The Nexus of Entrepreneurial Orientation and Knowledge Management on Business Performance of SMEs in West Java: Role of Competitive Advantage

Abstract

Purpose: The purpose of this study is to analyze the nexus of entrepreneurial orientation and knowledge management on the Business performance of SMEs mediated by competitive advantage.   Theoretical framework: The conceptual model for this study was developed based on previous research and resource-based theory as grand theory. The conceptual model has three factors that affect the Business performance of SMEs in West Java, Indonesia.   Design/methodology/approach: This study used verification methods with a number of samples of 200 respondents by using random sampling. The Structural Equation Models (SEM) analyzed the data using Lisrel.   Findings: The results show that entrepreneurial orientation and Knowledge Management have a significant effect on the competitive advantage and Business performance of SMEs and competitive advantage can be mediated by the nexus of Knowledge Management and entrepreneurial orientation on Business performance of SMEs in West Java.   Research, Practical & Social implications: The implications drawn from this research help owners or managers of human resources in existing SMEs to focus their performance by considering entrepreneurial orientation, Knowledge Management, and competitive advantage.   Originality/value: This study is important for owners of SMEs and the government because it confirms business owners' need to increase entrepreneurial orientation and Knowledge Management in order to boost a competitive advantage and business performance of SMEs in the marketplace.