The dark side of EO: Insights into the EO-as-experimentation perspective by investigating the effect of EO on firm performance and failure

The objective of this paper is to advance knowledge on the entrepreneurial orientation (EO) construct and its effect on firm performance and survival. The EO construct has become an essential concept in the entrepreneurship and strategic management literatures, thus it is of significance to pursue. In this paper we provide evidence for the EO-as-experimentation perspective, which has been overlooked by the EO-firm performance literature (Wiklund & Shepherd, 2011). Most of the literature aligns with the EO-as-advantage perspective and considers that EO as a gestalt construct is advantageous to a firm’s performance (Rauch et al., 2009). Overlooking the EO-as-experimentation perspective is dangerous because this perspective predicts a dark side to EO. Furthermore, the results align with the ignored multidimensional view of EO (Lumpkin & Dess, 1996). Here we aim to answer a vital research question: what is the effect of EO and its separate dimensions on firm performance/survival? Unusually, the paper examines the effect of EO on firm performance along a longitudinal timeframe from the pre-crisis (fiscal year 2000) until the post-crisis period (fiscal year 2014). Furthermore, it develops objective proxies to measure the main EO dimensions and considers short term and long term measures of firm performance

The EO-as-Experimentation perspective: the examination of the entrepreneurial orientation and firm performance/survival relationship

The implications of entrepreneurial orientation (EO) on firm performance have been extensively examined in the literature. However, limited attention has been given to the wide range of performance implications EO may have on shareholder value and financial performance; and the risk of failure created by EO. Instead, current studies have relied on short-term measures of firm performance and focused on a sample of active firms, revealing only the advantageous effects of EO on a firm’s performance as a consequence. This research aims to advance research on EO by examining the effects of EO on firm performance and survival on a separate sample of active and inactive firms in a longitudinal timeframe from the pre-financial crisis period to the post-crisis period. The research aims to reveal new insights into the EO–performance relationship by utilising the EO-as-experimentation perspective