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.

Keywords: Social media usage, Small and Medium Enterprises (SMEs), Entrepreneurial Orientation

(EO)

firms adopt adaptive business strategies. The Entrepreneurial Orientation (EO) which characterized by

innovativeness, proactiveness, and risk-taking, can act as a vital bridge between digital tools and business

success.

Focusing on the mediating role of EO, this study targets to discover how social media usage impacts the financial

and non-financial performance of Malaysian SMEs. Empirical evidence from manufacturing SMEs in Klang

Valley in Malaysia applied to present insights into how EO leverages digital resources for upgraded business

performance.

While social media is extensively accessible, SMEs struggle to fuse it effectively into their operations, especially

in evolving economies. Many SMEs deal obstacles such as confined digital literacy, insufficient resources, and

countries, where they contribute greatly to employment and national GDP. In Malaysia, SMEs report for over

98% of businesses and contribute around 38% to the country’s GDP, appearing them as the key driver of

economic growth (SME Corp Malaysia, 2020). In spite of the potential benefits of harnessing digital tools, many

SMEs continue to battle significant obstacles in successfully utilizing these platforms to boost their, specifically

social media. Social media provide SMEs a cost-effective way to engage customers, boost marketing, and ease

information exchange (Kaplan & Haenlein, 2010), yet many SMEs fail to fully employ its potential due to a lack

of digital literacy, resources, and strategic planning (Alalwan et al., 2017).

While existing literature highlights the significance of social media usage in enhancing business performance,

restricted study has discovered how social media decipher into tangible end results such as sales growth, cost

minimization, and customer satisfaction in the context of manufacturing SMEs. In particular, the role of

Thus, this study aims to investigate and explore how social media usage affects the performance of Malaysian

manufacturing SMEs and the mediating role of Entrepreneurial Orientation (EO) in this relationship.

Specifically, thus study seeks to examine how innovativeness and proactiveness can strengthen the positive

effects of social media on sales growth, cost reduction, and customer satisfaction. This study will serve insights

for SME owners and policymakers, facilitating them to comprehend the importance of digital tools and

entrepreneurial behaviour in propelling business success in an increasingly digital economy.

IDT demonstrates how new innovations are implemented based on their recognized usefulness, complexity, and

compatibility with organizational values (Rogers, 2003). SMEs vary broadly in their social media adoption

Social Media Usage

Defined as internet-based applications that support content sharing, social media enables SMEs to market their

products proficiently and directly connect with customers. The SMEs in Malaysia that actively utilize social

media present improved market penetration and lower advertising costs.

EO consists innovativeness, risk-taking, and proactiveness—capabilities necessaries for SMEs to prosper in the

Business performance is identified in both financial like profit and revenue metrics, as well as non-financial like

customer satisfaction metrics. Social media affects both, and EO reinforce this impact by driving strategic

resource utilization.

Moreover, financial performance indicators such as cost reduction and sales increases were validated to improve

with higher levels of social media engagement in SMEs.

Social media stimulate innovative thinking, faster decision-making, and a proactive approach in business

processes. Social media fosters entrepreneurial behaviour by revealing SME owners to new ideas, customer

feedback, and competitive trends. Empirical results from the research presented that social media utilizations

have a statistically notable influence on all three EO dimensions among SME leaders which are innovativeness,

risk-taking, and proactiveness. This aligns with the study by Kiss et al. (2012), who explored that digital tools

are vital for developing entrepreneurial capabilities in SMEs operating in emerging markets.

Supporting this, Ainin et al. (2015) discovered similar effects on customer experience and service satisfaction in

Southeast Asia.

EO characteristics such as innovativeness, risk-taking, and proactiveness furnish SMEs with tools to chase

growth opportunities, streamline operations, and adapt to market demands consequently maximizing sales and

minimizing costs. The study found that EO dimensions notably contributed to improved profitability, particularly

cost diminishing and sales boosting in Malaysian SMEs. This is reinforced by Fadda (2018), who stated that

innovativeness and proactiveness were determinant factor of financial outcomes in SMEs.

Non-financial aspects are moulded by the innovativeness and proactive behaviour of SME leaders, such as

The study’s data showed notable links between EO dimensions and improved customer service, as well as better

EO improve how SMEs explain and use social media for customer engagement and information management.

Businesses can infer more relational and experiential value from their social media activities with strong EO

traits. The study presented that EO, mediates the association between social media and non-financial gains such

as improved service quality and stakeholder trust, specifically proactiveness and innovativeness. These findings

mirror observations by Rodriguez et al. (2014), who highlighted EO’s role in converting digital interactions into

meaningful customer experiences.

orientation (EO), and performance outcomes. The results of the hypothesis testing are summarized below:

Table 2: Hypothesis Testing

Risk-taking, and Pro-activeness) mediate the effects of social media usage on SME performance.

Table 4: Mediating Role of EO

From this table, it is clear that Entrepreneurial orientation serves as partial mediators in the relationship

between social media usage and Financial Performance SME. For instance, Entrepreneurial Orientation

assists translate social media for marketing (SM4MK) into increased sales, while Pro-activeness mediates the

effect of social media on reducing costs. On the other hand, Risk-taking (RISK) did not show any significant

pivotal to SMEs in competitive markets. The importance of consistent engagement and communication with

customers through digital platforms highlighted with the significant influence of social media for customer

relations (SM) on sales and customer relations. Additionally, the need for SMEs to adopt a multifaceted approach

to social media usage, targeting both customer engagement and access to information indicated with the social

media for information accessibility (SM), though having a lesser impact than customer relations, also contributes

to sales.

Moreover, the importance entrepreneurial orientation (EO), specifically innovativeness and proactiveness, in

transforming social media efforts into tangible results includes sales growth and cost reduction is demonstrated

in this study. Innovativeness was discovered to mediate the effect of social media marketing on sales, verifying

the literature that innovation is necessaries for businesses to adapt and thrive in a rapidly evolving digital

digital tools effectively.

This study highlights the interlinked roles of digital tools and entrepreneurial behaviour in driving SME triumph.

By utilizing social media and developing EO, SMEs in Malaysia can improve both financial outcomes and non-

financial stakeholder relationships. Policymakers and SME development agencies should centre on building EO

capacity alongside digital training for sustainable growth.

The findings of this study emphasize the critical role that social media usage and entrepreneurial orientation

(EO) play in operating the performance of SMEs. Specifically, the results align with the hypothesis that social

media enhances the way SMEs engage with their customers and market their products which indicate that social

media usage for customer relations (SM) has a significant and positive impact on both better customer relations

consistent with the growing importance of digital platforms in business strategies, which can drive both relational

Overall, this study proves that entrepreneurial orientation boosts the effectiveness of social media strategies in

improving SME performance. Specifically in innovativeness and proactiveness, with a strong EO traits, SMEs

are better positioned to employ the benefits of social media, which correlates with existing literature on the

relationship between digital tools and business success.

This study provides multiples theoretical contributions to the fields of entrepreneurship and digital marketing.

Firstly, it amplifies on the existing literature by demonstrating the mediating role of entrepreneurial orientation

(EO) in associating social media usage to SME performance specifically in innovativeness and proactiveness.

While prior studies have targeted on the direct impact of social media on business outcomes, this study underlines

the importance of EO traits in reinforcing the effectiveness of digital tools. It proves that innovativeness

facilitates the translation of social media marketing efforts into sales growth, while proactiveness improve cost

reduction with the better use of social media for customer connections and service optimization.

Secondly, the study illustrates how SMEs with strong entrepreneurial capabilities (innovative and proactive

traits) are better equipped to leverage digital resources, such as social media, for competitive advantage with

providing empirical evidence that supports the Resource-Based View (RBV) and Innovation Diffusion Theory

marketing and customer service activities in maximizing benefits by emphasising the subtle ways in which

digital platforms impact sales and customer satisfaction.

In conclusion, this study contributes to the theoretical understanding of how social media can be a powerful

researchers and practitioners in the digital and entrepreneurial domains.

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