Perengki Susanto, Nor Liza Abdullah, Yunia Wardi
Understanding the degree of entrepreneurial orientation (EO) in the context of small and medium-sized enterprises (SMEs) is vitally important, since it priorities may vary among business sectors. Previous studies have extensively studied EO using simple and common method of measuring EO at the construct level (summated scale), ignoring the fact that different business sectors have different priorities in terms of the dimensions of EO. The purpose of this paper is to discuss these limitations based on a multi-criteria decision making (MCDM) method for each dimension and items using the Analytic Hierarchy Process (AHP). This method is used to analyse and classify the perception of managers or owners-managers of SMEs based on each dimension of EO. 409 SMEs were involved in ranking the EO score based on the dimensions (criteria) and multiple items (sub-criteria) at the industry and business sector level (e.g., handicraft, cakes, embroidery, and crackers). To illustrate the findings, a Cartesian diagram exhibits the priority of EO level in different business sectors. The findings indicate that innovativeness is the most important or main criteria, followed by proactiveness. At the level of sub-criteria, ‘research and product development’ obtained the highest score of innovativeness. Finally, mapping based on business sectors showed that cakes, as well as embroidery, considered innovativeness as main criteria compared with proactiveness, contrary to the handicraft, and crackers business sectors that have high proactiveness, but low innovativeness. The empirical findings hold important implications for SMEs managers and contribute to EO literature by using the AHP approach as a meaningful tool in management. © 2019, Czestochowa University of Technology. All rights reserved.
Universiti Kebangsaan Malaysia, Faculty of Economics and Management, Malaysia; Universitas Negeri Padang, Faculty of Economics, Department of Management, Indonesia
