EO is a firm-level strategic orientation, representing the extent to which an organization is committed to innovation by introducing new products and services, is proactive in initiating competitive actions, is willing to take risks and compete aggressively (Covin & Slevin, 1989; Miller, 1983, Lumpkin & Dess, 1996). While scholars have examined the direct effects of EO on performance, we propose that EO is an antecedent, requiring key organizational activities-more specifically, exploration vs. exploitation-which in turn influences performance. Both exploration, the experimentation with new alternatives and exploitation, the refinement and extension of existing competencies, technologies and paradigms, are important entrepreneurial processes. This paper poses these related questions: How does EO (values) lead to exploration and exploitation (actions)? How exploration and exploitation (actions) work as a means by which EO (values) leads to performance effectiveness (outcome)?