Microenterprises in Malaysia: a preliminary study of the factors for management success

  • J. Mark Munoz
  • Dianne H. B. WelshEmail author
  • Sow Hup Chan
  • Peter V. Raven


Microenterprises continue to proliferate in countries around the globe, creating jobs while improving the overall economic outlook of countries. A preliminary study of 151 microenterprises in Malaysia found performance and Entrepreneurial Orientation were significantly affected by key management activities. Performance was influenced little, if any, by outside financing or government support. Moderate support was found for the relationship between managerial capabilities and sales and profit, securing finances, and government financing. The findings indicate that management of the microenterprise is a key contributor to business success. Management training programs should be implemented to assist microenterprises. Personalized entrepreneurial training for groups must be developed to reach the multicultural and multi-ethnic Malaysian population. This study has major implications for government officials, non-government organizations, and policy-makers as they seek viable, sustainable models for microenterprise expansion in emerging economies. Information technology may offer solutions to access issues. Limitations and implications for future studies are discussed.


Entrepreneurial Orientation Malaysia Management success Microenterprises Performance 


  1. Abdul Jamak, A. B. S., Mahari, R., Saleh, R., & Abdullah, A. (2010). The micro business enterprise of Orang Asli Aborigines in Pahang, Malaysia. Paper presented at Oxford Business and Economics Conference Program, St. Hugh’s College, Oxford University, UK.Google Scholar
  2. Abdullah, M. A., & Manan, S. K. (2010). Adequacy of financial facilities for small-medium businesses: empirical findings from Malaysia. International Review of Business Research Papers, 6(4), 535–548.Google Scholar
  3. Aspen Institute (2009). The financing products. Field Forum, 2. Accessed 26 May 2009.
  4. Awang, A., Ahmad, Z. A., Asghar, A. R. S., Subari, K. A., & Kassim, S. A. (2011). Firm entrepreneurial orientation and knowledge/networking of agro-based enterprises in Malaysia: the role of technology and strategy. African Journal of Business Management, 5(22), 9684–9704.Google Scholar
  5. Bates, T., & Servon, L. J. (1996). Why loans won’t work for the poor. Inc, 18(5), 27–28.Google Scholar
  6. Benus, J. M., Lee, T. R., & Olvera, R. (1995). Self-employed programs: A new reemployment strategy. Final report on the UI self-employment demonstration. Unemployment insurance occasional paper 95–4. Washington, D.C: Department of Labor Employment and Training Administration Unemployment Insurance Service. (ERIC Document Reproduction Service No. ED386572).Google Scholar
  7. Brockhaus, R. H. (1982). The psychology of the entrepreneur. In C. A. Kent, D. L. Sexton, & K. H. Vesper (Eds.), Encyclopedia of entrepreneurship (pp. 39–57). New Jersey: Prentice Hall.Google Scholar
  8. Brüderl, J., & Preisendörfer, P. (1998). Network support and the success of newly founded businesses. Small Business Economics, 10(3), 213–225.CrossRefGoogle Scholar
  9. Bruno, A. V., Leidecker, J., & Harder, J. (1987). Why firms fail. Business Horizons, 30(2), 50–58.CrossRefGoogle Scholar
  10. Business Wire (2009). AEO Calls for Full Funding of PRIME. Accessed 29 May 2009.
  11. Bygrave, W. D., & Hofer, C. W. (1991). Theorizing about entrepreneurship. Entrepreneurship: Theory and Practice, 16, 13–22.Google Scholar
  12. Carbonara, P. (1997). Here’s a business plan to fight poverty. Fast Company, 12, 58–60.Google Scholar
  13. Chan, S. H. (2010). Microfinance–microenterprise relationship: The Malaysian growth experience. In M. Munoz (Ed.), Micro-enterprises: Concept and cases (pp. 180–192). Cheltenham: Edward Elgar Publishers.Google Scholar
  14. Che Rose, R., Kumar, N., & Yen, L. L. (2006). The dynamics of entrepreneurs’ success factors in influencing venture growth. Journal of Asia Entrepreneurship and Sustainability, 2(2), 119–141.Google Scholar
  15. Chee, P. L. (1984). Export-led growth with particular reference to small and medium industry: Experiences of Malaysia. Paper Presented at APO Symposium on export-oriented small industry, Lahore.Google Scholar
  16. Chong, F. (2010). Evaluating the credit management of micro-enterprises. WSEAS Transactions on Business and Economics, 2(7), 149–159.Google Scholar
  17. Clark, P., Kays, A. J., Zandniapour, L., Soto, E., & Doyle, K. (1999). Microenterprise and the poor. Findings from the Self-Employment Learning Project five-year study of microentrepreneurs. Washington D.C.: The Aspen Institute.Google Scholar
  18. Covin, J. G., & Slevin, D. P. (1986). The development and testing of an organizational-level entrepreneurship scale. Frontiers of entrepreneurship research. Boston: Babson College.Google Scholar
  19. Covin, J. G., & Slevin, D. (1989). Strategic management of small firms in hostile and benign environments. Strategic Management Journal, 10(1), 75–89.CrossRefGoogle Scholar
  20. Covin, J. G., Green, K. M., & Slevin, D. P. (2006). Strategic process effects on the entrepreneurial orientation-sales growth rate relationship. Entrepreneurship: Theory and Practice, 30(1), 57–81.Google Scholar
  21. Cunningham, F. (1998). How to avoid going bust. Management Today, August, 70–72.Google Scholar
  22. De Soto, H. (1989). The other path: The invisible revolution in the third world. New York: Harper & Row.Google Scholar
  23. Dorfling, T. (2001). Enhancing small, medium and microenterprise support provision: The case of Port Elizabeth, South Africa. Unpublished MA Dissertation, University of the Witwatersrand, Johannesburg.Google Scholar
  24. Dumas, C. (1999). Training for microenterprise creation: the case of the center for women and enterprise. International Journal of Economic Development, 1(2), 201–220.Google Scholar
  25. Dumas, C. (2001). Evaluating the outcomes of microenterprise training for low income women: a case study. Journal of Developmental Entrepreneurship, 6(2), 97–128.Google Scholar
  26. Durkin, M., & McGowan, P. (2001). “Net effect”—views from the periphery: exploring the role and importance of the internet on marketing activity in entrepreneurial firms. Irish Marketing Review, 14(1), 15–25.Google Scholar
  27. Easley, R. W., Madden, C. S., & Dunn, M. G. (2000). Conducting marketing science: the role of replication in the research process. Journal of Business Research, 48, 83–92.CrossRefGoogle Scholar
  28. Edgcomb, E. L. (2002). What makes for effective microenterprise training? Journal of Microfinance, 4(1), 99–114.Google Scholar
  29. Eversole, R. (2004). Change makers? Women’s microenterprises in a Bolivian city. Gender, Work & Organization, 11(2), 123–142.CrossRefGoogle Scholar
  30. Fong, C. O. (1989). Plan of action for development of small and medium industries. Report for Ministry of National and Rural Development.Google Scholar
  31. Frank, H., Kessler, A., & Fink, M. (2010). Entrepreneurial orientation and business performance—a replication study. Schmalenbach Business Review, 62, 175–198.Google Scholar
  32. Goldmark, L. (2001). Microenterprise development in Latin America: towards a new flexibility. Journal of Socio-Economics, 30(2), 145–149.CrossRefGoogle Scholar
  33. Goll, I., & Rasheed, A. (2005). The relationships between top management demographic characteristics, rational decision making, environmental munificence, and firm performance. Organization Studies, 26(7), 999–1023.CrossRefGoogle Scholar
  34. Greenbank, P. (2001). Objective setting in the micro-business. International Journal of Entrepreneurial Behaviour and Research, 7(3), 108–127.CrossRefGoogle Scholar
  35. Hall, G., & Wahab, K. A. (2007). Influences on the survival and failure of small firms in Malaysia. International Journal of Business and Globalisation, 1(1), 88–106.CrossRefGoogle Scholar
  36. Herbert, T. T., & Brazeal, D. V. (1998). The future of the corporation: Corporate entrepreneurship on the fly. Proceedings of the United States Association for Small Business and Entrepreneurship, 12th Annual National Conference.Google Scholar
  37. Himes, C., & Servon, L. J. (1998). Measuring client success: An evaluation of ACCION’s impact on microenterprising in the United States. U.S. Division of ACCION International. The U.S. Issues Series, Document No. 2.Google Scholar
  38. Ho, T. S., & Koh, H. C. (1992). Differences in psychological characteristics between entrepreneurially inclined and non-entrepreneurially inclined accounting graduates in Singapore. Entrepreneurship, Innovation and Change: An International Journal, 1(11), 243–254.Google Scholar
  39. Hornsby, J. S., Kuratko, D. F., & Zahra, S. A. (2002). Middle manager’s perception of the internal environment of corporate entrepreneurship: assessing a measurement scale. Journal of Business Venturing, 17(3), 189–290.CrossRefGoogle Scholar
  40. Hubbard, R., & Vetter, D. E. (1996). An empirical comparison of published replication research in accounting, economics, finance, management, and marketing. Journal of Business Research, 35, 153–164.CrossRefGoogle Scholar
  41. Hughes, M., & Morgan, R. E. (2007). Deconstructing the relationship between entrepreneurial orientation and business performance at the embryonic stage of firm growth. Industrial Marketing Management, 36(5), 651–661.CrossRefGoogle Scholar
  42. Hult, G. T. M., Hurley, R. F., & Knight, G. A. (2004). Innovativeness: its antecedents and impact on business performance. Industrial Marketing Management, 33(5), 429–438.CrossRefGoogle Scholar
  43. Julian, C. C., & Ahmed, Z. U. (2009). Doing business in Malaysia. Thunderbird International Business Review, 51(1), 53–69.CrossRefGoogle Scholar
  44. Kader, R. A., Mohamad, M. R., & Ibrahim, A. A. C. (2009). Success factors for small rural entrepreneurs under the one-district-one-industry programme in Malaysia. Contemporary Management Research, 5(2), 147–162.Google Scholar
  45. Kallerberg, A. L., & Leicht, K. T. (1991). Gender and organizational performance: determinants of small business survival and success. Academy of Management Journal, 34(1), 136–161.CrossRefGoogle Scholar
  46. Kibria, N., Lee, S., & Olvera, R. (2003). Peer lending groups and success: a case study of working capital. Journal of Developmental Entrepreneurship, 8(1), 41–58.Google Scholar
  47. Kiggundu, M. N. (2002). Entrepreneurs and entrepreneurship in Africa: what is known and what needs to be done. Journal of Developmental Entrepreneurship, 7(3), 239–258.Google Scholar
  48. Kirkpatrick, C., & Hulme, D. (2001). Impact assessment: An overview. EDIAS, Enterprise Development Impact Assessment Information Service. Accessed 29 May 2012.
  49. Knight, G. (1997). Cross-cultural reliability and validity of a scale to measure firm Entrepreneurial Orientation. Journal of Business Venturing, 12, 213–225.CrossRefGoogle Scholar
  50. Kotey, B., & Meredith, G. G. (1997). Relationships among owner/manager personal values, business strategies, and enterprise performance. Journal of Small Business Management, 35(2), 37–64.Google Scholar
  51. Kraut, R. W., & Grambsch, P. (1987). Home-based white collar employment: lessons from the 1980 Census. Social Forces, 66(2), 410–426.CrossRefGoogle Scholar
  52. Kuratko, D. F., Montagno, R. V., & Hornsby, J. S. (1990). Developing an intrapreneurial assessment instrument for effective corporate entrepreneurial environment. Strategic Management Journal, 11, 49–58.Google Scholar
  53. Larson, D. W., & Shaw, T. K. (2001). Issues of microenterprise and agricultural growth: do opportunities exist through forward and backward linkages? Journal of Developmental Entrepreneurship, 6(3), 203–220.Google Scholar
  54. Lee, E. (2008). Do good, get rich. Black Enterprise, 38(10), 72–75.Google Scholar
  55. Li-Murray, T. (1998). Constituting capitalist culture. In R. Hefner (Ed.), Market cultures: Society and morality in the New Asian capitalism (pp. 147–172). Boulder: Westview Press.Google Scholar
  56. Longenecker, C. O., Simonetti, J. L., & Sharkey, T. W. (1999). Why organizations fail: the view from the front-line. Management Decision, 37(6), 503–513.CrossRefGoogle Scholar
  57. Lubatkin, M., Ling, H. Y., & Veiga, J. F. (2006). Ambidexterity and performance in small- to medium-sized firms: the pivotal role of top management team behavioral integration. Journal of Management, 32(5), 646–672.CrossRefGoogle Scholar
  58. Lumpkin, G. T., & Dess, G. G. (1996). Clarifying the entrepreneurial orientation construct and linking it to performance. Academy of Management Review, 21(1), 135–172.Google Scholar
  59. Lumpkin, G. T., & Dess, G. G. (2001). Linking two dimensions of entrepreneurial orientation to firm performance: the moderating role of environment and industry life cycle. Journal of Business Venturing, 16(5), 429–451.CrossRefGoogle Scholar
  60. Lussiers, R. N., & Pfeifer, S. (2001). A crossnational prediction model for business success. Journal of Small Business Management, 39(3), 228–239.CrossRefGoogle Scholar
  61. Malaysia Business Forecast Report. (2010). Chapter 2: Economic outlook (pp. 19–28). London: Business Monitor International.Google Scholar
  62. Mambula, C. J. (2004). Relating external support, business growth and creating strategies for survival: a comparative case study analyses of manufacturing firms and entrepreneurs. Small Business Economics, 22(2), 83–109.CrossRefGoogle Scholar
  63. Masuo, D., Fong, G., Yanagida, J., & Cabal, C. (2001). Factors associated with business and family success: a comparison of single manager and dual manager family business households. Journal of Family and Economic Issues, 22(1), 55–73.CrossRefGoogle Scholar
  64. McClelland, D. C. (1961). The achieving society. Princeton: Van Nostrand.CrossRefGoogle Scholar
  65. Michel, J., & Hambrick, D. (1992). Diversification posture and top management team characteristics. Academy of Management Journal, 35(1), 9–37.CrossRefGoogle Scholar
  66. Miehlbradt, A. O. (2002). Assessing markets for business development services: What have we learned so far? SEED Working Paper No. 28, International Labour Office, Geneva.Google Scholar
  67. Miller, D., & Friesen, P. H. (1982). Innovation in conservative and entrepreneurial firms: two models of strategic momentum. Strategic Management Journal, 3(1), 1–25.CrossRefGoogle Scholar
  68. Mohayidin, M. G., & Hamid, S. A. (1988). Small and medium scale enterprises in Malaysia. Kuala Lumpur: Universiti Pertanian Malaysia.Google Scholar
  69. Monroe, S., Allen, K., & Price, C. (1995). The impact of entrepreneurial training programs on transitioning workers: The public policy implications. Frontiers of Entrepreneurship Research. Accessed 29 May 2009.
  70. Naman, J. L., & Slevin, D. P. (1993). Entrepreneurship and the concept of fit: a model and empirical tests. Strategic Management Journal, 14, 137–153.CrossRefGoogle Scholar
  71. O’Neill, H. M., & Duker, J. (1986). Survival and failure in small business. Journal of Small Business Management, 24(1), 30–37.Google Scholar
  72. Panjaitan-Dioadisuryo, R., & Cloud, K. (1999). Gender, self-employment and microcredit programs: an Indonesian case study. Quarterly Review of Economics and Finance, 39, 769–779.CrossRefGoogle Scholar
  73. Peteraf, M. (1993). The cornerstones of competitive advantage: a resource-based view. Strategic Management Journal, 14, 179–191.CrossRefGoogle Scholar
  74. Piore, M. J., & Sabel, C. (1984). The second industrial divide. New York: Basic Books.Google Scholar
  75. Porter, M. E. (1980). Competitive strategy. NewYork: Free Press.Google Scholar
  76. Prahalad, C. K., & Hamel, G. (1990). The core competence of the corporation. Harvard Business Review, 68(3), 79–91.Google Scholar
  77. Putnam, R. (1993). The prosperous community: social capital and economic growth. American Prospect, 35–42.Google Scholar
  78. Robinson, P. B., & Sexton, E. A. (1994). The effect of education and experience on self-employment success. Journal of Business Venturing, 9(2), 141–156.CrossRefGoogle Scholar
  79. Rogerson, C. M. (2004). The impact of the South African government’s SMME programmes: a ten-year review (1994–2003). Development South Africa, 21(5), 765–784.CrossRefGoogle Scholar
  80. Rogoff, E. G., Lee, M. S., & Suh, D. C. (2004). Who done it? Attributions by entrepreneurs and experts of the factors that cause and impede small business success. Journal of Small Business Management, 42(4), 364–376.CrossRefGoogle Scholar
  81. Rowe, B. R., Haynes, G. W., & Bentley, M. (1993). Economic outcomes in family owned home-based businesses. Family Business Review, 6(4), 383–396.CrossRefGoogle Scholar
  82. Sarder, J. H., Ghosh, D., & Rosa, P. (1997). The importance of support services to small enterprises in Bangladesh. Journal of Small Business Management, 35(2), 26–36.Google Scholar
  83. Schmidt, M. C., & Kolodinsky, J. M. (2007). Microenterprise development program success: a path analysis of factors that lead to and mediate client success. Journal of Developmental Entrepreneurship, 12(1), 47–69.CrossRefGoogle Scholar
  84. Servon, L. J. (1996). Microenterprise programs and women: entrepreneurship as individual empowerment. Journal of Developmental Entrepreneurship, 1(1), 31–55.Google Scholar
  85. Servon, L. J. (1997). Microenterprise programs in US inner cities: economic development or social welfare. Economic Development Quarterly, 11(2), 166–180.CrossRefGoogle Scholar
  86. Servon, L. J. (1999). Bootstrap capital: Microenterprises and the American poor. Washington, DC: Brookings Institution.Google Scholar
  87. Servon, L. J., & Doshna, J. P. (2000). Microenterprise and economic development toolkit: a small part of the big picture. Journal of Developmental Entrepreneurship, 5(3), 183–208.Google Scholar
  88. Severens, A., & Kays, A. (2002). Directory of U.S. micro enterprise programs. Washington, DC: The Aspen Institute.Google Scholar
  89. Shome, A. (2002). Malay political leadership. London: Routledge Curzon.Google Scholar
  90. SMIDEC (2011). Definitions of SMEs. Accessed 29 May 2012.
  91. Sonfield, M. C., & Barbato, R. J. (1999). Credit and equity support as components of self-employment development programs. Accessed 26 May 2009.
  92. Stokes, D., & Blackburn, R. (2002). Learning the hard way: the lessons of owner-managers who have closed their businesses. Journal of Small Business and Enterprise Development, 9(1), 17–27.CrossRefGoogle Scholar
  93. Storey, D. J. (1994). Understanding the small business sector. London: International Thomson Business Press.Google Scholar
  94. Terpstra, D., & Olson, P. (1993). Entrepreneurial start-up and growth: a classification of problems. Entrepreneurship: Theory and Practice, 17(3), 5–20.Google Scholar
  95. The Futurist (2003). Strength in Small Business. July–August, 14–15.Google Scholar
  96. The Herman Group. (2003). Micro-business will offer economic strength. Greensboro: The Herman Trend Alert.Google Scholar
  97. Ting, O. K. (2005). SMEs in Malaysia: Pivotal points for change. Accessed 29 May 2012.
  98. Tinker, I. (2000). Alleviating poverty: investing in women’s work. Journal of the American Planning Association, 66(2), 229–242.CrossRefGoogle Scholar
  99. US Commercial Service (2009). Doing Business in Malaysia. Accessed 21 January 2010.
  100. Walls, R., Dowler, D., Cordingly, K., Orslene, L., & Greer, J. (2001). Microenterprising and people with disabilities: strategies for success and failure. Journal of Rehabilitation, 67(2), 29–35.Google Scholar
  101. Wang, C. L. (2008). Entrepreneurial orientation, learning orientation, and firm performance. Entrepreneurship: Theory and Practice, 32(4), 635–657.Google Scholar
  102. Welsh, D. H. B., Memili, E., Kaciak, E., & Ahmed, S. (2013a). Sudanese women entrepreneurs. Journal of Developmental Entrepreneurship, 18(2), 1–18.CrossRefGoogle Scholar
  103. Welsh, D. H. B., Memili, E., Kaciak, E., & Al-Sadoon, A. (2013b). Saudi women entrepreneurs: a growing economic segment. Journal of Business Research (in press).Google Scholar
  104. Welsh, D. H. B., Memili, E., Kaciak, E., & Ochi, M. (2013c). Japanese women entrepreneurs: implications for family firms. Journal of Small Business Management (in press).Google Scholar
  105. Wiklund, J., & Shepherd, D. (2003). Knowledge-based resources, entrepreneurial orientation, and the performance of small and medium sized businesses. Strategic Management Journal, 24, 1307–1314.CrossRefGoogle Scholar
  106. Wiklund, P., & Shepherd, D. (2005). Entrepreneurial orientation and small business performance: a configurational approach. Journal of Business Venturing, 20(1), 71–91.CrossRefGoogle Scholar
  107. Woolcock, M. (2001). Microenterprise and social capital: a framework for theory, research, and policy. Journal of Socio-Economics, 30(2), 193–198.CrossRefGoogle Scholar
  108. Yusuf, A. (1995). Critical success factors for small business: perceptions of South Pacific entrepreneurs. Journal of Small Business Management, 33(2), 68–74.Google Scholar
  109. Zinger, T., LeBrasseur, R., & Zanibbi, L. (2001). Factors influencing early stage performance in Canadian microenterprises. Journal of Developmental Entrepreneurship, 6(2), 129–151.Google Scholar

Copyright information

© Springer Science+Business Media New York 2014

Authors and Affiliations

  • J. Mark Munoz
    • 1
  • Dianne H. B. Welsh
    • 2
    Email author
  • Sow Hup Chan
    • 3
  • Peter V. Raven
    • 4
  1. 1.Tabor School of BusinessMillikin UniversityDecaturUSA
  2. 2.Bryan School of Business and EconomicsUniversity of North Carolina at GreensboroGreensboroUSA
  3. 3.Faculty of Business AdministrationUniversity of MacauTaipaChina
  4. 4.Albers School of Business and EconomicsSeattle UniversitySeattleUSA

Personalised recommendations