Enhancing Sustainability in Small and Medium Enterprises through Performance, and Entrepreneurial Orientation, with Moderating Effects of Environmental Dynamics and Capital Accessibility

Abstract

Small and medium businesses play a crucial role in national economic affairs, requiring contributions from various factors to support their performance. In Indonesia, SMEs encounter varying levels of environmental dynamics based on industry characteristics, directly impacting resource acquisition, marketing strategies, and overall performance. Additionally, SMEs require an entrepreneurial orientation fostering innovation and risk-taking to ensure business success. Thus, this research aims to analyze and explore the impact of entrepreneurial orientation on SME performance, with a focus on assisting and promoting Corporate Social Responsibility (CSR). Furthermore, the study seeks to examine whether environmental dynamics and access to capital moderate the relationship between entrepreneurial orientation and performance. The sample for this research comprises 139 small and medium businesses affiliated with Bank Indonesia and PT. Bank Rakyat Indonesia in Yogyakarta, with assistance provided by both companies. A mixed-method approach was employed, utilizing PLS analysis to test hypotheses. Results indicate that entrepreneurial orientation significantly influences SME performance within Bank Indonesia and PT Bank BRI. Conversely, environmental dynamics and capital access do not significantly moderate the relationship between entrepreneurial orientation and SME performance. However, qualitative analysis suggests that SMEs still require assistance, particularly in continuing CSR programs to enhance performance..