Abstract

Entrepreneurial Orientation (EO) explains the strategy making processes of firms that are engaged in entrepreneurial activities. Such entrepreneurial activities have shown to contribute towards firm performance (Zara and Covin, 1995; Lumpkin and Dess, 1996; 2001). While much of the literature shows universal benefits of EO, this study proposes that EO may have very different strategic and resource dynamics for smaller firms (<50 employees). This can be true for small firms as the entrepreneurial strategies require considerable financial resources to be successful, thus at a higher level of EO, the gains may not surpass costs from EO at the same rate. Hence, it may be useful to explore particular internal and external factors that may moderate the relationship between EO and performance (Lumpkin and Dess, 2001). The key factor invested in this study are firm capability, namely, network capability i.e. firm’s ability to develop and utilize inter-organization relations (Walter et al. 2006) and information and communication technology (ICT) capability i.e. firm’s ability to effectively utilize ICT to manage information within firm (Tippins and Sohi, 2003) Therefore, this study focuses on the following questions (a) is the relationship between EO and performance linear for small firms? (b) do network and ICT capability reduce the challenges associated with higher level EO for small firms?

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