MANAGERIAL CAPABILITIES, PSYCHOLOGICAL EMPOWERMENT, ENTREPRENEURIAL INTENTION AND BUSINESS PERFORMANCE OF INFORMAL SECTOR: A STRUCTURAL EQUATION MODEL
Abstract
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.
References
Abdullahi, M. S., Jakada, B. A., & Kabir, S. (2016). Challenges affecting the performance of small and medium scale enterprises (SME’s) 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.
Giagtzi, Z. (2013). How perceived feasibility and desirability of entrepreneurship influence entrepreneurial intentions: A comparison between southern and northern European countries. (Master thesis) Erasmus School of Economics, Rotterdam.
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.
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.
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
https://apps.dtic.mil/docs/citations/ADA557445
Philippine Statistics Authority. (2008). Annual poverty indicators survey. Retrieved from
https://psa.gov.ph/content/annual-poverty-indicators-survey-apis
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
performance: An empirical study of SMEs in Saudi Arabia. Retrieved from
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 Edition. 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.
Copyright (c) 2019 SSBRN
This work is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.
Retained Rights/Terms and Conditions of Publication
1. As an author you (or your employer or institution) may do the following:
- make copies (print or electronic) of the article for your own personal use, including for your own classroom teaching use;
- make copies and distribute such copies (including through e-mail) of the article to research colleagues, for the personal use by such colleagues (but not commercially or systematically, e.g. via an e-mail list or list server);
- present the article at a meeting or conference and to distribute copies of the article to the delegates attending such meeting;
- for your employer, if the article is a ‘work for hire’, made within the scope of your employment, your employer may use all or part of the information in the article for other intra-company use (e.g. training);
- retain patent and trademark rights and rights to any process, procedure, or article of manufacture described in the article;
- include the article in full or in part in a thesis or dissertation (provided that this is not to be published commercially);
- use the article or any part thereof in a printed compilation of your works, such as collected writings or lecture notes (subsequent to publication of the article in the journal); and prepare other derivative works, to extend the article into book-length form, or to otherwise re-use portions or excerpts in other works, with full acknowledgement of its original publication in the journal;
- may reproduce or authorize others to reproduce the article, material extracted from the article, or derivative works for the author’s personal use or for company use, provided that the source and the copyright notice are indicated, the copies are not used in any way that implies RBAOS endorsement of a product or service of any employer, and the copies themselves are not offered for sale.
- All copies, print or electronic, or other use of the paper or article must include the appropriate bibliographic citation for the article’s publication in the journal.
2. Requests from third parties
Although authors are permitted to re-use all or portions of the article in other works, this does not include granting third-party requests for reprinting, republishing, or other types of re-use. Requests for all uses not included above, including the authorization of third parties to reproduce or otherwise use all or part of the article (including figures and tables), should be referred to RBAOS.
3. Author Online Use
- Personal Servers. Authors and/or their employers shall have the right to post the accepted version of articles pre-print version of the article, or revised personal version of the final text of the article (to reflect changes made in the peer review and editing process) on their own personal servers or the servers of their institutions or employers without permission from RBAOS, provided that the posted version includes a prominently displayed RBAOScopyright notice and, when published, a full citation to the original publication, including a link to the article abstract in the journal homepage. Authors shall not post the final, published versions of their papers;
- Classroom or Internal Training Use. An author is expressly permitted to post any portion of the accepted version of his/her own articles on the author’s personal web site or the servers of the author’s institution or company in connection with the author’s teaching, training, or work responsibilities, provided that the appropriate copyright, credit, and reuse notices appear prominently with the posted material. Examples of permitted uses are lecture materials, course packs, e-reserves, conference presentations, or in-house training courses;
- Electronic Preprints. Before submitting an article to an RBAOS, authors frequently post their manuscripts to their own web site, their employer’s site, or to another server that invites constructive comment from colleagues. Upon submission of an article to RBAOS, an author is required to transfer copyright in the article to RBAOS, and the author must update any previously posted version of the article with a prominently displayed RBAOS copyright notice. Upon publication of an article by the RBAOS, the author must replace any previously posted electronic versions of the article with either (1) the full citation to the work with a Digital Object Identifier (DOI) or link to the article abstract in RBAOS homepage, or (2) the accepted version only (not the final, published version), including the RBAOS copyright notice and full citation, with a link to the final, published article in journal homepage.
4. Articles in Press (AiP) service
RBAOS may choose to publish an abstract or portions of the paper before we publish it in the journal. Please contact our Production department immediately if you do not want us to make any such prior publication for any reason, including disclosure of a patentable invention.
5. Author/Employer Rights
If you are employed and prepared the article on a subject within the scope of your employment, the copyright in the article belongs to your employer as a work-for-hire. In that case, RBAOS assumes that when you sign this Form, you are authorized to do so by your employer and that your employer has consented to the transfer of copyright, to the representation and warranty of publication rights, and to all other terms and conditions of this Form. If such authorization and consent has not been given to you, an authorized representative of your employer should sign this Form as the Author.
6. Copyright Ownership
It is the formal policy of SSBRN to own the copyrights to all copyrightable material in its technical publications and to the individual contributions contained therein, in order to protect the interests of the SSBRN, its authors and their employers, and, at the same time, to facilitate the appropriate re-use of this material by others. SSBRN distributes its technical publications throughout the world and does so by various means such as hard copy, microfiche, microfilm, and electronic media. It also abstracts and may translate its publications, and articles contained therein, for inclusion in various compendiums, collective works, databases and similar publications
