Abstract:
The removal of trade barriers has encouraged the entry of new competitors into formerly protected
markets. This situation creates pressure on many small and medium enterprises (SMEs) in
emerging economies such as Tanzania. Using a survey method and cross-sectional research
design, the research examines three dimensions of entrepreneurial orientation (EO), namely:
pro-activeness, risk-taking and competitive aggressiveness. Understanding their relationships
and variance may help to improve our ability to explain SME performance. The findings
contribute to how SME performance in emerging economies can be enhanced to enable SMEs
to face challenges posed by competitor influx in the context of an open market economy. The
findings indicate a strong relationship between EO dimensions and performance, with risktaking
and competitive aggressiveness moderating the effect of pro-activeness. The proposed
model could predict 72% of the variance explained in SME performance.
