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IRMM 4019 aisyah okey

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2 International Review of Management and 2
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4 Marketing 4
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6 ISSN: 2146-4405 6
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8 available at http: www.econjournals.com 8
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10 International Review of Management and Marketing, 2017, 7(2), 1-8. 10
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Effect of Characteristics and Entrepreneurial Orientation 14
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16 towards Entrepreneurship Competence and Crafts and Arts 16
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18 Small and Medium Enterprises Business Performance in 18
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20 Makassar 19
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AQ1 St Aisyah1*, Chalid Imran Musa2, Anwar Ramli3 23
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Economics Department, Universitas Negeri Makassar, Indonesia, 2Economics Department, Universitas Negeri Makassar, Indonesia, 25
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Economics Department, Universitas Negeri Makassar, Indonesia. *Email: aisyahppsunm@gmail.com 26
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ABSTRACT
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30 This study was designed to test and analyze the characteristics and entrepreneurial orientation towards entrepreneurial competence and business 30
31 performance. The population in this study were 117 owners/managers of small and medium enterprises crafts in the city of Makassar, with a rate of 31
32 return of 79.49%. Convenience sampling technique is used with a total sample of 93 owners/managers. The results of the partial least squares Warp 32
33 5.0 analysis of provides evidence that the characteristics of entrepreneurs who are low in the opposite direction but it is significant to improving 33
the entrepreneurial competence. High entrepreneurial orientation in the same direction and significant impact on improving the competence of the
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entrepreneurial characteristics of entrepreneurs who are low in the opposite direction and significant impact on business performance improvement.
35 The owners or managers high autonomy are entrepreneurs strong desire to develop self-sufficiency in trying to have a significant impact on business
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36 performance. Low entrepreneurial competence in the opposite direction and no significant effect on business performance. 36
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38 Keywords: Characteristics, Orientation, Entrepreneurial Competence, Business Performance 38
39 JEL Classification: M2 39
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41 41
42 1. INTRODUCTION household income. Furthermore Zulkiefl imansyah and Banu 42
43 (2003) suggests the potential benefits of economic and social of 43
44 In some developing countries as well as in Indonesia the growth SMEs are characterized by their capacity in job creation at a level 44
45 of Micro, small and medium enterprises (SMEs) is one of the low capital costs, improvements in forward and backward linkage 45
46 crucial driving force for economic growth. There are at least three between the various sectors, the creation of opportunities for the 46
47 reasons underlying the developing countries recently considered development and adaptation of appropriate technologies, as semi 47
48 it the essential presence of SMEs (Berry et al., 2001). The first skill workers and as a supporter of large-scale enterprises. 48
49 reason is that the performance of SMEs tends to be better regarding 49
50 generating productive employment. Secondly, as part of its In another part, SMEs has some limitations, which the general 50
51 dynamics, SMEs often achieve increased productivity through business climate that is not conducive SMEs which looked at the 51
52 investment and technological change. Third, it is believed that occurrence of unfair competition, inadequate infrastructure, and 52
53 SMEs have advantages concerning flexibility compared to large development that have not been integrated (Hafsah, 2000). Limited 53
54 businesses. human resources is also a problem faced by small businesses 54
55 because most small businesses are traditionally grown and is 55
56 Kuncoro (2000) also states that small businesses and home a family business that is hereditary. These limitations include 56
57 businesses in Indonesia have played an important role in absorbing formal education as well as knowledge and skills, so that the 57
58 labor, increasing the number of business units and supporting management of small businesses are very practical and simple, 58

International Review of Management and Marketing | Vol 7 • Issue 2 • 2017 1


Aisyah et al.: Effect of Characteristics and Entrepreneurial Orientation towards Entrepreneurship Competence and Crafts and Arts SMEs Business
Performance in Makassar

1 making it difficult for optimal development in SMEs (Hafsah, achieve success, that the entrepreneurial competence is a realistic 1
2 2000). Problems often faced by small industries, among others view of how an entrepreneur running a business. 2
3 tight competition, raw material difficulties, lack of expertise and 3
4 technical skills, lack of managerial ability (Gaskill et al., 1993). Research Ahmad et al. (2010) on SME’s in Malaysia found 4
5 that entrepreneurial competence as a predictor of business 5
6 This research was conducted by selecting SMEs crafts in success. Results of research Man and Lau (2005) states that 6
7 Makassar, considering that SMEs crafts are unique compared the entrepreneurial competencies significant effect on business 7
8 to other MSME clusters, that the growth of MSMEs handicrafts success. The different findings shown in studies conducted Ardiana 8
9 is growing rapidly especially on the eve of religious festivals. et al. (2010) that the competence is refl ected by knowledge 9
10 Also, they are the perpetrators of MSMEs handicrafts in the no significant influence on the performance of SMEs. Such 10
11 city of Makassar in carrying out its business activities, is still evidence has similarities with the findings Baum et al. (2001) 11
12 very limited attention given by the government to them, both organizational skills and opportunities in the emerging expertise 12
13 regarding capital and management assistance and other aspects. as a representation of the general competence not signifi cant 13
14 The research looked at the potential for the development of influence on business growth. 14
15 SMEs handicrafts are quite interesting when looking at the data 15
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AQ2 the development of SMEs in the city of Makassar (Cooperatives Studies conducted by Kotey and Meredith (1997) analyzed the 16
17 and SME Makassar City, 2016). effect of the characteristics of the owner/manager (personal value) 17
18 on the performance, the findings provide evidence that business 18
19 The study of factors that are affecting the success of a small performance can be achieved if the owners/managers implement 19
20 business can be classified into external factors and internal factors. proactive strategies. The emotional connection owners/managers 20
21 The study focused on external factors reviewing the government’s with business performance at the stage of growth of different 21
22 role in creating an environment conducive to the growth of business, that when SME’s are in the stage of decline in business 22
23 small businesses, while the internal factors that determine the (decline), with entrepreneurial thinking (entrepreneurial minded) 23
24 success of business include variable organizational and individual owned by the owner/manager of the performance of SME’s to be 24
25 variables (individual characteristics). Variable organizations higher, the same thing also occurs when the SME’s that are in the 25
26 that have an impact on the performance of the organization growth stage (maturity) (De Zoysa and Herath, 2007). The study 26
27 include the organization’s resources, the company’s competency, of the behavior of entrepreneur (owner/manager) in Indonesia 27
28 organizational culture, and structure (Covin and Slevin, 1991). shows that the performance of SMEs determined by the ability 28
29 Individual variables can be seen from the entrepreneurial of management and business strategy, in which the ability of 29
30 orientation (entrepreneurial orientation) (Lumpkin and Dess, management and business strategy will be determined by the 30
31 2001), individual values (personal value) on personality traits entrepreneurial orientation of the owner/manager (Saints, 2009). 31 AQ2
32 (personality trait) (Boohene et al., 2008; Nimalathasan, 2008), 32
33 competence entrepreneurship (Man and Lau, 2005; Ahmad, et al., 2. THEORETICAL REVIEW 33
34 2010). 34
35 2.1. Enterpreneurship Charateristics 35
36 Several previous studies have revealed that the performance is Characteristics interpreted as temperament, character, traits 36
37 determined by the characteristics of the small business owner/ psychology, morals, or the character that distinguish one person 37
38 manager (De Zoysa and Herath, 2007; Nimalathasan, 2008). from another, the characteristics of entrepreneurs are attributes or 38
39 Conclusions of some research findings make it clear that the owner/ characteristics possessed by an entrepreneur, what distinguishes 39
40 manager is a key factor in business performance improvement. an entrepreneur with a non-entrepreneurial (Suryana and Bayu, 40
41 Competence entrepreneurship (entrepreneurial competency) 2011). Measurement of the characteristics of entrepreneurs in 41
42 describes the relationship between the attributes and behavior of this study, develop measures used (Sørensen and Chang, 2006), 42
43 the owners/managers of the business success (Man et al., 2002). which consists of 3 indicators, as follows: (1) Psychological 43
44 Ahmad et al. (2010) defines the entrepreneurial competence as factors, psychological factors are individual characteristics 44
45 an individual characteristic includes attitudes (attitudes) and (owner/manager) which include achievement needs (need for 45
46 behavior (behavior) that triggered the entrepreneurs to achieve and achievement). and motivation, (2) experience (experience), is 46
47 maintain success/business performance, business performance is the level of experience of the owners/managers in running the 47
48 determined from the relationship between attributes with behavior business, as well as experience in the business that is currently 48
49 through capabilities owners/managers behave in running efforts occupied, (3) the influence of family (family influence), the 49
50 and behavioral aspects of the representation of entrepreneurs to intensity of family influence in decision-making efforts, and the 50
51 implement the strategy in entrepreneurship. role of background family behind. 51
52 52
53 The study focuses on the competence factor entrepreneurs to 2.2. Entrepreneurial Orientation 53
54 analyze the effect of competence to business success is shown Entrepreneurial orientation or an overview on entrepreneurial 54
55 in research Kiggundu (2002) who found that the competence of activity in the company (Suhartini, 2007). Lumpkin and Dess 55
56 entrepreneurship (entrepreneurial competencies) is the whole of (1996. p. 136) equate the concept of entrepreneurial orientation of 56
57 the attributes of entrepreneurs that includes the attitudes, beliefs, the company with the entrepreneurial process of companies. The 57
58 knowledge, skills, abilities, personality, and directed behavior to application of the concept of entrepreneurial orientation contained 58

2 International Review of Management and Marketing | Vol 7 • Issue 2 • 2017


Aisyah et al.: Effect of Characteristics and Entrepreneurial Orientation towards Entrepreneurship Competence and Crafts and Arts SMEs Business
Performance in Makassar

1 in the strategy literature. He also explained that the entrepreneurial respondents the ability of the business to generate profits from 1
2 orientation refers to the processes, practices and decision time to time, (3) capital, capital is a respondent’s perception of 2
3 making activities. This study elaborates on the measurement of growth in venture capital from time to time. 3
4 entrepreneurial orientation (Weerawardena, 2003. p. 420) the 4
5 measurement, include; (1) autonomy is the desire of entrepreneurs 3. RESEARCH METHOD 5
6 strong to develop self-sufficiency, (2) proactive is the desire of 6
7 entrepreneurs to perform actions that precede the competitors and The study was conducted on 117 handicrafts SMEs in Makassar, 7
8 anticipate the competition, and (3) courage in taking the risk that with a return rate of 79.49%, or around 93 research instrument 8
9 the desire of entrepreneurs to dare to act in achieving business (questionnaire) by using a non-probability sampling technique are 9
10 objectives with conditions of uncertainty and risk. measured using Likert Scale points 1-5. This research conducted 10
11 in June to August 2016, this study uses variance-based technique 11
12 2.3. Entrepreneurship Competencies SEM partial least squares (SEMPLS) with 5.0 WarpPLS developed 12
13 The success or the failure of any business will be affected by by Kock (2010). 13
14 the skills and abilities (competencies) of owners/managers. 14
15 Understanding the role of entrepreneur gives a better insight 15
16 about what competencies needed by employers to ensure business 4. RESULTS 16
17 survival and success of the business (Ahmad et al., 2010. p. 67-75). 17
18 Entrepreneurial competence as a whole entrepreneur attributes 4.1. Goodness of Fit Model 18
19 such as attitudes, beliefs, knowledge, skills, abilities, personality, P-value for the average path coefficient and the R2 value average 19
20 skills and behavioral tendencies are needed to sustain and business (ARS) and the ARS must be <0.05 or significant meaning. 20
21 success (Kiggundu, 2002. p. 239). Additionally average full collinearity variance inflation factor 21
22 (VIF) as an indicator multikolinearitas should <5. Thus, it is 22
23 Measurement of entrepreneurial competence in this study shown in the Table 1. 23
24 developing Man’s measurement (2001) using 5 indicators, namely: 24
25 (1) Competence conceptual (conceptual competency), a conceptual The results showed that the test results suitability model (goodness 25
26 abilities that between one individual to individual differently (self- of fit model) have been met (Kock, 2011). 26
27 employment), which is reflected in the behavior businessman, 27
28 for example; decision skills, absorb and understand complex
4.2. Construct Validity and Reliability Test Results 28
29 Measurement models or models that outer construct validity 29
information, and to take risks, (2) take opportunities (opportunity
30 and reliability. This output is used investigators to report the 30
competency), the competence of the opportunities within the
31 results of testing the convergent validity of measuring instrument 31
competence relating to the recognition and develop market
32 (questionnaire). In Table 2 combined loading and cross-loadings 32
opportunities by entrepreneurs through various ways, (3) establish
33 are still construct validity konvergennya <0.70 (although the 33
a relationship (relationship competency), the competence of the
34 P < 0.05) and should be removed from the model, as shown in 34
relationship is competence related to the relationship between
35 Table 3. 35
individuals (entrepreneurs) with group interaction, for example;
36 building a context of cooperation and trust, using the contacts and 36
37 Testing results in Table 3 shows that the convergent validity 37
connections, persuasive skills, communication and interpersonal
38 criteria in model 1 have not been fulfilled and to model 2’ve 38
skills, (4) learning (learning competency), the competence of
39 fulfilled having already qualified, convergent validity of >0.70 39
learning is learning entrepreneurship gained from experience,
40 and significant (P < 0.05) so that model 2 is used for analysis, 40
the development of saman, training that resulted in someone has
41 (Hair et al., 2013). 41
work procedures so that businesses that do can be run efficiently,
42 (5) the ability of personal (Personal competency), the personal 42
43 4.3. Discriminant Validity of Test Results 43
ability is the ability of the entrepreneurs perceive and conducting
44 Discriminant validity test demonstrated through results output 44
business in a positive.
45 latent variable correlations. This output reports the correlation 45
46 coefficient between the latent variables. The criteria used are the 46
2.4. SMEs Business Performance
47 square roots (square roots) average variance extracted (AVE) is 47
Performance refers to the level of achievement or achievements
48 a column diagonal bracketed must be higher than the correlation 48
of the company within a Certain time period. The company’s
49 between latent variables in the same column (above or below) 49
performance is crucial in the development of the company.
50 (Sholihin and Dwi, 2013). 50
The company’s goal to continue to exist, gain, and can thrive
51 (growth) can be Achieved if the company has a good performance. 51
52 Performance (performance) of companies can be seen from the 52
53 Table 1: Fit test model 53
level of sales, the level of profitability, return on capital, the level AQ5
54 ??? Model 1 Model 2 54
of turnover and market share were achieved (Jauch and Glueck, APC 0.272, P=0.001 0.281, P=0.001 55
55 1998). Performance measuring using measurement (Munizu, 2010) ARS 0.276, P=0.001 0.207, P=0.009
56 the which consists of 3 indicators: (1) Sales, sales are respondent’s 56
AFVIF 1.285<5 1.203<5
57 perceptions of the performance achieved by measuring the sales 57
Source: Data processed (SEMPLS, 2016), APC: Average path coefficient, ARS: Average
58 growth from year to year, (2) profits, profit is the perception of R value average, AFVIF: Average full collinearity variance inflation factor
2 58

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Aisyah et al.: Effect of Characteristics and Entrepreneurial Orientation towards Entrepreneurship Competence and Crafts and Arts SMEs Business
Performance in Makassar

1 Table 2: Combined loading and cross-loadings (model 1) 1


2
AQ5 ??? Karakte Orient Kompet Bisnis Type (a) SE P 2
3 KW1 0.876 −0.062 0.170 0.046 Reflect 0.081 <0.001 3
4 KW2 0.821 0.098 −0.083 0.042 Reflect 0.082 <0.001 4
5 KW3 0.427 −0.062 −0.188 −0.175 Reflect 0.092 <0.001 5
6 OW1 −0.005 0.665 0.269 −0.395 Reflect 0.086 <0.001 6
OW2 0.037 0.911 −0.036 0.093 Reflect 0.080 <0.001
7 OW3 −0.033 0.919 −0.159 0.193 Reflect 0.080 <0.001 7
8 KK1 0.121 −0.017 0.689 0.100 Reflect 0.085 <0.001 8
9 KK2 −0.030 0.294 0.654 0.220 Reflect 0.086 <0.001 9
10 KK3 −0.205 0.003 0.805 0.015 Reflect 0.083 <0.001 10
11 KK4 −0.186 −0.164 0.687 −0.372 Reflect 0.085 <0.001 11
KK5 0.314 −0.097 0.731 0.042 Reflect 0.084 <0.001
12 12
KB1 −0.179 0.247 −0.391 0.725 Reflect 0.085 <0.001
13 KB2 0.038 −0.165 0.054 0.925 Reflect 0.080 <0.001 13
14 KB3 0.115 −0.032 0.281 0.828 Reflect 0.082 <0.001 14
15 Source: Data processed (SEMPLS, 2016)
15
16 16
17 Table 3: Combined loading and cross-loadings (model 2) 17
18 18
AQ5 ??? Karakte Orient Kompet Bisnis Type (a) SE P
19 KW1 0.879 −0.011 0.125 −0.018 Reflect 0.081 <0.001 19
20 KW2 0.879 0.011 −0.125 0.018 Reflect 0.081 <0.001 20
21 OW2 0.041 0.955 0.040 −0.060 Reflect 0.079 <0.001 21
22 OW3 −0.041 0.955 −0.040 0.060 Reflect 0.079 <0.001 22
23 KK3 −0.191 0.159 0.838 0.057 Reflect 0.082 <0.001 23
KK4 −0.119 −0.145 0.780 −0.206 Reflect 0.083 <0.001
24 KK5 0.332 −0.026 0.761 0.148 Reflect 0.084 <0.001
24
25 KB1 −0.210 0.238 −0.338 0.725 Reflect 0.085 <0.001 25
26 KB2 0.034 −0.159 0.053 0.925 Reflect 0.080 <0.001 26
27 KB3 0.146 −0.031 0.237 0.828 Reflect 0.082 <0.001 27
28 Source: Data processed (SEMPLS, 2016) 28
29 29
30 The Table 4 shows that the discriminant validity have been met, Table 4: Correlations among L versus with square roots of 30
31 which can be seen from the root of AVE on the diagonal column is average (model 2) 31
32 greater than the correlation between constructs in the same column. ??? Karakte Orient Kompet Bisnis 32
AQ5
33 The results of this cross-loading an indication of fulfillment of the Karakte (0.879) −0.118 −0.343 −0.239 33
34 criteria for the validity diskriminant. Orient −0.118 (0.955) 0.253 0.361 34
35 Kompet −0.343 0.253 (0.794) 0.111 35
36 4.4. Construct Reliability Test Results Bisnis −0.239 0.361 0.111 (0.830) 36
37 Results of testing the reliability of the construct can be shown Source: Data processed (SEMPLS, 2016) 37
38 by output coeffisient latent variable, as in the following Table 5. 38
39 Table 5: Latent variable output coefficient (model 2) 39
40 The coefficient of determination (R ) that indicates what percentage
2
??? Karakte Orient Kompet Bisnis 40
AQ5
41 of the variance of the construct of an endogenous/criterion can be R2 0.215 0.199 41
42 explained by the construct of the hypothesized effect. The higher Adjusted R2 0.198 0.172 42
43 the R2 shows a good model. From the results of Latent variable Composite reliability 0.872 0.954 0.836 0.868 43
44 Cronbach’s alpha 0.707 0.903 0.706 0.769 44
output shows R2 coefficient entrepreneurial competence by 0215 Average variable extract 0.773 0.911 0.630 0.689
45 means that entrepreneurial competence variance can be explained AFVIF 1.191 1.216 1.199 1.207
45
46 by 21.50% by the variance of the characteristics of entrepreneurs, Q2 0.228 0.273 46
47 entrepreneurial orientation, and business performance, while the Minimum −1.915 −2.390 −2.517 −3.073 47
48 R2 construct SME business performance for 0199 shows that the Maximum 2.496 1.575 1.689 2.027 48
49 Median −0.650 0.253 0.132 0.271 49
variance of performance business can be explained variance of
50 modes −0.650 0.253 −1.193 0.449 50
19.90% by the entrepreneurial competence. Skewness 0.487 −0.594 −0.120 −1.382
51 Excess kurtosis −0.359 0.005 −0.746 2.506
51
52 Reliability composite value and Cronbach alpha reliability have 52
Source: Data processed (SEMPLS, 2016), AFVIF: Average full collinearity variance
53 qualified that is >0.70. The output above also shows that the inflation factor 53
54 AVE >0.50, which means qualified convergent validity (Sholihin 54
55 and Dwi, 2013). Full collinearity VIF is full of collinearity when can cause the results to be biased. Full collinearity VIF in 55
56 test results which include vertical and lateral multicollinearity. this study was lower than 3.3 it indicates that the model is free 56
57 Colinearity lateral is colinearity between the latent variables from the problem of colinearity vertical, lateral, and common 57
58 predictor with the criterion. Colinearity lateral often overlooked method bias. (Kock, 2013). Q2 is a measure of non-parametric 58

4 International Review of Management and Marketing | Vol 7 • Issue 2 • 2017


Aisyah et al.: Effect of Characteristics and Entrepreneurial Orientation towards Entrepreneurship Competence and Crafts and Arts SMEs Business
Performance in Makassar

1 obtained through the algorithm blindfolding and used to study significant effect on entrepreneurial competence apart of it can be 1
2 the predictive validity or relevance of a set of latent predictor accepted or supported by empirical facts. 2
3 variables on criterion variables. The output showed Q2 is greater 3
4 than zero, namely 0228 and 0273 means that the estimated Low psychological factors, which are psychological factors (owner/ 4
5 model shows a good predictive validity. Overall, the results manager) and is characterized by the desire of owners/managers 5
6 of the measurement model (outer model) refl ective construct to excel into the factors causing low but the entrepreneurial 6
7 have been qualified. characteristics significantly impact the competency of the owners/ 7
8 managers to take advantage of its business opportunities. These 8
9 4.5. Testing Model and Hypothesis Testing results support a part of Zimmerer and Scarborough (1998) 9
10 Results of testing of models and hypothesis testing shows that, statement that the characteristics of a successful entrepreneur, 10
11 among the 5 causality between variables (direct influence) were including Proactive, which took the initiative and resolute in 11
12 built in this model, there is one between who reject the hypothesis taking action and decisions. Oriented to the achievement reflected 12
13 that the influence of entrepreneurial competencies to business in the views and actions against the odds, orientation efficiency, 13
14 performance P = 0.060> 0.05 (Figure 1 and Table 6). the quality of work, planning, and prioritizing supervision. Has a 14
15 strong commitment to others, for example in entering into contracts 15
16 4.6. H1: Characteristics Influence of Entrepreneurial and cooperative relations. 16
17 Competencies 17
18 Effect of entrepreneurial characteristics of the entrepreneurial 4.7. H2: Effect of Entrepreneurial Orientation Towards 18
19 competence can be demonstrated by a standardized path coefficient Entrepreneurial Competence 19
20 (beta/a standardized path coefficient) amounting −0359 negative Effect of entrepreneurial orientation towards entrepreneurial 20
21 directions. Beta/a standardized path coefficient is negative explain competence can be demonstrated by a standardized path 21
22 that the low entrepreneurial characteristics tend to improve the coefficient (beta/a standardized path coefficient) of 0255 with a 22
23 entrepreneurial competence. Then it can be proved with a P = 0.001 positive direction. Beta/a standardized path coefficient is positive, 23
24 <0.05. Hypothesis testing results prove that the characteristics of explaining that the high entrepreneurial orientation owned owner/ 24
25 the entrepreneur a significant negative effect on entrepreneurial manager tends to increase entrepreneurial competence. Then it 25
26 competencies, it can be concluded that the characteristics of can be proved with a P = 0.005 < 0.05. Hypothesis testing results 26
27 entrepreneurs who are low in the opposite direction but it is prove that the orientation entrepreneurial positive and significant 27
28 significant to improving the entrepreneurial competencies So effect on entrepreneurial competencies, it can be concluded that the 28
29 the hypothesis H1 characteristics of entrepreneurial positive and orientation of entrepreneurial high unidirectional and significant 29
30 30
31 Figure 1: Hypothesis testing 31
32 32
33 33
34 34
35 35
36 36
37 37
38 38
39 39
40 40
41 41
42 42
43 43
44 44
45 45
46 46
47 47
48 48
49 49
Source: Data processed (SEMPLS, 2016) AQ3
50 50
51 51
52 Table 6: The path coefficients and P value (model 2) 52
53 Path coefficients P 53
54 Karakte Orient Kompet Bisnis Karakte Orient Kompet Bisnis 54
55 Karakte 55
Orient
56 56
Kompet −0.359 0.255 <0.001 0.005
57 Bisnis −0.343 0.293 −0.156 <0.001 0.001 0.060 57
58 58
Source: Data processed (SEMPLS, 2016)

International Review of Management and Marketing | Vol 7 • Issue 2 • 2017 5


Aisyah et al.: Effect of Characteristics and Entrepreneurial Orientation towards Entrepreneurship Competence and Crafts and Arts SMEs Business
Performance in Makassar

1 impact on improving the competence of entrepreneurship So that standardized path coefficient) of 0293 with a positive direction. 1
2 hypothesis H2 orientation entrepreneurial positive and significant Beta/a standardized path coefficient is positive, explaining that 2
3 effect on entrepreneurial competence can be accepted or supported the high entrepreneurial orientation owned owner/manager tends 3
4 by empirical facts. to improve business performance. Then it can be proved with 4
5 a P = 0.001 < 0.05. Hypothesis testing results prove that the 5
6 The high courage owner/managers in taking risks which are orientation entrepreneurial positive and significant effect on the 6
7 characterized by the uncertainty of the business environment to be a performance of the business, it can be concluded that the orientation 7
8 factor causing the high entrepreneurial orientation which impacted of entrepreneurial high unidirectional and significant impact on 8
9 significantly impact the competency of the owners/managers business performance improvement, so the hypothesis H4 orientation 9
10 indicated through personal abilities possessed entrepreneurs entrepreneurial positive and significant impact on business 10
11 perceive and conducting business in a positive way. This study performance can be accepted or supported by the facts empirical. 11
12 supports the statement Weerawardena (2003. p. 424) that someone’s 12
13 proactivity in trying to excel is another indication of the application The high autonomy of the owners/managers are entrepreneurs 13
14 on entrepreneurial orientation in private. Similarly, when a company strong desire to develop self-sufficiency in trying to be a factor 14
15 emphasizes proactivity in its business activities, the company has causing the high entrepreneurial orientation which impacted 15
16 been doing entrepreneurial activities that will automatically boost significantly affect business performance demonstrated by the 16
17 the high performance. Companies with high entrepreneurial activity performance achieved through sales growth from year to year. 17
18 means visible from the high spirit that never goes out because of This study supports the findings of previous investigators, that 18
19 the barriers, obstacles, and challenges. Active and dynamic attitude a person’s desire in entrepreneurship due factorization of pull 19
20 is the key word (Papasolomou-Doukakis, 2002). in the form of the possibility of gain (financially) is higher, the 20
21 desire to acquire the responsibility of higher as well as control 21
22 4.8. H3: Influence of the Entrepreneurs Characteristics over the decision-making process and the desire to improve the 22
23 to Business Performance ability of the individual. Meanwhile, the push factor is more 23
24 Entrepreneurial characteristics influence on business performance about self-motivated employees to leave the place of work and 24
25 can be demonstrated by a standardized path coefficient (beta/a start a new business or things that are ‘pressing’ for someone to 25
26 standardized path coefficient) amounting −0343 negative start entrepreneurship. Employers who have more motivation 26
27 directions. Beta/a standardized path coefficient is negative explain to push that intend to sell or even close down. The causes vary, 27
28 that the lack entrepreneurial characteristics owned by the owner/ ranging from poor business performance to the desire for a break 28
29 manager tend to improve business performance. Then it can from business activities. Thus the success of the business is very 29
30 be proved with a P = 0.001 < 0.05. Hypothesis testing results dependent on the level of motivation of entrepreneurs. In other 30
31 prove that the characteristics of the entrepreneur a significant words, entrepreneurial orientation determines the performance of 31
32 negative effect on the performance of the business, it can be the business (Glancey et al., 1998). 32
33 concluded that the characteristics of entrepreneurs who are low 33
34 in the opposite direction and significant impact on business 4.10. H5: Effect of Entrepreneurial Competence to 34
35 performance improvement So that hypothesis H3 characteristics Business Performance 35
36 of entrepreneurial positive and significant impact on business Effect of entrepreneurial competence to business performance 36
37 performance that some part can be accepted or supported by can be demonstrated by a standardized path coefficient (beta/a 37
38 empirical facts. standardized path coefficient) amounting −0156 negative 38
39 directions. Beta/a standardized path coefficient is negative explain 39
40 Low levels of experience of the owners/managers in running the that the lack of entrepreneurial competencies possessed the 40
41 business, as well as experience in the business that is currently owners/managers tend to slow down their business performance. 41
42 occupied, became the cause of the characteristics of entrepreneurs, Then it can be proved with a P = 0.060 < 0.05. Hypothesis 42
43 but the impact on the real impact on business performance, testing results prove that the entrepreneurial competencies 43
44 demonstrated by the growth of venture capital owned by the negative and not significant to the performance of the business, 44
45 owner/manager from time to time. This study supports part of the it can be concluded that the entrepreneurial competence is low 45
46 findings by Kotey and Meredith (1997) that business performance in the opposite direction, and no significant effect on business 46
47 can be achieved if the owners/managers implement proactive performance So that hypothesis H5 entrepreneurial competencies 47
48 strategies. The emotional connection owners/managers with positive and significant effect on the performance of the business 48
49 business performance at the stage of growth of different business, cannot be accepted or supported by empirical facts. 49
50 that when SME’s are in the stage of decline in business (decline), 50
51 with entrepreneurial thinking (entrepreneurial minded) owned by Low ability conceptual individual to another individual is different, 51
52 the owner/manager of the performance of SME’S becomes higher, which is reflected in the behaviour of employers, for example; 52
53 the same thing also occur. decision skills, absorb and understand complex information, and 53
54 risk-taking resulted in a low capacity of the businesses owned by 54
55 4.9. H4: Effect of Entrepreneurial Orientation on the owners and managers to generate profits over time. 55
56 Business Performance 56
57 Effect of entrepreneurial orientation on business performance This study rejected the findings of Ahmad et al. (2010) that the 57
58 can be demonstrated by a standardized path coefficient 1 (beta/a entrepreneurial competence as a predictor of business success. 58

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Aisyah et al.: Effect of Characteristics and Entrepreneurial Orientation towards Entrepreneurship Competence and Crafts and Arts SMEs Business
Performance in Makassar

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25 AQ1: Kindly check author name 25
26 AQ2: Kindly provide these author details in the reference list 26
27 AQ3: Kindly cite reference in the text part 27
28 AQ4: Kindly provide volume number 28
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