Abstract

We study how entrepreneurial orientation (EO) and willingness to grow influence firms’ preparedness and responses when faced with economic recession. EO (Miller, 1983; Covin and Slevin, 1989, 1991), consisting of innovativeness, proactiveness, and risk-taking, may help companies benefit from environmental disruptions. On the other hand, the common three-dimensional EO construct may be disadvantageous in hostile environments (Lumpkin and Dess, 2001). EO also captures the risk profile of a firm only partially, as a firm may independently have conservative growth willingness.

Here we address two research questions. First, we study the generic approaches of how entrepreneurial firms tackle the challenges of recession. Second, we study how companies with different levels of EO and willingness to grow deviate in their responses and preparedness to recession. Our conceptual base for recession responses is motivated by strategic turnarounds (e.g. Hofer, 1980; Robbins and Pearce, 1992, 1993).

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