This study investigated the relationship between strategic decision-making and firm performance in pharmaceutical small and medium-sized enterprises (SMEs) in Southwest Nigeria, focusing on the mediating role of entrepreneurial orientation. It examined how entrepreneurial orientation enhances the effectiveness of decision-making processes in improving performance outcomes. A mixed-methods design was employed, combining quantitative survey data with qualitative insights. Primary data were collected via structured questionnaires administered to owners, managers, and key decision-makers across six states: Ekiti, Lagos, Ogun, Ondo, Osun, and Oyo. The study population comprised 1,510 registered pharmaceutical SMEs operating in manufacturing, distribution, wholesale, and retail segments. Using Yamane’s formula, a sample of 316 firms was determined, with 305 valid responses analyzed. Data were analyzed through descriptive statistics and mediation analysis using PROCESS Macro (Model 4) in SPSS, supported by bootstrapping. Findings revealed that strategic decision-making positively influences entrepreneurial orientation (β = 0.482, p < 0.001), with firms exhibiting higher innovativeness, proactiveness, and risk-taking. Entrepreneurial orientation also significantly improved firm performance (β = 0.515, p < 0.001). Mediation analysis confirmed that entrepreneurial orientation partially mediates the decision-making–performance relationship, with a significant bootstrapped indirect effect (0.248, 95% CI excluding zero). The study concludes that entrepreneurial orientation is a critical mechanism through which structured decision-making enhances firm performance, reinforcing innovation, proactive strategies, and calculated risk-taking as drivers of competitive advantage.
Ayeni et al. (Thu,) studied this question.