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

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  • Einar Lier Madsen

Abstract

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.

Suggested Citation

  • Einar Lier Madsen, 2007. "The significance of sustained entrepreneurial orientation on performance of firms -- A longitudinal analysis," Entrepreneurship & Regional Development, Taylor & Francis Journals, vol. 19(2), pages 185-204, March.
  • Handle: RePEc:taf:entreg:v:19:y:2007:i:2:p:185-204
    DOI: 10.1080/08985620601136812
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    File URL: http://hdl.handle.net/10.1080/08985620601136812
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    1. Shirokova, G. & Puffer, S.M. & Bogatyreva, K. & Beliaeva, T., 2015. "Entrepreneurial orientation in different environmental settings: A comparative cross-country study," Working Papers 6416, Graduate School of Management, St. Petersburg State University.
    2. Martyna Wronka & Grzegorz Glod, 2011. "The impact of entrepreneurial orientation (EO) on the effectiveness of management in health care units (Wplyw orientacji przedsiebiorczej na efektywnsc zarzadzania w jednostkach ochrony zdrowia)," Problemy Zarzadzania, University of Warsaw, Faculty of Management, vol. 9(33), pages 181-193.
    3. Aleksandra Gawel, 2015. "Entrepreneurial Orientation in Explaining the Early Internationalization of Companies (Orientacja przedsiebiorcza w wyjasnianiu wczesnej internacjonalizacji przedsiebiorstw)," Problemy Zarzadzania, University of Warsaw, Faculty of Management, vol. 13(56), pages 55-67.
    4. García-Granero, Ana & Llopis, Óscar & Fernández-Mesa, Anabel & Alegre, Joaquín, 2015. "Unraveling the link between managerial risk-taking and innovation: The mediating role of a risk-taking climate," Journal of Business Research, Elsevier, vol. 68(5), pages 1094-1104.
    5. Galina Shirokova & Karina Bogatyreva & Tatiana Beliaeva, 2015. "Entrepreneurial Orientation of Russian Firms: The Role of External Environment," Foresight and STI Governance (Foresight-Russia till No. 3/2015), National Research University Higher School of Economics, vol. 9(3), pages 6-25.
    6. Eijaz Ahmed Khan, 2018. "The Voice Of Informal Entrepreneurs: Resources And Capabilities Perspective," Journal of Developmental Entrepreneurship (JDE), World Scientific Publishing Co. Pte. Ltd., vol. 23(03), pages 1-19, September.
    7. Martin, Albert & Bartscher-Finzer, Susanne, 2014. "The self-concept of book publishers and its significance for job satisfaction and satisfaction with economic success," management revue - Socio-Economic Studies, Nomos Verlagsgesellschaft mbH & Co. KG, vol. 25(4), pages 285-314.
    8. García-Villaverde, Pedro M. & Ruiz-Ortega, María J. & Ignacio Canales, J., 2013. "Entrepreneurial orientation and the threat of imitation: The influence of upstream and downstream capabilities," European Management Journal, Elsevier, vol. 31(3), pages 263-277.
    9. Darshana Mudalige & Noor Azizi Ismail & Marlin Abdul Malek, 2019. "Exploring the Role of Individual Level and Firm Level Dynamic Capabilities in SMEs’ Internationalization," Journal of International Entrepreneurship, Springer, vol. 17(1), pages 41-74, March.
    10. Vega-Vázquez, Manuela & Cossío-Silva, Francisco-José & Revilla-Camacho, María-Ángeles, 2016. "Entrepreneurial orientation–hotel performance: Has market orientation anything to say?," Journal of Business Research, Elsevier, vol. 69(11), pages 5089-5094.
    11. Sundari, Made Siti & Ulfa, Hema Dian, 2018. "Orientasi kewirausahaan dalam bisnis keluarga," OSF Preprints 8sdax, Center for Open Science.
    12. Nathaniel Boso & Pejvak Oghazi & Magnus Hultman, 2017. "International entrepreneurial orientation and regional expansion," Entrepreneurship & Regional Development, Taylor & Francis Journals, vol. 29(1-2), pages 4-26, January.
    13. Izaias Martins & Felipe Uribe & Diana Mesa, 2012. "Contribución de la orientación emprendedora a la rentabilidad de las pymes: un análisis contingente considerando la función del entorno," Revista Ecos de Economía, Universidad EAFIT, April.
    14. Rauch, Andreas & Rosenbusch, Nina & Unger, Jens & Frese, Michael, 2016. "The effectiveness of cohesive and diversified networks: A meta-analysis," Journal of Business Research, Elsevier, vol. 69(2), pages 554-568.
    15. Oluwafemi Dele-Ijagbulu & Menisha Moos & Chukuakadibia Eresia-Eke, 2020. "The Relationship Between Environmental Hostility and Entrepreneurial Orientation of Small Businesses," The Journal of Entrepreneurship, Entrepreneurship Development Institute of India, vol. 6(2), pages 347-362, July.
    16. Rohaizan Baru & W. Aeshah Ameiha W. Ahmad & Mohd Shahril Othman & Syed Hadhzrullatfhi Syed Omar, 2014. "The Spiritual Competence Aspect in Counselling Service," International Journal of Management Sciences, Research Academy of Social Sciences, vol. 2(10), pages 469-478.
    17. Che Mohd Zulkifli Che Omar & Ahmad Haris & Anas Tajudin & Nur Fadiah Abd Hadi, 2014. "Entrepreneurial Strategic Planning on Business Performance: Relationship between Marketing and Business Performance," International Journal of Management Sciences, Research Academy of Social Sciences, vol. 2(9), pages 418-425.
    18. Shathees Baskaran & Nomahaza Mahadi & Siti Zaleha Abdul Rasid & Adriana Mohd Rizal, 2017. "A Proposed Framework of Academic Staff Up-Take in Integrating E-Learning in the Education Delivery," International Journal of Academic Research in Business and Social Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Business and Social Sciences, vol. 7(11), pages 345-355, November.

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