The purpose of the study is to examine the moderating effect of the external environmental
characteristics on the relationship between entrepreneurial orientation and SMEs
performance. Survey method of research was used by personally administering
questionnaires to the owners/managers. Multistage sampling technique was used in
selecting 470 SMEs that partook in the survey. SPSS 24 and PLS-SEM 3.0 were employed in
the analysis of the data. The results indicated that EO significantly affects SMEs
performance. Similarly, there is a significant moderating effect of environmental
dynamism on the relationship between EO and SMEs performance. Surprisingly, there is an
adverse moderating effect of environmental complexity and hostility on the relationship
between EO and SMEs performance. While environmental diversity shows insignificant
moderating effect. Therefore, the study put forward that to attain high SMEs performance.
There is a need for owners/managers to consider environmental characteristics and how
they affect SMEs performance.
