DETERMINANTS OF SUSTAINABLE BUSINESS PERFORMANCE IN MALAYSIA: DIRECT EFFECTS OF LEADERSHIP, CUSTOMER FOCUS, AND ECONOMIC FACTORS AND THE MEDIATING ROLE OF ORGANIZATIONAL CULTURE

This study examines the influence of leadership, customer focus, economic factors, and organizational culture on sustainable business performance among small and medium enterprises (SMEs) in Malaysia. Methodology – A quantitative, cross-sectional design was employed. Data were collected from 200 entrepreneurs operating in the Klang Valley, Malaysia, using a structured questionnaire. Purposive sampling was utilized to target SMEs owners with at least three years of operational experience. Hypotheses were tested using partial least squares structural equation modeling (PLS-SEM) via SmartPLS 4.0. Findings – Leadership (β = 0.327, p < 0.05), customer focus (β = 0.384, p < 0.05), and economic factors (β = 0.316, p < 0.05) have significant direct effects on sustainable business performance. Organizational culture did not exhibit a direct effect but served as a partial mediator, explaining 16.4% of the variance in the leadership–performance relationship, 12.7% in the customer–performance relationship, and 11.2% in the economic–performance relationship. The model explained 57.4% of the variance in venture performance (adjusted R² = 0.574). Originality/value – This study provides empirical evidence from the Malaysian context confirming that leadership, customer focus, and economic conditions are critical success factors for SMEs. It contributes to entrepreneurship literature by demonstrating the mediating rather than direct role of organizational culture, offering actionable insights for entrepreneurs and policymakers.