Linking entrepreneurial and market orientation to the SME’s performance growth: the moderating role of entrepreneurial experience and networks

Entrepreneurial orientation and market orientation (EO and MO, respectively) have received extensive research attention in the past several decades. Although scholars widely agree that both MO and EO are critical to firms’ performances, a better understanding is still needed about how market and entrepreneurial orientation develop over time as well as their relative impact on the growth of the SME’s performance. This study does not consider MO and EO as generic resources that always positively influence firms’ performances; instead, it tries to explore contingent elements, such as social and business networks and accumulated entrepreneurial experience. The hypotheses were tested on 191 small and medium-sized electronic firms located in an Italian geographical cluster during two periods: 2005 and 2016. This study suggests that SMEs, which develop social networks, may enjoy considerable advantages from entrepreneurial and market orientation, improving their performance benefits. Moreover, our results show that previous entrepreneurial experience, when specific, can reinforce the impact of entrepreneurial and market orientation on firms’ performance growth. This analysis makes several important contributions to the management literature on the strategic orientation of firms, the entrepreneurial experience and network development.

     

Environmental sustainability engagement of firms: The roles of social capital,resources, and managerial entrepreneurial orientation of small and medium enterprises in Vietnam

How firms in transition economies demonstrate their strategic engagement in sustainable environmental management given their limited resources and capabilities is less understood in the literature. This study explores how small and medium enterprises (SMEs) in Vietnam, an exemplar of a country in transition from a closed and socialist economy to an open and liberal market, draw on their external social capital to access critical resources that are leveraged by the entrepreneurial orientation or capabilities of the firms' top management towards engagement in business-wide environmentally sustainable practices. Drawing on a database of more than 2000 firms from a large-scale survey of firms in Vietnam, this study tests the relationships between two facets of social capital, environmental management resources and environmental sustainability engagement. This study further contends that managerial entrepreneurial orientation moderates by enhancing the strategic utilisation of resources to enable firms in Vietnam to engage in environmental sustainability. The results offer novel theoretical insights and timely managerial or practical implications as well as promising directions for future research on the resources, strategies and capabilities of firms in transition economies.     

Do Board's Corporate Social Responsibility Strategy and Orientation Influence Environmental Sustainability Disclosure? UK Evidence

The environmental implications of corporate economic activities have led to growing demands for firms and their boards to adopt sustainable strategies and to disseminate more useful information about their activities and impacts on environment. This paper investigates the impact of board's corporate social responsibility (CSR) strategy and orientation on the quantity and quality of environmental sustainability disclosure in UK listed firms. We find that effective board CSR strategy and CSR‐oriented directors have a positive and significant impact on the quality of environmental sustainability disclosure, but not on the quantity. Our findings also suggest that the existence of a CSR committee and issuance of a stand‐alone CSR report are positively and significantly related to environmental sustainability disclosure. When we distinguish between firms with high and low environmental risk, we find that the board CSR/sustainability practices that affect the quantity (quality) of environmental sustainability disclosure appear to be driven more by highly (lowly) environmentally sensitive firms. These results suggest that the board CSR/sustainability practices play an important role in ensuring a firm's legitimacy and accountability towards stakeholders. Our findings shed new light on this under‐researched area and could be of interest to companies, policy‐makers and other stakeholders. Copyright © 2017 John Wiley & Sons, Ltd and ERP Environment     

The interplay of corporate entrepreneurship,environmental orientation,and performance in clean‐tech firms—A double‐edged sword

Clean‐tech innovations are an important driver in solving global issues such as climate change and for the sustainable development of economies around the world. Whereas a large part of the literature focuses on clean‐tech ventures, less is known on corporate entrepreneurship, that is, entrepreneurial behavior in established firms and its relation to sustainability. This paper extends the sustainable entrepreneurship debate to corporate entrepreneurship, which represents a fruitful avenue to further developing clean technologies. We focus particularly on clean‐tech firms' organizational preparedness for corporate entrepreneurship (OPCE), that is, how well a firm's structures and processes are set for entrepreneurial activities. On the basis of contingency theory, this study investigates how the level of OPCE influences the environmental and financial performance of clean‐tech firms and whether their environmental orientation affects these relationships. Building on data from 103 firms, we find support for a positive effect of OPCE on both environmental and financial performance. Both effects are stronger the higher the external environmental orientation. In contrast, the leverage of internal environmental orientation is not equally positive. Our study reveals that the effect of OPCE on financial performance diminishes for firms that are more strongly driven by an internal than an external environmental orientation.     

The significance of sustained entrepreneurial orientation on performance of firms – A longitudinal analysis

This study focuses on the importance of changes in entrepreneurial orientation (EO) over time for subsequent firm performance, and the significance which inimitable resources (networks, governance system and unique competence) might have in this connection. Hypotheses are developed to test the effects that changes in EO level over a time period and resources have on subsequent firm performance. The study is based on data from 168 Norwegian SMEs, interviewed both in 2000 and 2003. The primary contribution of this study is that a change in EO over time (increased or decreased), may be of importance for a firm's performance represented by performance compared to competitors, and employment growth. A focus on entrepreneurial activities seems to be beneficial in the long run (increasing EO), while the opposite is the case if the EO level decreases. It is especially encouraging to see that firms focusing on EO (increased or the same) are positively associated with employment growth, one of the primary policy goals world-wide. Another contribution from this study is that resources that may be inimitable for firms have some influence on performance compared to competitors. Implications for policy-makers, practitioners and further research are discussed.     

Sustainable development in small and medium enterprises: The role of entrepreneurial orientation in supply chain management

Organizations are under increased pressure to improve their sustainable performance through the adoption of green supply chain management (GSCM) practices. Small and medium enterprises (SMEs) have lagged behind larger corporations due to a number of factors. Chief among these factors is the lack of resources and capabilities. In this study, we investigate whether entrepreneurial orientation as a distinctive firm-level resource contributes to the successful implementation of GSCM practices within SMEs. We use primary data obtained from 316 manufacturing SMEs and analyze the data by using a fuzzy-set qualitative comparative analysis (fsQCA). Our findings show four equifinal configurations of GSCM practices and the components of entrepreneurial orientation (EO) that lead to high environmental performance. Two practices, “eco-design” and “internal environmental management”, are present in all configurations, with the latter being the single core condition. The components of EO are present in all the configurations. Three distinct configurations lead to the simultaneous achievement of high environmental performance and high economic performance. Some noticeable differences appear in these configurations: “internal environmental management” is no longer a core condition, instead external practices (“green purchasing,” “cooperation with customers including environmental requirements,” and “investment recovery”) and “risk-taking” become core conditions. We exptrapolate our findings into a set of propositions that expand theory on the link between entrepreneurial orientation and sustainable performance. Our study provides insights for managers who seek to infuse entrepreneurial thoughts and actions into their green supply chain initiatives.     

Expect the unexpected: examining the shaping role of entrepreneurial orientation on causal and effectual decision-making logic during economic crisis

ABSTRACT

While many firms operate in dynamic environments, the competitive conditions faced by firms during an economic crisis are especially unstable and turbulent. We examine firm strategic decision-making in this distinctive context and investigate the question of whether causal and effectual logic provide similar paths to performance during such challenging economic times. Further, we examine the potential impact that a firm’s level of entrepreneurial orientation (EO) has upon the relationship between managers’ predominant decision-making logic and their firm’s overall performance in this crisis. To test these relationships, we employ a robust national random sample of 447 Russian small and medium-sized enterprises (SMEs) collected from 2015 to 2016 during a period of economic crisis. Our results indicate that EO plays an important moderating role, shaping the nature of the relationships between managers’ decision-making logic and financial performance. Moreover, additional analysis identifies the presence of a non-linear relationship between both logics and the performance of SMEs.     

Individual entrepreneurial orientation,value congruence,and individual outcomes: Does the institutional entrepreneurial environment matter?

Although entrepreneurial orientation (EO) at the firm-level is often conceptualized as a direct antecedent of performance, the findings of previous studies lending support to this association are inconsistent. Consequently, drawing on the attraction/selection/attrition and institutional theories and employing the moderated mediation analysis approach, this study conceptualizes the individual perception of a firm's EO or individual entrepreneurial orientation (IEO). It examines the direct and indirect effects of IEO on individual outcomes measured in terms of performance expectation, job involvement, and organizational commitment. More specifically, it examines whether these effects are mediated by value congruence and moderated by the institutional entrepreneurial environment to understand these inconsistent findings better. Using a sample of 398 environmentally concerned small and medium-sized enterprises (SMEs) in South Korea, partial least squares structural equation modeling (PLS-SEM), and the PROCESS macro were employed to analyzed the research model. This study finds that value congruence mediates the association between IEO and performance expectation, job involvement, and organizational commitment. The moderated mediation model analysis also suggests that the mediating role of value congruence increases as the level of the institutional entrepreneurial environment increases. These findings offer useful theoretical and managerial implications of the IEO on individual outcomes.     

Market orientation as determinant of entrepreneurship: An empirical investigation on SMEs

Entrepreneurial Orientation (EO) and Market Orientation (MO) are considered key factors in ensuring firm longevity in the new competitive landscape. Despite extensive research during the past decade, most of the studies use samples that exclude small and medium enterprises (SMEs), which represent the majority of economic activity worldwide. Some studies do investigate this relationship in small companies but place little importance on the subtle differences between SMEs and large companies when measuring MO. This study empirically investigates the relationship between MO and EO on a sample of 2500 Swedish SMEs. A new measure of MO that takes into consideration SMEs specific conditions has been developed and used. Findings suggest that MO is the main determinant of EO in SMEs.     

Modelling Corporate Stakeholder Orientation: Does the Relationship Between Stakeholder Background Characteristics and Corporate Social Performance Matter?

Though corporate stakeholder orientation is connected with corporate social performance practices, there is a dearth of knowledge on the theorized assertion that background characteristics influence stakeholders’ salience and attitude towards social performance practices of firms. The aim of this paper is to measure and examine this hypothesis. To test this claim, this research uses the Surat Resource Region in Queensland, Australia, as the case study. Based on the bivariate test, age, gender, occupation type and educational status have varying statistically significant effects on stakeholders’ attitude towards corporate social practices. The multinomial logistic findings showed that only education retained a net effect on a stakeholder's attitude to participation in corporate social practices, where those with a higher level of education are 1.388 times more likely to perceive stakeholder engagement practices as relevant, 2.864 times more likely for social impact assessment practices and 1.430 times more likely for practices aimed at rights of indigenous communities. Findings imply the need for awareness programs to be incorporated into corporate social practices, which can help promote the success of stakeholder‐oriented policies. The paper further makes suggestions that have both business strategy and policy planning implications. Copyright © 2016 John Wiley & Sons, Ltd and ERP Environment     

Entrepreneurial Orientation’s effect on marketing strategies and success: implications for US firms entering Cuba

Entering a newly liberalized market is a great challenge for companies as the environment is new and untested. On one side, to have success in these markets, firms must have a plan of action before resources are committed. Entrepreneurial orientation (EO) is associated with the successful exploration of resources and the creation of new niches as the Resource Theory supports. On another side, a natural bond between EO and marketing is found in the Value Creation Theory. So, to maximize firm success in newly liberalized markets (such as Cuba), firms must be able to objectively gauge their own entrepreneurial orientation adopting a marketing approach. Within this framework, the present paper will attempt to effectively measure the entrepreneurial orientation of US firms that have an interest in entering the Cuban market. A final sample of 81 US firms was obtained. The sample was then split into two groups (high and low entrepreneurial orientation) and compared regarding their marketing strategies (H1) and their levels of success (H2). Our results confirmed both hypotheses.     

Business orientations and innovation in small and medium sized enterprises

The capability of Small and Medium Enterprises (SMEs) to drive and shape markets is one path to competitive advantage. Firms that drive markets do so by leveraging radical and disruptive innovation to shape the needs of current and future customers, thereby altering market structure. In the current study, we find that firms with an entrepreneurial orientation are more likely to develop both driving markets and market driven innovations, while firms with a market orientation are more likely to develop market driven innovations.     

Connecting strategic orientation,innovation strategy,and corporate sustainability: A model for sustainable development through stakeholder engagement

This paper aims to enhance our understanding of the relationship between organizations' strategic orientation (i.e., instrumental, equidistant, and stewardship) and their innovational strategy (i.e., organizational ambidexterity and open innovation), and this relationship's influence on their sustainability performance. We expected organizations' strategic orientation to influence their innovational strategy and exhibit better corporate sustainability. We focused on 12 different multinational organizations in the Eurozone and found that inbound open innovation acts as a driver for corporate sustainability while simultaneously positively enabling organizations to pursue both financial and social initiatives. After suggesting open innovation as a new corporate sustainability antecedent, we only found empirical evidence of inbound open innovation. However, we would suggest that if organizations incorporated outbound open innovation in their strategy, they could likely improve their corporate sustainability. Also, we found that achieving an equidistant or stewardship orientation paves the way for sustainability to become an integral part of an organization's innovational culture and actualizes the organization's strategic behavior. Our findings further contribute to a deeper understanding of organizations' characteristics as their sustainability commitment grows and as they move from an instrumental to a stewardship orientation and implement an open innovational strategy.     

Small agricultural businesses' performance—What is the role of dynamic capabilities,entrepreneurial orientation,and environmental sustainability commitment?

The role that the resources and capabilities of agricultural entrepreneurs play on both environmental performance (EP) and financial performance (FP) is still unclear. This study analyzes how small farms enhance EP and FP in an inland Portuguese region through the relationship between dynamic capabilities (DCs), entrepreneurial orientation (EO), and environmental sustainability commitment (ESC). Based on a sample of 160 fresh fruit farms and applying a partial least squares structural equation modeling (PLS-SEM), our study concludes that EO and ESC influence EP and FP positively. Hence, farms can achieve competitive advantage through mitigating their profound impacts on the environment as proposed by the natural resource-based view (NRBV). Farms are also improving DCs, but farmers respond to the higher environmental requirements of agricultural markets primarily through research and development (R&D) capabilities and not through marketing capabilities. Having as theoretical supports the NRBV and the DCs, our study contributes to a better understanding of the mechanisms through which entrepreneurs enhance EP and FP in sectors with high environmental impacts such as agriculture. The findings suggest that entrepreneurship training projects may enable farmers to approach food security as a market opportunity and not only as rules they must follow.     

Factors affecting corporate environmental strategy in Spanish industrial firms

During the last 30 years, environmental issues have become very important for governments, consumers and companies. Firms, aware of their environmental responsibilities, have started to show an important commitment to society and the natural environment, developing environmentally friendly strategies. However, the factors that determine the choice of environmental strategies are still unclear. They range from ethical motivations to social, legislative and competitive factors. This study analyses the main antecedents that influence firms' ecological behaviour, distinguishing between environmental orientation and environmental strategies. The hypotheses proposed in this study are analysed by means of a structural equation model on a sample of 235 industrial firms. The results reveal that competitive motivations and management commitment are the most important factors explaining why firms incorporate environmental issues into their strategic planning process. Moreover, management commitment is a critical factor for firms because managers' perception about customers' ecological concern directly influences firms' environmental behaviour. Copyright © 2008 John Wiley & Sons, Ltd and ERP Environment.     

Chief executive officers' sustainability orientation and firm environmental performance: Networking and resource contingencies

Although the existing literature supports the relationship between chief executive officers' (CEOs') sustainability orientation (SO) and entrepreneurial behaviour, empirical studies exploring how SO drives firm environmental performance (FEP) are lacking. In addition, the potential moderating effects of firm-level factors on this relationship are less understood. We contribute to filling this gap by examining the moderating effects of political connections and financial slack on the relationship between SO and FEP. Using data obtained from 297 small and medium-sized enterprises (SMEs) in Ghana, our results reveal that SO is positively related to FEP. In addition, our results show that the effect of SO on FEP is negative when firms have stronger financial slack and when firms are highly politically connected.     

Assessing the Comprehensiveness of Supply Chain Environmental Strategies

As environmental awareness grows, firms are expected to expand the scope of their environmental strategies beyond organisational boundaries and to address more comprehensively environmental issues in their supply chains and product life cycles. Drawing on different literature streams, international standards and corporate disclosure, this paper presents a conceptual framework for the quantitative assessment of the comprehensiveness of firms' environmental strategies. This framework allows us to capture: (i) the environmental inputs and outputs addressed, (ii) the firm versus supply chain orientation of environmental strategies, and (iii) the environmental management practices adopted by companies. We illustrate the application of this framework with a content analysis of corporate sustainability reports for a cross‐sectoral sample of sustainability leaders. Our results indicate that there is a need for greater specificity in environmental reporting and that, overall, companies remain firm‐oriented. It is also observed that supply chain orientation can generally be associated with stakeholder pressure. Copyright © 2012 John Wiley & Sons, Ltd and ERP Environment.     

Fostering green product innovation through green entrepreneurial orientation: The roles of employee green creativity,green role identity,and organizational transactive memory system

Developing new green products is critical to an organization's achievement of sustainable goals as well as competitive advantage. This study aims to unravel the mechanisms through which organizations with green entrepreneurial orientation (green EO) can foster green product innovation. The dataset for testing these mechanisms was garnered from employees and managers who worked in manufacturing firms based in an Asia-Pacific market. Through a multilevel analysis of the data, the study revealed the positive nexus between organizational green EO and green product innovation. The results of the study further lent credence to employee green creativity as a mediation path for such a relationship. Furthermore, employee green role identity and organizational transactive memory system were found to fortify the linkage between green EO and employee green creativity. These results suggest to organizations how to optimally translate their green entrepreneurial strategy into new green products that met customer preferences and societal expectations.     

Understanding the effect of market orientation on circular economy practices: The mediating role of closed-loop orientation in German SMEs

The implementation of circular economy (CE) practices is considered a key driver towards sustainable development of firms. Earlier studies point to the general strategic approach of market orientation as an antecedent to CE practice implementation. Still, insights are limited as the mechanisms underlying this relationship remain unclear. Based on a sample of 121 German small and medium-sized enterprises (SME), we empirically examine how the strategic approach of closed-loop orientation mediates the relationship between market orientation and the implementation of three types of CE practices. Using structural equation modelling, we find that while market orientation is positively related to all three types of CE practices, closed-loop orientation mediates these relationships for only two. Our study extends CE literature by suggesting that market orientation is translated into closed-loop orientation to spur CE practice implementation. We also offer a differentiated understanding of CE practice implementation in the context of German SMEs.     

Sustainable entrepreneurship and sustainability innovation: categories and interactions

The purpose of this paper is to propose a framework to position sustainable entrepreneurship in relation to sustainability innovation. The framework builds on a typology of sustainable entrepreneurship, develops it by including social and institutional entrepreneurship, i.e. the application of the entrepreneurial approach towards meeting societal goals and towards changing market contexts, and relates it to sustainability innovation. The framework provides a reference for managers to introduce sustainability innovation and to pursue sustainable entrepreneurship. Methodologically, the paper develops an approach of qualitative measurement of sustainable entrepreneurship and how to assess the position of a company in a classification matrix. The degree of environmental or social responsibility orientation in the company is assessed on the basis of environmental and social goals and policies, the organization of environmental and social management in the company and the communication of environmental and social issues. The market impact of the company is measured on the basis of market share, sales growth and reactions of competitors. The paper finds conditions under which sustainable entrepreneurship and sustainability innovation emerge spontaneously. The research has implications for theory and practitioners in that it clarifies which firms are most likely under specific conditions to make moves towards sustainability innovation. The paper makes a contribution in showing that extant research needs to be expanded with regard to motivations for innovation and that earlier models of sustainable entrepreneurship need to be refined. Copyright © 2010 John Wiley & Sons, Ltd and ERP Environment.