Configuration Approach to Strategic &amp; Entrepreneurial Orientation Construct &amp; Small Firm Growth: Evidence from India

The answer to the question, “Which factors determine the sustainable growth of small- and medium-sized enterprises (SMEs)?” is still fragmented. While previous studies have paid attention to a firm’s entrepreneurial orientation (EO) as a key driver of SME growth, it is often overlooked that contextual factors can be crucial in order for EO to be effective in yielding sustainable growth in SMEs. This paper focuses on the role of relative performance as a boundary condition in the relationship between EO and sustainable growth of SMEs. We predict that the effect of EO on SMEs’ sustainable growth would differ depending on performance feedback based on their past performance. Our empirical analysis based on panel analysis shows that SMEs strongly pursue sales growth immediately after they achieve lower levels of performance than historical aspiration. However, when their performance goes beyond the historical aspiration level, their growth patterns appear to show a different pattern depending on their level of EO. SMEs with greater EO are more likely to pursue firm growth when performance is above historical aspirations while those with lesser EO are not. Our findings suggest that relative performance is an important boundary condition in the relationship between EO and SMEs’ sustainable growth.

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HR practice and small firm growth: balancing informality and formality

How Can HR Drive Growth? ◽

10.4337/9781781002261.00009 ◽

2013 ◽

pp. 26-45 ◽

Cited By ~ 11

Author(s):

John Kitching ◽

Susan Marlow

Keyword(s):

Small Firm ◽

Firm Growth

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Growth Intention and Growth in Small Accounting Firms

Administrative Sciences ◽

10.3390/admsci9020036 ◽

2019 ◽

Vol 9 (2) ◽

pp. 36

Author(s):

Lars Kolvereid ◽

Bjørn Willy Åmo

Keyword(s):

Human Resources ◽

Labor Productivity ◽

Entrepreneurial Orientation ◽

Firm Growth ◽

Employment Growth ◽

Accounting Firms

Previous research has found that owner/manager growth intention is related to subsequent firm growth, but growth intention alone only explains about 4–5% of the variance in actual firm growth. The purpose of this study is to investigate factors in addition to growth intention that may help us to explain a higher proportion of the variance in firm growth. We selected three factors for our study: Entrepreneurial orientation, versatile human resources and labor productivity. We tested the hypotheses in a sample of small Norwegian accounting firms. The findings indicate that, after controlling for growth intention, versatile human resources and labor, productivity contributed to the explanation of the variance in sales and employment growth, while entrepreneurial orientation has no such additional effect.

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