Abstract

Entrepreneurial orientation (EO) and market orientation (MO) are two important, albeit competing, aspects of firm strategy. While it has been observed that each of these strategic orientations has a positive impact on firm performance, they also represent “different logics of organization”, and require conflicting organizational architectures and activities. Fundamentally, EO and MO impose rather different learning challenges for the firm. With a focus on innovativeness, risk-taking and proactive pursuit of new opportunities, EO emphasizes learning through exploration of new knowledge and capabilities. MO, on the other hand, is concerned with providing superior value to the firm’s current customers through organizational learning based on exploitation of extant knowledge and capabilities. A firm desirous of pursuing both EO and MO thus faces tremendous challenges since it must create a learning environment that accords primacy to simultaneous knowledge exploration and exploitation. The organizational ambidexterity, essential in such a scenario, is difficult for firms to achieve because of inherent tensions and contradictions. Yet, firms that are able to do so receive high performance benefits. In this paper, we develop a moderated-mediation model linking the impact of EO, MO and OL on shareholder value.

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