Entrepreneurial Orientation and Firm Performance: Is Product Quality a Missing Link?

Xiao Feng Ju

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Entrepreneurship Studies and Influences Innovation and Knowledge Management Firm Innovation and Growth

Abstract

Abstract Prior literatures have argued that the relationship between entrepreneurial orientation and firm performance may be not as straightforward as expected. With EO–performance contingency framework, this study investigates how product quality mediates the relationship between EO and firm performance. Using survey data from 153 new ventures, we find that EO dimensions have non-uniform and non-linear, rather than merely linear, relationships with product quality. Specifically, the results reveal that innovativeness and autonomy may lead to superior product quality, however, risk-taking would decrease, not increase, product quality. Proactiveness has U-shaped, not inverse U-shaped, effect on product quality and competitive aggressiveness has U-shaped, not positive linear, effect on product quality. Our results enrich the EO-performance contingency framework and highlight the significance of concerning independent and unique effects of individual EO dimension.

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References

2004Firm resources and sustained competitive advantage 1991Exploration and Exploitation in Organizational Learning 1996Clarifying the Entrepreneurial Orientation Construct and Linking It To Performance 1962Economic Welfare and the Allocation of Resources for Invention 1993Market Orientation: Antecedents and Consequences 1989Strategic management of small firms in hostile and benign environments 1983The Correlates of Entrepreneurship in Three Types of Firms 1996Ambidextrous Organizations: Managing Evolutionary and Revolutionary Change

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