Accelerating the Performance of Micro and Small Enterprises in Surabaya City: Antecedents of Management Strengthening and Innovation Strategy
Keywords:
Innovation, management, micro_small, performance, strategy
Abstract
Objective: This study aims to examine the effect of management strengthening on innovation strategies and performance acceleration, as well as to examine the effect of innovation strategies on the performance acceleration of micro and small businesses.
Design/methodology/approach: This research is categorized as quantitative research with an associative/ explanatory approach accompanied by hypothesis testing. The unit of analysis in this study is micro and small business actors with a population of 154. The sample size in this study was 78 (50.65%), with members of the sample taken from the population using purposive sampling, hereinafter referred to as respondents. Questionnaires were sent to respondents to be completed within a period of one month (September 1, 2025 - September 30, 2025).
Findings: Path analysis reveals that management strengthening has a direct and significant effect on innovation strategy with standardized coefficient 0.362 (sig. 0.038) and on business performance acceleration with standardized coefficient 0.384 (sig. 0.037). Innovation strategy directly and significantly affects the acceleration of micro and small business performance with standardized coefficient 0.309 (sig. 0.041). These findings indicate that effective management strengthening, particularly in planning and implementation, not only facilitates innovation strategies responsive to environmental and digital changes but also leads to more efficient business processes and enhanced performance acceleration. Both management strengthening and innovation strategies are relevant predictors for accelerating the growth performance of micro and small businesses. Accordingly, hypotheses H1, H2, and H3 are supported because all antecedents tested show a direct, positive, and significant effect at a significance level below 0.05.
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References
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Islam, M. A., Hack-Polay, D., Rahman, M., & Dal Mas, F. (2024). Positioning marketing analytics for organisational agility in the ready-made garments industry in an emerging country context. Journal of Strategic Marketing, 32(8), 987–1000. https://doi.org/10.1080/0965254X.2024.2325530
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Mayanja, S. S., Kizito, R. D., Mutebi, H., & Zombeire, R. K. (2024). Entrepreneurial intentions and family business generational transfers: The mediating role of re-organization among small and medium enterprises. IIMBG Journal of Sustainable Business and Innovation, 2(2), 163–185. https://doi.org/10.1108/ijsbi-03-2024-0016
Mayanja, S. S., Mutebi, H., & Isingoma, J. W. (2025). Entrepreneurial networking and sustainability of women-owned micro-enterprise performance: the mediating role of self-organization and entrepreneurial learning behaviors. IIMBG Journal of Sustainable Business and Innovation, 3(1), 61–86. https://doi.org/10.1108/ijsbi-08-2024-0039
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Nguyen, N. X., Nguyen, D. T., Suseno, Y., & Bui Quang, T. (2024). The flipped side of customer perceived value and digital technology in B2B professional service context. Journal of Strategic Marketing, 32(8). https://doi.org/10.1080/0965254X.2020.1755350
Prashar, A. (2019). Towards sustainable development in industrial small and Medium-sized Enterprises: An energy sustainability approach. Journal of Cleaner Production. https://doi.org/10.1016/j.jclepro.2019.07.045
Sawaean, F. A. A., & Ali, K. A. M. (2020). The impact of entrepreneurial leadership and learning orientation on organizational performance of SMEs: The mediating role of innovation capacity. Management Science Letters, 10(2), 369–380. https://doi.org/10.5267/j.msl.2019.8.033
Qasim, D., Shuhaiber, A., & Rawshdeh, Z. (2025). The impact of entrepreneurial orientation on innovation performance: the role of knowledge sharing as a mediating factor. Journal of Innovation and Entrepreneurship, 14(1). https://doi.org/10.1186/s13731-025-00543-3
Wahyudiono, W., Gunawan, G., & Wijaya Putri, H. I. (2023). Leveraging the Growth of Micro and Small Sector Businesses In Sidoarjo Regency: Antecedents of Social Media And Strengthening Management. IJEBD (International Journal of Entrepreneurship and Business Development), 6(6). https://doi.org/10.29138/ijebd.v6i6.2564
Wahyudiono, Hermanto, Y. B., Estiasih, S. P., & Aminatuzzuhro. (2024a). Performance recovery of creative sector industries: strengthening management literacy and digital business innovation. Journal of Innovation and Entrepreneurship, 13(1). https://doi.org/10.1186/s13731-024-00376-6
Wahyudiono, Aini, N., Murni, S. A., & Rosyid, A. (2024b). Maintaining Sustainable Growth of Micro and Small Enterprises: Antecedents of Management Orientation and Digital Business. Sustainability (Switzerland), 16(15), 1–19. https://doi.org/10.3390/su16156638
Wahyuni, N. M., & Sara, I. M. (2020). The effect of entrepreneurial orientation variables on business performance in the SME industry context. Journal of Workplace Learning, 32(1), 35–62. https://doi.org/10.1108/JWL-03-2019-0033
Weaver, K., & Haim Faridian, P. (2023). The power of posture: organizational reputation following product failures and the role of entrepreneurial orientation. Journal of Strategic Marketing. https://doi.org/10.1080/0965254X.2023.2275138
Yadav, U. S., Ghosal, I., Pareek, A., Khandelwal, K., yadav, A. K., & Chakraborty, C. (2024). Impact of entrepreneurial orientation and ESG on environmental performance: moderating impact of digital transformation and technological innovation as a mediating construct using Sobel test. In Journal of Innovation and Entrepreneurship (Vol. 13, Issue 1). Springer Berlin Heidelberg. https://doi.org/10.1186/s13731-024-00443-y
Yadav, U. S., Vyas, S., Kanchan, Ghosal, I., & yadav, A. K. (2024). Impact of entrepreneurial leadership, Social media, digital technology, Entrepreneurial orientation and innovation on business performance in the handicraft sector: Talent management as mediating construct. Journal of Innovation and Entrepreneurship, 13(1). https://doi.org/10.1186/s13731-024-00434-z
Alareeni, B., Hamdan, A., Hamdan, R., & Shoaib, H. M. (2022). Marketing ?and entrepreneurship?: challenges and opportunities?. Journal of Strategic Marketing. https://doi.org/10.1080/0965254X.2022.2155688
Alqahtani, N., Uslay, C., & Yeniyurt, S. (2022). Entrepreneurial marketing and firm performance: scale development, validation, and empirical test. Journal of Strategic Marketing, 00(00), 1–22. https://doi.org/10.1080/0965254X.2022.2059773
Bekata, A. T., & Kero, C. A. (2025). The effects of customer orientation and entrepreneurial orientation on SMEs performance: the mediating role of innovation capabilities. The methodological moderators’ comparative study. In Journal of Innovation and Entrepreneurship (Vol. 14, Issue 1). Springer Berlin Heidelberg. https://doi.org/10.1186/s13731-025-00537-1
Bouallègue, S., Nefzi, A., & Chaney, D. (2025). Augmented reality’s influence on consumer responses: attachment and personal innovativeness effects. Journal of Strategic Marketing, 33(8), 1017–1035. https://doi.org/10.1080/0965254X.2025.2561654
Chakma, R., Dhir, S., Ongsakul, V., Sakka, G., & Ahmed, Z. U. (2025). Marketing resources, competitive advantage, and marketing performance: a modified TISM and MICMAC approach. Journal of Strategic Marketing, 33(6). https://doi.org/10.1080/0965254X.2022.2138954
Chatterjee, S., Chaudhuri, R., & Vrontis, D. (2024). Antecedents and consequence of social media marketing for strategic competitive advantage of small and medium enterprises: mediating role of utilitarian and hedonic value. Journal of Strategic Marketing, 32(8). https://doi.org/10.1080/0965254X.2021.1954070
Cantonnet, M. L., Aldasoro, J. C., & Iradi, J. (2019). New and emerging risks management in small and medium-sized Spanish enterprises. Safety Science. https://doi.org/10.1016/j.ssci.2018.11.032
Choi, J. K., Thangamani, D., & Kissock, K. (2019). A systematic methodology for improving resource efficiency in small and medium-sized enterprises. Resources, Conservation and Recycling. https://doi.org/10.1016/j.resconrec.2019.04.015
Da Silva, A., de Almeida, I. D., Dionisio, A., Rabadão, C., & Capela, C. (2025). How digital technologies enhance competitiveness in manufacturing SMEs. Journal of Innovation and Entrepreneurship, 14(1). https://doi.org/10.1186/s13731-025-00576-8
Dung, L. T., & Dung, T. T. H. (2024). Businesses model innovation: a key role in the internationalisation of SMEs in the era of digitalisation. Journal of Innovation and Entrepreneurship, 13(1). https://doi.org/10.1186/s13731-024-00391-7
Falahat, M., Ramayah, T., Soto-Acosta, P., & Lee, Y. Y. (2020). SMEs internationalization: The role of product innovation, market intelligence, pricing and marketing communication capabilities as drivers of SMEs’ international performance. Technological Forecasting and Social Change. https://doi.org/10.1016/j.techfore.2020.119908
Felício, J. A., Caldeirinha, V., & Dutra, A. (2019). Ambidextrous capacity in small and medium-sized enterprises. Journal of Business Research, 101, 607–614. https://doi.org/10.1016/j.jbusres.2019.02.061
Fitriati, T. K., Purwana, D., & Buchdadi, A. D. (2020). The role of innovation in improving small medium enterprise (SME) performance. International Journal of Innovation, Creativity and Change, 11(2), 232–250.
Goerzig, D., & Bauernhansl, T. (2018). Enterprise Architectures for the Digital Transformation in Small and Medium-sized Enterprises. Procedia CIRP. https://doi.org/10.1016/j.procir.2017.12.257
Hassan, N., & Raziq, A. (2019). Effects of knowledge management practices on innovation in SMEs. Management Science Letters, 9(7), 997–1008. https://doi.org/10.5267/j.msl.2019.4.005
Hashim, N., Taleb, T. S. T., & Faudzi, M. S. M. (2024). Entrepreneurial bricolage and micro-business performance: A moderated mediation of innovation capability and digital marketing capabilities. Journal of Strategic Marketing, 32(8). https://doi.org/10.1080/0965254X.2023.2216203
Henriques, J., & Catarino, J. (2016). Motivating towards energy efficiency in small and medium enterprises. Journal of Cleaner Production. https://doi.org/10.1016/j.jclepro.2016.08.026
Hervas-Oliver, J. L., Sempere-Ripoll, F., Boronat-Moll, C., & Estelles-Miguel, S. (2020). SME open innovation for process development: Understanding process-dedicated external knowledge sourcing. Journal of Small Business Management, 58(2), 409–445. https://doi.org/10.1080/00472778.2019.1680072
Islam, M. A., Hack-Polay, D., Rahman, M., & Dal Mas, F. (2024). Positioning marketing analytics for organisational agility in the ready-made garments industry in an emerging country context. Journal of Strategic Marketing, 32(8), 987–1000. https://doi.org/10.1080/0965254X.2024.2325530
Lin, F. J., & Ho, C. W. (2019). The knowledge of entry mode decision for small and medium enterprises. Journal of Innovation and Knowledge. https://doi.org/10.1016/j.jik.2018.02.001
Mayanja, S. S., Kizito, R. D., Mutebi, H., & Zombeire, R. K. (2024). Entrepreneurial intentions and family business generational transfers: The mediating role of re-organization among small and medium enterprises. IIMBG Journal of Sustainable Business and Innovation, 2(2), 163–185. https://doi.org/10.1108/ijsbi-03-2024-0016
Mayanja, S. S., Mutebi, H., & Isingoma, J. W. (2025). Entrepreneurial networking and sustainability of women-owned micro-enterprise performance: the mediating role of self-organization and entrepreneurial learning behaviors. IIMBG Journal of Sustainable Business and Innovation, 3(1), 61–86. https://doi.org/10.1108/ijsbi-08-2024-0039
Naila, D. L., Nandonde, F. A., & Makindara, J. (2025). Measuring the uptake of process innovation by SMEs in food industry: a resource-based view perspective. IIMBG Journal of Sustainable Business and Innovation, 3(1), 87–108. https://doi.org/10.1108/ijsbi-08-2024-0040
Nguyen, N. X., Nguyen, D. T., Suseno, Y., & Bui Quang, T. (2024). The flipped side of customer perceived value and digital technology in B2B professional service context. Journal of Strategic Marketing, 32(8). https://doi.org/10.1080/0965254X.2020.1755350
Prashar, A. (2019). Towards sustainable development in industrial small and Medium-sized Enterprises: An energy sustainability approach. Journal of Cleaner Production. https://doi.org/10.1016/j.jclepro.2019.07.045
Sawaean, F. A. A., & Ali, K. A. M. (2020). The impact of entrepreneurial leadership and learning orientation on organizational performance of SMEs: The mediating role of innovation capacity. Management Science Letters, 10(2), 369–380. https://doi.org/10.5267/j.msl.2019.8.033
Qasim, D., Shuhaiber, A., & Rawshdeh, Z. (2025). The impact of entrepreneurial orientation on innovation performance: the role of knowledge sharing as a mediating factor. Journal of Innovation and Entrepreneurship, 14(1). https://doi.org/10.1186/s13731-025-00543-3
Wahyudiono, W., Gunawan, G., & Wijaya Putri, H. I. (2023). Leveraging the Growth of Micro and Small Sector Businesses In Sidoarjo Regency: Antecedents of Social Media And Strengthening Management. IJEBD (International Journal of Entrepreneurship and Business Development), 6(6). https://doi.org/10.29138/ijebd.v6i6.2564
Wahyudiono, Hermanto, Y. B., Estiasih, S. P., & Aminatuzzuhro. (2024a). Performance recovery of creative sector industries: strengthening management literacy and digital business innovation. Journal of Innovation and Entrepreneurship, 13(1). https://doi.org/10.1186/s13731-024-00376-6
Wahyudiono, Aini, N., Murni, S. A., & Rosyid, A. (2024b). Maintaining Sustainable Growth of Micro and Small Enterprises: Antecedents of Management Orientation and Digital Business. Sustainability (Switzerland), 16(15), 1–19. https://doi.org/10.3390/su16156638
Wahyuni, N. M., & Sara, I. M. (2020). The effect of entrepreneurial orientation variables on business performance in the SME industry context. Journal of Workplace Learning, 32(1), 35–62. https://doi.org/10.1108/JWL-03-2019-0033
Weaver, K., & Haim Faridian, P. (2023). The power of posture: organizational reputation following product failures and the role of entrepreneurial orientation. Journal of Strategic Marketing. https://doi.org/10.1080/0965254X.2023.2275138
Yadav, U. S., Ghosal, I., Pareek, A., Khandelwal, K., yadav, A. K., & Chakraborty, C. (2024). Impact of entrepreneurial orientation and ESG on environmental performance: moderating impact of digital transformation and technological innovation as a mediating construct using Sobel test. In Journal of Innovation and Entrepreneurship (Vol. 13, Issue 1). Springer Berlin Heidelberg. https://doi.org/10.1186/s13731-024-00443-y
Yadav, U. S., Vyas, S., Kanchan, Ghosal, I., & yadav, A. K. (2024). Impact of entrepreneurial leadership, Social media, digital technology, Entrepreneurial orientation and innovation on business performance in the handicraft sector: Talent management as mediating construct. Journal of Innovation and Entrepreneurship, 13(1). https://doi.org/10.1186/s13731-024-00434-z
Published
2026-01-31
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