Entrepreneurial Orientation, Strategic Networking, and Croatian SMEs Performance: A Configurational Approach

Abstract

Background: Many studies on entrepreneurship indicate an affirmative entrepreneurial orientation (EO) and small firm performance interrelationship. However, the empirical results are inconclusive, especially when firms face certain contingencies. Objectives: Strategic networking and environmental dynamism are important to SMEs’ performance; therefore, the goal of this study is to apply a configurational approach for developing a model that promotes the roles of strategic networking and environmental dynamism as moderating variables in the EO-performance relationship. Methods/Approach: For determining which model fits the data best, a moderated linear regression analysis was used as an analytical method to test the proposed hypotheses. Specifically, configurational, contingency and universal models were examined. Results: Results reveal that a configurational model provides a statistically better explanation of variance in performance compared to both contingency and universal models. Conclusions: By adding strategic networking to the EO-performance relationship, our study helps explain why some firms, although restrained with internal resources, can still achieve entrepreneurial projects since required resources can be acquired from external network partners. Limitations of this study encompass the sample size, the use of a subjective scale, questioning of only one representative of the firm, and the short-term aspect of the study.

Preemptive Market Exploitability: Resource Advantage Theory of Competition Perspective

“…Product innovation requires resource capabilities to exploit its market (Abebe & Angriawan, 2014;O'Cass et al, 2014;Ferreira et al, 2020). Excellent resources can potentially increase innovative performance (Carnes et al, 2017;Milovanović et al, 2021).…”

Strategic Approach to Configurational Analysis of Entrepreneurial Orientation, Strategic Networking, and SME Performance within Emerging Markets of Selected Southeast European Countries

“…Structuring the impact of individual variables on business performance has been covered in the literature through a contingency two-interaction model between EO and a special characteristic of the external environment or connecting EO and internal organizational characteristics (Morić Milovanović et al 2021b). Zahra and Covin (1995) in their study demonstrated a greater positive impact of EO on performance in hostile environments compared to more benign environments.…”

“…Sci. 2023, 13, 52 2 of 19 findings mainly indicate that EO is commonly associated with superior firm performance (Morić Milovanović et al 2021b;Putnin , š and Sauka 2020;Rauch et al 2009;Wiklund and Shepherd 2005;Wiklund 1999). However, the empirical evidence is not straightforward.…”

“…However, relying solely on the effect of one of the factors does not provide the full potential in explaining the possible effect that EO can have on performance. Finally, the configurational three-way interaction model offers a more comprehensive understanding of EO implications on performance (Morić Milovanović et al 2021b;Wiklund and Shepherd 2005;Lumpkin and Dess 1996).…”