IDEAS home Printed from https://ideas.repec.org/a/eme/mrrpps/mrr-03-2017-0092.html
   My bibliography  Save this article

Entrepreneurial orientation and firm performance: the mediating role of functional performances

Author

Listed:
  • Jafar Rezaei
  • Roland Ortt

Abstract

Purpose - Earlier studies have generally shown a positive relationship between entrepreneurial orientation (EO) and the overall performance of the firm. The purpose of this paper is to understand in more detail how EO influences firm performance. It adds to the literature by distinguishing performances of different functions in a firm and by exploring how the dimensions of EO influence these functional performances and, in turn, overall firm performance. Design/methodology/approach - This study examined the relationship between three dimensions of EO (innovativeness, proactiveness, risk-taking), three types of functional performances of firms (R&D performance, production performance, marketing and sales performance) and the overall performance of firms. The data are collected from 279 high-tech small-to-medium-sized enterprises (SMEs) using a postal survey. The proposed hypotheses are tested using structural equation modeling (SEM). Findings - The results indicate that the dimensions of (EO) are related in different ways to the performance of functions in a firm. A positive relationship is observed between innovativeness and R&D performance and between proactiveness and marketing and sales performance. A negative relationship exists between risk-taking and production performance. The results also show a sequential positive relationship from R&D via production and marketing and sales to overall performance of firms. Therefore, it is concluded that the R&D, production and marketing and sales functions reinforce each other in a logic order and are complementary in their effect on overall firm performance. Practical implications - The results imply that the three functions, R&D, production and marketing and sales, in a firm play different roles, both in the firm’s EO and in their contribution to overall performance. Managers can use the findings to monitor and influence the performance of different functions in a firm to increase overall firm performance. Originality/value - The first contribution of this study is that it unravels (i) which dimensions of EO have an effect on the performance of separate functions in a firm, indicating that functions contribute in different ways to entrepreneurial orientation of the firm. A second contribution is assessing how the performance of these functions influence the firm’s overall performance. This paper fills a gap in the literature by exploring internal firm variables mediating the relationship between EO and overall firm performance and contributes to the discussion on the contradictory results regarding the relationship between risk-taking and firm performance.

Suggested Citation

  • Jafar Rezaei & Roland Ortt, 2018. "Entrepreneurial orientation and firm performance: the mediating role of functional performances," Management Research Review, Emerald Group Publishing Limited, vol. 41(7), pages 878-900, May.
    • Handle: RePEc:eme:mrrpps:mrr-03-2017-0092
    DOI: 10.1108/MRR-03-2017-0092
    as

    Download full text from publisher

    File URL: https://www.emerald.com/insight/content/doi/10.1108/MRR-03-2017-0092/full/html?utm_source=repec&utm_medium=feed&utm_campaign=repec
    Download Restriction: no
    File URL: https://www.emerald.com/insight/content/doi/10.1108/MRR-03-2017-0092/full/pdf?utm_source=repec&utm_medium=feed&utm_campaign=repec
    Download Restriction: no
    File URL: https://libkey.io/10.1108/MRR-03-2017-0092?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ariani, Mintarti & Putri, Arlika Anindya, 2018. "Entrepreneurial orientation dan pengalaman kerja," OSF Preprints nuj7p_v1, Center for Open Science.
    2. Ariani, Mintarti & Maharani, Raden Roro Irfani, 2018. "Entrepreneurial orientation dan pricing capability," OSF Preprints qek96_v1, Center for Open Science.
    3. Gonçalo Rodrigues Brás & Miguel Torres Preto, 2021. "The consequences of intrapreneurship in exporting firms: a structural-model approach," CeBER Working Papers 2021-06, Centre for Business and Economics Research (CeBER), University of Coimbra.
    4. Sundari, Made Siti & Dewi, Komang Indah Suryani, 2018. "Orientasi kewirausahaan dalam turbulensi lingkungan bisnis," OSF Preprints kbj89_v1, Center for Open Science.
    5. Muhammad Yaseen & Waseem Sajjad & Supawan Visetnoi & Siti Amanah & Shahab E. Saqib, 2024. "Entrepreneurial Orientation and SMEs Efficiency With Government Financial and Non-Financial Incentives as Moderators," SAGE Open, , vol. 14(3), pages 21582440241, September.
    6. Ariani, Mintarti & Nurhalizah, Gresta Deli, 2018. "Orientasi kewirausahaan dan kemampuan penjualan," OSF Preprints 62nc5_v1, Center for Open Science.
    7. Chakraborty, Imon & Nandhini, K. & Ilavarasan, P. Vigneswara & Edirippulige, Sisira, 2024. "Factors of front-end innovation in fem-tech startups: An empirical study," Technology in Society, Elsevier, vol. 76(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eme:mrrpps:mrr-03-2017-0092. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Emerald Support (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.