The Effects of
Entrepreneurial Orientation, Social Media, and Managerial Ties on Msme Performance in Surabaya City
Mediany Kriseka Putri1*, Dimas Rizqie Zanetti2
Universitas Telkom,
Indonesia1*2
Email: medianykep@telkomuniversity.ac.id1*, dimasrizqiez@student.telkomuniversity.ac.id2
|
Abstract |
The study investigates the
role of entrepreneurial orientation, social media usage, and managerial ties
in the performance of MSMEs in Surabaya City. MSMEs are vital for economic
growth and job creation but often face challenges such as limited resources
and technological adoption. The research aims to understand how
entrepreneurial orientation impacts MSME performance directly and through
social media usage and managerial ties. A quantitative approach was employed,
using surveys to collect data from MSMEs in Surabaya, and statistical
analysis was conducted to test the relationships between the variables. The
findings indicate that entrepreneurial orientation does not directly enhance
firm performance but significantly influences social media usage and
managerial ties, both of which positively affect firm performance.
Specifically, social media usage improves customer interaction and marketing,
while strong managerial ties provide access to valuable resources. The study
highlights the importance of leveraging social media and managerial
relationships to improve MSME performance, suggesting that policymakers and
business owners should focus on enhancing these areas to support MSME growth
and sustainability. Further research is recommended to explore additional
factors such as government support and funding access to provide deeper
insights into SME performance dynamics. |
|
Keywords: |
Entrepreneurial
Orientation, Firm Performance, Managerial Ties, MSMEs, social media. |
Introduction
Micro, Small, and Medium Enterprises (MSMEs) play a pivotal role
in Indonesia's economic landscape, significantly contributing to regional
development and job creation. The development of MSMEs is currently a top
priority for the Indonesian government
In Surabaya, the number of MSMEs has been on the rise, with
figures increasing from 10,897 in 2020 to 17,897 in 2022
The success of MSMEs is strongly influenced by entrepreneurial
orientation, which includes innovative product offerings and decision-making
Managerial ties are vital for sustaining and boosting MSME
performance. Mobile phone usage in Indonesia is high, with 98.3% of people aged
16-64 using mobile phones to access the internet. Social media is used
extensively for promotional activities, with platforms like Facebook and
LinkedIn being popular among small businesses
Method
The method in this research is quantitative.
Table 1. Research Characteristic
|
No |
Research
Characteristics |
Type
of Research |
|
1 |
Research Methods |
Quantitative Method |
|
2 |
Research Objective |
Conclusive |
|
3 |
Research Setting |
Non-Contrived Setting |
|
4 |
Time Horizon |
Cross Sectionals |
|
5 |
Analysis Unit |
Individual |
The strategy used in this study is survey research. According to
Results
and Discussion
Convergent Validity
Table 2. Loading Factor of Convergent Validity
|
Indicator |
Factor
Loading |
|
Category |
|
Entrepreneurial
Orientation (X) |
|||
|
EO
1 |
0.831 |
>
0.70 |
Valid |
|
EO
2 |
0.854 |
>
0.70 |
Valid |
|
EO
3 |
0.815 |
>
0.70 |
Valid |
|
EO
4 |
0.823 |
>
0.70 |
Valid |
|
EO
5 |
0.834 |
>
0.70 |
Valid |
|
EO
6 |
0.801 |
>
0.70 |
Valid |
|
EO
7 |
0.816 |
>
0.70 |
Valid |
|
EO
8 |
0.844 |
>
0.70 |
Valid |
|
EO
9 |
0.828 |
>
0.70 |
Valid |
|
Firm
Performance (Y) |
|||
|
FP
1 |
0.858 |
>
0.70 |
Valid |
|
FP
2 |
0.822 |
>
0.70 |
Valid |
|
FP
3 |
0.822 |
>
0.70 |
Valid |
|
FP
4 |
0.849 |
>
0.70 |
Valid |
|
FP
5 |
0.838 |
>
0.70 |
Valid |
|
Managerial
Ties |
|||
|
MT
1 |
0.822 |
>
0.70 |
Valid |
|
MT
2 |
0.811 |
>
0.70 |
Valid |
|
MT
3 |
0.828 |
>
0.70 |
Valid |
|
MT
4 |
0.839 |
>
0.70 |
Valid |
|
MT
5 |
0.830 |
>
0.70 |
Valid |
|
MT
6 |
0.838 |
>
0.70 |
Valid |
|
Social
media |
|||
|
SM
1 |
0.822 |
>
0.70 |
Valid |
|
SM
2 |
0.815 |
>
0.70 |
Valid |
|
SM
3 |
0.850 |
>
0.70 |
Valid |
|
SM
4 |
0.829 |
>
0.70 |
Valid |
|
SM
5 |
0.848 |
>
0.70 |
Valid |
|
SM
6 |
0.847 |
>
0.70 |
Valid |
|
SM
7 |
0.828 |
>
0.70 |
Valid |
|
SM
8 |
0.820 |
>
0.70 |
Valid |
|
SM
9 |
0.822 |
>
0.70 |
Valid |
The results show that
all loading factor values that have been tested show > 0.7. So, it can be
concluded that the loading factor value can show the correlation between the
indicator and the construct. An indicator with a low loading value indicates
that the indicator does not work in the measurement model.
Table 3. AVE Value
|
|
Average
Variance Extracted (AVE) |
Category |
|
Business Ties |
0.736 |
Valid |
|
0.684 |
Valid |
|
|
0.702 |
Valid |
|
|
0.781 |
Valid |
|
|
0.686 |
Valid |
|
|
Politic Ties |
0.757 |
Valid |
|
Practiveness |
0.754 |
Valid |
|
Risk Taking |
0.775 |
Valid |
|
Social media |
0.691 |
Valid |
The results show that
the Average Variance Extracted (AVE) Business Ties is 0.736, Entrepreneurial
Orientation is 0.684, Firm Performance is 0.702, Innovativeness is 0.781,
Managerial Ties is 0.686, Political Ties is 0.757, Proactiveness is 0.754, Risk
Taking is 0.775, and social media of 0.691. This shows that, because each
variable in this study has an AVE value greater than 0.5, they are all valid
and entitled to proceed to the next testing stage.
2. Discriminat Validity
Discriminant validity is a test carried out empirically to ensure
that there are differences between variables in a study
|
Business Ties |
Entrepreneurial Orientation |
Firm Performance |
Innovativeness |
Managerial Ties |
Politic Ties |
Proactiveness |
Risk Taking |
Social Media |
|
|
EO1 |
0.374 |
0.831 |
0.551 |
0.876 |
0.411 |
0.413 |
0.739 |
0.733 |
0.445 |
|
EO1 |
0.374 |
0.831 |
0.551 |
0.876 |
0.411 |
0.413 |
0.739 |
0.733 |
0.445 |
|
EO2 |
0.465 |
0.854 |
0.582 |
0.905 |
0.497 |
0.487 |
0.768 |
0.739 |
0.410 |
|
EO2 |
0.465 |
0.854 |
0.582 |
0.905 |
0.497 |
0.487 |
0.768 |
0.739 |
0.410 |
|
EO3 |
0.378 |
0.815 |
0.505 |
0.870 |
0.422 |
0.429 |
0.707 |
0.726 |
0.421 |
|
EO3 |
0.378 |
0.815 |
0.505 |
0.870 |
0.422 |
0.429 |
0.707 |
0.726 |
0.421 |
|
EO4 |
0.344 |
0.823 |
0.563 |
0.721 |
0.381 |
0.385 |
0.866 |
0.743 |
0.488 |
|
EO4 |
0.344 |
0.823 |
0.563 |
0.721 |
0.381 |
0.385 |
0.866 |
0.743 |
0.488 |
|
EO5 |
0.408 |
0.834 |
0.558 |
0.744 |
0.443 |
0.441 |
0.877 |
0.738 |
0.450 |
|
EO5 |
0.408 |
0.834 |
0.558 |
0.744 |
0.443 |
0.441 |
0.877 |
0.738 |
0.450 |
|
EO6 |
0.385 |
0.801 |
0.561 |
0.710 |
0.419 |
0.418 |
0.861 |
0.696 |
0.454 |
|
EO6 |
0.385 |
0.801 |
0.561 |
0.710 |
0.419 |
0.418 |
0.861 |
0.696 |
0.454 |
|
EO7 |
0.374 |
0.816 |
0.538 |
0.717 |
0.396 |
0.385 |
0.728 |
0.864 |
0.463 |
|
EO7 |
0.374 |
0.816 |
0.538 |
0.717 |
0.396 |
0.385 |
0.728 |
0.864 |
0.463 |
|
EO8 |
0.395 |
0.844 |
0.570 |
0.742 |
0.428 |
0.426 |
0.745 |
0.898 |
0.478 |
|
EO8 |
0.395 |
0.844 |
0.570 |
0.742 |
0.428 |
0.426 |
0.745 |
0.898 |
0.478 |
|
EO9 |
0.439 |
0.828 |
0.530 |
0.729 |
0.467 |
0.456 |
0.735 |
0.879 |
0.371 |
|
EO9 |
0.439 |
0.828 |
0.530 |
0.729 |
0.467 |
0.456 |
0.735 |
0.879 |
0.371 |
|
FP1 |
0.537 |
0.578 |
0.858 |
0.539 |
0.576 |
0.567 |
0.554 |
0.543 |
0.522 |
|
FP2 |
0.491 |
0.558 |
0.822 |
0.519 |
0.506 |
0.479 |
0.530 |
0.530 |
0.530 |
|
FP3 |
0.529 |
0.553 |
0.822 |
0.496 |
0.561 |
0.546 |
0.535 |
0.534 |
0.495 |
|
FP4 |
0.501 |
0.558 |
0.849 |
0.517 |
0.536 |
0.526 |
0.553 |
0.508 |
0.544 |
|
FP5 |
0.531 |
0.543 |
0.838 |
0.517 |
0.565 |
0.552 |
0.534 |
0.485 |
0.487 |
|
MT1 |
0.870 |
0.407 |
0.512 |
0.388 |
0.822 |
0.711 |
0.368 |
0.396 |
-0.011 |
|
MT1 |
0.870 |
0.407 |
0.512 |
0.388 |
0.822 |
0.711 |
0.368 |
0.396 |
-0.011 |
|
MT2 |
0.850 |
0.423 |
0.553 |
0.410 |
0.811 |
0.707 |
0.374 |
0.412 |
0.015 |
|
MT2 |
0.850 |
0.423 |
0.553 |
0.410 |
0.811 |
0.707 |
0.374 |
0.412 |
0.015 |
|
MT3 |
0.854 |
0.402 |
0.525 |
0.385 |
0.828 |
0.738 |
0.382 |
0.370 |
-0.027 |
|
MT3 |
0.854 |
0.402 |
0.525 |
0.385 |
0.828 |
0.738 |
0.382 |
0.370 |
-0.027 |
|
MT4 |
0.727 |
0.417 |
0.542 |
0.404 |
0.839 |
0.879 |
0.378 |
0.396 |
-0.008 |
|
MT4 |
0.727 |
0.417 |
0.542 |
0.404 |
0.839 |
0.879 |
0.378 |
0.396 |
-0.008 |
|
MT5 |
0.721 |
0.473 |
0.549 |
0.456 |
0.830 |
0.867 |
0.453 |
0.430 |
0.023 |
|
MT5 |
0.721 |
0.473 |
0.549 |
0.456 |
0.830 |
0.867 |
0.453 |
0.430 |
0.023 |
|
MT6 |
0.739 |
0.456 |
0.573 |
0.448 |
0.838 |
0.863 |
0.416 |
0.426 |
0.027 |
|
MT6 |
0.739 |
0.456 |
0.573 |
0.448 |
0.838 |
0.863 |
0.416 |
0.426 |
0.027 |
|
SM1 |
-0.029 |
0.419 |
0.490 |
0.385 |
-0.030 |
-0.028 |
0.417 |
0.383 |
0.822 |
|
SM2 |
0.043 |
0.502 |
0.544 |
0.467 |
0.053 |
0.057 |
0.493 |
0.460 |
0.815 |
|
SM3 |
0.000 |
0.450 |
0.498 |
0.397 |
0.001 |
0.003 |
0.451 |
0.425 |
0.850 |
|
SM4 |
-0.006 |
0.455 |
0.534 |
0.411 |
0.022 |
0.047 |
0.452 |
0.424 |
0.829 |
|
SM5 |
-0.001 |
0.448 |
0.524 |
0.398 |
0.007 |
0.014 |
0.444 |
0.425 |
0.848 |
|
SM6 |
-0.011 |
0.468 |
0.485 |
0.407 |
-0.019 |
-0.025 |
0.483 |
0.436 |
0.847 |
|
SM7 |
-0.062 |
0.409 |
0.480 |
0.373 |
-0.040 |
-0.016 |
0.391 |
0.392 |
0.828 |
|
SM8 |
-0.036 |
0.420 |
0.497 |
0.369 |
-0.014 |
0.008 |
0.438 |
0.383 |
0.820 |
|
SM9 |
0.025 |
0.418 |
0.543 |
0.382 |
0.040 |
0.051 |
0.416 |
0.384 |
0.822 |
Based on the results from the table above, it can be concluded
that the existing construct has adequate discriminant validity. This can be
seen from comparing the correlation of indicators of a construct which is
higher than other constructs.
3. Reliability Test
Assessment of construct acoustics is measured using composite
reliability and supported by Cronbach's alpha. Each construct is considered
reliable if it has a composite reliability above 0.70 and Cronbach's alpha more
than 0.6. The Cronbach alpha value is seen to assess the consistency of
indicators for each variable by looking at the correlation of one indicator
with other indicators.
Table 5. Composite Reliability
|
Composite Reliability |
|
|
Business Ties |
0.893 |
|
Entrepreneurial
Orientation |
0.951 |
|
Firm Performance |
0.922 |
|
Innovativeness |
0.915 |
|
Managerial Ties |
0.929 |
|
Politic Ties |
0.903 |
|
Proactiveness |
0.902 |
|
Risk Taking |
0.912 |
|
Social media |
0.953 |
Based on the table above, each variable has a good construction in
its variables. This is known from the composite reliability values
for each variable, all of which are more than 0.7. Apart from
using Composite reliability values, this research also uses Cronbach alpha
values to test reliability. This test measures the consistency of
the construct in a variable.
Table 6. Cronbach Alpha
|
Cronbach's Alpha |
|
|
Business Ties |
0.820 |
|
Entrepreneurial
Orientation |
0.942 |
|
Firm Performance |
0.894 |
|
Innovativeness |
0.860 |
|
Managerial Ties |
0.908 |
|
Politic Ties |
0.839 |
|
Practiveness |
0.837 |
|
Risk Taking |
0.855 |
|
Social media |
0.944 |
Based on the table above, it can be seen that each variable has a
good construct in forming its variables. This can be seen because the value is
> 0.6. So it can be said that the variables in this
study are consistent in measuring each construct.
Evaluation Analysis of Structural Model or Inner
Model
1. Hypothesis Analysis
According to
|
Original Sample (O) |
Sample Mean (M) |
Standard Deviation (STDEV) |
T Statistics (|O/STDEV|) |
P Values |
Description |
|
|
Entrepreneurial
Orientation -> Firm Performance |
-0.001 |
0.001 |
0.035 |
0.020 |
0.492 |
Rejected |
|
Entrepreneurial
Orientation -> Managerial Ties |
0.519 |
0.518 |
0.037 |
14.005 |
0.000 |
Accepted |
|
Entrepreneurial
Orientation -> Social Media |
0.535 |
0.533 |
0.037 |
14.613 |
0.000 |
Accepted |
|
Managerial
Ties -> Firm Performance |
0.653 |
0.653 |
0.033 |
19.766 |
0.000 |
Accepted |
|
Social Media
-> Firm Performance |
0.613 |
0.613 |
0.032 |
19.383 |
0.000 |
Accepted |
Conclusion
This study aims to
examine the effect of Entrepreneurial Orientation, the use of Social Media, and Managerial Ties on the performance of
Micro, Small, and Medium Enterprises (MSMEs) in Surabaya City. Based on the
results of hypothesis testing, several important findings can be concluded as
follows:
1.
Effect of
Entrepreneurial Orientation on MSME Performance
The hypothesis that Entrepreneurial Orientation
has a positive effect on the performance of MSMEs in Surabaya City is rejected.
This shows that entrepreneurial orientation consisting of innovation,
proactivity, and risk-taking does not directly improve the performance of MSMEs
in Surabaya. Other factors may be more dominant in influencing the performance
of MSMEs in this region.
2.
Effect of
Entrepreneurial Orientation on Social Media Usage
The hypothesis that Entrepreneurial Orientation
has a positive effect on the use of social media is accepted. This indicates
that MSMEs with a strong entrepreneurial orientation tend to more actively use
social media as a marketing and customer communication tool. Social media is
considered an important platform for MSMEs to develop networks and expand their
markets.
3.
Effect of Social Media
on MSME Performance
The hypothesis that the use of social media has
a positive effect on the performance of MSMEs in Surabaya City is accepted. The
use of social media has proven to be an effective strategy for MSMEs to improve
their performance, both in terms of sales, brand visibility, and interaction
with customers. This shows the importance of technology adaptation and
digitalization in developing MSMEs.
4.
Effect of
Entrepreneurial Orientation on Managerial Ties
The hypothesis that Entrepreneurial Orientation
has a positive effect on Managerial Ties is accepted. MSMEs with a strong
entrepreneurial orientation tend to have better managerial ties, both in the
context of business and political relationships. This is important because good
managerial relationships can help MSMEs access the resources, information and
support needed for business growth and sustainability.
5.
The Effect of Managerial
Ties on MSME Performance
The hypothesis that Managerial Ties have a
positive effect on the performance of MSMEs in Surabaya City is accepted.
Managerial Ties proved to be the most influential factor on MSME performance,
with strong business and political relationships having a significant impact on
improving performance. This suggests that good networks and relationships with
relevant parties can help MSMEs overcome various challenges and take advantage
of opportunities to grow.
Overall, this study highlights the importance of social media use
and managerial relationship development in improving MSME performance in
Surabaya City. Although entrepreneurial orientation does not directly affect performance,
it plays an important role in encouraging the use of social media and building
strong networks.
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Alfabeta.