Roles of owner-managers in achieving SMEs’ dual goals

Valentinus Ricky Sjofyan, Ruslan Prijadi

Research output: Contribution to journalArticlepeer-review

Abstract

Small and Medium Enterprises (SMEs) play an important role in the Indonesian economy. Not only do they generate jobs, they also nurture a culture of innovation and entrepreneurial skills that enable small firms manage economic downturns with minimal fallouts. Because of the SMEs’ unique management characteristics and mixed business-personal goals, they are an interesting subject of research. This study examined if the strategy of SMEs executed by owner-managers affected their performance (financial/economic vs. non-economic). One of the strategies pursued by SMEs is a differentiation strategy, characterised by a unique product that is hard to imitate and results in customers’ willingness to purchase goods or services at higher prices. Using a small sample size and applying SEM-PLS, this research attests to the strategic role of owner-managers for achievement of their non-economic goals, but not the SMEs’ economic/financial goals. These results imply the presence of non-financial goals that may be considered to be important or perhaps more important than the financial goals. Small sample size and self-assessed performance measures are among the limitations of this research.

Original languageEnglish
Pages (from-to)227-240
Number of pages14
JournalPertanika Journal of Social Sciences and Humanities
Volume26
Issue numberAugust
Publication statusPublished - 1 Aug 2018

Keywords

  • Financial goals
  • Non-financial goals
  • Owner-manager
  • Small enterprise
  • Strategy

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