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Entrepreneurial Orientation, Resource Orchestration Capability, Environmental Dynamics and Firm Performance: A Test of Three-Way Interaction

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  • Suk Bong Choi

    (College of Global Business, Korea University, 2511 Sejong-ro, Sejong City 30019, Korea)

  • Wang Ro Lee

    (College of Global Business, Korea University, 2511 Sejong-ro, Sejong City 30019, Korea)

  • Seung-Wan Kang

    (College of Business, Gachon University, Seongnam 13120, Korea)

Abstract

This study investigated the effect of entrepreneurial orientation on firm performance with the firm resource orchestration capability and environmental dynamics in moderating roles. Using survey data collected from 301 Korean manufacturing and service firms, we devised a three-way interaction model to uncover the complex and dynamic conditions that maximize the effect of entrepreneurial orientation on firm performance. We found a positive association between entrepreneurial orientation and firm performance. Moreover, our findings indicated that both the firm resource orchestration capability and environmental dynamics played positive moderating roles in the above relationship. The results also showed that, in the case of a high level of environmental dynamics, entrepreneurial orientation was more positively related to firm performance for firms with a high resource orchestration capability. In addition, in the case of low resource orchestration capability, entrepreneurial orientation was associated more positively with firm performance for firms with high environmental dynamics. Thus, this study confirmed the importance of interaction between the three factors for enhancing firm performance. Furthermore, our investigation of substantial moderators provided key insights regarding the conditions that better explain how entrepreneurial orientation promotes firm performance. In addition to two-way interaction, the support for a three-way interaction suggests that moderators of the relationship interact to further explain the relationship. The theoretical and practical implications are discussed.

Suggested Citation

  • Suk Bong Choi & Wang Ro Lee & Seung-Wan Kang, 2020. "Entrepreneurial Orientation, Resource Orchestration Capability, Environmental Dynamics and Firm Performance: A Test of Three-Way Interaction," Sustainability, MDPI, vol. 12(13), pages 1-13, July.
    • Handle: RePEc:gam:jsusta:v:12:y:2020:i:13:p:5415-:d:380292
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    6. Aziz Ariwibowo & Adi Afiff & Riani Rachmawati & Ratih Kusumastuti, 2024. "The impact of boundary spanning activities and resource orchestration in improving performance of Indonesian state-owned bank branches," Palgrave Communications, Palgrave Macmillan, vol. 11(1), pages 1-12, December.
    7. Lexin Yun & Xiaolin Yao & Wenlong Zhu & Zishan Zhang, 2022. "Evaluating the Effect of Redundant Resources on Corporate Entrepreneurial Performance," Sustainability, MDPI, vol. 14(12), pages 1-14, June.
    8. Kristoffersen, Eivind & Mikalef, Patrick & Blomsma, Fenna & Li, Jingyue, 2021. "The effects of business analytics capability on circular economy implementation, resource orchestration capability, and firm performance," International Journal of Production Economics, Elsevier, vol. 239(C).

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