Entrepreneurs' Competence And Firm Performance

Today's rapidly changing socio-economic environment, social environment,complicated, complex business environment in which good businesses rely on thecompetitiveness of enterprises according to their internal and external environment todevelop an appropriate management decision-making process through effectivemanagement of enterprises in the competition to determine the environment anddevelopment control process to achieve business performance. According toresource-based theory, the difference between business and the source of businessperformance not only exist in the external business, but also in the enterprise. Theentrepreneurs at the core of the enterprise, they play a key role for the use of resources andintegrating resources.Some scholars have pointed out that in an uncertain and complexenvironment, the entrepreneur with a keen insight can earn excess profits, that ishigh-quality entrepreneurs are the major source of competitive advantage.Entrepreneurshave a pivotal position in the SME's competitiveness and improving the performance.Based on the resource-based theory, the theoretical models of entrepreneurship-competitive advantage-corporate performance were built up, since the activities ofentrepreneurs and their industry environment are closely related, so adding the industryenvironment as the entrepreneurship and business performance's manipulated variable,which is measured by the popular combination of objective measurement and subjectivefeelings of the environment.Through theoretical and empirical research to explore which entrepreneurialcompetencies affect business performance? What relationship between the entrepreneurialcompetencies and competitive advantage? What are the differences betweenentrepreneurial competencies and SME's competitive advantage impact on theperformance? What are the impacts between the individual characteristics of entrepreneurs and business background characteristics impact on competitive advantage and businessperformance? Whether the industry environment of SME can regulate the entrepreneurialcompetencies or SME's performance?Based on these questions, a theoretical model has been developed through combingthe literature. Seven competencies have been identified, including opportunitycompetencies, relationship competencies, organizing competencies, strategic competencies,commitment competencies, learning competencies and innovation competencies.Competitive advantages include innovation, quality, cost and customer response. In orderto confirm whether the framework of this study and verify whether the logic is reasonable,this paper used not only a qualitative research method but also a quantitative researchmethods to their empirical studies.In this paper, a sample of69entrepreneurs'squestionnaires were tested firstly, and then cut some test items, adjust the number of testitems, ultimately forming a formal questionnaire. The formal questionnaire collected203valid questionnaires, using a variety of statistical analysis methods, empirical results showin the following:(1)Entrepreneurial competencies impact the SME's performance through two ways.One is the entrepreneurial competencies directly affect the performance; the other way isentrepreneurial competencies affect competitive advantages through which affect businessperformance. In both ways, competitive advantages have a stronger power to SME'sperformance than entrepreneurial competencies. However, the source of competitiveadvantages is entrepreneurial competencies, entrepreneurial competencies have played avery important role in accumulating competitive advantage.(2)Entrepreneurial competencies directly affect the firm performance by regulatingthe industrial environment. Industry environment has a positive role in regulatingentrepreneurs's opportunity competencies, relationship competencies and strategiccompetencies.(3)Entrepreneur's opportunity competencies, strategic competencies, learningcompetencies and innovation competencies have a strong affect to business performance.Innovation advantage and customer response advantage play the main role in explainingthe business performance. (4)Some control variables, such as the entrepreneur's individual characteristics, firmcharacteristics also play an impact on business performance.