Factors Determining Success in Malaysian SMEs By Implementing Effective Entrepreneurship and Strategic Management

Yusuf B. Abdullahi

This study aims to explore and develop a clearer understanding of the factors that influence success  in Malaysian small and medium enterprises by implementing entrepreneurship and strategic management, as perceived by local owner and/or managers. Using a qualitative approach, fifteen in-depth face-to-face semi-structured interviews were conducted with selected owner-managers of SMEs, forming a judgmental selection, to explore their experiences, beliefs, and attitudes with respect to the external factors of success. The study suggested that there are three generalized factors that influence success and performance in SMEs based on the entrepreneur’s perceptions: the “owner and manager attributes” which involves the language skills factor, financial and networking partnership, and business characteristics with a focus on the location factor, which was mainly associated with the selected districts in Malaysia. The importance of financial resources stemmed from the substantial challenges faced by SMEs in Malaysia. A response to these challenges often adopted an equity model of financial resources. Furthermore, the concepts of conduct, equipment, and commitments, clearly explained the importance of a good infrastructure to the appreciation of success in this type of business. The study contributes to the understanding of the impact of critical external factors on the success of SMEs in Malaysia. The three significant factors could be considered to be ways of understanding the external environment by small business owners and managers, allowing the impact of external factors to become part of the way that the small business owners conduct their business.