Entrepreneurial Orientation of Russian Firms: The Role of External Environment

Abstract

The paper investigates the relationship between the dimensions of entrepreneurial orientation (EO) — innovativeness, pro-activeness, and readiness to take risks — and firm performance of Russian SMEs. We assess the effects of EO on firmperformance in the context of an emerging market taking into account environmental contingencies. Our findings are underpinned by the results of a survey of managers in 104 Russian small and medium firms. The data were processed using structural equation modeling. We find that EO structure in the context of the Russian market differs from the traditional three-dimensional conceptualization of entrepreneurial orientation that is typical of Western countries. Emerging markets — as illustrated byRussia — are characterized by a two-dimensional EO structure: innovativeness and pro-activeness are perceived as a single dimension, while readiness to take risks is a separate component. Moreover, a positive relationship between the united dimension of entrepreneurial orientation — innovativeness and pro-activeness – and firm performance is manifested only in a dynamic or hostile external environment. Particular features of Russia’s institutional and cultural environment may help to explain our findings.

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