The relationship between top management team (TMT) metacognition, entrepreneurial orientation and firm performance in Small and Medium Enterprises (SMEs)

Abstract

This study integrates entrepreneurial orientation and top management team (TMT) behavioural integration, as a mediator and moderator respectively, to determine the effect of TMT metacognition on firm performance in SMEs. Fifteen hundred SMEs were surveyed and 140 usable returns were used in this study. The result revealed that risk in entrepreneurial orientation is often associated with lower firm performance and innovativeness and proactiveness could be considered the mechanisms through which TMT metacognition contributes most to higher organisational performance. This finding is significant for SMEs, whose resources are limited, and TMT could consider less risky projects, but still maintaining its innovativeness and proactiveness, particularly in the niche market areas. Furthermore, the empirical result supported previous findings that top managers’ abilities and behaviour collectively as a team could be seen as an important factor in their innovative and competitive outcomes in SMEs.