Are managerial competencies a blessing to the performance of innovative SMEs in Malaysia?

Abstract

Innovativeness has been empirically recognized as one of the entrepreneurial orientation (EO) characteristics mandatory for improving the organizational performance of SMEs. Managerial competencies are the business functional skills that have been playing an increasingly important role in the development of successful small and medium business firms. Whether integration exists between innovativeness and managerial competencies to influence SME performance in Malaysia remains controversial. This study attempts to examine the moderating effect of managerial competencies on the relationship between innovativeness and SME performance in Malaysia. Drawing a sample of 258 SMEs across industries in the country revealed that managerial competencies do not impact on the relationship between innovativeness and SME performance. The findings provide managerial implications and strategic recommendations to entrepreneurs, owner-managers, and policy makers in the SME sectors.