Abstract

Despite increased interest in EO over the last several decades, its relationship to planning and implementation has been seldom explored. Little is known about why some firms have more EO than others and some firms derive greater value from EO than others. Drawing on strategic planning flexibility (SPF) and organizational learning literatures, we suggest that “the capacity of a firm’s strategic plan to change as environmental opportunities/threats emerge,” could be a key driver for developing firm EO (Barringer & Bluedorn, 1999: 424). Furthermore, although EO could be present within a firm, organizational learning routines could play a critical role in explaining why and how a firm leverages internal resources to enhance effectiveness of EO. We posit that ambidexterity and absorptive capacity are key organizational learning approaches that could help firms further leverage EO.

  • Hypothesis 1: Strategic flexibility is positively associated with entrepreneurial orientation.
  • Hypothesis 2: Entrepreneurial orientation is positively associated with venture growth.
  • Hypothesis 3: Ambidexterity moderates the relationship between entrepreneurial orientation and venture growth such that higher levels of ambidexterity strengthen the relationship and lower levels weaken the relationship.
  • Hypothesis 4: Absorptive capacity moderates the relationship between entrepreneurial orientation and venture growth such that higher levels of absorptive capacity strengthen the relationship and lower levels weaken the relationship.

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