Assessing the Impact of Entrepreneurial Orientation on the Business Performance of MSMEs in Central India

This study examines the relationship between entrepreneurial orientation (EO) and business performance among Micro, Small, and Medium Enterprises (MSMEs) in Central India. It is quantitative research in which data were collected from 243 MSME owners/managers of select districts of central India. Structured questionnaires and schedules were used. The study used a framework of entrepreneurial orientation consisting of five constructs: innovation, risk-taking, proactiveness, competitive aggressiveness, and autonomy. Factor analysis confirmed the five-dimensional structure of EO, showing good reliability for all its dimensions (Cronbach’s alpha > 0.7). The findings reveal moderate levels of total entrepreneurial orientation (mean = 2.89) and business performance (mean = 2.79) among sampled MSMEs. The result of multiple regression shows that the dimensions of EO explain 58.4% variance in business performance. Among the dimensions of EO, proactiveness has emerged as the strongest predictor of business performance (β = 0.749, p < .001), whereas competitive aggressiveness bears a significant negative relationship (β = -0.118, p = .006). Surprisingly, innovation, risk-taking, and autonomy did not reveal significant direct relationships with business performance. These findings are useful for MSME owners, policymakers, and practitioners in developing targeted interventions to enhance entrepreneurial orientation and business performance in the region.