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Determining the key success factors of tourism small and medium-sized enterprises (TSMEs) in Malaysia

By Kalsitinoor Set

Abstract

Research Doctorate - Doctor of Philosophy (PhD)This thesis investigates the underlying success factors of tourism small- and medium-sized enterprises (TSMEs) in Malaysia. Tourism has emerged as one of the world’s major industries with significant changes in the structure and operation of the tourism industry worldwide. The global transition to tourism-focused economies, the emergence of new destinations, and increasing demands for differentiated tourism products and services have engendered the need for TSMEs to develop strategies to become competitive in the changing global economy. Despite the efforts, TSMEs continue to face challenges that impede successful tourism development in destination countries, thus slowing gains that can emerge from TSMEs activities. As one of the most popular destinations in the world, the Malaysian government has taken a strategic approach to developing the performance of its tourism industry. Currently, tourism has become the second largest contributor to gross domestic product and a major contributor to foreign exchange earnings in the country. Given this, the Malaysian government has made concerted efforts to spur the tourism industry through empowering and supporting TSMEs. Understanding the key success factors of TSMEs is therefore pertinent. To achieve this objective, this study examines the operations and identifies key success factors of TSMEs in Malaysia based on Resource-Based View (RBV) theoretic framework. A structured questionnaire was administered to 346 Malaysian tourism entrepreneurs to elicit information on their managerial characteristics and performance. The descriptive and inferential analyses were conducted using the SPSS 18 and AMOS 18 statistical packages. The empirical findings from this research are summarised. First, the motivation of tourism entrepreneurs to enter the industry in Malaysia is driven by certain socio-economic and demographic characteristics. Empirical results indicate that there exists a positive association between age and entrepreneurial motivation. Second, tourism entrepreneurs in Malaysia perceive management practices of business planning, business alliances, motivation and government support as key factors for sustaining TSME business performance. Third, there is strong empirical evidence to indicate that a causal relationship exists between management practices and TSME performance in Malaysia. That, the key success factors of business planning, tourism entrepreneurial motivation and government assistance programmes have had a strong positive effect on the performance of TSMEs in Malaysia. This study provides strong empirical evidence to indicate that to improve the performance of TSMEs there is the need to enhance the socio-economic and demographic characteristics of managers as well as continue to maintain government assistance programmes to TSMEs. This could be achieved through developing effective government policies and creating greater awareness of assistance programmes offered by the government, improve efficacy of public and private institutions that support TSMEs, and encouraging further training and exposure of managers to advances in entrepreneurial skill development in Malaysia.

Topics: tourism small and medium enterprises, tourism entrepreneur, management practices, success factor, firm performance, Malaysia
Year: 2014
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