Implications of customer and entrepreneurial orientations for SME growth

PURPOSE. The aim of this paper is to empirically investigate how the business orientations of customer orientation (CO) (represented by responsiveness to customers) and entrepreneurial orientation (EO) (represented by proactiveness, innovativeness and risk‐taking) impact the growth of SMEs. DESIGN/METHODOLOGY/APPROACH. This study uses a quantitative empirical approach, using structural equation modeling with the software package AMOS to analyze the results of 660 surveyed SMEs from Austria. FINDINGS. This analysis reveals that EO is positively related to SME growth but CO shows a negative association with growth. Moreover, this analysis suggests that SMEs grow the most if they exhibit high EO and low CO. RESEARCH LIMITATIONS/IMPLICATIONS. This analysis shows that CO, interpreted as a purely responsive and reactive construct, cannot be considered a strategy that leads to sustainable SME growth. If an SME desires growth, EO is needed to fuel these growth aspirations. In spite of these findings however, this study shows that SMEs tend to respond to a scarcity of financial resources with more CO and less EO, which then leads to less or even negative growth. PRACTICAL IMPLICATIONS. Sustainable firm growth seems impossible without an EO. However, this does not mean that CO is not of any value for SMEs. Being non‐entrepreneurially oriented does not mean that a firm is automatically customer oriented. So, it is not only about implementing CO or EO since there is still the third option: implementing neither. ORIGINALITY/VALUE. This paper contributes to the ongoing scholarly conversation on the value of different orientations to firms and takes the view that the conversation on CO and EO has mis‐specified business performance in seeking to understand their performance consequences. By looking at firm growth, relevant to the longer‐term performance of a firm, EO might drive growth because of its emphasis on innovation to renew the firm's growth trajectory whereas CO might stifle growth owing to its myopic focus. Thus, this study addresses calls in the business and entrepreneurship literatures to more fully understand how SMEs can capture value from their customer and entrepreneurial orientations

A configurational analysis of network and knowledge variables explaining born globals’ and late internationalizing SMEs’ international performance

Network-based and knowledge-based conditions are widely regarded as important antecedents to international performance among new venture Born Globals (BGs) and their counterpart late internationalizing small and medium-sized enterprises (SMEs). Yet, while studies have examined the single effects of these ingredients on BGs’ and late internationalizing SMEs’ international activity, a configurational approach is still missing. How do network-based and knowledge-based factors matter for international performance and do they share the same importance for both types of firms? To address these questions, we apply for the first time a fuzzy set qualitative comparative analysis (fsQCA) on data from managers and founders of 365 international German, Austrian, Swiss, and Liechtensteinian companies, mapping configurational paths that lead to high international performance. The results demonstrate that late internationalizers do not share the same paths as BGs for high international performance, except in one instance. We find four causal configurations for BGs and three for late internationalizing SMEs. Results show that while both groups of firms rely on network size, BGs rely much more on collaboration intensity as well as international market knowledge and education

Innovative behaviour, trust and perceived workplace performance

Building on theories of social exchange, enactment, and trust, we provide a theorization of innovative work behaviour at the individual (IB) and team (IBT) levels and explain how desirable performance returns occur for individuals and teams. We further propose that horizontal (between team members) and vertical (between teams and their supervisor) team trust moderate the relationship between IBT and team performance. The results based on surveys conducted at two points in time in a large insurance company in the Netherlands show that employees’ IB is positively associated with perceived workplace performance at the individual and team levels and that the effects vary based on the forms of trust at play. Our findings offer important new knowledge about the consequences of entrepreneurship and innovation in the workplace and the significant role that trust plays in enabling such behaviour to promote perceived workplace performance, particularly in the vital financial services sector

Family firm configurations for high performance: The role of entrepreneurship and ambidexterity

The performance drivers of family firms have spawned considerable research interest. Almost exclusively this research has relied on independent sets of explanatory variables in linear analyses. These analyses mask the complex interdependencies that are likely to exist among key success factors, leading to faulty theory and misspecified implications for practice. As treatment, we propose a configuration approach to family firm performance that accounts for complex interdependencies among entrepreneurial, innovation and family influence conditions. Using a fuzzy set qualitative comparative analysis (fsQCA) of a sample of 129 Finnish family firms, we identify sufficient conditions with regards to the existence or absence of antecedent conditions to family firm performance. These conditions include entrepreneurial orientation, exploration and exploitation activities that form causal paths towards family firm performance. To enrich our analysis, we theorize and empirically analyse how these conditions might differ in family firms with high and low levels of family influence. We deepen the current understanding of configurations that promote the performance of family firms, offer important implications for theory and practice, and set new directions for future research on the strategic management of family firms. Our results are also virtually identical and insensitive to change across subjective and objective performance measures

Developing relationships in innovation clusters

This study assesses the composition of micro-level behaviours embedded within innovation clusters. Drawing on network theory of innovation, we examine the relational complexities of a specific university-business form of clustered exchange to characterise the actor level behaviours that influence the breadth and spread of network involvement. Whilst some current research posits behavioural attributes of clustered networks, there have been few studies that have focused on the extent of influence that individuals have on the development of value creating relationships, the roles individuals play and the various factors that have the potential to impact their effectiveness. This conceptual development study provides insights into the actor-level behavioural features that play a central role in promoting the innovation effectiveness of these regions. The findings of this three year long ethnographic study suggest that in the face of resource constraints individuals act as agents in creating and sourcing external input for the benefit of their projects. This has implications for policy-makers as well, as our findings suggests that policies should be shaped to provide enabling factors for boundary-spanning, thus allowing relationships to be equipped with the ability to manage complex partner contexts to access the benefits of diversity

Technology adoption factors in the digitization of popular culture: Analyzing the online gambling market

This study explores the psychological factors that influence market diffusion of popular culture digital services. Digital service websites have been diffusing through global markets with relative ease, but the factors influencing this are not well understood. The transition from the brick and mortar services to a digital outlet represents a form of market disruption but the way that this impacts the consumer experience and the way firms engage in innovation are not fully understood, nor are the various cognitive factors driving the adoption rates. There is a need to understand cognitions that influence intent to engage, as well as the perceptions of the social environment in which the service offering occurs. Therefore, we offer an examination of different social contexts (US and UK) to explore the impact of certain attitudes and norms toward online gambling consumption. The results of study demonstrate how variations between online and offline environments impact consumer adoption and market diffusion. Additionally, the results further support the need for more studies to focus on the soft factors that influence their innovation capabilities

Digital strategy implementation: the role of individual entrepreneurial orientation and relational capital

In transformational strategy contexts such as digitalization, the entrepreneurial behavior of the firm’s employees is crucial. This study examines the role of employees’ individual-level entrepreneurial orientation (IEO) in terms of proactiveness, risk-taking, and innovativeness, and their relational capital within the organization, on their performance in achieving organizations’ digital strategy goals. We hypothesize that all IEO dimensions are positively associated with employees’ digital strategy performance and that relational capital positively moderates the effect of proactiveness and risk-taking but negatively moderates the effect of innovativeness. The results of an intra-organizational survey of 166 employees at a medium-sized Northern European manufacturing firm provide partial support for our hypotheses. As part of the empirical design, we introduce a four-dimensional scale for organizational and individual digital strategy performance (Digital – Management, Infrastructure, Networking, and development – MIND). With this scale, we contrast the informants’ self-assessment of their individual performance against the assessment of the overall organizational performance. Our study is one of the first to investigate IEO in a digital strategy context and provides implications for harnessing employees' entrepreneurial and innovative potential in digital transformation

Individual entrepreneurial orientation and intrapreneurship in the public sector

Municipalities and Cities are facing a strong pressure to digitalize and develop themselves into Smart Cities. This article investigates the relationship of Individual Entrepreneurial Orientation (IEO) and individual-level exploration and exploitation activities to analyze a municipality’s ability to discover potentially important technologies and innovations. Moreover, the influence of self-regulatory modes is used to provide more insights into this relationship. For this, an online survey with 266 municipality and city employees in the German-speaking realm has been carried out. Our results show that employees with a high level of IEO are more likely to work on explorative activities which are the foundation for every intrapreneurial process ,whereas IEO does not seem to have an influence on exploitative activities. Locomotion as a moderating variable has a positive effect on the IEO exploration relationship. Therefore, employees with a high level of IEO and locomotion are more likely to discover new opportunities as they are working on explorative activities. Furthermore, our results show that the self-regulatory mode assessment affects the exploitative activities positively. The final findings suggest that municipalities that want to engage in intrapreneurial activities should start hiring people with a high level of IEO

Subsidiary managers’ initiative pursuit: A behavioral agency model

Subsidiary managers’ decisions to pursue initiatives for innovative product introductions in their host markets provide opportunities for rent creation, but also bear risks for the multinational corpo-ration (MNC). However, we lack insights into which factors drive such decisions. Grounded in be-havioral agency theory, our study investigates which factors at the individual level, the corporate level, and the subsidiary’s implementation context increase subsidiary managers’ likelihood of initi-ative pursuit. We propose that an individual manager’s capability and the MNC’s entrepreneurial orientation serve as reference points in a specific implementation context. Based on a stated-choice experiment with 799 respondents, results show that subsidiary managers’ likelihood to pursue an innovation initiative varies depending on the context, and the choice of implementation mode acti-vates subsidiary managers’ gain frames. Our findings advance theory by providing granularity on the situational complexity across multiple methodological levels that instigate subsidiary managers’ initiative pursuit

It all depends? Unravelling the contingency factors of international opportunity recognition in multinational subsidiaries [Abstract]

It all depends? Unravelling the contingency factors of international opportunity recognition in multinational subsidiaries [Conference abstract]<br