Entrepreneurial Orientation, Environmental Hostility and SMEs Profitability: A Contingency Approach (original) (raw)
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Entrepreneurial orientation, environmental hostility and SME profitability: a contingency approach
2013
This study investigates the effect of the entrepreneurial orientation (EO) on SME financial performance. The essay also proposes a contingency model to explore the moderating effects of environmental hostility on the relationship between EO and profitability. The study was conducted using a sample of 121 manufacturing SMEs in Spain. Results confirm the positive influence of EO on a firm's profitability. More importantly, the impact of EO on SME profitability is higher when there is a fit between EO and the external environment.
2019
The purpose of the study is to examine the moderating effect of the external environmental characteristics on the relationship between entrepreneurial orientation and SMEs performance. Survey method of research was used by personally administering questionnaires to the owners/managers. Multistage sampling technique was used in selecting 470 SMEs that partook in the survey. SPSS 24 and PLS-SEM 3.0 were employed in the analysis of the data. The results indicated that EO significantly affects SMEs performance. Similarly, there is a significant moderating effect of environmental dynamism on the relationship between EO and SMEs performance. Surprisingly, there is an adverse moderating effect of environmental complexity and hostility on the relationship between EO and SMEs performance. While environmental diversity shows insignificant moderating effect. Therefore, the study put forward that to attain high SMEs performance. There is a need for owners/managers to consider environmental char...
Entrepreneurial Business and Economics Review, 2020
The objective of the study is to investigate the relationship between Entrepreneurial Orientation and the performance of small firms in Nigeria to determine the effect of environmental hostility towards this relationship. Research Design & Methods: A survey was conducted on small firms. The gathered data were analysed with Andrew Hayes' Simultaneous Entry on SPSS 23.0 and PROCESS 3. Findings: We discovered that there is no significant relationship between Entrepreneurial Orientation and firm performance, while environmental hostility moderates this relationship positively. We concluded that a hostile environment motivates firms to adopt Entrepreneurial Orientation, and ultimately improve their performance. Implications & Recommendations: Environmental hostility is a crucial element in determining how Entrepreneurial Orientation relates to small firm performance. Therefore, owners/managers must identify and strengthen these factors that will enable them to improve on their Entrepreneurial Orientation to survive hostile business environments. Contribution & Value Added: Concerning the Resource-Based Theory (RBT) and contingency theories, this study advances the field of Entrepreneurial Orientation by showing how the two combine to explain the Entrepreneurial Orientation-performance relationship in a developing economy. Article type: research article
Journal of Economics and Behavioral Studies, 2017
While the EO-performance nexus has received extensive attention in entrepreneurship literature, other studies suggest that the magnitude of this relationship is dependent upon the external environment and internal organizational processes. The objective of this study was to measure the effects of EO (innovativeness, risk-taking, proactiveness, autonomy and competitive aggressiveness) on SME performance, as well as to examine the moderating effect of environmental hostility on the EO-performance relationship in South Africa. The study showed thatwhile innovativeness and proactiveness does not have a significant effect on SME performance; risk taking propensity, competitive aggressiveness, and autonomy have a significant positive effect on SME performance. It was also seen that while the risk taking-performance relationship is negatively moderated by environmental hostility, the competitive aggressiveness-performance relationship is positively moderated by environmental hostility. This suggest the need for SMEs to always align their business strategies with appropriate EO dimensions to mitigate some of the negative consequences of operating in hostile business environments and improve the performance of their businesses.
Journal of Economics and Behavioral Studies
Entrepreneurial Orientation (EO) involves business mindset and behavior. The firm and industry context of entrepreneurship has always fascinated researchers for inquiry. The main aim of this study is to establish an association of factors such as EO characteristics (innovativeness and risk-taking), Entrepreneurial Management (EM), and Environmental Dynamism (ED) with firm’s financial performance. The objective also includes examining the moderating impact of EM and ED respectively on the link between EO characteristics and firm performance. This investigation covered small-to-medium enterprises (SMEs) in Pakistan from the cities of Islamabad and Lahore, and constituted a diverse sample of entrepreneurs from various sectors. Results reveal direct positive, individual relationships of innovativeness, risk-taking, and EM with firm’s financial performance. As far as moderating influence is concerned, EM and ED could not establish any significant interaction between EO characteristic...
Abstract This paper develops a theoretical model of the relationship between four dimensions of entrepreneurial orientation (EO) and firm financial performance. Also included in the theoretical model are environmental characteristics such as dynamism and hostility that are likely to impact on the relationship between entrepreneurial orientation and firm financial performance. Hypotheses were developed regarding the various relationships between the EO dimensions that would be most appropriate in a particular environment. Future research may benefit from the study by considering the important role that environmental dynamism and hostility play in this model. The implications of this model for the policy makers, practitioners, managers and researchers are also discussed.
Review of Managerial Science, 2000
Entrepreneurial Orientation (EO) is often mentioned as an antecedent of growth, competitive advantage and superior performance, and prior empirical research has often shown a positive relationship between EO and performance appears to exist. However, an important question that remains unanswered is what effect EO might have on firm performance during periods of economic crisis, and the severe environmental turbulence that
The purpose of this paper is to investigate how EO dimensions; innovativeness, proactiveness, risk-taking and competitive aggressiveness, affect financial performance of SMEs in Nigeria. In doing so, the study examines the moderating impact of key environmental characteristics; dynamism and hostility on these relationships. The sample used was SMEs in Kano State-Nigeria. The respondents were the owner/managers of SMEs in the study area. A total of 352 owner/managers participated in the research. Data collected were analyzed, utilizing multiple regressions and hierarchical multiple regression analysis implemented in SPSS version 17, statistical program .Our findings indicate, that hypotheses 1-4 are supported, while hypotheses 5-11 are partially supported except for that regarding the moderating impact of environmental dynamism on the proactive- performance relationship, which was not found to be significant. The implications of these findings for both researchers and managers are also discussed. The study contributes to the expanding field of EO research and provides additional insight into the strategic behavior of firms in a variety of environmental contexts
Journal of Small Business Management
Little is known about how Chinese small and medium‐sized enterprises (SMEs) respond to their competitive environment. We predict that when industry competition is intense, entrepreneurial Chinese SMEs tend to perceive more environmental hostility than do their nonentrepreneurial peers. The perceived environmental hostility further drives these firms to choose marketing strategies but not cost control or innovation strategies. Data from 170 Chinese SMEs confirm our hypotheses, indicating that though some entrepreneurial orientation (EO) effects transcend different economy types, other EO effects differ significantly as the environment changes.