Entrepreneurial Traits, Competency, Performance, and Sustainability of Micro-Enterprises in Kelantan, Malaysia

Introduction

Small and medium enterprises (SMEs) provide job and self-employment opportunities for many households (Kongolo 2010; Simpson, Taylor, & Barker 2004). Micro and small enterprises also facilitate technological capability building, diffusion of innovations, and capital mobilization (Nabiswa & Mukwa, 2017). For instance, Al-Mamun, Nawi, and Zainol (2016) highlighted that the activities of micro-enterprises can beef up the national development of Malaysia. A total of 1.3 million individuals (9.7% of the total workforce) are actively engaged in micro-economic. According to Aziz, Halim, and Wahid (2017), Malaysian micro-enterprises contributed 75 percent to the total SMEs with less than five full-time employees and an annual turnover of approximately RM 300,000. They are involved in extremely small business activities such as food and burger stalls, night market vendors, grocery stores, construction, and service contractors.

Individuals should possess unique abilities and personality traits to achieve organizational success (Beattie, 2016; Gartner, 1990). To understand the underlying capabilities and traits, it is crucial for researchers to look into the relationship between entrepreneurs and organizational success (Driessen & Zwart, 2007), because the value creation process of small firms is highly reliant on the capabilities of entrepreneurs (Grant, 1991). Thus, the Babson’s survey considered entrepreneurial traits and characteristics as main focuses (Gartner, 1990).

Entrepreneurial competencies are required by owners to perform entrepreneurial activities in small and new enterprises (Mitchelmore & Rowley, 2010). Al-Mamun et al. (2016) defined entrepreneurial competencies as the ability to complete a task with available resources to accomplish micro-enterprise performance. For example, Bird (1995) confirmed a relationship between entrepreneurial competencies and the sustainability of enterprises. Particularly, an entrepreneur’s competencies can enhance his or her ability to manage an enterprise (Man, Lau, & Chan, 2002) in order to maintain firm performance (Gerli, Gubitta, & Tognazzo, 2011). Mitchelmore and Rowley (2013) contended that entrepreneurial competencies can facilitate enterprise performance, and the economic growth and development.

Nevertheless, several limitations are discovered to slow down the growth of micro-enterprises (Lateh, Hussain, & Halim, 2017). In Malaysia, human factor is one of the major challenges local micro-enterprises need to overcome (Wahid, Aziz, & Halim, 2017). Specifically, the influence of entrepreneurial traits and competencies on the firm performance and sustainability remains unexplored (Gerli et al., 2011). Moreover, salient entrepreneurial traits such as locus of control, tolerance of ambiguity, persistence, visionary, and resilience have been under-researched. To address this limitation, this study examined the effect of these entrepreneurial traits on entrepreneurial competencies, enterprise performance, and sustainability of micro-enterprises in Kelantan, Malaysia.