The Casual Relationship between Corporate Entrepreneurship, Organizational Creativity, Organizational Innovation and Financial Performance in Small and Medium Enterprises
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Abstract
The research article consisted of the following objectives: 1) to investigate the congruence of structural model based on literature review with empirical evidence; and 2) to explore the casual relationships between corporate entrepreneurship, organizational creativity, organizational innovation, and financial performance in small and medium enterprises. The population of the study included 4,760 middle- and upper-level executives at firms listed on the Alternative Investment Market (MAI). A sample size of 336 was determined using Hair's criteria and 51 parameters chosen by multi-stage sampling. The research tool was a questionnaire. The statistics used were percentage, mean, standard deviation, confirmatory factor analysis, and structural equation modeling.
From the study, the following results are found:
1) The structural model is found to be compatible with empirical data using the item-objective congruence index, which is as follows: χ2 = 55.082, df = 51, χ2/df = 1.020, p = 0.433, RMSEA = 0.008, GFI = 0.978, AGFI = 0.957, CFI = 1.000. 2) Corporate entrepreneurship has direct influence on the financial performance of the organization as well as organizational creativity and innovation. Organizational creativity has direct influence on organizational innovation. Organizational creativity has direct influence on the financial performance of organization. Organizational creativity has direct influence on organizational innovation while organizational innovation has negative influence on the financial performance of organization.
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