**1.2 Entrepreneurial orientation**

Being an entrepreneur requires an entrepreneurial orientation to face the current various challenges [1]. Entrepreneurial orientation can also be a significant contributor to the success of a job [23]. Based on various previous studies, entrepreneurial orientation has a positive relationship to job performance [2–6]. Based on its definition, Entrepreneurial Orientation is a process, practice, and activity of deciding something that gives rise to a new action [2]. Another definition of Entrepreneurial Orientation according to Miller [24] is something that requires the emergence of innovativeness, risk-taking, and proactiveness simultaneously. Entrepreneurial Orientation can also

*Women Entrepreneurship Psychology in Managing Micro, Small, and Medium Enterprises… DOI: http://dx.doi.org/10.5772/intechopen.109320*

#### **Figure 1.**

 *Dimensions of psychological capital [ 3 ].* 

be defined as a tendency that can lead to a behavior associated with entrepreneurial activity [ 11 ]. Entrepreneurial Orientation, at the organizational level, is defined as a strategy-making process that provides the basis for making decisions and acting for entrepreneurship [ 3 ].

 According to Lumpkin & Dess [ 25 ], there are several dimensions that characterize an Entrepreneurial Orientation. These dimensions are autonomy, innovativeness, risk-taking, proactiveness, and competitive aggressiveness. These dimensions can arise when an organization plans to do something new. These dimensions are processes in an organization that involve strategic decisions of the organization.

#### *1.2.1 Autonomy*

 Autonomy is an independent action of a person or group in bringing an idea or view and will be carried out until it is resolved. In general, autonomy means the ability and desire to be able to independently pursue an opportunity. In the context of the organization, autonomy can be explained as an action that is independently carried out to deal with obstacles occurred. Although there are factors such as the availability of resources, actions from competitors, or internal organizational decisions that can change the initiative to create new things, these things are considered insufficient to eliminate a person's autonomy to create new things.

#### *1.2.2 Innovativeness*

Innovativeness reflects a tendency of organizations to use and support new ideas, things, experiments, and creative processes that can produce new products, services, or technologies. Although innovativeness can vary in degree of radicalism, it represents a basic willingness to move beyond existing technologies and practices and pursue something new that has never existed. Innovativeness has various kinds that can be formed on a continuum, ranging from simple things such as trying a new product or experimenting with something, to being committed to mastering a product or technology. Innovativeness is an important component of Entrepreneurial Orientation because innovativeness reflects the importance of an organization to seek new opportunities.

#### *1.2.3 Risk-taking*

The concept of risk-taking is very often used to describe entrepreneurship. This concept arises from the main factor that distinguishes between entrepreneurs and recruited employees, namely the uncertainty and risk in entrepreneurship. Risk itself has various meanings, depending on the context in which it is applied. For instance, in the context of strategy or in the context of financial analysis. It can also be said that risk-taking has its own levels, ranging from "no risk at all" to the "safe" level and to the "very risky" level.

#### *1.2.4 Proactiveness*

Taking initiative by anticipating and pursuing new opportunities as well as participating in emerging markets is often defined as proactiveness. Proactiveness according to Webster's Ninth New Collegiate dictionary (1991) in Lumpkin & Dess [25] is defined as anticipatory action against problems, needs, or changes that will occur in the future. Hence, proactiveness can be crucial to entrepreneurship orientation as it provides a forward-looking perspective accompanied by innovation or activity to create new things.

#### *1.2.5 Competitive aggressiveness*

Competitive aggressiveness is a tendency to face challenges directly and intensely from competitors to create new things or improve their position, in order to outperform their competitors in the market. Competitive aggressiveness is characterized by responsiveness, which can take the form of direct confrontation. For example, a new product plans to enter a market, and other competitors have identified a lower price in the face of the challenge. Competitive aggressiveness also reflects a willingness to be unconventional rather than having to rely on traditional methods to compete. Examples of forms of competitive aggressiveness that can occur are using unconventional tactics to challenge incumbents in the industry, analyzing and targeting competitors' weaknesses, and focusing on high-value products while monitoring spending.

Based on various previous studies, it was found that entrepreneurial orientation has a positive relationship with performance [2–5]. Based on the meta-analysis conducted by Rauch et al. [26], from more than 50 research studies that have been conducted, the results show that entrepreneurial orientation has positive implications for performance (**Figure 2**).

*Women Entrepreneurship Psychology in Managing Micro, Small, and Medium Enterprises… DOI: http://dx.doi.org/10.5772/intechopen.109320*

 **Figure 2.**

 *Dimensions of entrepreneurial orientation [ 27 ].* 

#### **1.3 Entrepreneurial performance**

 Performance has become something that is greatly important in running a business. In the context of entrepreneurship, performance is the output of entrepreneurs that can be measured. In addition, it is one of the most significant dependent variables and is widely used in research in the field of management or business. This is due to the fact that performance can explain how well an entrepreneur is at work [ 28 ]. Daft [ 29 ] in his research writes on business performance, namely ability in the process of utilizing resources owned by the organization, which includes knowledge, human resources, and raw materials to achieve the goals of effectiveness and efficiency. Entrepreneurial performance is defined as profit growth made by an entrepreneur [ 30 ] and taking the opportunity to develop business ideas in [ 31 ]. In this case, these advantages indicate the progress and good development of a business they manage. In addition, entrepreneurial performance is also defined as the capability of an entrepreneur/organization in achieving business goals [ 32 , 33 ]. The goals can be seen from the high profits earned, adequate product quality, good financial wheels, etc. This performance can generally be analyzed through an objective or subjective perspective. In their research, many recommend that this performance measurement should include two important dimensions, namely from a financial and non-financial side that can measure what goals have been achieved and can predict the future [ 34 ]. The financial dimension, for example, is profit, turnover, and the financial wheel related with finance. On the other hand, nonfinancial dimension includes the ability to take risks, innovation, need for achievement, commitment, and sustainability of the business.

 Kimatu and Bichanga [ 35 ] state that the performance of enterprises can be determined by their competitive strategy, which means the enterprise with a higher competitive advantage compared with its competitor will have better performance and vice versa. Entrepreneurial performance consists of two dimensions, namely financial performance and non-financial performance.

Financial aspect includes:


Non-financial aspect includes:


The framework used in this research can be seen in the **Figure 3** .

 Developing on the base of logical relationships derived from the aforementioned theoretical background, which provided support for psychological capital being an antecedent of entrepreneurial performance with the intermediary effect of entrepreneurial orientation, this study proposes following hypotheses:

H1. Psychological capital has positive direct effect on entrepreneurial orientation.

 **Figure 3.**  *Research framework.* 

*Women Entrepreneurship Psychology in Managing Micro, Small, and Medium Enterprises… DOI: http://dx.doi.org/10.5772/intechopen.109320*

H2. Psychological capital has positive direct effect on entrepreneurial performance.

H3. Entrepreneurial orientation has positive direct effect on entrepreneurial performance.

H4. Psychological capital has positive indirect effect through entrepreneurial orientation impacts on entrepreneurial performance.

In the empirical study, the relationship model of psychological capital, entrepreneurial orientation, and entrepreneurial performance as shown in **Figures 1**–**3** can be constructed based on the above hypotheses with each hypothesis being divided into sub-hypotheses to test the relationship between psychological capital and entrepreneurial orientation. The independent variables of this study are Psychological Capital, including Self-Efficacy, Hope, Optimism, and Self-Resilience. The intermediary variables are entrepreneurial orientation, including Innovativeness, Proactiveness, Autonomy, Competitive Aggressiveness, and Risk-Taking. The dependent variable is enterpreneurial performance, including Financial Performance and Non-Financial Performance. Based on the current entrepreneurial environment, psychological capital can positively affect the performance of enterprise through entrepreneurial orientation.

#### **2. Methods**

The method used in this research was descriptive quantitative. Descriptive quantitative research is research that aims to explain and describe a phenomenon based on numerical data to answer the research question. This method is also usually used by researchers to determine the status of human groups, an object, a set of conditions, a system of thought, or a class of events in the present, which aims to make a systematic, factual, and accurate description of the facts, characteristics, as well as the relationship between the phenomena examined. The research population was SMEs in Indonesia. Sampling was carried out on three provinces, including Province of the Special Region of Yogyakarta, West Java Province, and West Sumatra Province. The number of samples was 995 MSME actors.

The instrument used to measure Psychological Capital was Psychological Capital Questionnaire (PCQ ), which was adapted from Luthans and Youssef et al. [3] with Cronbach's Alpha value of 0.905, indicating that PCQ is reliable. Meanwhile, the instrument used to measure Entrepreneurial Orientation was an instrument modified from the Individual Entrepreneurial Questionnaire [36]. Based on the analysis results, the adapted Individual Entrepreneurial Orientation Scale (IEO) had a Cronbach's Alpha value of 0.929, meaning that IEO is reliable. The instrument used to measure women entrepreneurial performance was an instrument adapted and modified from several previous studies on entrepreneurial performance, including Entrepreneurial Performance Questionnaire on the Non-Financial Performance aspect [35] and Entrepreneurial Performance Questionnaire on the Financial Performance aspect. This Entrepreneurial Performance instrument was then re-adapted by researchers from the original language into Indonesian and adapted to the research population. Based on the results, the value of Cronbach's alpha was .910, indicating that the instrument is reliable.

#### **3. Discussion**

Gender Equality and Women's Empowerment have become part of Indonesia's National Long-Term Development Plan for the period 2000–2025. Women as economic drivers of families and communities can be implemented through entrepreneurship activities and Micro, Small, and Medium Enterprises (MSMEs). In 2022, Indonesia has more than 64 million MSMEs that contribute to the National Gross Domestic Product (GDP) by 61%, of which 64% of MSME actors are women, and there has been an increase in the number of businesses led by women by 114%. Given that women constitute 48.4% of the total population of Indonesia, the potential of women must continue to be explored and empowered. Women play a big role in the economy for themselves, their families, and even for the country. Therefore, the empowerment of women must be carried out properly.

The economic condition in Indonesia currently continues to develop with the increasing number of MSMEs; hence, the competition faced will be even tighter. During the process, women who can take advantage of the situation and have consistency and confidence in their abilities will be able to move forward more easily than those who do not. If this is not addressed, there will be a continuing gap that makes it difficult for women-owned businesses to progress and develop, given the important role of women in Indonesia's economic progress. Women's empowerment is needed as it can be a solution for women in considering their strengths, weaknesses, opportunities, threats, and developing themselves to be able to move forward so as to open up the potential to change the lives of themselves, their families, and communities through their MSMEs. Further treatment is necessary because empowerment of women requires a positive psychological role from within in the form of psychological capital [2]. Psychological capital will be studied further as it plays significant role that can strengthen the role of women's empowerment. Psychological capital is an individual's positive psychological state of development and is characterized by: (1) having confidence (self-efficacy) to take on and put in the necessary effort to succeed at challenging tasks; (2) making a positive attribution (optimism) about succeeding now and in the future; (3) persevering toward goals and when necessary, redirecting path to goals (hope) in order to succeed; and (4) when beset by problems and adversity, sustaining, and bounce back and even beyond (resilience) to attain success [3].

Based on the results, it was found that entrepreneurial orientation as a mediator has data as shown in **Table 1**.

The path analysis performed provides data as shown in **Table 2**.

The data above show that entrepreneurial orientation plays as a mediator that correlates psychological capital with entrepreneurial performance with an indirect


**Table 1.** *Mediation estimates.* *Women Entrepreneurship Psychology in Managing Micro, Small, and Medium Enterprises… DOI: http://dx.doi.org/10.5772/intechopen.109320*


 **Table 2.**  *Path analysis.* 

effect of 0.475. If there is no mediator, it provides a direct effect of 0.120. This can be seen in **Figure 4** .

 Based on the analysis, Entrepreneurial Orientation plays a significant role in mediating the relationship between psychological capital and entrepreneurial performance. Before deciding to be an entrepreneur, a person must have an orientation in order that they can carry out their work with good performance and be able to overcome various difficulties. Therefore, entrepreneurial orientation is one aspect that needs to be considered. In accordance with the definition of entrepreneurial orientation that is a process, practice, and activity of deciding something that gives rise to a new course of action, then this is what will arise when they decide to be an online shop actor to take action for entrepreneurship and face all situations that will arise. The dimensions of entrepreneurial orientation consisting of innovativeness, proactiveness, risk-taking, passion, and perseverance can have an important role in performance.

 If innovativeness possessed in a person, it will bring up a good image and reputation of the business. Therefore, it can increase the income earned and increase the efficiency of the operational costs that must be incurred [ 7 ]. If a person also has innovativeness, they will be able to answer the various needs requested by their consumers, resulting in satisfaction and retention.

 Proactive individuals are able to adapt to change, to see the risks that will occur in the future, and to turn these risks into opportunities rather than challenges. They will also be able to identify gaps that occur and to close those gaps with the products and services offered [ 8 ]. In addition, those who are proactive will actively seek new opportunities and are able to outperform their competitors who are less willing to seek new opportunities [ 9 ].

 Taking risks means having the courage to face the possibility of failure or success. Those who take risks enable them to stand out from their competitors to create new opportunities [ 8 ]. Those who take risks also enable them to act aggressively and explore new possibilities [ 10 ].

 **Figure 4.**  *Relationship between variables.* 

Those who have passion in doing their job will make them get wider recognition, take advantage of various opportunities ahead, be able to develop new ideas, and improve their performance [12]. Individuals who have perseverance or persistence will continue to strive to achieve the desired goals even though they are faced with various difficulties [12]. In addition, persistence is also positively related to income [13].

In general, if all the dimensions possessed in a person, it will have a positive impact on the performance of MSME actors both financially and non-financially. Given this positive impact, the performance of MSME actors will be much better. It will enable them to encounter the various difficulties and develop them to be entrepreneurs with improved abilities.

In entrepreneurship, there are various factors that can affect the orientation and performance of an entrepreneur, both internal and external [14]. Internal factors include personality and motivation [14], gender [15–18], age [19, 20], and education [21]. Meanwhile, external factors include cultural factors, assistance from government programs, business size, and length of business [14, 22].

In external factors, culture is one of the important elements in entrepreneurship as it can influence the attitude of an individual in entrepreneurship. Some cultures can make a person encouraged or even given up continuing to run the business. Assistance from government such as facilities, programs, or subsidies can also affect entrepreneurial orientation as it will further encourage business actors to strengthen their entrepreneurial activities [22]. In addition, a person's tenure has a negative relationship to entrepreneurial orientation because the longer working hours make a person hampered to innovate and avoid taking risks.

Psychological capital consisting of self-efficacy, hope, optimism, and self-resilience will encourage MSME actors to develop innovation, autonomy, proactive attitude, risk-taking, and competitive aggressiveness, which will drive the achievement of financial and non-financial performance of MSME actors, consisting of profit, sales, cash flow, employee conditions, valued customers, and product development.

The female MSME actors who come from different provinces and ethnic groups do not show any fundamental differences in terms of psychological capital, entrepreneurial orientation, or entrepreneurial performance. However, this indicates that female MSME actors can increase their psychological capacity to create entrepreneurial orientation that can support the better achievement of MSME performance results, in terms of both financial and non-financial.
