Entrepreneurial orientation and firm performance in different environmental settings

Abstract

Purpose – The purpose of this paper is to explore the relationship between entrepreneurial orientation (EO) and firm performance across different levels of environmental hostility and market growth. The contingency approach of two-way interactions of EO with each environmental variable is contrasted with the configurational approach of three-way interactions of EO simultaneously with different levels of both environmental variables. Design/methodology/approach – Hierarchical regression analysis is applied for the pooled data set of 163 Finnish and Russian small- and medium-sized enterprises, and supplemented with post hoc analysis of the differences in regression slopes across environmental configurations. Findings – Results show that EO is directly and positively associated with firm performance. However, the strength and direction of this relationship varies by configurations of the external environment variables. Firms achieve superior performance when adopting EO in environments with high levels of both hostility and market growth. In contrast, in favorable environments with low hostility and high market growth, EO adoption leads to lower firm performance. Research limitations/implications – The study contributes to the EO literature by demonstrating different effects of EO on firm performance across various environmental configurations. It uses cross-sectional data from two countries. Replication studies using different samples may further corroborate the results. Practical implications – In order to take advantage of opportunities and achieve better performance, managers of firms should analyze multiple elements of the environment concurrently and align EO to those conditions. Originality/value – The configurations of environmental hostility and market growth, representing both favorable and unfavorable elements of business context, have not been previously investigated together in one model of the EO-performance relationship.

Investment in intangible resources and capabilities spurs sustainable competitive advantage and firm performance

“…In line with Su, Guo, and Sun (), we used Porter's competitive strategy measures as a proxy for assessing SCA. Furthermore, although the measurement of FP by either objective or subjective measures is a challenge for researchers, prior studies have recommended self‐reported measures for FP in cases involving SMEs (Shirokova, Bogatyreva, Beliaeva, & Puffer, ). We thus relied on self‐reported measurements used by (Stam & Elfring, ; see Appendix for details).…”

“…We thus relied on self‐reported measurements used by (Stam & Elfring, ; see Appendix for details). Likewise, we used the age and size of firm as a control variable to reduce spuriousness in the results (Shirokova et al, ).…”

Firm Performance During Economic Crisis: The Role of Strategic Orientations and Financial Capital

“…В то же время данная связь не универсальна для всех фирм и условий внешней среды [Широкова, Бо гатырева, Беляева, 2015;Laukkanen et al, 2013;Liu, Li, Xue, 2011;Shirokova et al, 2016]. В ра-ботах, изучающих комбинации и совмест-ные эффекты стратегических ориентаций, было обнаружено, что наилучшим резуль-татам деятельности фирмы способствует развитие сразу нескольких стратегических ориентаций, объясняемое свойством их вза-имодополняемости [Atuahene-Gima, Ko, 2001;Deutscher et al, 2016;Ho, Plewa, Lu, 2016;Lonial, Carter, 2015].…”

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“…Similarly Dai et al (2014) show that the dimensions in EO have differential roles in entering new international markets. Furthermore, the ability of a firm's EO dimensions to predict its success depends on several contingencies, for example, external variables such as cultural and industry characteristics and internal variables such as organizational structure (Lomberg et al, 2016;Saeed et al, 2014;Shirokova et al, 2016).…”