Abstract
In the globalization era, the
competition faced by all companies can not be avoided, as happened to small
businesses in the city of Malang. Globalization will lead to the environment
becomes increasingly complex and changing. To cope with the ever-changing
environment changes, so SMEs need to increase the EO to improve firm
performance. The purpose of this study was to determine the effect of EO on the
firm performance.The population in this study are the owners or managers of
SMEs cluster in Malang. Quantitative approaches were used to data collecton
from 140 SMEs cluster and data was analyzed by using AMOS 16. The results
indicate that the significance of the direct effect of EO on firm performance
is reduced when the indirect effect of EO through strategic flexibility is
included in a total effect model. Consequently, EO is positively related to
firm performance, and strategic flexibility plays a mediating role in this
relationship.
Keyword
: Entrepreneurial Orientation, SMEs, Organizational Performance

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