INSPIRA: Indonesian Journal of Psychological Research https://journal.iainlangsa.ac.id/index.php/inspira How to cite (APA 7th Edition) Taslim, F. & Lestari Kadiyono, A. (2023). Entrepreneurial orientation of Muslim Micro, Small and Medium Enterprises (MSMEs) owners in West Sumatra. INSPIRA: Indonesian Journal of Psychological Research, 4(1), 20-28. https://doi.org/10.32505/inspira.v4i1.6069 This is an open-access article distributed under the terms of the Creative Commons Attribution-Noncommercial 4.0 International (CC BY-NC 4.0) Copyright ©2023 by Fauziah Taslim & Annisa Lestari Kadiyono RESEARCH ARTICLE Entrepreneurial orientation of Muslim Micro, Small and Medium Enterprises (MSMEs) owners in West Sumatra https://doi.org/10.32505/inspira.v4i1.6069 Fauziah Taslim1, Annisa Lestari Kadiyono2 1 Department of Psychology, Universitas Negeri Padang, West Sumatra, Indonesia 2 Department of Psychology, Universitas Padjadjaran, West Java, Indonesia Corresponding Author: Fauziah Taslim (email: fauziahtaslim@fpk.unp.ac.id) ABSTRACT This study aims to provide an overview of Entrepreneurial Orientation in Muslim Micro, Small and Medium Enterprises (MSMEs) in West Sumatera Province, ranked in the top 10 in the number and growth of national Micro, Small, and Medium Enterprises. This research used a quantitative approach with random sampling (n = 671). Participants of this study are Muslim entrepreneurs from different backgrounds, such as genders, education, and residence. The individual Entrepreneurial Orientation (IEO) scale was used as the measurement instrument. The data analysis used is descriptive statistics and mean comparison. The study results found that most Micro, Small and Medium Enterprises in West Sumatera opened businesses in the culinary field and had a very high Entrepreneurial Orientation. Based on the average per dimension, all dimensions had high scores. The dimension of perseverance has the highest average score (8.52), while the lowest score is owned by the innovativeness dimension (7.98). Based on the analysis of the variance test, significant differences in entrepreneurial orientation were found based on gender, age, city origin, and gross profit. Article History: Received 17 May 2023 Revised 24 May 2023 Accepted 22 June 2023 Keywords: entrepreneurial orientation; Micro, Small and Medium Enterprises (MSMEs); Muslim; West Sumatra INTRODUCTION Micro, Small and Medium Enterprises (MSMEs) or Usaha Mikro, Kecil, dan Menengah (UMKM) played a crucial role in Indonesia’s economic growth (Hastuti et al., 2020). The number of MSMEs reaches 64 million or 99% of all business units in Indonesia and absorbs 96.9% of the national workforce (Limanseto, 2021). The contribution of MSMEs to GDP (Gross Domestic Product) has exceeded 20% of the country’s total income. Based on data from the Ministry of Cooperatives and Small and Medium Enterprises, the number of MSME owners has reached 64.2 million people (Novitasari, 2022). MSMEs absorb capital up to 60.4% of the total circulating investment. Thus, it can be concluded that MSMEs influence the country’s economic growth (Alansori & Listyaningsih, 2020). A survey conducted by the LIPI Economic Research Center regarding the effects of the Covid-19 pandemic on MSMEs in Indonesia found that 94.69% of businesses experienced a decline in profits during the pandemic. The factor is production costs that remain constant or increase while sales decline. Raw materials, distribution, human resources and other costs also increased. Other obstacles https://doi.org/10.32505/inspira.v4i1.6069 https://orcid.org/0009-0006-1778-0121 https://orcid.org/0000-0001-6134-6847 21 are difficulty securing raw materials, obtaining capital investments, decreased purchasing power, and hampered distribution and production (Limanseto, 2021). The problems faced by MSMEs certainly affect the country’s economy. Many efforts have been made by the Government and Non-Governmental Organizations to deal with this problem, both in terms of financing and assistance (loan restructuring policies, capital investments, cost reduction subsidies), programs to stimulate MSME growth and other policies that are expected to provide relief, protection, and empowerment for Indonesian MSMEs (Limanseto, 2021). In addition to the government and organizations’ efforts, MSME owners must also try to maintain their businesses. Several strategies have been proven to help MSME owners survive when they get hit by the effects of the Covid-19 pandemic. One effective way to minimize the adverse effects of the Covid-19 pandemic on MSMEs is the use of technology. The Covid-19 pandemic has changed consumer behavior. Most transactions are carried out at home using digital technology. Therefore, MSME owners must innovate according to market needs (Limanseto, 2021). To carry out innovation and adapt to the digital market, it takes courage to take action and make your own decisions because there are risks that must be taken when owners make a change or breakthrough. Behavior to make decisions and courage to take risks are concrete manifestations of entrepreneurial orientation (EO) (Lumpkin & Dess, 2014). Lumpkin and Dess define EO as processes, practices, and decision-making that lead to new actions. EO contains 5 dimensions: autonomy, innovativeness, risk-taking, proactiveness, and competitive aggressiveness (Rauch et al., 2009). Due to the disruptive effect of Covid-19 and the rise of the digital market, there is a need to reexamine entrepreneurial orientation in a new context (Krishnan et al., 2022). According to other research, EO is one of the factors in achieving business success, meaning that this EO influences the success and sustainability of MSMEs, especially after the Covid-19 pandemic (Zighan et al., 2022). So far, researches about entrepreneurial orientation in West Sumatra are still limited to a smaller scale. Researchers limited their focus only to education (Harfandi, 2014), products (Yeni H Y et al., 2014), and geographic regions (Putri & Hariance, 2017). Therefore, we researched entrepreneurial orientation (EO) in MSME owners in West Sumatra to reexamine EO in a post covid-19 context and on a bigger scale to provide more comprehensive data. This study aims to describe the entrepreneurial orientation of Muslim MSME owners in West Sumatera Province. Understanding EO at the individual level can also benefit entrepreneurs, business incubators and potential investors considering supporting business proposals (Bolton & Lane, 2012). METHOD This study used a non-experimental quantitative approach to explore Entrepreneurial Orientation (EO) descriptions of MSME owners in West Sumatra. Quantitative research uses data from numbers obtained through measurements to explain research results (Stockemer, 2019). The technique used for sampling is simple random sampling. The criteria for participants are Muslim SME entrepreneurs settled in West Sumatra (n=671). According to Indonesia Law Number 20 of 2008, SMEs are businesses with annual sales from IDR 300.000.000 to IDR 2.500.000.000. SMEs have three categories: 1) Micro business or annual sales of less than IDR 300,000,000; 2) Small business or annual sales between IDR 300,000,000–IDR 2,500,000,000; and 3) Medium business or annual sales of more than IDR 2,500,000,000. West Sumatera was chosen as the research location because, based on data, West Sumatera province was ranked in the top ten in the number of MSMEs in 2022 (Santika, 2022) and MSME growth in 2021 (Rizaty, 2022). Muslim owners were chosen as subjects because, despite the majority status 22 in west Sumatera, not many pieces of research explored their entrepreneurial orientation among them (Az Zahra & Nurul Husna, 2021). Data was gathered using a questionnaire spread through the internet and offline visit. Before filling out the questionnaire, participants were required to fill out a consent form. The instrument used in this research was the Individual Entrepreneurial Orientation (IEO) scale by Lumpkin & Dess (Lumpkin & Dess, 2014), which consisted of 10 items which included the dimensions of risk-taking, innovativeness, proactiveness, passion, and perseverance. Items were measured using a five-point Likert scale (1 strongly disagree to 5 strongly agree). Higher scores implied greater levels of entrepreneurial orientation. The measurement was administered in Bahasa Indonesia. Google Forms and SPSS were used to gather and analyze data. The measuring instrument has a reliability of 0.8. For data analysis, researchers used descriptive analysis and analysis of variance presented in the tables below. RESULT This research managed to get 671 respondents spread throughout West Sumatra. Table 1 is the demographic data of the research respondents. Table 1. Respondents demographics Category n (%) Gender Men 215 (28,9%) Women 457 (61,5%) Age (year) <20 10 (1,5%) 20-25 140 (20,8%) 25-35 170 (25,3%) 35-45 182 (27,1%) 45-60 148 (22,0%) >60 22 (3,3%) Residence Agam 5 (0,7%) Bukittinggi 155 (20,8%) Limapuluh Kota 8 (1,1%) Tanah Datar 4 (0,5%) Padang 315 (42,3%) Padang Pariaman 8 (1,1%) Pariaman 10 (1,3%) Pasaman Barat 3 (0,4%) Payakumbuh 28 (3,8%) Pesisir Selatan 2 (0,3%) Sawahlunto 44 (5,9%) Sijunjung 1 (0,1%) Solok 87 (11,7%) Education Elementary School 19 (2,6%) Middle School 59 (7,9%) High School 372 (50,1%) Vocational Diploma 43 (5,8%) Undergraduate 169 (22,7%) Master 6 (0,8%) PhD 1 (0,1%) Uneducated Formally 3 (0,4%) Business Field Trade, Hotels and Restaurants, Provision of Food and Drink 621 (92,5%) Wholesale and Retail, Auto & Motorcycle Repair 5 (7.5%) 23 Business Category Culinary 467 (69.0%) Fashion 67 (10.0%) Accessories 30 (4.5%) Batik 2 (.3%) Custom Tailor 4 (.7%) Others 102 (15.3%) Business Age 0-6 Month 20 (2,7%) 6-12 Month 74 (%) 1-3 Years 201 (27,1%) 3-5 Years 165 (22,2%) 5-10 Years 127 (17,1%) >10 Years 85 (11,4%) Yearly Income Micro 529 (71,2%) Small 121 (16,3%) Medium 22 (3,0%) Employee(s) 1-4 596 (80,2%) 5-19 69 (9,3%) 20-100 6 (0,8%) >100 1 (0,1%) Based on gender, it was found that most MSME owners were women (61.5%). In the age category, the majority of MSMEs in West Sumatra are in the range of 35-45 years old. Based on the residence, most MSME owners come from the provincial capital, Padang (42.3%). In the education category, most MSMEs in West Sumatra chose SMA as their last education (50%). Based on the business sector, MSME owners prefer to do business in the trade, hotel & restaurant, food and drink provision sector. Furthermore, the most popular business category is the culinary business (69%). For the length of business, most MSMEs have been in business for 1-3 years (27.1%). Regarding income, most are still on a micro scale, with annual sales lower than IDR 300,000,000 (71.2%). Based on the number of employees, most MSMEs still have 1-4 employees (80%). Based on descriptive statistics, an overview of Entrepreneurial Orientation for MSME owners in West Sumatera as a whole and based on each dimension can be seen in Table 2. Table 2. Overview of Entrepreneurial Orientation in SMEs owners in West Sumatera Category n (%) Very Low 0 (0%) Low 3 (0.4%) Average 36 (5.4%) High 253 (37.6%) Very High 380 (56.5%) The results of entrepreneurial orientation research on Muslim SMEs owners in West Sumatra show that 56.5% of SME owners had a very high level of entrepreneurial orientation (EO), and 37.6% had a high EO. There are no Muslim MSME owners who have very low EO, and only 0.4% have low EO. This finding shows that Muslim MSME owners in West Sumatra have high EO in running their businesses, which means they can create processes, practice, and make decisions that lead to actions. Based on the average per dimension, all dimensions have a high score. The dimension of perseverance has the highest average score (8.52), while the lowest score is owned by the innovativeness dimension (7.98). Perseverance means persistence in entrepreneurship, then innovativeness means creativity in discovering new things (Rauch et al., 2009). Then the researchers also tested the mean difference, as seen in Table 4. 24 Table 3. Entrepreneurial Orientation Score Per Dimensions Dimensions Mean (SD) Risk Taking 8.04 (1.55) Innovativeness 7.98 (1.56) Proactiveness 8.46 (1.17) Passion 8.51 (1.30) Perseverance 8.52 (1.16) Table 4. Mean Comparison Between Demographics Category p-value Result Category with the Highest Average Category with the Lowest Average Gender <.001 Significant Men (Mean: 45) Women (Mean: 42.46) Age .001 Significant 20-25 (Mean: 44.8 ) < 20 (Mean: 40.5) Residence .028 Significant Bukittinggi (Mean: 45.37) Padang (Mean: 42.03 ) Business field .233 Not significant Trade, Hotels and Restaurants, Provision of Food and Drink (Mean: 43.4) Wholesale and Retail, Auto & Motorcycle Repair (Mean: 41.32) Business Age .361 Not significant 1-3 years (Mean: 43.9) 10 years (Mean:40.80 ) Income <.001 Significant Middle (Mean: 45.2) Micro (Mean: 42.8) Business Category .061 Not significant Culinary (Mean: 44.5) Accessories (Mean: 43.1) Employee(s) .150 Not significant 20-100 employees (Mean: 48.5) 1-4 employees (Mean: 46.8) Education .086 Not significant Undergraduate (Mean: 45.6) Master (Mean: 40.16) The means different tests showed significant differences in entrepreneurship orientation scores between groups in gender, age, residence, and income (p-value = <.05). DISCUSSION The result showed that Muslim MSME owners in West Sumatra have a high entrepreneurial orientation. This finding means they can independently lead a business and see them succeed, have a competitive spirit, have a tendency to be creative in the form of experimentation to introduce new products and services, have an opportunistic and visionary perspective to anticipate future demands, take bold action by exploring a risky business (Rauch et al., 2009). A high entrepreneurial orientation has been associated with company performance, profitability, growth and product innovation (Bolton & Lane, 2012). This result contradicts the previous research that found Indonesian samples tend to have a low entrepreneurial orientation (Herlinawati et al., 2019). Culture-specific factors might cause the difference. Entrepreneurship is culturally engraved in West Sumatra people. There is a proverb, “Elok jadi kapalo samuik daripado ikua gajah”, which means it is better to be a small group leader than a member of a large organization. Becoming an entrepreneur is one way to prove those principles (Handaru et al., 2015). Also, according to West Sumatera’s culture, entrepreneurship was believed to be a concrete form of religious observance and belongingness to one’s culture (Sutanto & Nurrachman, 2018). Respondents to this research were primarily women (61.5%). A shift in gender roles causes a large number of women in business. Women earning a living are increasingly common, primarily through entrepreneurship. Many successful businesses are controlled by women (Boeri, 2018). Many businesses in Indonesia also provide broad access for women to show their achievements. In many big cities in Indonesia, women’s participation in managing family businesses is also high, especially for women with higher education. The advantages of women in family business management are unique because women are patient, painstaking, tenacious and thrifty (Nikou et al., 2019). Based on a previous survey 2018, women manage 51% of MSMEs in Indonesia.(Setiawan et al., 2020). This study supported the results of the survey. 25 Despite being the majority, women had lower entrepreneurial orientation scores. The previous research had similar results. Men tend to have a higher tendency towards entrepreneurship, and men tend to become entrepreneurs. However, no differences were found in risk-taking and innovation (Kumar et al., 2021). Other studies have shown that men get higher averages in risk-taking, whereas scores for women respondents are higher for innovation scores (Barba-Sánchez et al., 2022). Other research confirms that male respondents show higher levels of entrepreneurial desire, highlighting that men are more risk-oriented while women desire situations with known outcomes. Then, women will show a more significant change in entrepreneurial orientation than men after receiving entrepreneurial training (Mutlutürk, 2018; van Ewijk & Belghiti-Mahut, 2019). Most of this research respondents hailed from Padang, the capital of West Sumatra. This finding supports the previous research, which found that the highest number of MSMEs in West Sumatra was in Padang (Ningsih & Tasman, 2020). The environment is an essential factor that forms entrepreneurial intentions. Cities that are administrative and economic centers tend to have more businesses due to ease of access to capital, raw materials, distribution, and the number of potential buyers (Bilgiseven & Kasimoǧlu, 2019). The city/district with the highest average entrepreneurship orientation score is held by the City of Bukitinggi (43.64). Research on linking entrepreneurship orientation with a place of residence is still rarely investigated. However, based on other studies, it was found that the businesses of rural entrepreneurs earn far more than rural workers but are still lower than entrepreneurs from urban areas (Yu & Artz, 2019). Most Muslim entrepreneurs in West Sumatra are 35-45 years old, and the age group 20-25 has the highest average (44.88). The general assumption is that the older a person is, the lower the probability of doing business. However, recent research shows a lack of statistical evidence to support the hypothesis that age is inversely related to entrepreneurial tendencies (Nguyen, 2018). In previous meta-analytical research linking age and entrepreneurship, it was found that age has a weak positive linear relationship with entrepreneurship as a whole, and further research should be carried out because entrepreneurship is complex (Zhao et al., 2021). Most MSME owners are S1 graduates or bachelor. Regarding the link between education and entrepreneurship, it was found that education can influence entrepreneurial intentions. The higher the education, the higher the interest in entrepreneurship (Atiningsih & Kristanto, 2020). Entrepreneurial education and unique facilities such as classes, workshops, scholarships, grants, and work experience influence entrepreneurial orientation (Debarliev et al., 2022; Mutlutürk, 2018). In Indonesia, some university has entrepreneurship program in the form of Program Mahasiswa Wirausaha (PMW) or Students Entrepreneurship Program, entrepreneurship class or workshop, and business incubator. The programs could be pivotal in developing entrepreneurial orientation in college students (Endriani, 2020). In the income category, most of them were categorized in micro-entrepreneurship (71%). The medium category achieved the highest entrepreneur orientation score (2.5 M-50 M per year) with an average score of 46. No definite conclusions regarding the relationship between income and entrepreneur orientation have been found. Older research assumes that entrepreneurial orientation is positively related to company profits. However, in the latest empirical findings, EO has no significant effect on profitability. Nonetheless, it has been agreed that EO directly affects the company’s growth rate (Genc et al., 2019). This study described entrepreneurial orientation in Muslim MSEs owners in West Sumatra. Just like other research, this research has several limitations. First, the study limited itself to Muslims in West 26 Sumatra respondents. It could not be used as a base to generalize entrepreneurial orientation in Indonesia. Second, the questionnaire was self-administered. Thus, subjective biases are probable. CONCLUSION Based on the analysis that has been carried out, it was found that Muslim MSME owners in West Sumatera have a very high entrepreneurship orientation, which means they are innovative, passionate, proactive, able to take risks and persevere. The study also found a significant difference in entrepreneurial orientation based on gender, age category, residence, and income. The finding shows how strong the entrepreneurial orientation in West Sumatra is. As a recommendation, doing similar research in different provinces is encouraged to obtain more complete data. DECLARATION Acknowledgment The authors would like to express their deepest gratitude to each researcher participating in this research. We also thank the Muslim entrepreneurs in West Sumatra who participated in this study. Author contribution statement Fauziah Taslim composed the research background, discussion, and data gathering. Anissa Lestari Kadiyono helped with the data analysis part and general support in every part of the research. Funding statement This research received no specific grant from funding agencies in the public, commercial, or not-for- profit sectors. Data access statement The data described in this article are not publicly available, so that the research results can be seen directly in the presented manuscript. Declaration of interest’s statement The author declares no conflict of interest. Additional information No additional information is available for this paper. REFERENCES Alansori. A. & Listyaningsih, E. (2020). Kontribusi UMKM terhadap kesejahteraan masyarakat. Penerbit Andi. Atiningsih Suci, & Kristanto Rudi Suryo. (2020). Peran self-efficacy dalam memediasi pengaruh pengetahuan berwirausaha, tingkat pendidikan, lingkungan keluarga, dan pengalaman kerja terhadap minat berwirausaha. 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