Citation:

Ralph Benjie Austral, REB, REA, MBA, Vicente Montaño, DBA. "Structural Equation Model on Organizational Effectiveness in Relation to Entrepreneurial Marketing, Operating Environment, Employee Engagement and Financial Management Practices among Micro, Small and Medium Enterprises in Davao Region" International Research Journal of Economics and Management Studies, Vol. 4, No. 4, pp. 1-19, 2025.

Abstract:

This quantitative research aimed to determine the best-fit model with the following independent variables: entrepreneurial marketing, operating environment, employee engagement and financial management practices concerning organizational effectiveness as dependent variables. A survey questionnaire was disseminated to various MSME managers and owners in Davao Region. A structural equation model was used to find the best-fit model of the study. Results showed that entrepreneurial marketing (x̄=4.42), operating environment (x̄=4.40), employee engagement (x̄=4.47), and financial management practices (x̄=4.31) were very high; organizational effectiveness, as the dependent variable, was also observed as very high (x̄=4.41). The study further showed that Entrepreneurial Marketing (β=0.464, p=0.00), Employee Engagement (β=0.408, p=0.00) and Financial Management Practices (β=0.153, p=0.002) have an influence on organizational effectiveness while operating environment (β =-0.105, p=0.113) does not have. The best-fit model then suggested that Proactive Orientation and Innovation focused as indicators of Entrepreneurial Marketing, Job Characteristics and Perceived Organizational Support as indicators of Employee Engagement and Working Capital Management Practices, Accounting Information System and financial reporting practice and analysis, and Capital Budgeting and non-current assets management, as indicators of Financial Management Practices, were final indicators for independent variables which can influence Organizational Effectiveness, with Organizational Structure and Knowledge Management, as indicators.

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Keywords:

Employee Engagement, Entrepreneurial Marketing, Financial Management Practices, MSME, Operating Environment, Organizational Effectiveness, Philippines, Structural Equation Model.