Entrepreneurial Orientation and Firm Performance: Drawing Attention to the Senior Team

Abstract

Prior studies have argued entrepreneurial orientation (EO) plays an important role in explaining firm performance. This study aims to assess how senior team attributes moderate the relationship between EO and firm performance. For this purpose, an attention‐based perspective is adopted, focusing on attention scope as well as distributed and situated attention. By considering the role of senior team heterogeneity in broadening the attention scope of senior teams and the role of senior team shared vision in aligning distributed attention across organizational functions, this research investigates how senior teams may enhance the value‐creating potential of EO. In addition, we assess situated attention by including the notion of environmental dynamism and examining whether the role of the senior team attributes is contingent upon environmental conditions. Using a time‐lagged sample of 346 firms operating in various industries, we find that senior team heterogeneity helps firms to leverage their EO and improve their performance. Moreover, once environmental conditions are taken into account, results indicate that the absence of heterogeneity at senior team level may be particularly detrimental for firms operating in stable environments. The direct moderating effect of shared vision on the relationship between EO and performance is not substantiated. However, senior team shared vision has a positive impact for firms operating in dynamic environments, providing a premium for firms aiming to realize the inherent value of EO. Our research provides important implications for senior teams aiming to leverage their EO into increased firm performance. Evidence shows that while a heterogeneous team composition and senior team shared vision may provide several benefits, these advantages may fluctuate across environmental conditions.

Entrepreneurial orientation and firm performance in family SMEs: the moderating effects of family, women, and strategic involvement in the board of directors

“…This finding is important because, although previous studies have examined TMT heterogeneity in the EO-firm performance relationship, there is a lack of research on the effect that board diversity may have on EO-firm performance. Furthermore, considering that EO results from the collaboration between the TMT and board members (Eddleston et al 2008), our research findings complement those of Van Doorn et al (2013) related to the impact of TMT heterogeneity on the EO-firm performance relationship. Future research should build on these findings and investigate the effect of different levels of family involvement in the TMT and board when collaborating to turn EO into successful firm performance.…”

“…Anderson and Eshima 2013;Moreno and Casillas 2008;Van Doorn et al 2013). Schepers et al (2014, p. 39) affirm that the logic behind this relationship is that "entrepreneurial firms will identify and pursue lucrative product/market opportunities which in turn will improve their company financial performance (Zahra and Covin 1995)".…”

The implications of international entrepreneurial orientation, politicization, and hostility upon SME international performance

“…To additionally validate the subjective performance measures, we followed the practice of previous studies (Dess et al, 1997;Gupta and Batra, 2015;Van Doorn, Jansen, et al, 2013) and collected data for a subset of the overall sample of the study (firms representing around 26% of study participants). The significant correlation pattern of 0.47, which is within the range of 0.4 to 0.6 reported in the literature (Richard et al, 2009), attested to the close association between objective and subjective performance measures.…”

Entrepreneurial orientation in the emerging Russian regulatory context: the criticality of interpersonal relationships

“…However, the antecedents which drive the manifestation of EO are less fully understood. Although some research has investigated EO antecedents, such as external environment influences (Becherer and Maurer, 1997;Tang and Hull, 2012;Yordanova, 2011;Zahra and Neubaum, 1998), the psychological characteristics of entrepreneurs or top managers (Poon et al, 2006;Simsek et al, 2010;Van Doorn et al, 2013), knowledge exchange and social relationships among managers (De Clerg et al, 2013), financial, organisational and social capital (Iakovleva, 2010), and strategic processes (Green et al, 2008), little is known about how the regulatory aspect of the institutional environment may drive the manifestation of EO.…”