Exploration of Factors Influencing Saudi Small Enterprises Survival: Study on the Qassim Region

Abstract

This study focuses on factors that have affected the survival of Saudi small enterprises by using a two-part mixed-methods approach of qualitative followed by quantitative (Creswell et al., 2003). In the qualitative part of the research, semi-structured interactive interviews were the chosen data collection method. After interviewing small enterprise owners and managers about this issue, the data were analyzed using a structural analysis method via the MicMac software program. The qualitative results show 25 common concepts provided by the interviewees that influence small enterprises’ survival. Based on the results of the qualitative research, an online questionnaire was constructed for the quantitative part of the research. Data from the questionnaires were analyzed by means of structural equation modeling via Amos 28.0 software. The study was conducted on 394 owners and managers of Saudi small enterprises in the Qassim region. The results show that (i) entrepreneurship orientation and its five components (autonomy, risk-taking, proactiveness, competitive aggressiveness, and innovativeness) positively affect the survival of small enterprises; (ii) external environment factors have positive direct effects on risk-taking and innovativeness, and indirect effects on the survival of small enterprises through entrepreneurship orientation, risk-taking, and innovativeness; and (iii) human capital has a positive indirect effect on the survival of small enterprises through autonomy. To our knowledge, the following are the main contributions of this study: First, this is the first study to use the MicMac software program to explore the factors affecting small business survival, particularly in Saudi Arabia. Second, no previous study has examined the mediation role of entrepreneurship orientation in explaining the relationship between small business survival and organizational environment, human capital, and social capital. Third, in terms of results, external environmental factors have positive direct effects on entrepreneurship orientation, risk-taking, and innovativeness, and an indirect effect on the survival of small enterprises through entrepreneurship orientation, risk-taking, and innovativeness. Finally, from a managerial viewpoint, to increase their business survival, owners and managers are called to pay more attention to the changes in the external environment because of its double effects on entrepreneurial orientation and business survival. Keywords: Enterprise survival; Human capital; Social capital, Organizational environments; Entrepreneurship Orientation; Small enterprises.