DOI: 10.28934/jwee23.pp37-57 JEL: L25, L26, M12 ORIGINAL SCIENTIFIC PAPER 2BImproving Business Performance through Entrepreneurship Orientation and Management Capacity for Women Entrepreneurs Fauziah Umar6 F1 Abdul Rahman Kadir7 F2 Andi Reni8F3 Rianda Ridho Thaha9 F4 Romi Setiawan10 F5 Hasanuddin University, Faculty of Economics and Business, Departement for Management, Makassar, Indonesia A B S T R A C T Human Resources (HR) is very important for the organization because various things that influence attitudes and behavior must be well understood to make their contribution to the organization optimal. This study aimed to find out and analyze the effect of entrepreneurial orientation and management skills on women entrepreneurs' business performance. The type of research used is descriptive verification by literature studies and field research. The influence model will be analyzed using Path Analysis (Part Analysis). The results showed that entrepreneurial orientation significantly affects women entrepreneurs' management capabilities and business performance. Management capability also 1 E-mail: fauziah.umar@fe.unhas.ac.id 2 E-mail: rahmankadir@fe.unhas.ac.id 3 E-mail: andireni@fe.unhas.ac.id 4 E-mail: ridho.thaha@unhas.ac.id 5 Corresponding author, e-mail: romi.setiawan@fe.unhas.ac.id 38 Journal of Women’s Entrepreneurship and Education (2023, Special Issue, 37-57) significantly affects the business performance of women entrepreneurs. In the end, entrepreneurial orientation indirectly affects business performance through the management capabilities of women entrepreneurs. The theoretical and practical implications are discussed below. KEYWORDS: entrepreneurial orientation, management capability, business performance, women entrepreneurship Introduction Improving the economy will require the growth of small and medium- sized enterprises (SMEs). Several small and medium-sized enterprises (SMEs) have made significant contributions but continue to struggle with issues like inadequate technology, insufficient funding, and inadequate management. Low productivity and frequent business failures can be traced back to factors such as inadequate human resources and a lack of scale. To compete in the global market, SMEs need to enhance their technical capabilities, education and training, licensing, access to capital, product promotion, product quality control, standardization of technology, and the development of resources. In the manufacturing sector, notably, small and medium-sized enterprises (SMEs) play a crucial role in the national economy and exports other than oil and gas. According to statistics from Indonesia's Ministry of Cooperatives and Small and Medium Businesses, women run as much as 60% of the country's MSMEs. Yet, most women business owners operate on a micro or modest scale, notably in the textile, clothing, and food and beverage manufacturing sectors (Tambunan, 2012). Women-owned small and medium-sized enterprises in Indonesia contribute 9.1% to GDP (International Finance Corporation, 2016). Yet, women company owners confront challenges in advancing their enterprises, such as the juggling act of fulfilling numerous tasks, a lack of confidence, a deficiency in formal education and management expertise, and unhelpful regulations from the government. In order to succeed in today's business world, women business owners need to do everything they can to boost their companies' productivity. Businesses should encourage female business owners by treating them with respect and trust. A company's performance is evaluated based on its level of accomplishment over a specified time frame (Glancey) (1998). A small business's success can be gauged by examining how its profits and sales F. Umar, A. R. Kadir, A. Reni, R.R. Thaha, R. Setiawan 39 have changed over time (Jauch & Glueck, 1988). According to figures collected by the BPS in Makassar City between 2013 and 2015, the total number of micro, small, and medium enterprises reached 119,494. The company's success depends on its employee's ability to increase sales and profits (Jauch & Glueck, 1988). In Makassar, the growth of the processing industry is stunted by a lack of entrepreneurial spirit and established administrative roles (Sekar & Rofiq, 2017). According to Scarborough & Zimmerer (2008), the low performance of small and medium-sized industries is attributed to outdated technology, a lack of funding, and ineffective management. Business failure can be attributed to a lack of competent management, poor decision-making, low- quality employees, insufficient company size, or lax financial controls. Management skills and a strong sense of initiative are essential for success as a business owner (Scarborough & Zimmerer, 2008; Lee & Peterson, 2000). A more entrepreneurial mindset can lead to more aggressive business practices such as constant reinvention, risk taking, proactivity, and competition (Lee & Peterson, 2000). Increased productivity and the ability to outperform rivals are two outcomes that might result from adopting an entrepreneurial mindset (Lee & Peterson, 2000). Evidence from the academic literature shows that an entrepreneurial mindset can boost company performance, but this effect varies among settings and cultures (Wiklund & Shepherd, 2005; Chow, 2006; Coulthard, 2007). According to Suci's (2008) research, management competence significantly affects business output and effectiveness. Therefore, researchers are interested in studying the effect of entrepreneurial orientation and management skills on women entrepreneurs' business performance. The primary aim of the paper is centered on analyzing how the influence of entrepreneurial orientation on the management capabilities and business performance of women entrepreneurs, as well as exploring the effect of management capabilities on the business performance of women entrepreneurs and the indirect effect of entrepreneurial orientation on business performance through the management abilities of women entrepreneurs. This study also assesses each attribute that is designed to form a construct variable. 40 Journal of Women’s Entrepreneurship and Education (2023, Special Issue, 37-57) Literature Review Business Performance Business performance is commonly defined as the level of achievement or accomplishment of a company within a specific period. The achievement of the company's goals is usually linked to the level of performance that it achieves. According to Glancey (1998), performance refers to the level of achievement or accomplishment of a company within a specific period. A company's performance is crucial to its development, and its objectives are typically to maximize its value, as reflected in various performance metrics. Small business performance can be seen through profit and growth levels, as pointed out by Jauch and Glueck (1988), who define performance as the level of achievement or accomplishment of a company within a specific period. Gitman (1994) notes that business performance is used to measure the impact of a company's strategy. Performance is always directed toward achieving the company's goals, whether in marketing or finance, using financial ratios to measure efficiency, liquidity, profitability, and market value, as noted by Keown et al. (2005). Small and medium-sized business performance can be measured by evaluating the respondents' perceptions using a Likert scale of several financial measures, such as sales growth, gross profit, return on investment, and net income (Covin & Slevin,1989). Therefore, business performance measurement depends on the validity of the measures used, as this research uses three indicators to measure business performance, including sales growth, profit growth, and asset growth. Entrepreneual Orientation Entrepreneurial orientation (EO) is a widely studied concept in entrepreneurship research. Lumpkin and Dess (1996) define EO as a set of beliefs, behaviors, and values that facilitate creating or recognizing opportunities for new products or services and the allocation of resources to pursue those opportunities. Covin and Slevin (1989) also describe EO as a strategic posture emphasizing innovation, proactivity, and risk-taking. These characteristics enable firms to respond effectively to dynamic environments and to capitalize on opportunities. According to Miller (1983), EO can be measured through five dimensions: autonomy, innovativeness, risk-taking, proactiveness, and competitive aggressiveness. F. Umar, A. R. Kadir, A. Reni, R.R. Thaha, R. Setiawan 41 Furthermore, Wiklund and Shepherd (2005) argue that EO positively affects firm performance and is a key predictor of the success of small and medium-sized enterprises (SMEs). Rauch and Frese (2007) also suggest that individual entrepreneurial orientation (IEO) plays a significant role in creating new ventures. They define IEO as a set of individual-level characteristics influencing an individual's likelihood to engage in entrepreneurial activities. Overall, EO is considered an essential characteristic of successful entrepreneurial firms and entrepreneurs, and it has become a crucial topic in entrepreneurship research. H1: Entrepreneurial orientation significantly affects the management skills of women entrepreneurs. Entrepreneurial orientation is a key factor in the success of an organization, as it reflects the extent to which the organization is willing to take risks, innovate, and pursue new opportunities. According to Covin and Slevin (1991), entrepreneurial orientation is the tendency of a firm to engage in activities characterized by innovativeness, risk-taking, proactiveness, autonomy, and competitive aggressiveness. On the other hand, management capability is managers' capacity to make effective decisions, organize resources, and lead the organization towards achieving its goals. A study by Hmieleski and Baron (2009) found that entrepreneurial orientation has a significant positive effect on the management capability of an organization, as it fosters a culture of innovation and risk-taking that enables managers to make effective decisions in dynamic and uncertain environments. H2: Entrepreneurial orientation significantly affects the business performance of women entrepreneurs. Rauch, Wiklund, Lumpkin, and Frese (2009) found that entrepreneurial orientation positively impacts firm performance, and Lumpkin and Dess (1996) found that firms with higher levels of entrepreneurial orientation are more likely to achieve superior financial performance. Additionally, Covin and Slevin (1991) found that firms with higher entrepreneurial orientation are more likely to succeed in new product development and achieve greater profitability. H3: Entrepreneurial orientation indirectly affects business performance through the management capabilities of women entrepreneurs. According to Hmieleski and Baron (2009), entrepreneurial orientation fosters a culture of innovation and risk-taking, which enables managers to 42 Journal of Women’s Entrepreneurship and Education (2023, Special Issue, 37-57) make effective decisions in dynamic and uncertain environments. These management skills, in turn, can positively impact business performance. In support of this, a study by Wiklund and Shepherd (2005) found that management skills mediate the relationship between entrepreneurial orientation and firm performance. Management Capacity Management skill is the ability to effectively plan, organize, lead, and control resources within an organization to achieve its goals. Effective management is crucial for the success of any organization, and numerous studies have examined the various skills required for effective management. Katz (1974) categorized managerial skills into three categories: technical, human, and conceptual. Technical skills refer to the ability to apply specialized knowledge or expertise in a particular area, while human skills refer to the ability to work with and through people. Conceptual skills refer to thinking and conceptualizing abstract and complex situations. Other studies, such as those by Mintzberg (1975) and Kotter (1982), have identified additional skills required for effective management, including communication, decision-making, problem-solving, and leadership. Moreover, a study by Hmieleski and Baron (2009) found that entrepreneurial orientation significantly positively affects management capability, as it fosters a culture of innovation and risk-taking that enables managers to make effective decisions in dynamic and uncertain environments. Therefore, management skills are crucial for effective organizational performance, and organizations should prioritize developing and enhancing the skills of their managers. H4: Management capability significantly affects the business performance of women entrepreneurs. According to Kossek (2016), a good work-life balance strategy is only effective when linked with good performance management and adaptability. This statement highlights the importance of effective management practices in creating a positive work environment and improving employee performance. Additionally, a study by Armstrong and Baron (2018) found that effective performance management is crucial in improving employee motivation and productivity, which is achieved by setting clear goals, providing feedback, and rewarding good performance. F. Umar, A. R. Kadir, A. Reni, R.R. Thaha, R. Setiawan 43 Furthermore, the impact of management capability on business performance can also be seen in the context of workforce resilience. As Vila (2019) discussed, workforce stressors can significantly impact performance, and effective leadership and management practices can help mitigate these stressors and improve resilience. The research model can be seen in Figure 1 below. Figure 1: The hypothetical model of the variables Methodology Research Design This study will use a quantitative research design using quantitative data collection and analysis techniques. The quantitative method will use surveys to collect data on the relationship between management capability and business performance. The survey will be administered to a sample of female entrepreneurs in Makassar, Indonesia, selected through stratified random sampling. The survey will consist of closed-ended questions that will be analyzed using statistical tools such as correlation and regression analysis. Participants and Data Collection The target population in this study were all female entrepreneurs, Small and Medium Enterprises (SMEs) engaged in the culinary, fashion, and craft 44 Journal of Women’s Entrepreneurship and Education (2023, Special Issue, 37-57) businesses in Makassar. The sampling technique used was purposive sampling, which is a sampling technique that is adjusted to the needs of the research. The sampling criteria were women entrepreneurs registered as members of IWAPI, totaling 85 entrepreneurs. The implementation of distributing questionnaires in this study was carried out by accidental sampling, namely conducting research when researchers met directly with respondents. (Situmorang, 2011). Data Analysis As stated previously, this research employs a quantitative research design. The data was analyzed with statistical analysis techniques to evaluate descriptive analysis and regression using SPSS version 26. The authors began by analyzing the characteristics of the respondents based on several parameters, including age, marital status, level of education, ownership status, type of business, duration of business, and business activities. After analyzing the characteristics of the respondents, the authors conducted multiple regression tests to analyze the respondent's responses based on the survey responses on the research variables. The results of these analyses are provided in the next section below. Result Analysis of Respondent Characteristics The characteristics of research respondents are based on age, marital status, education level, ownership status, type of business, length of business, and business activities. In each of the characteristics, it can be seen that the composition of the respondents adequately represents the population. Consequently, 41% of respondents ages are between 46 and 55, 78% of respondents are married, 22% are not married, and 75% of respondents are business owners. Similarly, 53% of respondents have a culinary business, and 72% perceive it as their primary income source. The characteristics of these respondents are quite representative of the population as a whole. F. Umar, A. R. Kadir, A. Reni, R.R. Thaha, R. Setiawan 45 Descriptive Analysis This study uses a Likert scale, with the highest weight in each statement being five (5) and the lowest weight being one (1). Value categories = π»π»π»π»π»π»β„Žπ‘’π‘’π‘’π‘’π‘’π‘’ π‘’π‘’π‘ π‘ π‘ π‘ π‘ π‘ π‘’π‘’βˆ’ 𝐿𝐿𝑠𝑠𝐿𝐿𝑒𝑒𝑒𝑒𝑒𝑒 𝑒𝑒𝑠𝑠𝑠𝑠𝑠𝑠𝑒𝑒 𝑆𝑆𝑠𝑠𝑠𝑠𝑠𝑠𝑒𝑒 π‘ π‘ π‘Ÿπ‘Ÿπ‘Ÿπ‘Ÿπ»π»π‘’π‘’ Value categories = 5βˆ’ 1 5 = 0,8 So that the value category for this research is 0.8, including: 1,0 – 1,8 = Very low 1,8 – 2,6 = Low 2,6 – 3,4 = Neutral 3,4 – 4,2 = High 4,2 – 5,0 = Very high Table 1 indicates that respondents' perceptions of Entrepreneurial Orientation (X) fall into the High category, with an average score of 4.02, indicating a high level of entrepreneurial orientation. The dominant indicator shaping entrepreneurial orientation is Competitive Aggressiveness, with the highest score of 4.21, while Productiveness has the lowest score of 3.87. Table 1: Entrepreneurship Orientation Test Results (X) No Indicator Answer Average Infomation TD D N A A F F F F F % % % % % 1 Autonomy 1 7 15 34 28 3.95 High 2 Innovativeness 1 1 11 41 31 3.94 High 3 Risk Taking 1 1 10 46 27 4.14 High 4 Productiveness 1 4 25 30 25 3.87 High 5 Competitive Aggressiveness 1 0 15 33 36 4.21 Very High Total 4.02 High Source: SPSS 2023 46 Journal of Women’s Entrepreneurship and Education (2023, Special Issue, 37-57) Based on Table 2, respondents' perceptions towards the Management capability variable (Y1) are categorized as High, with a mean score of 4.10, indicating that respondents have high management skills. The dominant indicator forming the Management capability variable is the ability to organize and coordinate, with the highest score of 4.29. Meanwhile, the lowest indicator is the ability to handle information, with a score of 3.83. Table 2: Management Capability Test Results (Y1) No Indicator Answer Average Information TD D N A A F F F F F % % % % % 1 Ability to organize and coordinate 1 0 10 36 38 4.29 Very High 2 Ability to handle information 2 2 26 33 22 3.83 High 3 Able to motivate and influence others. 1 1 16 36 31 4.11 High 4 Able to solve strategic problems. 1 2 14 36 32 4.12 High 5 Able to manage time and stress. 1 3 10 36 35 4.18 Very High Total 4.10 High Source: SPSS 2023 Based on Table 3, respondents' perceptions of the Performance variable (Y2) were in the High category, with an average score of 3.97, indicating that they have high business performance. The dominant indicators forming the business performance variable are job quality, with a score of 4.25, and adaptability, with a score of 4.25. Meanwhile, the lowest indicator is the level of return on investment, with a score of 3.71. F. Umar, A. R. Kadir, A. Reni, R.R. Thaha, R. Setiawan 47 Table 3: Business Performance Test Results (Y2) No Indicator Answer Average Informa-tion TD D N A A F F F F F % % % % % 1 Job Quantity 0 1 7 46 31 4.25 Very High 2 Quality of Work 1 2 18 43 21 3.95 High 3 independence 2 3 26 39 15 3.72 High 4 Adaptability 0 1 7 46 31 4.25 Very High 5 Sales Geographic Expansion 1 2 18 42 22 3.96 High 6 Return On Investment 2 3 26 40 14 3.71 High Total 3.97 High Source: SPSS 2023 Path Analysis Path analysis consists of direct and indirect influence. The research employs regression analysis with variable intervention to determine effect magnitude. Table 4: Path Coefficient (1st model) Sources: SPSS, (2023) 48 Journal of Women’s Entrepreneurship and Education (2023, Special Issue, 37-57) Table 5: Path Coefficient (2nd model) Sources: SPSS, (2023) Table 5: Path Coefficient (2nd model) Sources: SPSS, (2023) Then to determine the error value in the model, the following calculations are carried out: 𝒆𝒆1 = οΏ½1 βˆ’ 𝑅𝑅1 2 = οΏ½1 βˆ’ 0,581 = 0,647 𝑒𝑒2 = οΏ½1 βˆ’ 𝑅𝑅2 2 = οΏ½1 βˆ’ 0,821 = 0,423 From the two models, the path analysis model is obtained as follows: F. Umar, A. R. Kadir, A. Reni, R.R. Thaha, R. Setiawan 49 Figure 2: Path Analysis Information: ________ = Direct Effect - - - - - - - = Indirect Effect Based on Figure.2, the following equation is obtained: Y1 = 0.762X + e1 (1) Y2 = 0.319X + 0.639Y1 + e2 (2) From the path analysis, the equations can be interpreted as follow: 1. p1 = 0.762, indicating that a 1% increase in entrepreneurial orientation leads to a 0.762 increase in management capability. 2. p2 = 0.319, indicating that a 1% increase in entrepreneurial orientation leads to a 0.319 increase in entrepreneurial performance. 3. p3 = 0.639, indicating that a 1% increase in management capability leads to a 0.639 increase in entrepreneurial performance. Assessment of Total, Direct, and Indirect Effects Table 4 shows the following results where the variable entrepreneurial orientation towards management capability has a p-value of 0.000 < 0.05, meaning that entrepreneurial orientation significantly influences management capability, with a path coefficient (X β†’ Y1) of 0.762. The 50 Journal of Women’s Entrepreneurship and Education (2023, Special Issue, 37-57) variable management capability towards business performance has a p-value of 0.000 > 0.05, meaning that management capability significantly influences business performance, with a path coefficient (Y1 β†’ Y2) of 0.639. The variable entrepreneurial orientation towards business performance has a p-value of 0.000 > 0.05, meaning that entrepreneurial orientation significantly influences business performance, with a path coefficient (X β†’ π‘Œπ‘Œ2) of 0.319. Additionally, the R-squared value for entrepreneurial orientation towards management capability in Table 4 is 0.581, meaning that entrepreneurial orientation can explain 58.1% of management capability, while other unexamined variables explain the remaining 41.9%. Similarly, the R-squared value for entrepreneurial orientation and management capability in Table 5 is 0.821, meaning that they can explain 82.1% of business performance, while other unexamined variables explain the remaining 17.9%. Table 6: Direct Effect Test Results Direct Effect Path Coefficient p-value R2 (coefficient of determination) Entrepreneurial Orientation οƒ  Management Capability 0,762 0,000 0,581 Management Capability οƒ Business Performance 0,639 0,000 0,821 Entrepreneurial Orientation οƒ  Entrepreneurial Performance 0,319 0,000 0,821 Source: SPSS 2023 The indirect effect of entrepreneurial orientation on business performance through management capability (𝑋𝑋1 β†’ 𝑀𝑀 β†’ π‘Œπ‘Œ) is (0.762 Γ— 0.639) = 0.487. The total effect of entrepreneurial orientation on business performance through management capability is obtained by adding the direct effect of entrepreneurial orientation on business performance with the indirect effect of entrepreneurial orientation on business performance through management capability (𝑋𝑋1 β†’ 𝑀𝑀 β†’ π‘Œπ‘Œ) = (0.319 + 0.487) = 0.806. The significance of the indirect effect is determined using the Sobel test, with the coefficients and standard errors as follows: = 0.771 (regression coefficient of entrepreneurship orientation on management capability), 𝑏𝑏 = 0.639 (regression coefficient of management capability on business F. Umar, A. R. Kadir, A. Reni, R.R. Thaha, R. Setiawan 51 performance), 𝑆𝑆𝑆𝑆 = 0.072 (standard error value of entrepreneurship orientation on management capability), 𝑆𝑆𝑏𝑏 = 0.076 (standard error value of management capability on business performance). 𝑧𝑧 βˆ’ 𝑣𝑣𝑆𝑆𝑣𝑣𝑣𝑣𝑒𝑒 = π‘Ÿπ‘Ÿπ‘Žπ‘Ž οΏ½π‘Žπ‘Ž2π‘’π‘’π‘Žπ‘Ž 2+π‘Ÿπ‘Ÿ2𝑒𝑒𝑏𝑏 2 (3) 𝑧𝑧 βˆ’ 𝑣𝑣𝑆𝑆𝑣𝑣𝑣𝑣𝑒𝑒 = (0,771)(0,672) οΏ½(0,672 π‘₯π‘₯ 0,072)2+(0,771 π‘₯π‘₯ 0,076)2 𝑧𝑧 βˆ’ 𝑣𝑣𝑆𝑆𝑣𝑣𝑣𝑣𝑒𝑒 = 7,3281 Table 7: Model Assessment Results Indirect Effect z- value Information Entrepreneurial Orientation on Business Performance through Management Capability 7,3281 z-value > z-absolute 1.96 (indirect effect is significant) Source: SPSS 2023 The results show that managerial competence indirectly affects entrepreneurial success through entrepreneurial orientation. The z-value is 7.3281 > z-absolute 1.96. The significance of each partial regression coefficient was tested using the t-test with a significance level of 0.05. The results showed that the orientation towards entrepreneurship (X) had a significant effect on management capability (Y1), which in turn had a significant effect on business performance (Y2). The direct effect of X on Y2 was also significant. Furthermore, the Sobel test found that the indirect effect of X on Y2 through Y1 was significant. These findings support the hypotheses that X has a significant impact on Y1, Y1 has a significant impact on Y2, and X has a significant impact on Y2 through Y1. Discussion The study found that Entrepreneurial Orientation significantly and positively affects Management Capability among female entrepreneurs, with a P value less than alpha. The findings supported Lee & Peterson's (2000) concept of applying management functions in line with entrepreneurial 52 Journal of Women’s Entrepreneurship and Education (2023, Special Issue, 37-57) orientation. The average values for both variables were in the high category, indicating a positive relationship. The results are consistent with Suci's (2008) earlier study, which also found a significant and positive effect of entrepreneurial orientation on management capability. Entrepreneurial orientation and management capabilities work together through innovation and creative ideas to achieve performance and profit. This result suggests that entrepreneurial orientation should be nurtured to avoid common mistakes entrepreneurs make. The analysis found that entrepreneurial orientation significantly affects the performance of female entrepreneurs, meaning that the better the entrepreneurial orientation of female entrepreneurs, the higher their business performance. This finding is consistent with the theory proposed by Lin (2022), stating that developing entrepreneurial orientation concepts is crucial for small businesses. Personal attributes of owners that form entrepreneurial orientation strongly impact business performance, whereas the dimensions of entrepreneurial orientation, including autonomy, risk, innovation, and aggressive competition, positively affect business performance. The description of the entrepreneurial orientation variable shows a high average value of 4.02, while the business performance variable has a high average score of 3.97. This result indicates that business performance will also increase when entrepreneurial orientation is good. The research findings support previous studies by Wiklund and Shepherd (2005), Chow (2006), and Coulthard (2007) that entrepreneurial orientation significantly improves business performance. High entrepreneurial orientation is closely related to the main driver of profit, which creates opportunities for entrepreneurs to profit from emerging opportunities. Based on interviews with female entrepreneurs in Makassar City, they believe it is necessary to have a courageous attitude to try new things, accept orders beyond capacity, introduce new processed products, and improve product quality to improve business performance. By looking at market opportunities based on the risk-taking attitude of female entrepreneurs in Makassar City, they can continue to strive to improve their business performance. The analysis found that management capability significantly influences female entrepreneurs' business performance. The results of the hypothesis test show that the better the management capability, the higher the business F. Umar, A. R. Kadir, A. Reni, R.R. Thaha, R. Setiawan 53 performance. This finding is consistent with previous research by Suci (2008), which found that management capability significantly affects the productivity and performance of small manufacturing companies. The average value of the management capability is high (4.10), and the business performance is also high (3.97), indicating that good management capability leads to good business performance. Female entrepreneurs in Makassar generally have good management capabilities but face challenges such as solving employee problems, motivation and influence, and innovation to improve business performance. The analysis results show that entrepreneurial orientation indirectly affects business performance through management capabilities, meaning that the better the management capabilities of female entrepreneurs, the more able they are to mediate the influence of entrepreneurial orientation on business performance. Developing entrepreneurial orientation in small businesses is highly influenced by management capabilities. This finding is consistent with previous research by Suci (2008), which found that entrepreneurial orientation and management capabilities can improve business performance. Conclusion The present study investigated the relationship between entrepreneurial orientation, management capability, and business performance among female entrepreneurs in Makassar City. The findings showed a significant positive effect of entrepreneurial orientation on management capability and business performance and a significant influence of management capability on business performance. Furthermore, the study revealed that management capability mediates the relationship between entrepreneurial orientation and business performance. These results support previous research and highlight the importance of fostering entrepreneurial orientation and management capability for small business success, especially for female entrepreneurs. Theoretical Implications The study's findings contribute to the theoretical understanding of the relationship between entrepreneurial orientation, management capability, and business performance, particularly among female entrepreneurs. The results supported the concept proposed by Lee and Peterson (2000) that applying management functions in line with entrepreneurial orientation is 54 Journal of Women’s Entrepreneurship and Education (2023, Special Issue, 37-57) essential for business success. Additionally, the study's findings align with the theory proposed by Lin (2022), emphasizing the significance of developing entrepreneurial orientation for small businesses. The research also contributes to the existing literature by highlighting the mediating role of management capability in the relationship between entrepreneurial orientation and business performance. Practical and Policy Makers Implications The study's findings have practical implications for female entrepreneurs and policymakers. The results suggest that female entrepreneurs need to cultivate entrepreneurial orientation to avoid common mistakes made by entrepreneurs and improve business performance. Policymakers can support female entrepreneurs by providing training and resources to develop entrepreneurial orientation and management capability. Additionally, policymakers can consider developing policies that promote gender equality in business ownership and access to resources, which may contribute to increasing female entrepreneurs' success rates. To sum it up, the study's findings support the importance of entrepreneurial orientation and management capability in improving business performance, particularly among female entrepreneurs. These findings have theoretical implications for understanding the relationship between these variables and practical implications for female entrepreneurs and policymakers. Female entrepreneurs can enhance business performance by fostering entrepreneurial orientation and management capability, contributing to economic growth and development. Limitations and Suggestions for Further Research The studies mainly focus on the relationship between entrepreneurial orientation, management capability, and business performance among female entrepreneurs in Makassar, Indonesia. Therefore, the generalizability of the findings to other contexts or regions is limited. The studies do not consider the socio-cultural factors affecting women entrepreneurs' entrepreneurial behavior and performance, such as gender stereotypes, limited access to resources, and institutional barriers. Moreover, the studies do not differentiate the impact of specific dimensions of entrepreneurial orientation, such as risk-taking or innovation, on management capability and business performance among women F. Umar, A. R. Kadir, A. Reni, R.R. Thaha, R. Setiawan 55 entrepreneurs. Thus, it is unclear which dimension of entrepreneurial orientation is more critical for improving female entrepreneurs' management capability and business performance. 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