Financial Self-Efficacy and Entrepreneurial Leadership on SME Performance

Abstract

Small, and Medium Enterprises (SME) management is highly dependent on the role of entrepreneurial leadership because it is one of the keys to success in the company. Entrepreneurial leadership is an act of change that leads to the increasing of creativity, innovation, intuition, leadership skills, motivation, and the courage to take risks in an organization. A leader must be able to influence subordinates’ behavior so that they can cooperate and work productively to achieve organizational goals. A number of researchers have studied the success factors for Small, and Medium Enterprises (SMEs) by discussing about human/ social and financial capital. But, it is found that only small numbers of researcher who analyze the role of socio-cognitive factors in the SMEs’ success. One of the most important factors is self-efficacy. Self-efficacy is particularly suited for entrepreneurial studies because it builds certain tasks, including an individual's self-esteem, both internal (personality) and external (environmental). The population of this study is the Alumni of UNESA. The sampling technique is conducted by purposive sampling. Alumni who run a business and graduated at least 2 years before 2017 are chosen as sample. The data analysis technique used is multiple regression analysis. The results of this study conclude that there is influence between entrepreneurial leadership and financial self-efficacy on the performance of micro and small business amongst the alumni.