Entrepreneurial orientation and the business performance of SMEs: a quantitative study from the Netherlands

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...

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Bibliographic Details
Published in:Review of managerial science 2012-03, Vol.6 (2), p.161-182
Main Authors: Kraus, Sascha, Rigtering, J. P. Coen, Hughes, Mathew, Hosman, Vincent
Format: Article
Language:English
Subjects:
Accounting/Auditing
Banking
Business and Management
Business Strategy/Leadership
Competition
Competitive advantage
Economic crisis
Entrepreneurs
Entrepreneurship
Financial performance
Global economy
Innovations
Keywords
Market entry
Marketing
Original Paper
Small & medium sized enterprises-SME
Studies
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Summary: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 accompany such crises. This research is a first investigation towards the effects of EO on the performance of small and medium sized firms during the current global economic crisis. In this study we use the multidimensional model of EO and test a series of hypotheses pertaining to its performance effects using survey data gathered from 164 Dutch SMEs. The present research shows that proactive firm behavior positively contributes to SME performance during the economic crisis. We further show that innovative SMEs do perform better in turbulent environments, but those innovative SMEs should minimize the level of risk and should take action to avoid projects that are too risky.
ISSN:1863-6683
1863-6691
DOI:10.1007/s11846-011-0062-9