How entrepreneurial orientation, environmental dynamism, and resource rareness influence firm performance

2013 ◽  
Vol 19 (2) ◽  
pp. 167-187 ◽  
Author(s):  
TingKo Lee ◽  
Wenyi Chu
Keyword(s):  
Firm Performance ◽  
Entrepreneurial Orientation ◽  
External Environment ◽  
Dynamic Environment ◽  
Interactive Effects ◽  
Environmental Dynamism ◽  
Public Firms ◽  
Secondary Database ◽  
Combining Data ◽  
Improved Performance

AbstractPrior studies on strategic management and entrepreneurship have argued that entrepreneurial orientation (EO) is positively associated with performance when firms face certain contingencies, specifically, the dynamism of the external environment and the attributes of resources/capabilities owned by the firm. However, the current empirical evidence is inconclusive. This study advances the argument that the interactive effects of EO, environmental dynamism, and the rareness of resource–capability (rareness) combinations positively influence firm performance. By combining data collected via a secondary database and a questionnaire survey from 237 public firms in Taiwan, this study finds that EO positively influences firm performance. The EO–performance relationship is further moderated by the rareness of resource–capability combinations and environmental dynamism. It is also found that firm performance is collectively determined by the three-way interactions of EO, rareness, and environmental dynamism. That is, when firms own rare resources and are located in a dynamic environment, EO will lead to improved performance.

scholarly journals Entrepreneurial orientation in dynamic environments

2016 ◽  
Vol 22 (5) ◽  
pp. 616-642 ◽  
Author(s):  
Samuel Adomako ◽  
Bedman Narteh ◽  
Joseph Kwadwo Danquah ◽  
Farhad Analoui
Keyword(s):  
Firm Performance ◽  
Entrepreneurial Orientation ◽  
Longitudinal Design ◽  
Dynamic Environment ◽  
Dynamic Environments ◽  
Causal Inferences ◽  
Cross Sectional ◽  
Content Type ◽  
Improved Performance ◽  
Cross Sectional Design

Purpose – Research on entrepreneurial orientation (EO) has concluded a positive link between EO and firm performance and that relationship depends on several contingencies. The purpose of this paper is to derive insights from the absorptive capacity and contingency perspectives to introduce extra-organizational advice as a moderator of the relationship between EO and firm performance in a dynamic environment. Design/methodology/approach – Using survey data from 340 small- and medium-sized enterprises (SMEs) in Ghana, the study examines the moderating influence of extra-organizational advice on the EO-firm performance relationship in dynamic environments. Findings – The study’s empirical findings suggest that extra-organizational advice amplifies the EO-performance relationship in dynamic environments. Research limitations/implications – The cross-sectional design of the study does not permit causal inferences to be made regarding the variables examined. Future studies may use longitudinal design to examine the causal links of the variables. Limitations aside, the study helps to answer how extra-organizational advice translates EO into improved performance in an environment characterized by constant flux. Practical implications – The results of this paper can assist entrepreneurs and policy makers in understanding the dynamics and processes involved in implementing a strategic orientation to achieve higher performance. For SME managers, firm performance is determined by high levels of EO and extra-organizational advice in dynamic environments. The understanding of this issue can promote the development and maintenance of entrepreneurial ventures. Originality/value – The paper examines an important, but under-researched issue – the moderating effect of extra-organizational advice on the EO-performance relationship in dynamic environments. To the best of the authors’ knowledge, the present study pioneers research in this area.

The nature of entrepreneurial orientation strength: the impact of shared values on firm performance

2021 ◽  
pp. 1-21
Author(s):  
Laurence G. Weinzimmer ◽  
Eric J. Michel ◽  
Jennifer Robin
Keyword(s):  
Firm Performance ◽  
Entrepreneurial Orientation ◽  
Convergent Validity ◽  
Field Studies ◽  
Theory And Practice ◽  
Interactive Effects ◽  
Revenue Growth ◽  
Entrepreneurship Theory ◽  
The Impact ◽  
Strong Culture

Abstract Drawing on Wales, Monsen, and McKelvie's (2011, Entrepreneurship Theory and Practice, 35(5), 895–923) model of entrepreneurial orientation pervasiveness and the strong culture hypothesis (Denison, 1984, Organization Dynamics, 13, 4–22), this study investigates how entrepreneurial orientation (EO) strength, defined as the level of agreement in the shared perceptions of EO, serves as a boundary condition of the EO–firm performance relationship. Four field studies provide evidence for a valid and reliable 10-item multidimensional measure of entrepreneurial orientation, the EO-10, which in turn, may be used to assess EO strength. We establish content and construct validity of the EO-10 (study 1; n = 447 employees), criterion-related validity with revenue growth and sales growth (study 2; n = 412 employees in 43 profit centers), and convergent validity with Covin and Slevin's (1989, Strategic Management Journal, 10, 75–87) 9-item measure (study 3; n = 291 employees). Finally, in study 4 (n = 853 employees nested in 22 organizations), we demonstrate the interactive effects of EO and EO strength on profit growth and revenue growth. In sum, this study provides conceptual and empirical evidence for the importance of EO strength as a moderator of the EO–firm performance relationship.

Entrepreneurial orientation, passion for work, perceived environmental dynamism and firm performance in an emerging economy

2016 ◽  
Vol 23 (3) ◽  
pp. 728-752 ◽  
Author(s):  
Samuel Adomako ◽  
Samuel Howard Quartey ◽  
Bedman Narteh
Keyword(s):  
Firm Performance ◽  
Entrepreneurial Orientation ◽  
Developing Economies ◽  
Longitudinal Design ◽  
Environmental Dynamism ◽  
Causal Inferences ◽  
Cross Sectional ◽  
Content Type ◽  
Cross Sectional Design ◽  
Passion For Work

Purpose – Previous scholarly studies have concluded that entrepreneurial orientation (EO) positively relates to firm performance and that relationship is dependent on several contingencies. The purpose of this paper is to show how managers’ passion for work and the external environment (i.e. environmental dynamism) within which firms operate interactively impact on EO-firm performance relationship. Design/methodology/approach – This theoretically derived research model is empirically validated using survey data from 250 small- and medium-sized enterprises (SMEs) operating in Ghana. Findings – The study’s empirical findings indicate that passion for work strengthens the EO-performance relationship in dynamic market environments. Research limitations/implications – The cross-sectional design of the study does not permit causal inferences to be made regarding the variables examined. Future studies may use longitudinal design to examine the causal links of the variables. Practical implications – The study’s findings provide managers with a deeper understanding of how to achieve superior product firm performance, especially when firms are entrepreneurially oriented. The understanding of this issue can promote the development and maintenance of further entrepreneurial ventures in developing economies. Originality/value – The paper has a strong theoretical value because to the best of authors’ knowledge, this study is the first to examine the moderating role of passion for work on the relationship between EO and firm performance in dynamic environments.

EMPIRICAL INVESTIGATIONS INTO FIRM TECHNOLOGY ORIENTATION AND ENTREPRENEURIAL ORIENTATION

2010 ◽  
Vol 07 (04) ◽  
pp. 329-351 ◽  
Author(s):  
BORIS URBAN ◽  
JOSE BARRERIA
Keyword(s):  
South Africa ◽  
Firm Performance ◽  
Entrepreneurial Orientation ◽  
Reliability And Validity ◽  
Statistical Analyses ◽  
Environmental Dynamism ◽  
Relevant Variables ◽  
Technology Orientation ◽  
The Relationship ◽  
Robust Reliability

Entrepreneurship and its relation with technology is studied extensively within organizations and often conceptualized as entrepreneurial orientation (EO) and technology orientation (TO). This paper empirically tests the relationship between these orientations and firm performance by measuring how environmental dynamism and hostility may influence the EO–TO relationship. After providing an overview of the relevant variables, data are collected from 229 firms in Johannesburg, South Africa. Statistical analyses are employed to test the hypothesized associations. Findings reveal robust reliability and validity of scales used, and significant correlations between EO and environment hostility and dynamism are reported.

scholarly journals Impact of Entrepreneurial Orientation, Entrepreneurial Management and Environmental Dynamism on Firm’s Financial Performance

2011 ◽  
Vol 3 (2) ◽  
pp. 101-114 ◽  
Author(s):  
Imran Hameed
Keyword(s):  
Firm Performance ◽  
Financial Performance ◽  
Risk Taking ◽  
Entrepreneurial Orientation ◽  
Analytical Framework ◽  
Environmental Dynamism ◽  
Entrepreneurial Management ◽  
Medium Enterprises ◽  
Degree Of Association ◽  
The Impact

Entrepreneurial Orientation (EO) involves business mindset and behavior. The firm and industry context of entrepreneurship has always fascinated researchers for inquiry. The main aim of this study is to establish an association of factors such as EO characteristics (innovativeness and risk-taking), Entrepreneurial Management (EM), and Environmental Dynamism (ED) with firm’s financial performance. The objective also includes examining the moderating impact of EM and ED respectively on the link between EO characteristics and firm performance. This investigation covered small-to-medium enterprises (SMEs) in Pakistan from the cities of Islamabad and Lahore, and constituted a diverse sample of entrepreneurs from various sectors. Results reveal direct positive, individual relationships of innovativeness, risk-taking, and EM with firm’s financial performance. As far as moderating influence is concerned, EM and ED could not establish any significant interaction between EO characteristics and firm performance. Interestingly, from the contextual landscape of this study, risk-taking and EM have proved to be stronger, more consistent and stable predictors of performance compared with innovativeness. The EO dimension of innovativeness exhibits dual results of either strong or very weak predictor to performance, hence implying vulnerability. In fact, running full regression, the impact of innovativeness on performance gets diminished in the presence of risk-taking and EM. The investigation also reveals that when controlling for ED the analytical framework shows a slightly better degree of association between predictor and criterion variables. Under the context of this study it, therefore, concludes that SME managers should rely more on risk-taking dimension of EO compared with innovativeness especially in executing entrepreneurial management (EM) approaches.

scholarly journals Entrepreneurial Orientation as a Determinant of Oil and Gas Service Firm Performance in Nigeria: The Moderating Role of External Environment

2020 ◽  
Vol 11 (2) ◽  
pp. 1
Author(s):  
M. A. Arokodare ◽  
O. U. Asikhia
Keyword(s):  
Firm Performance ◽  
Entrepreneurial Orientation ◽  
Service Sector ◽  
Oil And Gas ◽  
Market Performance ◽  
External Environment ◽  
Oil And Gas Industry ◽  
Service Firms ◽  
Cross Sectional Survey ◽  
Cross Sectional

Oil and gas service sector is one of the major sectors of the oil and gas industry that contributes to and enhances economic functions across the globe. This industry in Nigeria was plagued with problems of unstable global oil prices, absence of entrepreneurial mindset, poor entrepreneurship ideas and mis-match of entrepreneurial orientation strategies with local and international business environmental conditions. Due to these problems, the oil and gas service firms recorded declining market performance and profitability. This study therefore examined the effect of entrepreneurial orientation components on overall performance. The study adopted cross-sectional survey research design with a target population of 14,038 owners and managers of oil and gas service companies operating in Nigeria. A mixed sampling technique was adopted to select the sample size of 576 using the Cochran (1997) formula. The data was analyzed using descriptive statistics and multiple and hierarchical regression methods of analyses. Findings revealed that entrepreneurial orientation components (proactiveness, innovativeness, risk taking propensity, autonomy and competitive aggressiveness) had significant effect on market performance (Adj.R2 = .538, F-stat = 92.142, p<0.05). Entrepreneurial orientation components significantly affected profitability (Adj. R2 = .626, F-stat = 76.584, p<0.05); while external environment significantly moderated the relationship between entrepreneurial orientation and firm performance (Δ Adj.R2 = .593, ΔF = 25.451; F-stat = 47.215, p<0.05) all at 5% level of significance. Implications of the findings and recommendations were made.

The Moderating Effect of Environmental Variables on the Entrepreneurial and Marketing Orientation of Entrepreneur-led Firms

1997 ◽  
Vol 22 (1) ◽  
pp. 47-58 ◽  
Author(s):  
Richard C. Becherer ◽  
John G. Maurer
Keyword(s):  
Firm Performance ◽  
Organizational Performance ◽  
Empirical Evidence ◽  
Entrepreneurial Orientation ◽  
Environmental Variables ◽  
External Environment ◽  
Moderating Effects ◽  
Marketing Orientation ◽  
Relationship Of ◽  
The Relationship

A firm's marketing orientation and entrepreneurial orientation intuitively should relate to organizational performance. Considerable theory can be found concerning the causes and consequences of each orientation as well as their relationship, but little empirical evidence exists, especially for small-firm samples. This paper examines the relationship between the two concepts and how this relationship is moderated by the firm's external environment. In addition, the relationship of marketing orientation and entrepreneurial orientation to firm performance and the moderating effects of the environment on these two relationships are examined. The sample consists of entrepreneurs, defined as those individuals who have started or purchased a small business, and who are still leading the business they started or purchased.

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