Disentangling the individual entrepreneurial orientation and SMEs success nexus: an action-based interplay of exploration activities and entrepreneurial alertness

Abstract

Purpose This study aims to extend the much-held strategic entrepreneurial orientation stance and conceptualized it as a psychological disposition of small- and medium-scale enterprises (SMEs) owners. Based on this notion, the authors theorized that individual entrepreneurial orientation (IEO) is a precursor of success in manufacturing sector SMEs. Building on the credo of action regulation, the authors clarified the IEO and SMEs’ success association by introducing exploration activities as a conduit. Further, the authors posited that entrepreneurial alertness augments the nexus of IEO, exploration activities and SMEs success. Design/methodology/approach A three-wave survey was done by drawing a cluster-based sample of 389 SME owners in the manufacturing sector of Pakistan. The mediation and moderation analysis were done by PROCESS macro that uses bootstrapping with 5,000 draws to calculate the indirect (Model 4), conditional and conditional indirect effects (Model 7) at a 95% confidence interval. Findings The results offered empirical support to the conjectured association among IEO and SMEs’ success mediated by exploration activities. Moreover, the conditional direct (between IEO and exploration activities) and indirect impact (among IEO and SMEs’ success mediated by exploration activities) of entrepreneurial alertness was substantiated. Originality/value The authors added to the sprouting body of knowledge in the field of entrepreneurial orientation by focusing on its individual-level psychological conception. The authors have unlocked the interplay between IEO and SMEs’ success via the role of action characteristics of exploration activities and entrepreneurial alertness based on the action regulation tenet. Thus, the authors made a novel contribution by linking the micro-level entrepreneurial orientation and actions with macro-level SMEs' success.

Entrepreneurial alertness as a determinant of success in the SME context: a qualitative study

“…The need to be alert to the environment surrounding SMEs is a fundamental factor of success in this firm segment and especially in micro-firms (Vu and Nwachukwu, 2021; (Bilal and Fatima, 2022). While entrepreneurship creates employment, wealth and economic growth, the entrepreneurial alertness allows this type of firm to create value through discovering new opportunities (Brockman, 2014; Vu and Nwachukwu, 2021).…”

“…The entrepreneurial alertness in the SME context is therefore fundamental for their development and success (Bilal and Fatima, 2022). According to Vu and Nwachukwu (2021), and grounded on resource-based theory, the entrepreneurial alertness stimulates micro-firms’ profitability.…”

“…The context (environment) is therefore considered a primary element of company development. Any firm that manages to adapt its activities to the constantly changing environment is considered successful (Bilal and Fatima, 2022). The environment is complex and dynamic and requires entrepreneurs’ constant attention so that they can cope with successive changes and adversities that arise (Pirhadi et al , 2023).…”

Entrepreneurial Orientation, Psychological Capital, Entrepreneurial Strategy, and Firm Performance on Private Daycare in Indonesia: A Conceptual Paper

“…First, some literature reported inconclusive findings regarding entrepreneurial orientation and business performance relationships requiring more empirical attention. Numerous studies have found a direct and indirect relationship between entrepreneurial orientation and business performance (Bilal & Fatima, 2021;Vaitoonkiat & Charoensukmongkol, 2020;Wahyuni & Sara, 2020). Conversely, a significant relationship between entrepreneural orientation and business performance has not been found yet (Cho & Lee, 2018;Fuentes-Fuentes et al, 2015;Rachmawati et al, 2020).…”

Individual entrepreneurial orientation, self-efficacy, and managerial skills for project performance: an integrated structural approach and analysis

“…Since IEO is still an emerging area of exploration, some limited theories have been used to explain this behavior, including social exchange theory (Hughes et al , 2018; Covin et al , 2020), action regulation theory (Bilal and Fatima, 2021), regulatory mode theory (Kraus et al , 2019) and machine learning theory (Sabahi and Parast, 2020). Social exchange theory is used in this study to explain the correlation between IEO and PP within teams.…”