relationships are accepted with variables (EO and IPs), while TQM is rejected.
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