ABSTRACT
Business performance is important indicator for business sectors SMEs to explain about their successful contributions and achievement. Positive outcome of business is vital to promote entrepreneurship for sustaining a healthy economy and creating new jobs for the local community. Entrepreneurial competencies have been used widely to examine business performance. Competency theory evaluated entrepreneurs’ behaviors, attitudes and skill in order to create individuals who demonstrate superior performance. On the other hand, organizational innovation is used to recognize entrepreneurs’ capacity to introduce of some new process, product, or idea in the organization. Organizational innovation related to changes in individual’s social behavior, changes in organizational structures or culture. Innovative, creative, flexible, risk taking, and tolerant of uncertainty and ambiguity people are needed to ensure successful business. Therefore, comprehensive understanding the effects of organizational innovation as a mediating factor between entrepreneurial competencies and business performance are needed.
