Developing the Concept of Firm Success among Muslim SMEs in Malaysia: a Study of Islamic Religion Practices as Moderator

  • Authors

    • Nadratun Nafisah Abdul Wahab
    • Shahrina Othman
    • Noraini Binti Nasirun Hirun
    • Abdullah Abdul Ghani
    • Mohd Rushdi Idrus
    2018-08-24
    https://doi.org/10.14419/ijet.v7i3.30.18336
  • Firm Success, Muslim SMEs, Islamic Religion Practices, Malaysia

  • This paper intended to develop the concept of firm success among Muslim SMEs in Malaysia. The researchers used entrepreneurial orientation multidimensional as independent variable (innovative, risk and proactive) to examine the relationship of these dimensions towards the success of Muslim SMEs by using Islamic religion practices as moderator. It is about developing the concept of Islamic success factors, as the failure of Muslim SMEs is alarming and the empirical references to Muslim SMEs success focusing on Islamic religion practices are limited. There were many attempts to connect entrepreneurial orientation to the Resource-Based View theory of firms. Resource-Based View, as underpinning theory, helps to describe the proposed research theoretical framework. Recent studies related to firm success have shown that entrepreneurial orientation is composed of innovation, risk and proactive having significant relationship with the firm success in the develop countries. However in Malaysia, there was only one study has documented the conceptual religiosity that influence relationship between entrepreneurial orientation and business success of entrepreneurs among the Malay community. The methodology for this study uses quantitative analysis, specifically, the Partial Least Squares Structural Equation Modelling (PLS-SEM) in processing the data. The population of the study is 2,286 PUNB (Perbadanan Usahawan Nasional Berhad) firms in Malaysia. Finally, this concept finding is able to facilitate future research proposals and to fill the knowledge gap in Resource-Based View concerning the relationship of Resource-Based View towards firm success. This study also contributed to the Resource-Based View literature on the perspective of Islamic religion practices as moderator.

     

  • References

    1. [1] Gunto, M., & Alias, M. H. (2013). SMEs Development in Malaysia : Lessons for Libya. Persidangan Kebangsaan Ekonomi Malaysia Ke VIII (PERKEM) VIII, JILID, 3, 1521–1530.

      [2] Rodríguez-Gutiérrez, M. J., & Tejada, P. M. and P. (2015). Entrepreneurial Orientation and Performance of SMEs in the Services Industry. Journal of Organizational Change Management.

      [3] Stefanovic, I., Prokic, S., & Rankovic, L. (2010). Motivational and Success Factors of Entrepreneurs: the Evidence from a Developing Country. Zb. Rad. Ekon. Fak. Rij, 28, 251–270.

      [4] Zulkifli, R., & Rosli, M. (2013). Entrepreneurial Orientation and Business Success of Malay Entrepreneurs: Religiosity as Moderator. Ijhssnet.com, 3(10), 264–275.

      [5] Hisrich, R., Langan-fox, J., & Grant, S. (2007). Entrepreneurship Research and Practice - A call to Action for Psychology. American Psychologist.

      [6] Miller, D. (2011). Miller (1983) Revisited: A Reflection on EO Research and Some Suggestions for the Future. Entrepreneurship: Theory and Practice, 35(5), 873–894.

      [7] Rauch, A., Wiklund, J., Lumpkin, G. T., & Frese, M. (2009). Entrepreneurial Orientation and Business Performance: An Assessment of Past Research and Suggestions for the Future. Entrepreneurship: Theory and Practice, 33(3), 761–787.

      [8] Davis, J. L., Bell, R. G., Payne, G. T., & Kreiser, P. M. (2010). Entrepreneurial Orientation and Firm Performance: The Moderating Role of Managerial Power. American Journal of Business, 25(2), 41–54.

      [9] Anderson, A. R., Drakopoulou-Dodd, S. L., & Scott, M. G. (2000). Religion as an Environmental Influence on Enterprise culture – The Case of Britain in the 1980s. International Journal of Entrepreneurial Behaviour & Research, 6(1), 5–20.

      [10] Burns, C. D. (2005). The Protestant Ethic and the Spirit of Capitalism. By Max Weber. Mass Emergencies, 23(2), 1–164.

      [11] Tiliouine, H., & Belgoumidi, A. (2009). An Exploratory Study of Religiosity, Meaning in Life and Subjective Wellbeing in Muslim Students from Algeria. Applied Research in Quality of Life, 4(1), 109–127.

      [12] Gümüsay, A. A. (2014). Entrepreneurship from an Islamic Perspective. Journal of Business Ethics.

      [13] NNA Wahab, N Muhammad, G Abdullah (2015). Pengurusan Harta Islam: Faktor-faktor Kejayaan Perniagaan Usahawan Muslim. Prosiding Seminar Hibah dalam Pengurusan Harta Islam 2015 1 (1), 15–19

      [14] Malaysia, S. S. (2012). Pernyataan Visi Ssm Nilai-Nilai Korporat. Putrajaya.

      [15] Malaysia, S. S. (2013). SSM Annual Report 2013. Putrajaya.

      [16] Gilbar, G. (2015). The Muslim Big Merchant-Entrepreneurs of the Middle East, 1860-1914. Die Welt Des Islam’s, 43(1), 1–36.

      [17] William J. Wales, Vinit Parida, & Patel, P. C. (2013). Absorptive Capacity, Firm Performance, and the Moderating role of Entrepreneurial Orientation. Strategic Management Journal, 87(June 2011), 12.

      [18] Andersson, S., Danilovic, M., & Huang, H. (2015). Success Factors in Western and Chinese Born Global Companies. Scientific Research Publishing, 7(March), 25–38.

      [19] Hanafi, N. (2012). Business Performance of Women-Owned Smes in Malaysia: Learning and Entrepreneurial Orientations and the Mediating Roles of Competitive Advantage.

      [20] Kadir, S. A. (2013). Characteristics of Entrepreneurs and the Practice of Islamic Values in Influencing the Success of Small Medium Enterprises in Kelantan and Selangor. Journal of Social and Development Sciences, 4(5), 229–235.

      [21] Hussain, J., Ismail, K., & Akhtar, C. S. (2015). Linking Entrepreneurial Orientation with Organizational Performance of Small and Medium Sized Enterprises: A Conceptual Approach. Asian Social Science, 11(7), 1–10.

      [22] Campagnolo, G., & Vivel, C. (2012). Before Schumpeter: Forerunners of the Theory of the Entrepreneur in 1900s German Political Economy – Werner Sombart, Friedrich von Wieser. In The European Journal of the History of Economic Thought (Vol. 19, pp. 908–943).

      [23] Faizal, P. R. M., Ridhwan, a. a. M., & Kalsom, a. W. (2013). The Entrepreneurs Characteristic from al-Quran and al-Hadis. International Journal of Trade, Economics and Finance, 4(4), 191–196.

      [24] Grine, F., Fares, D., & Meguellati, A. (2015). Islamic Spirituality and Entrepreneurship : A Case Study of Women Entrepreneurs in Malaysia İslami maneviyat ve girişimcilik : MalezyaTM daki kadın girişimciler üzerine bir vaka incelemesi. The Journal of Happiness & Well-Being, 3(1), 41–56.

      [25] NNA Wahab, N Muhammad, G Abdullah (2017a). Faktor Motivasi Dan Kejayaan Firma Usahawan: Amalan Agama Sebagai Penyederhana. Journal of Global Business and Social Entrepreneurship (GBSE) 3 (5), 28–35

      [26] Hoyos-ruperto, M. De, Romaguera, J. M., Carlsson, B., & Lyytinen, K. (2013). Networking : A Critical Success Factor for Entrepreneurship, 13(2008), 55–72.

      [27] Islam, M. A., Khan, M. A., Obaidullah, A. Z. M., & Alam, M. S. (2011). Effect of Entrepreneur and Firm Characteristics on the Business Success of Small and Medium Enterprises (SMEs) in Bangladesh. International Journal of Business and Management, 6(3), 289–299.

      [28] Simpson, M., Padmore, J., & Newman, N. (2013). Towards a New Model of Success and Performance in SMEs. International Journal of Entrepreneurial Behaviour & Research, 18(3), 264–285.

      [29] NNA Wahab, N Muhammad, G Abdullah (2017b). Faktor Rangkaian Dan Kejayaan Firma Usahawan : Amalan Agama Sebagai Penyederhana. Journal of Humanities, Language, Culture and Business (HLCB) 1 (1), 13-21

      [30] Abebe, M. (2014). Electronic Commerce Adoption, Entr preneurial Orientation and Enterprise (SME) Performance. Journal of Small Business and Enterprise Development, 111(8), 1238–1269.

      [31] Al-Dhaafri, H. S., & Al-Swidi, A. (2016). The Impact of Total Quality Management and Entrepreneurial Orientation on Organizational Performance. International Journal of Quality & Reliability Management, 33(5), 597–614.

      [32] Amin, M., Thurasamy, R., Aldakhil, A. M., & Kaswuri, A. H. Bin. (2016). The Effect of Market Orientation as a Mediating Variable in the Relationship Between Entrepreneurial Orientation and SMEs Performance. Nankai Business Review International Article, 10(3), 560–571.

      [33] Anders, S. J., Samuelsson, J., Anders, J., & Samuelsson, J. (2016). Resource Organization and Firm Performance: How Entrepreneurial Orientation. International Journal of Entrepreneurial Behaviour & Research, 22(3), 346–374.

      [34] Eggers, F., Kraus, S., Hughes, M., Laraway, S., Snycerski, S., Eggers, F., Hughes, M. (2013). Implications of customer and entrepreneurial orientations for SME growth. Management Decision, 51(3), 524–546.

      [35] Kantur, D. (2016). Strategic Entrepreneurship: Mediating the Entrepreneurial Orientation- Performance link. Management Decision, 54(1), 24–43.

      [36] Vora, D., & Polley, J. V. and D. (2012). Applying Entrepreneurial Orientation to a Medium Sized Firm. International Journal of Entrepreneurial Behavior & Research.

      [37] Wolff, J. A., Pett, T. L., & Ring, J. K. (2015). International Journal of Entrepreneurial Behavior & Research Small firm Growth as a Function of Both learning orientation and

      [38] Zhang, H., Zhang, T., Cai, H., Li, Y., Huang, W. W., & Xu, D. (2014). Proposing and Validating a Five-Dimensional Scale for Measuring Entrepreneurial Orientation: An Empirical Study. Journal of Entrepreneurship in Emerging Economies.

      [39] Lumpkin, G. T., & Dess, G. G. (1996). Clarifying the Entrepreneurial Orientation Construct and linking it to Performance. Academy of Management Review, 21(1), 135–172.

      [40] Lussier, R. N., & Pfeifer, S. (2001). A Cross-national Prediction Model for Business Success. Journal of Small Business Management, 39(3), 228–239.

      [41] Ekpe, I. (2012). Women Entrepreneurs’ Performance : Microfinance Factors with Mediating Effect of Opportunity and Moderating of Attitude. Universiti Utara Malaysia.

      [42] Javed, N. (2012). The Mediating Effect of Corporate Entrepreneurship on the Relationship between Structural, Managerial, Cultural, Environmental Factors and Organizational Performance in the State Government Higher Education Institutions of Pakistan. Universiti Utara Malaysia.

      [43] Covin, J. G., & Slevin, D. P. (1989). Strategic Management of Small Firms in Hostile and Benign Environments. Strategic Management Journal, 10(1), 75–87.

      [44] Miller, K. D., & Bromiley, P. (1990). Strategic Risk and Corporate Performance: an Analysis of Alternative Risk Measures. Academy of Management Journal, 33(4), 756–779.

      [45] Busenitz, L. W. (1999). Entrepreneurial Risk and Strategic Decision Making: It’s a Matter of Perspective. The Journal of Applied Behavioural Science, 35(3), 325–340.

      [46] Salleh, M. S. (2012). Religiosity in Development : A Theoretical Construct of an Islamic-Based Development. International Journal of Humanities and Social Science, 2(14), 266–274.

      [47] Adamu, I. M., Kedah, Z., & Osman-gani, A. (2011). Entrepreneurial Motivation, Performance and Commitment to Social Responsibility: A Conceptual Analysis on the Influence of Islamic Religiosity. International Conference of the Academy of HRD (Asia Chapter) Kuala Lumpur, Malaysia, 1–33.

      [48] Henley, A. (2014). Is Religion Associated with Entrepreneurial Activity? IZA Discussion Paper (Vol. 8111). Germany.

      [49] Naail, M. K., Ali, H. A.-K., & Sulaiman, M. (2014). The components of spirituality in the business organizational. Asian Journal of Business and Management Sciences, 1(2), 166–180.

      [50] Mohd Nasir, R., & Nurul Huda, M. (2010). Keusahawanan Menurut Perspektif Al-Quran. Keusahawanan Menurut Perspektif Al-Quran.

  • Downloads

  • How to Cite

    Nafisah Abdul Wahab, N., Othman, S., Binti Nasirun Hirun, N., Abdul Ghani, A., & Rushdi Idrus, M. (2018). Developing the Concept of Firm Success among Muslim SMEs in Malaysia: a Study of Islamic Religion Practices as Moderator. International Journal of Engineering & Technology, 7(3.30), 374-377. https://doi.org/10.14419/ijet.v7i3.30.18336