Entrepreneurial Orientation And Work Engagement As Mediators In The Relationship Between Psychological Capital And Employee Performance In Indonesian MSMEs

Dorris Yadewani, Salamiah Muh Kulal, Marjohan Marjohan, Eka Hendrayani

Abstract


The purpose of this study is to examine the effect of psychological capital dimensions (self-efficacy, optimism, resilience, hope) on employee performance with the mediating role of entrepreneurial orientation and work engagement in Micro, Small and Medium Enterprises (MSMEs) to understand the processes of performance enhancement in resource-limited environments. The data were collected using a cross-sectional research design from 60 employes of MSMEs in West Sumatra, Indonesia and analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM) with a double mediation analysis approach.This study aims to analyze the influence of psychological capital dimensions (self-efficacy, optimism, resilience, hope) on employee performance through the mediating role of entrepreneurial orientation and work engagement in MSMEs. This is to understand the process of performance improvement in resource-constrained settings. The data were collected by using a cross-sectional research design of 60 employes of MSMEs in West Sumatra, Indonesia. The data were analyzed using PLS-SEM with a double mediation analysis approach. Despite the limitations of this regional study due to the cross-sectional nature of the data and limited scope for generalization, the study provides practical implications for MSME managers to focus on fostering employees’ psychological capital to encourage entrepreneurial behavior and work engagement. The novelty of this research is its contribution to the literature in terms of providing new insights into the dual mediation mechanisms linking psychological capital with performance in the context of SMEs in developing economies, providing a practical framework for human capital development.

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References


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DOI: https://doi.org/10.33373/dms.v15i3.9222

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