Empowering SME Performance Through Social Media: The Mediating Role of Entrepreneurial Orientation in Malaysian Manufacturing SMEs

Abstract

The role of social media in the digital era extends far beyond personal communication, evolving into a multifaceted tool that shapes social, economic, and organizational dynamics. It plays a critical role in business and marketing, providing firms particularly SMEs with cost-effective avenues for brand promotion, customer engagement, and market intelligence. This study investigates the impact of social media usage on the financial and non-financial performance of Malaysia SMEs, with evidence drawn from manufacturing SMEs in the Klang Valley, Malaysia, the research highlights how entrepreneurial orientation leverages digital resources to enhance business performance. Partial Least Squares Structural Equation Modelling (PLS-SEM) was employed to test the proposed model, based on survey responses from 351 manufacturing SMEs selected through stratified random sampling. The findings indicate that social media usage for customer relations has a significant positive impact on both customer relations and sales. Moreover, Entrepreneurial Orientation act as partial mediators in the relationship between social media usage and Financial Performance and SME non-financial Performance. This calls for further investigation into other factors, such as digital literacy or resource availability, may play a more crucial role in leveraging digital tools effectively.