Entrepreneurs’ Competencies and Competitive Advantages: A Study on Malaysian Microenterprises

Abstract

Considering the significance of relevant competencies towards business success and the dependency of socio-economical vulnerable micro-entrepreneurs on their enterprise income, this study examined the effect of entrepreneurs’ competencies (i.e., opportunity recognizing competency, strategic competency, organizing competency, relationship competency, conceptual competency and commitment competency) on the competitive advantage of microenterprises in Malaysia. This study adopted a cross-sectional research design and collected quantitative data from 300 randomly selected respondents from Peninsular Malaysia. The findings revealed significant positive effects of organizing and commitment competency on the competitive advantage with a significantly negative effect of relationship competency on the competitive advantage. Apart from enriching the current literature, this study offers significant policy implications for the government and socio-developmental organizations in Malaysia for improving the micro-entrepreneurship and uplifting large low-income groups from poverty.

Keywords

Entrepreneurial competency competitive advantage microenterprise Malaysia

Introduction

Micro, small and medium enterprises played a strategic role in the national development by bridging the economic dearth, which was unattended by the macro or large-scale organizations (Chatterjee & Das, 2016; Ratnawati, Soetjipto, Murwani, & Wahyono, 2018). Microenterprises were acknowledged for their contribution in providing employment and regional development, thereby addressing issues such as unemployment, poverty and inequality (Chatterjee & Das, 2016). In developing nations, micro-entrepreneurial activities can improve the local economy to fulfil the residents’ standard of living, and they are considered the key to wealth creation (Poon, Mohamad, & Yusoff, 2018). It contributed more than 36 per cent contribution to the Gross Domestic Product and over 60 per cent to employment. Hence, it is considered the primary catalyst that could transform Malaysia into a prosperous developed nation. The success and sustainability of micro to medium-sized enterprises are crucial for the national economy and social well-being of Malaysia (Poon et al., 2018).

Existing studies had highlighted the significance of competitive advantages for sustainable enterprise performance (Mamun, Nawi, Permarupan, & Muniady, 2018). Microenterprises had a relatively higher level of competitive advantage as they can perform better than their competitors. However, small enterprises cannot acquire sustainable competitive advantage if they did not prioritize the effort in enhancing their intangible resources to create more values than their competitors (Ratnawati et al., 2018). According to Chatterjee and Das (2016), entrepreneurs must possess unique resources such as relevant competencies, which are essential for entrepreneurial success. Saleem, Hanif, and Hamid (2018) affirmed that the focus on competencies is the most important factor to enhance the effectiveness and performance at the workplace. Mamun et al. (2018) highlighted that entrepreneurial competency is the key determinant for superior microenterprise performance and rapid economic development in Malaysia.

Several studies in entrepreneurship literature focused on various entrepreneurial dimensions and business success. Only a handful of empirical studies have specifically looked into the effects of entrepreneurial competencies on micro-entrepreneurial competitive advantages in emerging nations, such as Malaysia. The existing literature portrays inadequate studies that have empirically investigated entrepreneurial competency using several dimensions (e.g., strategic competency, opportunity recognizing competency and organizing competency). With the present rapidly changing the socio-economic environment of emerging economies, such as Malaysia, it is timely and significant to empirically verify (or reject) if existing popular conceptualizations of competency approach (see Man, Lau, & Chan, 2002; Man, Lau, & Snape, 2008) remain contextually valid.

Apart from the above, it is integral to comprehend in an in-depth manner as to which valid competencies (at present) enable superior firm performance, in order to formulate effective entrepreneurial development programmes that are required to promote entrepreneurial activities, particularly amidst socio-economically vulnerable low-income households to eradicate poverty. Hence, in order to enrich the current literature, particularly in the Malaysian context, and to ascertain validity of Man’s et al. (2008) measure of entrepreneurial competencies; this study examined the effects of multi-dimensional competencies (opportunity recognizing competency, strategic competency, organizing competency, relationship competency, conceptual competency and commitment competency) on the competitive advantage of microenterprises in Malaysia. The resultant can assist the Malaysian government and socio-developmental organizations, such as TEKUN Nasional and Majlis Amanah Rakyat (MARA), to alleviate poverty and to improve socio-economic conditions among low-income households in Malaysia through effective competency-based strategies, policies and programmes.

Entrepreneurial Competencies and Competitive Advantages

Entrepreneurial competencies refer to a set of characteristics (total ability), including individual traits, knowledge and skills, which can improve entrepreneurial performance (Man et al., 2002). Competitive advantage is defined as a firm’s ability to perform its activities in a way, which is different, that cannot be imitated by others (Al-Mamun, Nawi, Ibrahim, & Muniady, 2018). Resources are known to possess several potential advantages for enterprises such as lower costs, greater efficiency, improved quality, larger market share, increasing profitability and enhanced achievement (Ratnawati et al., 2018). This study used the analytical approach of the resource-based view (RBV) that emphasized on improving competitive advantages through valuable, non-substitutable and inimitable resources of firms (Barney, 1991; Reese, 2018). The core of RBV believed that firms are different from each other due to their specific set of resources. It is believed that acquiring the most sustainable competitive advantages can be done by employing entrepreneurial competence or firm-specific capabilities (Barney, 1991; Grant, 1996; Ratnawati et al., 2018).

Saleem et al. (2018) found a significantly positive influence of entrepreneurs’ competencies on firm performance. A study by Kurniawan and Yun (2018) found a positive effect of business continuity and entrepreneurial competencies on the competitive advantages of the firms. Hence, it can be said that entrepreneurs’ competencies are one of the most significant factors for business success and development in the modern economy (Mitchelmore & Rowley, 2013). For entrepreneurial competency, the extensive review of the literature revealed that most studies emphasized on opportunity recognizing, strategic, organizing, relationship, conceptual and commitment-related abilities of an individual to adopt the key entrepreneurial competencies (Kanniainen & Poutvaara, 2007; Mamun et al., 2018; Man, Lau, & Chan, 2002; Man, Lau, & Snape, 2008; Zainol & Al-Mamun, 2018). This study focused on these specific constructs to develop the hypotheses.

Opportunity Recognizing Competency and Competitive Advantages

One of the most crucial requirements for the entrepreneurs is the alertness in identifying innovative ideas within a limited timeframe and transforming them into novel business opportunities (Kwon, Ryu, & Park, 2018). According to Mamun et al. (2018), competent entrepreneurs possessed a greater capacity to screen new opportunities. Man et al. (2002) identified opportunity recognition competency as an entrepreneur’s ability to identify and select suitable opportunities before pursuing entrepreneurial activities. Another study by Man et al. (2008) confirmed that the contributions of entrepreneurs’ capacity in recognizing income-generating opportunity towards organizational capability and competitive scope of the firms. It was perceived that entrepreneurs’ capacity to recognize income-generating opportunities can lead to an increase in entrepreneurial insights, innovative methods and novel solutions that can deceive the risk of business failure (Zainol & Al-Mamun, 2018).

Strategic Competency and Competitive Advantages

From a strategic perspective, competencies can be organizational processes, functions and routines (Cardy & Selvarajan, 2006). Man et al. (2002) defined strategic competency as the abilities of an entrepreneur in formulating, evaluating and implementing strategies of an enterprise. Man et al. (2008) revealed the significant contribution of entrepreneurs’ strategic competency towards firms’ capabilities and competitiveness. According to Cardy and Selvarajan (2006), competencies must synchronize with the strategic intent to accomplish the organizational mission. Strategic competency is the entrepreneur’s capability to develop a vision for the business by planning, formulating and employing strategies, setting clear standards and goals, forecasting financial needs and providing creative ideas to ensure value addition and integration which lead to superior business performance (Man et al., 2002; Zainol & Al-Mamun, 2018).

Organizing Competency and Competitive Advantages

Organizing competency requires skills and knowledge to lead, delegate, coach and train (Man et al., 2002). Based on RBV, Tallman, Jenkins, Henry, and Pinch (2004) stated that organizing competency could provide competitive advantages by offering rear and firm-specific ways to organize knowledge and other assets that deliver unique values to customers. According to Man et al. (2002), organizing competency is associated with the effective allocation of various external, internal, physical, technological and financial resources along with managing human assets, team-building, training and controlling business performance. Existing studies affirmed that organizing competency is the ability to command, lead, coordinate, manage, control, delegate, monitor and motivate the structures and processes such as preparing budgets, planning raw material allocation and human resource related work schedules and developing programmes that focus on core competencies in achieving competitive advantages (Man et al., 2002; Zainol & Al-Mamun, 2018).

Relationship Competency and Competitive Advantages

The present competitive business environment required enterprises to develop strong relationships with their suppliers and customers for competitive advantages (Mamun et al., 2018). Man et al. (2002) defined relationship competency as individual-to-individual or person-to-group-based interactions in building trust and cooperation using persuasive communications, connections and interpersonal skills. A study by Halvadia and Singh (2018) stated that relationship competency is the process of identifying, building and sustaining critical business relationships both externally and internally that has leverage on the existing customer relationships to achieve competitive advantages. According to Sayil, Akyol, and Simsek (2018), relationship competence can induce consumer loyalty through customer value, relationship quality and satisfaction based on communication, trust and relationship investment. It can facilitate competitive advantages.

Conceptual Competency and Competitive Advantages

Conceptual competency reflects the identifiable and observable responses such as analytical, cognitive, learning, problem-solving and decision-making abilities along with the abilities to sustain tension, innovate and cope with risks and uncertainties that can determine entrepreneurial success (Man et al., 2002). Mamun et al. (2018) noted that entrepreneurial activities required higher levels of conceptual abilities to learn, solve problems, analyze and make decisions. According to Man et al. (2002), conceptual competency required analytical ability when confronting complex situations such as making the decision regarding opportunities, comprehending and absorbing complex information, assessing the risk of new markets, evaluating different ways of sourcing and building novel capabilities.

Commitment Competency and Competitive Advantages

Commitment competency refers to the fundamental traits of successful entrepreneurs including diligence, determination, initiative, dedication and being proactive (Man et al., 2002). According to Sayil et al. (2018), some of the factors that can help in achieving competitive advantages are commitment, conflict handling and communications-related competencies. Moreover, Man et al. (2002) noted that entrepreneurs who aimed to achieve long-term goals with strong devotion, initiatives and possessing entrepreneurial attitude are more likely to have commitment competencies. Humphrey, Miao, and Qian (2017) confirmed that individuals with high organizational commitment have lower turnover intentions and higher work-related performance. It is believed that entrepreneurs should have commitment abilities to sustain competitive advantages.

Methodology

This study implemented the cross-sectional design using quantitative data from the structured interview sessions to determine the effects of entrepreneurial competencies on the competitive advantages for the microenterprises from various development organizations in Peninsular Malaysia. The respondents, who were from low-income and poor households, were interested in socio-economic development through the provision of working capital and enterprise development training programmes. Besides that, all information regarding the development of the organizations and respondents were retrieved from eKasih National Poverty Data Bank. This study had randomly selected 400 low-income and poor households from Kelantan, Terengganu, Kedah and Perlis. Before the data collection, the selected respondents were contacted to explain the purpose of the survey and set an appointment for the interview. The entire data collection process took 2 months from October until November 2017. A total of 300 respondents agreed to participate in the survey and allowed the team to visit their premises for the interview.

Sample Size

The sample size of this study was determined using G-Power version 3.1. Based on the power of 0.95 (should exceed 0.80 for social and behavioural science research) with an effect size of 0.15, this study required 146 respondents to test the model with six predictors. Therefore, this study planned to select 300 low-income and poor households from Kelantan, Terengganu, Kedah and Perlis as the respondents to avoid any possible limitation due to small sample size.

Research Instrument

The questionnaire included simple and unbiased terms for ease of comprehension so that the respondents can provide accurate answers based on their perceptions. This study adapted questions from Man et al. (2008) for commitment competency, conceptual competency, organizing competency, opportunity recognition competency, relationship competency and strategic competency. The questions for competitive advantages were adapted from Norshafizah (2012) with minor modifications. Complete questionnaire presented in Table 1A.

Data Analysis

Descriptive Analysis

The data were collected from 300 low-income households in the states of Kelantan, Terengganu, Kedah and Perlis, in Peninsular Malaysia. The majority of the respondents (53.7%) were males. A total of 111 respondents (37%) were in the age range from 31 to 40 years old, followed by 85 respondents (28.3%) who were 41–50 years old and 66 respondents (22%) within the age range from 51 to 60 years old. However, only 10 respondents (3.3%) were between 20 and 30 years old. Perhaps, most poor micro-entrepreneurs ventured into business as a last (or at least later) resort out of necessity, after failing to find employment, which is why most of them are found to be in their 30s (and above). Regarding marital status, 243 respondents (81.0%) were married. The remaining respondents were either widowed (7%) or separated from their partners (1.3%). For educational background, most of the respondents (31.7%) achieved primary school education while 81 of them (27%) completed secondary school education. There were two respondents (0.7%) with a master’s degree. The remaining respondents (17%) had never attended school. For employment status, 200 households (66.7%) had two gainfully employed members, 69 (23%) had one employed member, 30 (10%) had three employed members and only one (0.3%) had four employed members. The final demographic data profile showed the number of household income sources. The majority of the respondents (72%) relied on one source of household income, 76 households (25.3%) relied on two sources of income and the remaining eight households (2.7%) relied on three sources of income.

Reliability and Validity

Table 1 shows Cronbach’s alpha and composite reliability values for all variables in this study. Cronbach’s alpha values for opportunity recognizing competency, strategic competency, organizing competency, relationship competency, conceptual competency, commitment competency and competitive advantages were more than 0.8, which were more than 0.7. Hence, all of the items were considered reliable. For the composite reliability, the indicators had different loadings for all items more than 0.8. If the indicators are higher than 0.7, they are considered reliable (Hair, Ringle, & Sarstedt, 2013). The Dillon–Goldstein rho values for all constructs were more than 0.8, which confirmed the items’ reliability (see Table 1). Table 2 shows the absolute standardized outer loadings for all items to measure opportunity recognizing competency, strategic competency, organizing competency, relationship competency, conceptual competency, commitment competency and competitive advantages which were higher than 0.6. The results confirmed that there was adequate reliability.

For validity, this study relied on convergent and discriminant validity tests. Convergent validity is a set of indicators that represent the same underlying construct, which can be demonstrated through their unidimensionality. The average variance extracted (AVE) values for all items were more than 0.5, which had sufficient convergent validity (Hair, Ringle, & Sarstedt, 2011) (see Table 1). The cross-loadings of the indicators should be examined to assess discriminant validity (Hair, Ringle, & Sarstedt, 2013). Table 2 shows the cross-loading values which were far below the outer loadings. The results suggested good discriminant validity. Moreover, the Fornell–Larcker test was used to assess the discriminant validity at the construct level. The Fornell–Larcker criterion in Table 2 was unable to detect any lack of discriminant validity. The heterotrait–monotrait ratio (HTMT) was used as an estimate of the correlation between the constructs which was parallel to the disattenuated construct score creation. By using the value of 0.9 as the threshold, this study confirmed that there was no evidence for the lack of discriminant validity and all the constructs had met the criteria. This study also tested the variance inflation factors (VIF) to address the multicollinearity issue. The VIF values for all variables were below 3.0 (see Table 1), indicating the absence of multicollinearity between the variables (Diamantopoulos & Siguaw, 2006).

Table 1.

Reliability Analysis

Variables	Items	CA	DG rho	CR	AVE	VIF
Opportunity recognizing competency	6	0.907	0.910	0.929	0.684	2.142
Strategic competency	5	0.827	0.882	0.870	0.574	1.147
Organizing competency	6	0.935	0.936	0.949	0.756	2.014
Relationship competency	6	0.867	0.884	0.901	0.606	1.179
Conceptual competency	6	0.866	1.223	0.860	0.508	1.083
Commitment competency	6	0.876	0.877	0.907	0.622	1.677
Competitive advantage	5	0.926	0.930	0.944	0.773	-

Source: The authors.

Notes: CA, Cronbach’s Alpha; DG rho, Dillon-Goldstein’s rho; CR, Composite Reliability; AVE, Average Variance Extracted; VIF, Variance Inflation Factors.

Table 2.

Outer Model Loading and Cross-loading

	ORC		STC	ORG	REC	COC	COM	COA
ORC -1	0.860		0.140	0.581	−0.197	0.075	0.419	0.379
ORC -2	0.762		0.185	0.530	−0.141	0.068	0.421	0.338
ORC -3	0.812		0.124	0.548	−0.248	0.068	0.453	0.394
ORC -4	0.853		0.077	0.561	−0.231	0.060	0.470	0.424
ORC -5	0.801		0.069	0.535	−0.267	0.052	0.434	0.379
ORC -6	0.870		0.149	0.552	−0.249	0.066	0.454	0.398
STC -1	0.103		0.754	0.136	0.026	−0.081	0.286	0.068
STC -2	0.074		0.642	0.108	0.078	−0.065	0.273	0.028
STC -3	0.127		0.725	0.127	0.118	−0.042	0.239	0.082
STC -4	0.171		0.781	0.198	0.101	−0.002	0.249	0.108
STC -5	0.080		0.869	0.182	0.051	−0.051	0.250	0.134
ORG -1	0.605		0.222	0.906	−0.144	−0.030	0.524	0.573
ORG -2	0.605		0.195	0.905	−0.099	−0.036	0.494	0.565
ORG -3	0.580		0.191	0.887	−0.106	−0.003	0.472	0.549
ORG -4	0.510		0.133	0.801	−0.173	−0.003	0.461	0.521
ORG -5	0.552		0.130	0.786	−0.120	−0.057	0.441	0.521
ORG -6	0.617		0.205	0.922	−0.148	−0.001	0.465	0.530
REC -1	−0.218		0.065	−0.096	0.855	0.196	−0.053	−0.118
REC -2	−0.223		0.143	−0.158	0.742	0.079	−0.023	−0.120
REC -3	−0.233		0.089	−0.111	0.852	0.126	−0.001	−0.130
REC -4	−0.182		0.028	−0.096	0.715	0.204	−0.023	−0.120
REC -5	−0.211		0.080	−0.136	0.628	0.120	−0.037	−0.093
REC -6	−0.207		0.051	−0.117	0.848	0.178	−0.033	−0.160
COC -1	0.123		−0.021	−0.031	0.163	0.663	0.046	0.003
COC -2	0.053		−0.024	−0.050	0.139	0.687	0.012	0.031
COC -3	0.113		−0.027	−0.007	0.160	0.682	0.032	0.031
COC -4	0.005		−0.058	−0.033	0.150	0.859	0.039	0.090
	ORC		STC	ORG	REC	COC	COM	COA
COC -5	0.153		−0.033	0.016	0.148	0.660	0.045	0.014
COC -6	0.153		−0.026	0.040	0.146	0.704	−0.003	0.022
COM -1	0.448		0.225	0.462	0.015	0.047	0.770	0.342
COM -2	0.480		0.270	0.492	−0.076	0.051	0.823	0.372
COM -3	0.434		0.283	0.408	−0.084	0.029	0.899	0.333
COM -4	0.415		0.262	0.468	−0.028	0.043	0.702	0.357
COM -5	0.426		0.229	0.407	−0.025	0.024	0.690	0.328
COM -6	0.283		0.259	0.314	0.045	−0.029	0.828	0.280
COA -1	0.434		0.061	0.536	−0.172	0.039	0.436	0.904
COA -2	0.414		0.148	0.587	−0.129	0.082	0.398	0.912
COA -3	0.288		0.102	0.515	−0.089	0.097	0.210	0.779
COA -4	0.438		0.147	0.569	−0.163	0.044	0.398	0.873
COA -5	0.467		0.097	0.542	−0.152	0.064	0.432	0.922
Fornell–Larcker Criterion
OCR		0.827
STC		0.148	0.758
ORG		0.666	0.208	0.870
REC		−0.271	0.096	−0.151	0.778
COC		0.078	−0.054	−0.025	0.195	0.713
COM		0.535	0.325	0.549	−0.036	0.038	0.789
COA		0.467	0.127	0.626	−0.162	0.073	0.431	0.879
Heterotrait–Monotrait Ratio
OCR		-
STC		0.169	-
ORG		0.724	0.221	-
REC		0.307	0.126	0.171	-
COC		0.150	0.077	0.054	0.223	-
COM		0.591	0.396	0.598	0.079	0.077	-
COA		0.506	0.124	0.673	0.177	0.062	0.470	-

Source: The authors.

Notes: OCR, Opportunity Recognizing Competency; STC, Strategic Competency; ORG, Organizing Competency; REC, Relationship Competency; COC, Conceptual Competency; COM, Commitment Competency; COA, Competitive Advantage.

Path Coefficients

Path coefficients were estimated as the path relationships in the structural model between the constructs. Table 3 shows the path coefficients of organizing competency and commitment competency that had a positive and statistically significant effect on competitive advantages (at the chosen 5% level of significance). Relationship competency had a significantly negative effect on competitive advantages. On the other hand, opportunity recognizing competency and conceptual competency had a positive but insignificant (statistically) effect on competitive advantages at the chosen 5 per cent level of significance. Strategic competency had a negative and insignificant effect on competitive advantages. Table 3 shows that organizing competency had a medium to a large effect (size) on competitive advantages. Opportunity recognizing competency and strategic competency had almost no effect on competitive advantages, whereas relationship competency, conceptual competency and commitment competency had zero to small effect on competitive advantages.

Discussion

The results confirmed the importance of certain entrepreneurial competencies in achieving competitive advantages. The findings revealed that opportunity recognizing competency had a positive but insignificant effect on competitive advantages (H₁). Although in line with Man et al. (2008), a positive correlation is identified across the sample, the data does not allow us to conclude a significant association between opportunity recognizing competence and microenterprise competitiveness. This indicates that low-income entrepreneur abilities to identify and select suitable opportunities did not impact the competitive advantages of microenterprises in Malaysia. It can be said that the poor micro-entrepreneurs in this study had limited resources (e.g., entrepreneurial education, skills or characteristics) and financial constraints that impeded them from assessing potential business opportunities thoroughly.

Strategic competency had a negative and insignificant effect on competitive advantages (H₂). In line with existing studies (Man et al., 2008; Zainol & Al-Mamun, 2018), this indicates that the low-income entrepreneurs’ abilities to formulate and evaluate long-term plans did not affect the competitive advantages of the microenterprises in Malaysia. It could be because micro-entrepreneurs were mostly driven by basic needs and therefore, paid little attention to strategizing long-term performance plans. The organizing competency portrayed a positive and statistically significant effect on competitive advantages (H₃). This finding was in line with the previous studies (Man et al., 2002; Tallman et al., 2004), suggesting that low-income entrepreneurs’ abilities to effectively allocate resources can facilitate the microenterprises in Malaysia to achieve competitive advantages. Unexpectedly, relationship competency had a significantly negative effect on competitive advantages (H₄). The significance of entrepreneurs’ relationship abilities towards the firms’ competitiveness was established in the existing literature (Man et al., 2008; Mitchelmore & Rowley, 2013). However, the negative correlation could be because the poor micro-entrepreneurs might lack the interaction skills which affected their microenterprises performance negatively.

Table 3.

Path Coefficient

	Coefficient	t-value	p-value	ƒ²	Decision
ORC → COA	0.008	0.100	0.460	0.000	Reject
STC → COA	−0.014	0.258	0.398	0.000	Reject
ORG → COA	0.543	8.158	0.000	0.252	Accept
REC → COA	−0.091	1.823	0.034	0.012	Accept
COC → COA	0.099	0.981	0.163	0.015	Reject
COM → COA	0.126	1.942	0.026	0.016	Accept

Source: The authors.

Notes: ORC, Opportunity Recognizing Competency; STC, Strategic Competency; ORG, Organizing Competency; REC, Relationship Competency; COC, Conceptual Competency; COM, Commitment Competency; COA, Competitive Advantage.

Conceptual competency had a positive but insignificant effect on competitive advantages (H₅). Despite the positive effect identified by the respondents, the data did not allow the conclusion on any significant impact of micro-entrepreneurs’ analytical, cognitive or problem-solving abilities on the competitive advantages of the microenterprises in Malaysia. It is believed that superior firm performance did not require conceptual competencies (among microenterprises) or their linkage was simply not linear. It was found that commitment competency had a significant positive effect on competitive advantages. In line with the existing literature (Zainol & Al-Mamun, 2018), this finding found that low-income entrepreneurs’ determination and dedication were necessary to invoke competitiveness among the microenterprises in Malaysia.

Implications and Conclusion

It is important to identify the various entrepreneurial competencies and their effects on competitive advantages of microenterprises to enhance the entrepreneurship developmental strategies and entrepreneurial activities among the low-income groups in Malaysia. Hence, this study examined the effects of opportunity recognizing, strategic, organizing, relationship, conceptual and commitment competencies of low-income entrepreneurs on the competitive advantages of the microenterprises in Malaysia.

This study has addressed the existing inadequacy noted in the present literature by enriching the context through the provision of empirical evidence that depicts the correlations between various entrepreneurial competencies and competitive advantages in light of microenterprises of emerging economies, using uncommon Malaysian dataset. This study further contributes by empirically investigating several entrepreneurial competency dimensions (i.e., opportunity recognizing competency, strategic competency, organizing competency, relationship competency, conceptual competency and commitment competency) in a single framework, which is limited in the existing literature. This study empirically validated Man’s et al. (2002) conceptualizations of competencies in the present rapidly changing socio-economic scenario portrayed in Malaysia. The findings revealed that Man et al.’s (2008) measure of entrepreneurial competencies remains statistically valid and reliable even after a decade; wherein, organizing competency, relationship competency and commitment competency are still significant predictors of firms’ superior performance.

In terms of theory, this study empirically confirms the resource-based view (RBV), advocating the exploitation of organizing, relationships and commitment competencies, as unique and valuable resources (capabilities) to leverage firms’ competitive edge. Considering the significance of nuanced understanding of valid and contemporary competencies that facilitate superior firm performance, this study presents significant practical implications and policy considerations for both the government and socio-developmental organizations in Malaysia. Such implications and considerations may assist in formulating viable and effective entrepreneurial developmental programmes, which are in need to promote entrepreneurial activities and micro-entrepreneurship growth, particularly among socio-economically vulnerable and low-income households in the attempt of addressing poverty. The findings imply that policies and programmes should focus on improving the organizing and commitment-related abilities of the microenterprises. Strategies should also target strengthening the relationships competencies through a common platform between micro-entrepreneurs and other stakeholders such as government agencies, non-profit organizations, suppliers and customers in the effort to improve the competitiveness of micro-entrepreneurship in the country.

For the researchers, this study had enriched the knowledge related to the present study. This study had its limitations. First, it focused on entrepreneurial competency as a driver of competitive advantages as the real practice might be influenced by other factors. This study focused on a few potential dimensions of entrepreneurial competency, which were non-exhaustive. Furthermore, the study was confined to selected microenterprises that could limit the generalizability. Based on the limitations, future researchers are recommended to study other variables that could drive SME competitiveness such as entrepreneurial orientation, business environment and many more. Future research can consider and integrate other competency-related dimensions to extend the present model (e.g., learning competency). It could also be worthwhile for future researchers to use big sample size, which can be cross-validated to provide a generalized output and more comprehensive understanding of discrepancies associated with entrepreneurial competency and firms’ sustainable competitive advantages across the nations.

Appendix A

Table 1A.

Survey Questions

Code	Questions
ORG-1	As the owner of this business, I am able to plan the operations of the business
ORG-2	As the owner of this business, I am able to organize resources
ORG-3	As the owner of this business, I am able to coordinate tasks
ORG-4	As the owner of this business, I am able to supervise subordinates
ORG-5	As the owner of this business, I am able to lead subordinates
ORG-6	As the owner of this business, I am able to delegate effectively
STC-1	As the owner of this business, I am able to determine long-term issues, problems or opportunities
STC-2	As the owner of this business, I am aware of the projected directions of the industry and how changes might impact the firm
STC-3	As the owner of this business, I am able to prioritize work in alignment with business goals
STC-4	As the owner of this business, I am able to align current actions with strategic goals
STC-5	As the owner of this business, I am able to monitor progress towards strategic goals
REC-1	As the owner of this business, I am able to develop long-term trusting relationships with others
REC-2	As the owner of this business, I am able to negotiate with others
REC-3	As the owner of this business, I am able to interact with others
Code	Questions
REC-4	As the owner of this business, I am able to maintain a personal network of work contacts
REC-5	As the owner of this business, I am able to understand what others mean by their words and actions
REC-6	As the owner of this business, I am able to communicate with others effectively
COC-1	As the owner of this business, I am able to apply ideas, issues and observations to alternative contexts
COC-2	As the owner of this business, I am able to integrate ideas, issues and observations into more general contexts
COC-3	As the owner of this business, I am able to take reasonable job-related risks
COC-4	As the owner of this business, I am able to monitor progress towards objectives in risky actions
COC-5	As the owner of this business, I am able to look at old problems in new ways
COC-6	As the owner of this business, I am able to explore new ideas
COM-1	As the owner of this business, I am able to dedicate time/other resources to make the venture work whenever possible
COM-2	As the owner of this business, I am able to refuse to let the venture fail whenever appropriate
COM-3	As the owner of this business, I am able to possess an extremely strong internal drive
COM-4	As the owner of this business, I am able to commit to the financial management decisions in terms of using money for other activities
COM-5	As the owner of this business, I am able to commit to the financial management decisions in terms of selling products on credit
COM-6	As the owner of this business, I am able to commit to long-term business goals
ORC-1	As the owner of this business, I am able to identify goods or services customers want
ORC-2	As the owner of this business, I am able to understand the usefulness of new tools/technologies to improve business performance
ORC-3	As the owner of this business, I am able to understand the usefulness of new methods/services to improve business performance
ORC-4	As the owner of this business, I am able to perceive unmet consumer needs
ORC-5	As the owner of this business, I am able to actively look for products or services that provide real benefit to customers
ORC-6	As the owner of this business, I am able to seize high-quality business opportunities
COA-1	Sometimes, I give extra (adding the volume) of my sale product or if they don’t have enough small money I just give away
COA-2	I sell the products more cheaper to my customer (after consider my cost)
COA-3	I have experience more than the others, about the product, market and network
COA-4	I have prepared myself and business to sustain in these economy situations, considered to the current economy
COA-5	I build up a good relationship with the customers

Source: Items used to measure commitment competency, conceptual competency, organizing competency, opportunity recognition competency, relationship competency and strategic competency adapted from Man et al. (2008). The questions for competitive advantages were adapted from Norshafizah (2012).

Footnotes

Acknowledgement

The authors are grateful to the anonymous referees of the journal for their extremely useful suggestions to improve the quality of the article. Usual disclaimers apply.

Declaration of Conflicting Interests

Funding

The authors received no financial support for the research, authorship and/or publication of this article.

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