TRANSFORMING ENTREPRENEURIAL RESOURCES INTO PERFORMANCE: THE MEDIATING ROLES OF ENTREPRENEURIAL ORIENTATION AND ENTREPRENEURIAL BEHAVIOR IN SOCIAL BUSINESS CONTEXTS

Social businesses provide market-based mechanisms to address social challenges, particularly in developing economies where entrepreneurship is promoted as a tool for poverty alleviation. Type II social businesses operate by optimising available resources to enable marginalised individuals to run micro-scale enterprises that fulfil their socially defined needs. This study examines how internal resources at the individual level namely entrepreneurial competencies, digital technology application, attitudes, religiosity, and capital availability influence the performance of Type II social businesses through organisational-level internal resources that are appropriate to micro-scale enterprises, specifically Individual Entrepreneurial Orientation (IEO) and entrepreneurial behaviours (EB). Drawing on the Resource-Based View (RBV), the study conceptualises IEO and EB as organisational mechanisms through which individual-level resources are transformed into financial and non-financial performance outcomes within the context of Type II social businesses. Data were collected through surveys from participants in one of the zakat-based entrepreneurship programmes in Malaysia and analysed using Partial Least Squares Structural Equation Modelling (PLS-SEM). The findings reveal that IEO and EB significantly enhance non-financial performance, while financial performance is only weakly influenced. Entrepreneurial competencies indirectly affect non-financial outcomes through IEO, whereas religiosity shapes non-financial performance through EB. These results highlight that marginalised entrepreneurs leverage individual-level intangible resources through simple yet effective organisational practices to achieve meaningful socio-economic outcomes, prioritising non-financial indicators such as self-esteem and self-actualisation over financial gains. This study contributes to the social entrepreneurship literature by extending the RBV to account for multi-level internal resources in marginalised micro-enterprise and poverty alleviation contexts.