HOW DO STRATEGIC ORIENTATION AND ISLAMIC VALUES RELATE TO MICRO AND SMALL ENTERPRISES PERFORMANCE?

A CONCEPTUAL FRAMEWORK

Abstract

There is a surfeit of studies exploring the causal influence of micro and small business performance based on the institution, financing and environmental factors, paying little attention to the intangible assets such as strategic orientations and Islamic values of entrepreneurs. These studies were seen inadequate to enlighten Micro and Small Enterprise (MSE) entrepreneurs on how to attain competitive advantages and ultimately coping with the current global trend. Only firms with ability in all aspects of competitive edges will be able to gain advantages over their rivals. Hence, the creation and management of intangible assets such as Entrepreneurial Orientation (EO) and Islamic Values (IV) are imperative to overcome competitiveness and performance issues. What components of entrepreneurial orientation should be emphasized to gain a competitive edge and profitability? Do Islamic values predict the performance of MSE? Building on previous research, this paper may provide a cavernous understanding of the relationships between EO, IV and MSE performance. Specifically, a conceptual model is developed linking different dimensions of EO and IV to MSE performance. This is used to provide insights into how these factors affect firm performance. Finally, the study makes a conclusion based on previous researches on the relationship among the variables and suggests that more empirical studies should be carried out in developing countries using intervening variables to strengthen the constructs correlations.