Creation of Social Network and Applying Sufficiency Economy Philosophy Toward Balanced Scorecard of Small and Medium Enterprises in Songkhla Province

Abstract

The purpose of this research was to analyze the causal relationship between the creation of social network, the applying of sufficiency economy philosophy (SEP) and performance in the context of small and medium enterprises (SMEs). The sample consisted of 240 entrepreneurs in Songkhla province by multi-stage sampling. A set of questionnaires was used as a research instrument which measured on checklist and five-point Likert scales. The developed structural equation model (SEM) consisted of 3 latent variables and 12 observed variables. The primary data were analyzed by descriptive statistics, and the goodness of fit of the model was assessed by using structural equation modeling. The results revealed that the measurement model fitted with the empirical data and accounted for a construct reliability of 0.69-0.87, and an average variance of 0.59-0.81. The SEM model was found to have a good fit for the empirical data (c²/df=1.87, CFI=0.93, RMSEA=0.046, SRMR=0.043). An application of the SEP factor was found to mostly affect the SMEs performance with an effect size of 0.65, followed by social network with an effect size of 0.53 at a significant level of 0.05. Additionally, social network positively affected an application of the SEP with an effect size of 0.47.