The Role of External Environment in the Business Outcomes of Malaysia’s Micro-Entrepreneurs: A Conceptual Paper

Abstract

The uncertain external environment significantly influences the performance of small and medium enterprises (SMEs). Various studies highlight how different dimensions of environmental uncertainty impact SMEs' strategies and overall performance. Previous research has found the relationship between external environmental variables and business performance is complex and often inconsistent. This statement has been proven through several findings from past studies, which found an inconsistent relationship between external environmental variables and business performance. The relationship between external environmental factors (dynamic, hostile, and munificent) and the business performance of micro-businesses in Malaysia is complex and multifaceted. Research indicates that these environmental factors significantly influence micro-business performance, particularly in the context of strategic decision-making and resource allocation. The respondents consisted of micro-entrepreneurs running various business sectors in Malaysia. The respondents registered until June 2024 will be obtained from SME Corp. Malaysia. Micro-businesses operating in Malaysia will be randomly selected as respondents in this study. Researchers will use online and face-to-face approaches to receive information through the questionnaire developed. Correlation analysis and multiple regression will be used to test the three main hypotheses of the study. The findings from this study can be utilized by the government, entrepreneurs, other researchers, and stakeholders responsible for helping entrepreneurs in Malaysia.