MANAGERIAL CAPABILITIES, PSYCHOLOGICAL EMPOWERMENT, ENTREPRENEURIAL INTENTION AND BUSINESS PERFORMANCE OF INFORMAL SECTOR: A STRUCTURAL EQUATION MODEL
DOI:
https://doi.org/10.32770/rbaos.vol1179-188Keywords:
business performance, informal sector, structural equation modeling, PhilippinesAbstract
This study was conducted to determine the best fit model of business performance among the informal sectors in Region 12, Philippines. A conceptual model comprising of managerial capabilities, psychological empowerment, and the entrepreneurial intention was studied to explore their relationship. The study was done in Region 12, utilizing a quantitative research approach, specifically structural equation modeling (SEM) to determine the best fit model. A total of 400 respondents participated in this study. Findings revealed that managerial capabilities, psychological empowerment, and entrepreneurial intentions significantly impact the business performance of the informal sector. Moreover, results suggested that hypothesized model 5 is the best fit model. It was also found that managerial capabilities and entrepreneurial intention significantly influence business performance. Thus, managerial capabilities and entrepreneurial intention are strong predictors of business performance among the informal sectors.
Downloads
References
Abdullahi, M. S., Jakada, B. A., & Kabir, S. (2016). Challenges affecting the performance of Small and Medium Scale Enterprises (SMEs) in Nigeria. Journal of Human Capital Development (JHCD), 9(2), 21-46.
Ahmed, K. A. (2017). The influence of development on managerial capabilities and performance: Empirical evidence from Pakistan. Journal of Southeast Asian Research, 20, 1-12.
Bhatta, T. R., Albert, J. M., Kahana, E., & Lekhak, N. (2017). Early origins of later life psychological well-being: A novel application of causal mediation analysis to life course research. The Journals of Gerontology, 73(1), 160-170.
Christensen, L. & Burke, J. (2008). Educational research: Quantitative, qualitative, and mixed approaches. California: SAGE Publications, Inc.
Gano-An, J.C. (2019). On becoming creative solopreneurs: A case of rural peddlers. Review of Integrative Business and Economics Research, 8, 119-133.
Giagtzi, Z. (2013). How perceived feasibility and desirability of entrepreneurship influence entrepreneurial intentions: A comparison between southern and northern European countries. Master thesis. Erasmus Universiteit Rotterdam, Erasmus School of Economic.
González‐Benito, J., & Suárez‐González, I. (2010). A study of the role played by manufacturing strategic objectives and capabilities in understanding the relationship between Porter's generic strategies and business performance. British Journal of Management, 21(4), 1027-1043.
Grant, R. M. (1991). Analyzing resources and capabilities, contemporary strategic analysis: Concepts, techniques and applications. Cambridge, MA: Blackwell.
Gruber, M., Heinemann, F., Brettel, M., & Hungeling, S. (2010). Configurations of resources and capabilities and their performance implications: An exploratory study on technology ventures. Strategic Management Journal, 31(12),1337-1356.
Hair, J. F., Babin, B. J., & Krey, N. (2017). Covariance-based structural equation modeling in the journal of advertising: Review and recommendations. Journal of Advertising, 46(1), 163-177.
Hasman, A. (2015). An introduction to structural equation modeling. Retrieved from
Hox, J. J., Moerbeek, M., & Van de Schoot, R. (2017). Multilevel analysis: Techniques and applications. London, England: Routledge.
https://apps.dtic.mil/docs/citations/ADA557445
https://psa.gov.ph/content/annual-poverty-indicators-survey-apis
Islam, M. A., Khan, M. A., Obaidullah, A. Z. M., & Alam, M. S. (2011). Effect of entrepreneur and firm characteristics on the business success of small and medium enterprises (SMEs) in Bangladesh. International Journal of Business and Management, 6(3), 289-299.
Kelliher, F., & Reinl, L. (2009). A resource-based view of micro-firm management practice. Journal of Small Business and Enterprise Development, 16(3), 521-532.
Kim, J.S., & Arnold, P. (1992). Manufacturing competence and business performance: A framework and empirical analysis. International Journal of Operations and Production Management, 13(10), 4-25.
King, E. B., Hebl, M. R., George, J. M., & Matusik, S. F. (2010). Understanding tokenism: Antecedents and consequences of a psychological climate of gender inequity. Journal of Management, 36, 482–510.
Krueger, N., Hansen, D. J., Michl, T., & Welsh, D. H. (2011). Thinking “sustainably”: The role of intentions, cognitions, and emotions in understanding new domains of entrepreneurship. Bingley: Emerald Group Publishing Limited.
Llorente-Alonso, M., & Topa, G. (2018). Prevention of occupational strain: Can psychological empowerment and organizational commitment decrease dissatisfaction and intention to quit? Journal of Clinical Medicine, 7(11), 450
Mappigau, P., Ir, S. U., & Maupa, H. (2012). Entrepreneurial intention and small business growth: An empirical study of small food processing enterprises in South Sulawesi, Indonesia. International Journal of Business and Social Research, 2(4),237-248.
Ngek, N. B. (2015). Entrepreneurial self-efficacy and small business performance: The mediating effect of entrepreneurial mindset and openness to experience. Problems and Perspectives in Management, 13(4), 271-280.
Ofoegbu, E. O., Akanbi, P. A., & Joseph, A. T. (2013). Effect of contextual factors on the performance of SMEs in Nigeria: A case study of Ilorin Metropolis. Advance in Management and Applied Economics, 3(1), 95-114.
Osalor, P. (2012). Contributions of SMEs to the Nigerian economy. Retrieved from http://www.successinyourbusiness.com/contribution_of_smes_to_the_nigerian_economy
Pearl, J. (2012). The causal foundations of structural equation modeling. Retrieved from
performance: An empirical study of SMEs in Saudi Arabia. Retrieved from
Philippine Statistics Authority. (2008). Annual poverty indicators survey. Retrieved from
Pranic, L., & Roehl, W. S. (2012). Rethinking service recovery: A customer empowerment (CE) perspective. Journal of Business Economics and Management, 13(2), 242-260.
Rababah, N. M. (2017). The role of psychological empowerment and innovation on firm
Seedee, R., Sulaiman, M., & Ismail, I. (2015). Best business practices and performance in ceramics industry in Thailand. 9Th Global Conference on Business and Economics. Paper presented at University UK, United Kingdom.
Sok, P., O’Cass, A., & Sok, K. M. (2013). Achieving superior SME performance: Overarching role of marketing, innovation, and learning capabilities. Australasian Marketing Journal (AMJ), 21(3), 161-167.
Song, M., Droge, C., Hanvanich, S. & Calantone, R. (2005). Marketing and technology resource complementarity: An analysis of their interaction effect in two environmental contexts. Strategic Management Journal, 26(3), 259-276.
Stangor, C. (2004). Research methods for the behavioral sciences. 2nd Ed. New York: Houghton Mifflin.
Thomas, W. Y. M., Theresa, L., & Ed, S. (2008). Entrepreneurial competencies and the performance of small and medium enterprises: An Investigation through a framework of competitiveness. Journal of Small Business and Entrepreneurship, 21(3), 257.
Valmohammadi, C., & Roshanzamir, S. (2015). The guidelines of improvement: Relations among organizational culture, TQM and performance. International Journal of Production Economics, 164,167-178.
Wernerfelt, B. (1984). A resource‐based view of the firm. Strategic Management Journal, 5(2), 171-180.
Zulkiffli, S. N. A., & Perera, N. (2011). A Literature Analysis on Business Performance For SMEs: Subjective or Objective Measures?. In Society of Interdisciplinary Business Research (SIBR) 2011 Conference on Interdisciplinary Business Research.
Published
How to Cite
Issue
Section
Copyright (c) 2019 Lotis Divino Cubin
This work is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.
Review of Behavioral Aspect in Organizations and Society is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License
