KEY ELEMENTS OF MARKET ORIENTATION ON MALAYSIAN SMEs PERFORMANCE

ABSTRACTMalaysian Small Medium Enterprises (SMEs) are vital components of the country's economic development. This paper assessed the relationship between market orientation critical success factors and Malaysian SMEs performance. Data were collected via mail survey employing the simple random sampling procedure. A total of 140 SMEs responses to this study. The findings revealed mix relationship among the components of market orientation critical success factors in SMEs performance. Two factors, specifically, customers focus and market dissemination was found to have significant relationships with SMEs performance. On the other hand, the other factors, namely market intelligence and responsiveness did not indicate significant influence on the SMEs performance. Consequently, the result of this study has significant impact to SMEs owners in forwarding organizational excellence. For SMEs to contribute significantly to the realization of the long term business and industrial competitiveness of the country, they need to focus on any activities that related to the market orientation critical success factors.Keywords: Market Orientation; Small Medium Enterprise (SME); Performance; Malaysia.1. INTRODUCTIONSMEs in Malaysia has evolved to become key supplier and service provider to large corporation, inclusive of multinational and transnational corporation. Most of these SMEs are in the service sector, particularly in retail, restaurant and wholesale businesses. SMEs successfully contributed 56 percent of employment creation and 19 percent for national export (National SME Development Council, 2010). Furthermore, as reported in the SMEs Annual Report 2009/2010, SMEs sector contributes 31 percent of real gross domestic product (GDP). At the same time, there are wide recognitions in the literature about the challenges and barriers facing Malaysian SMEs to face arising hurdles from globalization, liberalization and extensive organizational, institutional and technological changes (Hall, 2002; Moha, 1999; Wang, 2003). One of the most challenging issues for SMEs to confront in any industries is economic turbulence. Recession, rising fuel prices and other raw material are some of the major factors impacting SMEs businesses (2011; "SME urge domestic," 2008). Although research on SMEs in Malaysia has attracted an increase in attention due to the importance of SMEs in contributing to the economy, it has been argued that studies on SME in Malaysia are still limited in scope and fragmented in nature (Hashim & Ahmad, 2005). The focus is mainly on reporting and describing the general profile of SMEs such as owners' characteristics, problems and the assistance provided by the government to the SMEs. Research on SMEs has neglected the applicability of modern management theory to SMEs This is probably due to the argument that small enterprises are more difficult to study since there is a lack of a clear structure and procedures recorded; hence, offering a wide area of topics to investigate (Curran & Blackburn, 2001). Thus, it is proposed that future research on SMEs should consider various management disciplines as 'there have been limited attempts to study SMEs from this perspective in the Malaysian context (Hashim & Ahmad, 2005). One of the important management areas, which are still limited research on it, is marketing management particularly in SMEs sector. Studies have identified organizations thatare orientedd towards market orientation have been recognized to influence on organisational performance and indirectly enhance competitive advantage. Similarly, numerous studies have linked marketing oriented organisation as an approach that can contribute to organisational performance (Jaworski & Kohli, 1993; Narver & Slater, 1990; Pelham & Wilson, 1996; Pitt, Caruana, & Berthon, 1996; Slater & Narver, 1994a; SME Corp, 2010). However, despite the importance of these sources of competitive advantage, there are limited studies that examine these management strategies together particularly in the context of small medium sized enterprises. …