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Effects of Entrepreneurial Orientation on Business Performance: The Mediating Role of Customer Satisfaction—A Formative–Reflective Model Analysis

Author

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  • Héctor Cuevas-Vargas
  • Neftalí Parga-Montoya
  • Rudy Fernández-Escobedo

Abstract

This empirical study was aimed at deepening the knowledge of the direct and indirect effects of entrepreneurial orientation (EO) on business performance and how industrial organization (IO) influences EO of micro and small firms from a city in a developing country, using the partial least squares structural equation modeling (PLS-SEM). In this study, the satisfaction of the customers was considered as a mediator variable and the IO as a formative construct. The results show enough evidence that IO positively affects EO; EO positively influences business performance and customer satisfaction (CS); likewise, EO impacts business performance in a positive manner both directly and indirectly through CS. Regarding managerial implications, the study provides knowledge to managers over the processes of shaping strategy and decision making, stressing the importance of both encouraging the development of EO capabilities and focusing efforts on CS to improve business performance.

Suggested Citation

  • Héctor Cuevas-Vargas & Neftalí Parga-Montoya & Rudy Fernández-Escobedo, 2019. "Effects of Entrepreneurial Orientation on Business Performance: The Mediating Role of Customer Satisfaction—A Formative–Reflective Model Analysis," SAGE Open, , vol. 9(2), pages 21582440198, June.
    • Handle: RePEc:sae:sagope:v:9:y:2019:i:2:p:2158244019859088
    DOI: 10.1177/2158244019859088
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    References listed on IDEAS

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    2. Olaleye Dotun Faloye & Owoeye Idowu, 2021. "Business Model Innovation and Micro and Small Enterprises’ Performance in Nigeria: Does Entrepreneurial Orientation Mediate?," European Journal of Economics and Business Studies Articles, Revistia Research and Publishing, vol. 7, January -.
    3. Muhammad Shahid & Shafaq Chaudhry & Muhammad Bilal & Hina Amber & Shoaib Aslam & Shumaila Malik & Khuram Shahzad, 2022. "The Link Between Team Identification, Entrepreneurial Orientation, and Innovative Work Behavior and Its Dimensions in the Context of Pakistan," SAGE Open, , vol. 12(1), pages 21582440221, March.
    4. Zina Arabeche & Ahlem Soudani & Mohsen Brahmi & Luigi Aldieri & Concetto Paolo Vinci & Mohammed El Amine Abdelli, 2022. "Entrepreneurial Orientation, Organizational Culture and Business Performance in SMEs: Evidence from Emerging Economy," Sustainability, MDPI, vol. 14(9), pages 1-20, April.
    5. Adelaide Spio-Kwofie & Abdul -Aziz Ibn Musah & Hannah Opoku, 2024. "A Study of Small-Size Hotels in Ghana’s Entrepreneurial Orientation, Firms’ Resources, and Industry Forces on Business Performance," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 8(6), pages 3091-3110, June.
    6. Cuevas-Vargas Héctor & Velázquez-Espinoza Noé & Colín-Salgado Mónica, 2022. "Technological Innovation in Colombian Small Firms: A Gender Multi-Group Analysis," Business Systems Research, Sciendo, vol. 13(1), pages 46-65, June.

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