Sys Rev Pharm 2019;10(2):223-233

A multifaceted review journal in the field of pharmacy

Influence of Entrepreneurial Orientation and Total

Quality Management on Organizational Performance
of Pharmaceutical SMEs in Thailand with moderating
role of Organizational Learning
Krisada Chienwattanasook 1, Kittisak Jermsittiparsert 2, 3*
1
Faculty of Business Administration, Rajamangala University of Technology Thanyaburi, Pathum Thani, Thailand
E-mail: [email protected]
2
Department for Management of Science and Technology Development, Ton Duc Thang University, Ho Chi Minh City, Vietnam
3
Faculty of Social Sciences and Humanities, Ton Duc Thang University, Ho Chi Minh City, Vietnam
Corresponding author: E-mail: [email protected]

Article History: Submitted: 16.08.2019 Revised: 05.10.2019 Accepted: 10.11.2019

ABSTRACT
organizational learning as a moderator of the relationships of entrepreneurial
Performance is a serious concern for manufacturing SMEs, especially for
pharmaceutical SMEs in Thailand. Specifically, pharmaceutical SMEs face orientation, total quality management, and pharmaceutical SMEs’
challenges regarding the enhancing performance by application of total quality performance..From the practical perspective, the key contribution of this study is
that pharmaceutical SMEs in Thailand may clearly appreciate the benefits of
management and entrepreneurial orientation. This study envisioned to assess the
entrepreneurial orientation and total quality management on organizational devoting greater attention to the implementation of entrepreneurial orientation,
performance of pharmaceutical organizations in Thailand. This study also aimed to total quality management, and organisational learning to attain a sustained
test the moderating role of organizational learning. To study the proposed competitive advantage.
association of variables, the data was gathered from the owners and managers of Keywords: TQM, Organizational Performance, Entrepreneurial Orientation,
Thai pharmaceutical small and medium firms. This study concluded that Pharmaceutical SMEs.
entrepreneurial orientation and total quality management are the factors that Correspondance:
significantly enhance the performance of pharmaceutical organizations in Krisada Chienwattanasook
Thailand. Findings of the study demonstrate that organizational learning Faculty of Business Administration, Rajamangala University of Technology
significantly moderate the relationship of TQM with performance of Thanyaburi, Pathum Thani, Thailand
pharmaceutical organizations but it does not moderate the link of entrepreneurial Email: [email protected]
orientation. The theoretical contribution of the present study lies in its use of DOI: 10.5530/srp.2019.2.31
© Advanced Scientific Research. All rights reserved

INTRODUCTION contrast to the aforementioned countries in developed

Small and medium-sized enterprises (SMEs) are and emerging economies, the SMEs contributed 46
regarded as the key facilitators of financial percent in the GDP of Thailand in 2015 (Charoenrat &
development, competitiveness and employment Harvie, 2014).
generation in the settings of both developing and International Monetary Fund (IMF) statistics represent
developed countries (Tuck, 2014; Kaliappen, Nu’Man, & that GDP of Thailand with respect to Purchasing Power
Jermsittiparsert, 2019). It is also generally accepted in Parity (PPP) enhanced to $1.1 trillion in the year 2016
both theory and practice that SMEs are used as engine that characterise Thailand as the another largest
for solving socio-economic problems such as country of Southeast Asia subsequently Indonesia that
unemployment, poverty alleviation. For example, SMEs has a GDP PPP of $3 trillion. Thailand’s GDP rose with
have been regarded crucial for financial development the rate of 3.2% in comparison to the 1.6% increase of
with providing jobs to the 88.8 million employees and US and 2% of the European Union (IMF). According to
by producing €3,666 trillion of valued added that the Asian Development Bank, Thailand’s GDP has the
represent the 28 percent of GDP with regard to the 28 potential of growth about 3.5% and 3.6% in the years
member nations of European Union (EU) (Muller et al., 2017 and 2018 respectively. Pharmaceutical industry of
2014). Relatedly, the role of SMEs in the GDP and the Thailand has the worth of $4.4 billion in 2012 that
employment of high-income countries, such as has the highest worth in the market of Southeast Asia
Australia, Austria, Canada, and Germany, were 55 (Urias, 2017). Destroying floods of 2011 bounced back
percent and 65 percent, respectively. It is also estimated the market but is now growing with the rate of about 9
that in the United Kingdom (UK), SMEs contribute 60 percent annually. With the same growth rate, Thailand’s
percent to total employment and about 47 percent of all pharmaceutical industry should attain worth of $9
private sector turnover. It has also been reported that in billion till the year 2020. Although Thailand remains
upper middle income countries, SMEs are important Asian's biggest economy, evidence has shown that
economic agents for growth (Pail, 2015). In Southeaster business enterprises, including SMEs have been facing
Asia, SMEs are integral to ASEAN economic integration, challenges, such as entrepreneurial orientation
providing approximately 80 percent of employment, deficiencies, poor market orientation, lack of competent
and contributed as much as 50 percent to the GDP, as management, intense competition, low demand for
well as significantly constituting more than 96 percent product and service lack of financial support, lack of
of enterprises in the region (Rosli et al., 2015). In training and experience, unfriendly business
223 Systematic Reviews in Pharmacy Vol 10, Issue 2, July-Dec, 2019
 Krisada Chienwattanasook et al: Influence of Entrepreneurial Orientation and Total Quality Management on Organizational Performance of
Pharmaceutical SMEs in Thailand with moderating role of Organizational Learning

environment, and limited capacity for innovations, empirical researches have also demonstrated the
among others (Aigboduwa & Oisamoje, 2013; Shehu & important role of TQM implementation for improving
Mahmood, 2014). the performance of business enterprises (Herzallah,
Pharmaceutical companies are also a part of SMEs, Gutiérrez-Gutiérrez, & Rosas, 2013; Vanichchinchai &
especially in the context of Thailand. In 2013, Igel, 2011). Two main reasons justified why total
approximate worth of Thailand healthcare industry was quality management has been selected as one of the key
$15.8 billion that is half the size of Taiwan’s total variables in this study. First, while total quality
economic worth. Per-capita spending with regard to management is widely applied in large listed
healthcare was about $240 in 2013, and major part was manufacturing companies (C. B. Fotopoulos & Psomas,
spent on pharmaceuticals. With the increase of 2009).
population in Thailand, urbanization becomes more There is still a lack of TQM studies on the SMEs,
popular that ultimately will require more appropriate especially in the pharmaceutical sector (Sharma &
and better healthcare facilities (Urias, 2017). The Modgil, 2019). Second, even though SMEs are still
pharmaceutical industry in Thailand had a worth of dominant in many areas of manufacturing industries in
more than $4.5 billion than that of 2013 that is Thailand, yet currently, there are few studies conducted
approximately equal to the Taiwan market. Thai drug regarding the association of total quality management
industry has the potential to achieve the worth of implementation and SMEs performance. Taken
double till 2020 that is already at the second largest in together, while there are many factors that affect SME
Southeast Asia (After Indonesia). After the introduction performance in Thailand, entrepreneurial orientation
of Universal Coverage Scheme, local pharmaceutical and total quality management have been chosen as the
firms are rapidly increasing in numbers by last 20 years key independent variables because literature indicated
(Rao, 2008). Total worth of drug exports has the value absence of a study examining the cumulative influence
of more than $300 million that are exported to the other of these factors, which complement and enhance each
Southeast Asian countries that include Vietnam, other on the outcomes of pharmaceutical SMEs.
Myanmar and Cambodia. Furthermore, government is Furthermore, organizational learning has been
promoting biotechnology with the contemporary incorporated as a moderator between the independent
starter of biotech parks and big tax incentives. variables and performance of pharmaceutical SMEs
Although, pharmaceutical companies are also a part of because contingency theory (Sharma & Modgil, 2019),
SMEs, but it contribute very less in GDP of country. and characteristics of the environment might have a
Therefore, it will be pertinent to understand the strong effect on the intensity and direction of the
underlying factors that affect pharmaceutical SMEs’ relationship among these three variables and SME
performance. Alarape (2013) has attributed poor performance. Organisational learning has been defined
entrepreneurial orientation as the major cause of as the process through which the organizations learn
decrease in growth performance of pharmaceutical (Lee et al., 2013). Theory and empirical studies
SMEs in Thailand. Likewise, Ibeh (2003) associated considered organisational learning as an intangible
poor entrepreneurial orientation as one of the factors resource for achieving sustained competitive advantage.
responsible for non-encouraging performance of SME.
Furthermore, Boso, Cadogan, and Story (2012) LITERATURE REVIEW
identified entrepreneurial orientation as one of critical Organizational Performance
as drivers of product innovation achievement among Organizational performance has been defined as “a
SME in developing economy. Similarly, Mantok et al. metric that quantifies the efficiency and effectiveness of
(2019) considered entrepreneurial orientation as a firm’s past actions through the acquisition, collation,
solution for the growth of SMEs productivity. sorting, analysis, interpretation, and dissemination of
Furthermore, “it is generally agreed that firms that appropriate data” (Lee et al., 2013). Organizational
behave entrepreneurially perform better than more performance has also been defined “as the achievement
conservative firms” (Gupta & Gupta, 2015). While of organizational goals related to profitability and
researchers have commonly agreed that businesses that growth in sales and markets share, as well as the
operate entrepreneurially outperform their accomplishment of general firm strategic objectives”
conservative counterparts. Shehu and Mahmood (2014) (Hult, Hurley, & Knight, 2004). Organizational
noted that research linking entrepreneurial orientation performance also is considered as the sustainable
to SME performance in Thailand is still rare, especially welfare and development of the business enterprise in
in pharmaceutical sector. Hence, in an attempt to relation to its competitors. Consistent with the
address this gap and make theoretical and empirical aforementioned definitions, organizational performance
contributions, entrepreneurial orientation is selected in this study refers to the degree to which a firm has
and incorporated as one of the key variables in the actually achieved its organizational goals with respect
present study. Kober, Subraamanniam, and Watson to growth in sales, increase in market share, and
(2012) observed that lack of total quality management profitability relative to its competitors. Literature
(TQM) adoption may be a fundamental factor indicates that several studies have used various kinds of
responsible for poor financial performance of SMEs. Ou- measures to evaluate business performance in different
Yang and Tsai (2014) emphasized the need of TQM organizational settings. These measures can be
implementation for improving operations performance categorized as “subjective and objective” measures of
multinational corporations in China. A number of other firm performance. Subjective measures of business

224 Systematic Reviews in Pharmacy Vol 10, Issue 2, July-Dec, 2019

 Krisada Chienwattanasook et al: Influence of Entrepreneurial Orientation and Total Quality Management on Organizational Performance of
Pharmaceutical SMEs in Thailand with moderating role of Organizational Learning

performance indicate that are directed at firm's key in entrepreneurship, business learning, innovativeness
representatives that include Managers, CEOs and and the performance. The authors measured
Directors who are inquired to rate the overall performance by using three objective indicators that
performance of their firms relative to its competitors include average variation in return-on investment, rate
(Zulkiffli & Perera, 2011). of change in income and stock price change rate for five-
Khandekar and Sharma (2006) in a study among 100 year average each. Consistent with resource-based
senior managers in three global firms operating in India theory, the findings showed that market orientation,
used subjective measure of business performance to innovativeness, entrepreneurship, as well as
examine the association of organizational learning and organizational learning exhibit significant positive
firm performance. The study recognised a significant relation with performance.
positive linkage of organizational learning and business Relatedly, Chiu, Tsai, and Chung (2007) investigated the
performance (as reflected by organizational efficiencies relationships between internal competences, outside
and inefficiencies in terms of corporate image, networks and business performance by using both
competences and overall financial performance). In the subjective and objective data from Korean technological
same vein, Schepers et al. (2014) inspected the firms. Both internal competences and external networks
moderating link of socio-emotional wealth with the were measured using subjective data (i.e., self-
association of entrepreneurial orientation and business administered questionnaires), while firm performance
performance of family-based manufacturing firms in was assessed using profit-based performance indicators
Belgium. Using subjective evaluations of firm (i.e., ration of sales growth to the sales volume). The
performance, the conclusions showed a significant statistics of regression examination indicated that both
positive linkage of entrepreneurial orientation and internal capabilities and external networks occupy a
business performance. In addition, socio-emotional significant role in predicting firm performance.
wealth was found to be a moderator with regard to the Furthermore, using resource-based theory, Aragón‐
association of entrepreneurial orientation and Sánchez and Sánchez‐Marín (2005) studied the
performance. influence of strategic orientation and executives
In a more recent study, Deligianni et al. (2016) also characteristics on performance of Spanish SMEs. Both
applied subjective measures of performance, as subjective performance indicator (self-administered
reflected by levels of sales, market contribution, return questionnaires) and objective data, as reflected by
on investment, and profit ratio to investigate the return on investment were utilized to empirically test
moderating role of decision-making rationality the hypotheses. As expected, the results confirmed that
regarding association of entrepreneurial orientation strategic orientation and Management characteristics
and international business performance. The researcher are positively associated with firm performance. In
revealed that: (1) a positive relationship of decision- another study, Vega-Jurado, Gutiérrez-Gracia, and
making rationality and international performance, and Fernández-de-Lucio (2009) examined the moderating
(2) decision-making rationality was found to moderate influence of strategy, construction, human resource
linkage of entrepreneurial orientation and international strategies and information systems regarding the
performance. Objective measures of business association of entrepreneurial orientation and business
performance focus on actual performance indicators, in performance among a sample of SMEs in the Spanish
which firm's key informants may provide absolute chemical industry.
quantitative data on how well an organization is doing Using objective measures of performance, Ferreira,
(Zulkiffli & Perera, 2011). Examples of such quantitative Leitão, and Azevedo (2008) investigated the impact of
performance data include, but not limited to return on the entrepreneurial orientation on small firm’s growth
assets (ROA), Return on Equity (ROE), overall profit (measured using two objective indicators: the sales and
margin, profit per employee, growth in assets, number employment development). The results supported the
of customers, number of employees trained, number of hypothesized relation of entrepreneurial orientation
innovations, rate of good output with regard to total and small firm’s growth. Furthermore, while objective
output, new products introduction , time required for measures of organizational performance are less
the marketing of new products, number of customer affected by social desirability bias; subjective measures
complaint, customer response time and rate of poor of organizational performance would be utilized in the
quality products return (Mayer-Haug et al., 2013; Yıldız present study for the following reasons. Firstly,
& Karakaş, 2012). subjective measures are more concerned with the
Extant empirical studies have utilized objective general performance, however objective measurement
measure for organizational performance in different are concerned with the monetary indicators. Secondly,
contexts. Specifically, Hussain (2004) utilized objective many researchers have argued that SME are often very
data to study the association of information technology reluctant to disclose details of their operation and
investments and business performance as measured by actual financial performance, possibly due to fear of tax
Tobin's q (i.e., ratio of the firm’s assets market worth and competition reasons (Abubakar, 2016; Promwichit,
and their exchanging cost). The study revealed that Mohamad, & Hassan, 2013; Zulkiffli & Perera, 2011).
information technology investments show a positive Hence, this justified the need for utilizing subjective
significant relation with performance. In the same vein, measures of organizational performance. Finally, SME
Hult and Ketchen Jr (2001) used objective performance are not mandated to make their financial performance
indicators to examine the linkage of market orientation, publicly, as such it would be very difficult to have access

225 Systematic Reviews in Pharmacy Vol 10, Issue 2, July-Dec, 2019

 Krisada Chienwattanasook et al: Influence of Entrepreneurial Orientation and Total Quality Management on Organizational Performance of
Pharmaceutical SMEs in Thailand with moderating role of Organizational Learning

to firms’ financial data. Hence, this makes it impossible example, Li, Huang, and Tsai (2009) concluded a
to obtain objective data of SME performance. statistically significant association of EO and
performance in a research with the sample of 165
ENTREPRENEURIAL ORIENTATION (EO) production, high-tech, and service firms in Taiwan.
“Entrepreneurial orientation” has certainly developed a Jalali, Jaafar, and Ramayah (2014) also concluded a
key place in the realm of entrepreneurship over the past positive association of EO and performance in a
thirty years, research on EO has flourished for research sample of SMEs in the manufacturing industry
continuous improvement of theory development and in Iran. Zhang, Ma, and Wang (2012) have recognised a
measurement technique (Lyon, Lumpkin, & Dess, 2000; positive and significant link of entrepreneurial
Wiklund & Shepherd, 2005; Yama, Mukem, & orientation with performance in their study of SMEs in
Jermsittiparsert, 2019). The historical foundations of EO the northeaster China. In line with the aforementioned
research can be found in the seminal works of strategic empirical studies, a positive relation of entrepreneurial
management theorists, such as (Giraud Voss, Voss, & orientation and SME performance is also expected in
Moorman, 2005) and (Deshpandé et al., 2013), among the present study. Hence, it can be hypothesised as:
others. Specifically, Hooi et al. (2016), viewed an H1: There is a positive association between
entrepreneurial firm “that engages in product-market entrepreneurial orientation and performance of
innovation, undertakes somewhat risky ventures, and is pharmaceutical SMEs in Thailand.
first to come up with proactive innovations, beating
competitors to the punch”. Relatedly, Mantok et al. TOTAL QUALITY MANAGEMENT
(2019) considered entrepreneurial firms as those In contemporary globalized and competitive
characterized by innovativeness, pro-activeness, risk environment, adoption of the total quality management
bearing, bold and aggressiveness strategic orientations practices is widely recognized as an indispensable
when pursuing opportunities. In a similar pioneering strategy for the survival and success of organizations
work, Deshpandé et al. (2013) defined entrepreneurial (Abdi, Awan, & Bhatti, 2008; Yunis, Jung, & Chen, 2013).
orientation as a business-level predisposition and Total Quality Management (TQM) is well defined by
commitment to involve in behaviours that results in the Dahlgaard, Khanji, and Kristensen (2008) “a corporate
variation of business or market, such as initiating and culture characterized by increased customer
sustaining innovative ideas that lead to new products, satisfaction through continuous improvements, in
adopting new business operations in order to expand which all employees in the firm actively participate”.
new markets, trying out new product offerings in the Furthermore, from methodological perspective, a
face of uncertainty, encouraging employees to be comprehensive review of literature suggests several
independent in initiating and implementation of factors as critical for measuring and successful
innovative ideas, and monitoring industry trends and implementation of TQM (Porter & Parker, 1993).
competitors' best practices. Vanichchinchai and Igel (2011) developed and validated
Entrepreneurial orientation has also been viewed by Total Quality Management Practice (TQMP) measure in
Pearce, Fritz, and Davis (2010) “as a set of distinct but Thailand’s automotive industry. One necessary
related behaviours that have the qualities of condition for building a strong competitive position is
innovativeness, pro-activeness, competitive creating a customer relationship, which help firms to
aggressiveness, risk taking, and autonomy”. Meanwhile, understand whether the needs and expectations of their
Alam et al. (2015) conceptualized EO as “the top customers are met, as well as to receive feedback on
management’s strategy in relation to innovativeness, how well those needs are being met (Tortorella et al.,
pro-activeness, and risk taking”. In general, the above 2019). Commitment and strategy relate to the need for
conceptualization of entrepreneurial orientation executives to positively inspire workers participation in
suggests that EO is multidimensional construct quality management, as well as to have a clear idea,
consisting of at least three components or dimensions. vision, strategies, long term aims and plans for quality
For instance, Cools and den Broeck (2007) definition betterment (Vanichchinchai & Igel, 2011). Human
suggests three perspectives of EO that are resource management has to do with providing training
innovativeness, pro-activeness and risk taking. While and training facilities to employees, as well as
other definitions of EO are equally important, yet the evaluating and implementing workers feedback with
present study adopts Miller (2011) conceptualization of regard to the quality and supply chain management of a
the EO because majority of entrepreneurship firm. Information analysis is concerned with making
researchers have also adopted this earliest definition sure that information is shared among functional
(Hughes, Hughes, & Morgan, 2007; Hughes & Morgan, business departments, such as production department,
2007). marketing department and finance department in order
Furthermore, regardless of the conceptualization used to improve quality and process management
to describe entrepreneurial orientation construct, many (Vanichchinchai & Igel, 2011).
researchers have argued that EO could lead to superior Nuruzzaman (2015) studied the association of TQM
business performance and sustained competitive application and different indicators of firm
advantage (Boso et al., 2015; Hasan, Syyedhamzeh, & performance, including employee affiliations,
Ali, 2013; Lechner & Gudmundsson, 2014). The operational methods, client satisfaction, and increased
literature supports a positive entrepreneurial profitability. As expected, the results confirmed the
orientation with business performance relationship. For hypothesized positive relationships between TQM

226 Systematic Reviews in Pharmacy Vol 10, Issue 2, July-Dec, 2019

 Krisada Chienwattanasook et al: Influence of Entrepreneurial Orientation and Total Quality Management on Organizational Performance of
Pharmaceutical SMEs in Thailand with moderating role of Organizational Learning

implementation and all investigated perspectives of study because multidimensional constructs are
firm performance. C. V. Fotopoulos and Psomas (2010) associated with item redundancy, i.e., where the items
also studied the relationships between TQM and within a scale are simply repeated versions of one
organizational performance, by utilizing a sample of another. Secondly, from a questionnaire administration
370 ISO 9001:2000 certified Greek companies. They point-of-view, organizational learning is modelled as a
showed that a number of TQM factors, including quality unidimensional construct because it would reduce the
steps of executives, employee participation, client tiredness, hindrance, and boredom linked with
emphasis, management of information, and quality responding lengthy survey (Robins, Hendin, &
techniques and tools improved organizational Trzesniewski, 2001). Finally, organizational learning
performance. Akgün et al. (2014) study among 193 has been widely used and successfully validated as a
firms in Turkey demonstrated that TQM had significant unidimensional construct across a number of
and positive effects on firm’s financial performance. researches in the field of entrepreneurship.
Recently, besides the aforementioned empirical studies, Organizational learning could moderate the relationship
there are also several researches that found significant of Entrepreneurial Orientation and Total Quality
positive relationships of TQM practices and business Management with Organizational Performance.
performance (Nguyen & Chau, 2017; Pantouvakis & Accordingly, it can be hypothesised as:
Karakasnaki, 2017; Sweis et al., 2016). Consistent with H3: Organizational learning has moderating role on the
above discussion, a positive association between TQM association of entrepreneurial orientation and total
and SME performance is also expected in the present quality management with performance of
study. Accordingly, it can be hypothesised as: pharmaceutical SMEs in Thailand.
H2: There is a positive association of TQM Research Framework:
implementation with performance of pharmaceutical Current research is intended to investigate the
SMEs in Thailand. association of EO and TQM with business Performance
of pharmaceutical SMEs in Thailand with moderating
ORGANIZATIONAL LEARNING role of Organizational Learning.
Learning organization can be defined as a specific type
of organization, which is conducive or ideal for learning Figure 1: Proposed research framework
to take place, so that behaviour can be improved and
adapted, with the aid of learning facilities (Yeo, 2008).
The focus of this study will be on organizational
learning. Organizational learning is important because
it enables firms to increase their competitive advantage,
innovativeness, as well as enhancing their effectiveness
(Goh, Elliott, & Quon, 2012).
Organizational learning is often conceptualized as
either unidimensional or multidimensional construct
(Goh, Quon, & Cousins, 2007; Wang & Ellinger, 2011).
Specifically, an earlier study by Chakrabarty and Rogé
(2002) has attempted to examine dimensionality of the
organizational learning construct. Following a
confirmatory factor analysis using LISREL 8.30, the METHODOLOGY
study has established a unidimensionality of This study has the aim to investigate the relations
organizational learning construct. Relatedly, drawing among entrepreneurial orientation, TQM and
from a sample of 546 private and public sector organizational learning on the performance of SME.
organizations in Canada, Goh et al. (2007) have re- Towards this end, the present study employed a
examined the unidimensionality of organizational quantitative technique. The study also adopted survey
learning construct. Using both exploratory and research method where data was gathered once during
confirmatory factor analysis, results suggest a the whole study by means of questionnaire. The choice
unidimensionality for organizational learning construct. of quantitative and survey approach as the most
Wang and Wang and Ellinger (2011) have come up with appropriate type of research design is guided by several
four dimensions of organizational learning, including considerations. Firstly, quantitative technique allows
information access, information delivery, information researchers to collect numerical data rather than data in
understanding, and organizational retention. Michna words and concepts; analyse such data using
(2009) concluded that organizational learning is statistically based method in order to draw valid
conceptualized into six orientations, namely: knowledge conclusions. Secondly, quantitative technique enables
source, strong commitment, documentation focus, skills researchers to understand the views of respondents
development focus, dissemination focus, Value-chain concerning an organization and/or the behaviours of
focus, and skills development focus. In spite of this people within a social setting by mean of questionnaire
converging evidence for the multidimensionality of the administration (Sekaran & Bougie, 2010). Thirdly,
organizational learning, the present study focused on survey research method was applied in the study due to
unidimensional approach for the following reasons. resource constraints of the researchers in terms of time
Firstly, unidimensional approach is opted for in this

227 Systematic Reviews in Pharmacy Vol 10, Issue 2, July-Dec, 2019

 Krisada Chienwattanasook et al: Influence of Entrepreneurial Orientation and Total Quality Management on Organizational Performance of
Pharmaceutical SMEs in Thailand with moderating role of Organizational Learning

and money (J. F. Hair et al., 2007; Sekaran & Bougie, 3 OP 0.754 0.834
2010). In the present study, the population of interest
was the pharmaceutical SMEs in Thailand. The unit of 4 TQM 0.825 0.877
analysis was organizational, in which owners and
Table 2 presents that the “square root of AVE” for the
managers were invited to participate in the study.
investigation of Validity of constructs.
Owners and managers were specifically involved as key
informants because they are the most informed about
Table 2: Discriminant Validity
firms’ strategies and capabilities (Sciascia et al., 2014),
Sr Construc 1 2 3 4
and could therefore respond to the research issues and
# ts
the information sought accurately (Zahra & Covin,
1995). 1 EO 0.798
2 OL 0.730 0.760
ANALYSIS AND DISCUSSION 3 0.71
The data was tested by applying Partial Least Squares OP 0.643 0.576
2
Structural Equation Modeling (PLS-SEM), which is 4 0.64 0.76
typically a multivariate statistical analysis for testing TQM 0.625 0.676
6 6
theoretical models. The data was analysed in two Structural Model:
portions i.e. measurement model and structure model. Hypotheses of the study were tested by using structure
Measurement Model Assessment: model. The results of structure model presents in Table
Testing of the “structural model” may be worthless 3 and Table 4.
without the evaluation of “measurement model” to
determine whether the data fits the model Given that Figure 3. Structural Model Assessment
PLS path modeling belongs to a family of structural
equation modelling. This study, before testing the
“structural model”, “measurement model” was assessed
to determine “reliability and validity” of data (Hair & F,
2010). “Measurement model”, also recognized as the
outer model demonstrates the associations between
indicators and the latent constructs. “Reliability and
validity” are two important criteria for evaluating the
quality of measures. Reliability was assessed by
composite reliability and alpha and threshold value for
both is 0.7 (Hair & F, 2010). Present study focuses
mainly Fornell and Larcker (1981), as well as cross-
loadings approach because they are the most widely
used methods of establishing discriminant validity in
entrepreneurship research.
Table 3. Structural Model Assessment (Direct
Figure 2. Measurement Model Assessment Results)
(STDEV T P
(β) ) Statistics Values
0.41
EO -> OP 0.090 4.623 0.000
5
TQM -> 0.34
0.078 4.487 0.000
OP 9

The purpose of the study was to investigate the

relationship of EO and TQM with performance of Thai
pharmaceutical SMEs. The study also intended to
investigate the moderating role of organizational
Learning. Results of structure model indicated that
entrepreneurial orientation has positive significant
impact on the performance of pharmaceutical SMEs in
Thailand. The t-value 4.623 and p-value 0.000 indicated
that H1 is significant at 1% significance level. The
Table 1: Values of alpha and CR: significant positive influence of entrepreneurial
Sr# Constructs alpha CR orientation on SME performance in current study was
consistent with many of the past empirical studies, such
1 EO 0.857 0.897 as Li et al. (2009), Jalali et al. (2014), and Brouthers,
Nakos, and Dimitratos (2015). Collectively, these
2 OL 0.760 0.845 studies found a significant positive influence of

228 Systematic Reviews in Pharmacy Vol 10, Issue 2, July-Dec, 2019

Krisada Chienwattanasook et al: Influence of Entrepreneurial Orientation and Total Quality Management on Organizational Performance of
Pharmaceutical SMEs in Thailand with moderating role of Organizational Learning

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