IJCSCM

Entrepreneurial Orientation and Financial Performance of SMEs in Construction Industry: Role of Governance Mechanisms

Author's Name:

Abdullah Hamoud Ali Seraj


Management Department, School of Business, King Faisal University, Al-Ahsa 31982, Saudi Arabia.

Ahmed Faek Mohamed Elgendy


Management Department, School of Business, King Faisal University, Al-Ahsa 31982, Saudi Arabia.

Mahmoud Abdul Aleem Elkholy


Accounting Department, College of Business Administration, Taibah University, KSA

Jehad Abdallah Atieh Afaneh


Management Department, School of Business, King Faisal University, Al-Ahsa 31982, Saudi Arabia.

Hashed Mabkhot


Management Department, School of Business, King Faisal University, Al-Ahsa 31982, Saudi Arabia.

Alshymaa Eldessouki Abd Elaziz Elmashad


Department of Business Administration, Arab East Colleges, Riyadh, Saudi Arabia

Financial performance could help to increase the decision-making process of stakeholders through providing reliable data which helps them to take their better investment decsions. Entrepreneurial orientation can further strengthen this process by leveraging improved governance structures. Therefore, the study objective was to test influence of enterprenuerial orientation on improving financial performance through governance mechanisms for enhancing stakeholders' decision making in making their investment in constructions SMEs. To test this objective, data were collected from 380 construction SMEs employees in Saudi Arabia. Hypothesis results exhibited that entrepreneurial orientation dimensions significantly and positively increase both financial performance and governance mechanisms of the construction industry in Saudi Arabia. Governance mechanisms also significantly increase the financial performance. Further indirect effect also shown that the governance mechanism significantly mediated between entrepreneurial orientation and financial performance. Theoereticaly,  study with the significant findings contributed a unique model to improve the decision making process of stakeholders in their investment after analyzing the company's financial performance that could be improve through effective enterprenuerial orientation and governance structure.  Practically, the study also contributed to know the significance of a strong enterprenuerial orientation and governance framework to improve the financial performance. This enhancement in performance could support sustainable growth and strengthens the overall decision-making efficiency within Saudi Arabia’s construction SMEs.

Keywords: Decision Making, Entrepreneurial Orientation, Financial Performance, Governance Mechanisms, Construction SMEs.