THE EFFECT OF ENTREPRENEURIAL ORIENTATION, ORGANIZATIONAL LEARNING AND INNOVATION PERFORMANCE ON SMES FIRM PERFORMANCE IN ALGERIA

Abstract

Algerian SMEs play an important role in economic development and income growth. However, increasing business competition has placed SMEs in a vulnerable position due to their limited resources. Undoubtedly, their success in responding to the challenges of the business environment depends, in great part, on their strategy for engaging in entrepreneurial behaviors. The main purpose of this study was to investigate the mediating effect of organizational learning (OL) and Innovation performance (IP) on the relationships between Entrepreneurial Orientation (EO) and the firm performance (FP). However, this study contributed to the entrepreneurial orientation (EO)–performance literature by offering a wider picture that includes two intermediate steps: organizational learning (OL) and innovation performance. This study also provided an explanation of firm performance differences by focusing on EO. Due to the acknowledged importance of OL as a critical variable for strategy implementation, this study integrated many theories such as the contingency theory and resource-based view theory and get inspired by the congruence model to study the effect of organizational learning (OL) on successful strategy implementation. This quantitative study presents and discusses empirical findings from a survey of a total of 500 owner/managers of SMEs in Algeria, 258 questionnaires were returned giving a response rate of 51.6 percent, which is relatively good. In fact, this study followed a rigorous process to establish the construct validity of the measure by employing EFA as well as CFA using both SPSS and PLS- SEM.