Small and medium enterprises (SMEs) have a critical role in economic
growth in Indonesia and become the backbone for job creation, poverty
alleviation, and safeguard during the crisis. However, they are highly
exposed to uncertain environments. The present study aimed to
investigate the influence of SMEs’ entrepreneurial orientation on
business performance when uncertain environments exist. A total of 152
Indonesian SMEs were studied in order to assess this relationship.
Moderated regression analysis is performed as the main statistical
procedures to analyse the moderating role of environmental uncertainty
on the influence of entrepreneurial orientation on business performance.
Surprisingly, the result of the present study did not confirm the
previous predominant studies which found that entrepreneurial orientation
dimensions are positively associated with business performance in
growing in an uncertain environment. Indonesian entrepreneurs were
reluctant to innovate, be proactive, and take risks when an uncertain
environment exists. The present study was an endeavour to provide better
insight in explaining the inconsistent and ambiguous findings from
existing literature.