Entrepreneurial orientation, competitive advantage and strategic knowledge management capability in Malaysian family firms

Abstract

Purpose The purpose of this study is to test the thesis that the family firm’s success hinges on effective strategic knowledge management (SKM) capability coupled with an entrepreneurial orientation (EO). Contingency theory holds that entrepreneurial success is contingent on strategic capabilities and resource orchestration theory explains how well family firms nurture capabilities to structure, bundle and leverage resources that define competitive advantage (CA). This study combines these two theoretical viewpoints to propose the effects of EO and SKM capability on CA to achieve successful performance in family firms. Design/methodology/approach This study uses a hybrid approach applying structural equation modelling (SEM) and deep-learning artificial intelligence (DL-AI) analysis to survey data on 268 Malaysian family firms. Findings SEM results confirm that CA mediates the relationship between innovativeness, proactiveness and risk-taking dimensions of EO and firm performance. Autonomy and competitive aggressiveness have no bearing, however. The relationships among innovativeness, proactiveness and risk-taking with CA and performance are positively moderated by SKM capability, becoming more potent at higher levels. Moreover, four additional DL-AI models reveal the necessity of specific EO dimensions and the interacting effects of EO–SKM capability to influence CA and to attain performance success subsequently. Originality/value This study theorizes and presents two new boundary conditions to a knowledge-based theory of the family firm and its firm performance. First, CA mediates the relationship between EO and performance; and second, SKM capability moderates the relationships between EO and CA and between EO and family firm performance. Methodologically, this study uses DL-AI to embrace non-linearity and prioritize predictor variables based on normalized importance to produce greater accuracy over regression analysis. Hence, DL-AI adds methodological novelty to the knowledge management and family firm literature.

The Impact of Knowledge Management Process and Intellectual Capital on Entrepreneurial Orientation and Innovation

“…The results suggest that entrepreneurial orientation proves as an area of substantial importance in promoting innovation in the IT sector of Pakistan. These findings argue that entrepreneurial orientation partially mediates the relationship between knowledge management, intellectual capital, and innovation, and the results are in line with the past literature ( Rezaei and Ortt, 2018 ; Mostafiz et al, 2021 ).…”

Guest editorial

“…Relatedly, Zahra (2012) affirms that this results in a lower ability of family firms to succeed in knowledge application. These lower levels of breadth and depth of knowledge source can be especially harmful for family firm performance (Mostafiz et al , 2021) and product innovation (Brinkerink, 2018). In other words, preceding KM phases have a direct impact on the knowledge application phase in general and product development in particular.…”

“…Mostafiz et al (2021) analyze the thesis that the family firm’s success is dependent on effective strategic knowledge management (SKM) capability coupled with an EO. In this respect, the authors focus on responding to two specific questions such as to what extent does achieving CA mediate the relationships between EO and family firm performance as well as to what extent does the family firm’s SKM capability affect whether it achieves CA and firm performance from its EO.…”

Does Entrepreneurial Orientation Lead to Successful Sustainable Innovation? The Evidence from Chinese Environmentally Friendly Companies

“…Entrepreneurial orientation, which gives organizations strategic flexibility in turbulent environments, is a top-level strategic framework of innovating, preempting, and risk-taking, intended to redistribute and configure organizations' resources, processes, and strategies to overcome discontinuities in the environment [20]. Previous studies have pointed out that entrepreneurial orientation reflects the tendency of organizations' resource-based entrepreneurial activities [21,22].…”