Behavioral and Environmental Influences on Entrepreneurial Orientation
Keywords:
Innovation, entrepreneurial alertness, entrepreneurial self-efficacy, environmental dynamism and hostility, entrepreneurial orientation, South Africa
Abstract
Traditionally, theories of innovation and entrepreneurship have concentrated on either environmental or dispositional variables to explain different rates and levels in entrepreneurial activity. However, these theories have unsuccessfully represented the complexity of human behavior actions involve the interaction of various environmental, cognitive, and behavioral variables. Recognizing this shortcoming and considering that contextual influences on entrepreneurial behavior in an emerging market context are rarely accounted for, this study empirically examined the degree to which individual-level variables of entrepreneurial alertness and self-efficacy interact with environmental dynamism and hostility to influence a firm’s entrepreneurial orientation. Appreciating the multiplicity of elements facing an entrepreneur who is trying to make sense of the external environment, the study surveyed 310 owner-mangers in South Africa and relied on SEM to determine the best model fit. The study findings reveal that as a result of mediating and interaction effects, an individual with higher levels of alertness and self-efficacy is more likely to be innovative, engage in risk-taking behavior and show pro-activeness, in other words, have higher levels of entrepreneurial orientation. It is recommended that policymakers encourage entrepreneurial orientation by fostering a high-support route in which the effects of the hostile environments are minimized to encourage higher levels of innovation. Moreover, scholars can build on these findings by investigating the interconnectedness of exogenous environmental and individual factors in terms of explaining entrepreneurial orientation.
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References
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Bruwer, J. P. (2018). Do internal control activities adversely influence the profitability and solvency of South African SMMEs? Journal of Economics and Behavioral Studies, 10(1), 49-58. Busenitz, L. W. & Lau, C. M. (1996). A cross-cultural cognitive model of new venture creation. Entrepreneurship Theory and Practice, 20(1), 25-39. Busenitz, L. W., Plummer, L. A., Klotz, A. C., Shahzad, A. & Rhoads, K. (2014). Entrepreneurship research (1985–2009) and the emergence of opportunities. Entrepreneurship Theory and Practice, 38(8), 981– 1000. Business Partners. (2016). Available at: https://www.businesspartners.co.za/en-za. Chen, C. C., Greene, P. G. & Crick, A. (1998). Does entrepreneurial self-efficacy distinguish entrepreneurs from managers? Journal of Business Venturing, 13(2), 295-316. Covin, J. G. & Lumpkin, G. (2011). Entrepreneurial orientation theory and research: reflections on a needed construct. Entrepreneurship Theory and Practice, 35(5), 855–872. Crowne, D. & Marlowe, D. (1960). A new scale of social desirability independent of psychopathology. Journal of Consulting Psychology, 24(4), 340-354. Davidsson, P. & Honig, B. (2003). The role of social and human capital among nascent entrepreneurs. Journal of Business Venturing, 18(3), 301-331. Davidsson, P., Delmar, F. & Wiklund, J. (2006). Entrepreneurship and the growth of firms. Cheltenham, UK: Edward Elgar. De Noble, A. F., Jung, D. & Ehrlich S. B. (1999). Entrepreneurial self-efficacy: The development of a measure and its relationship to entrepreneurial action. Frontiers of Entrepreneurship Research. Babson: Babson College. Department of Trade and Industry. (2016). Available at: www.dti.gov.za. Dess, G. G. & Beard, D. W. (1984). Dimensions of organizational task environment. Administrative Staff Quarterly, 29(1), 52-73. Dess, G. G. & Lumpkin, G. T. (2005). The role of entrepreneurial orientation in stimulating effective corporate entrepreneurship. Academy of Management Perspectives, 19(1), 147–156. Dobbs, M. & Hamilton, R. T. (2007). Small business growth: recent evidence and new directions. International Journal of Entrepreneurial Behavior and Research, 13(5), 296–322. Drnovsek, M. & Glas, M. (2002). The entrepreneurial self-efficacy of nascent entrepreneurs: The case of two economies in transition. Journal of Enterprising Culture, 10(2), 107-131. Earley, P. C. (1994). Self or group? Cultural effects of training on self-efficacy and performance. Administrative Science Quarterly, 39(1), 89-109. Estrin, S., Korosteleva, J. & Mickiwicz, T. (2013). Which institutions encourage entrepreneurial growth aspirations? Journal of Business Venturing, 28(1), 564-580. Fornell, C. & Larcker, D. F. (1981). Evaluating structural equation models with unobservable variables and measurement error. Journal of Marketing Research, 18(2), 39–50. Gaglio, C. M. & Katz, J. (2001). The psychological basis of opportunity identification: entrepreneurial alertness. Journal of Small Business Economics, 16(1), 95–111. Hair J. F., Black W. C., Babin B. J. & Anderson R. E. (2010). Multivariate data analysis: a global perspective. (Eds.). 7th Ed, Upper Saddle River, NJ: Pearson. Hameed, I. & Ali, B. (2011). Impact of entrepreneurial orientation, entrepreneurial management and environmental dynamism on firm’s financial performance. Journal of Economics and Behavioral Studies, 3(2), 101-114. Haynie, J. M., Shepherd, D., Mosakowski, E. & Earley, P. C. (2010). A situated metacognitive model of the entrepreneurial mindset. Journal of Business Venturing, 25(2), 217–229. Herrington, M., Kew, P. & Mwanga, A. (2017). South Africa Report 2016/2017. Can Small Businesses Survive in South Africa? Cape Town: UCT. Kaish, S., Gilad B. (1991). Characteristics of opportunity search for entrepreneurs versus executives: sources, interests, and general alertness. Journal of Business Venturing, 6(1), 45-61. Kampel, K. (2003). The role of South African competition law in supporting SMEs. Paper presented at the 48th ICSB World Conference, Advancing Entrepreneurship and Small Business 15-18 June 2003, Belfast, Northern Ireland.
Khanna, T. & Palepu, K. G. (2010). Winning in emerging markets: A roadmap for strategy and execution. Boston: Harvard Business School Press. Kirzner, I. M. (1997). Entrepreneurial discovery and the competitive market process: An Austrian approach. Review of Austrian Economics, 11(12), 5-17. Krueger, N. F. (2007). What lies beneath? The experiential essence of entrepreneurial thinking. Entrepreneurship Theory and Practice, 31(1), 123-138. Lundström, A. & Stevenson, L. (2005). Entrepreneurship Policy: Theory and Practice, Volume 9, New York: Springer. Luthans, F., Stajkovic, A. D. & Ibrayeva, E. (2000). Environmental and psychological challenges facing entrepreneurial development in transitional economies. Journal of World Business, 35(1), 95-117. McGee, J. E., Peterson, M., Mueller, S. L. & Sequeira J. M. (2009). Entrepreneurial self-efficacy: refining the measure. Entrepreneurship Theory and Practice, 33(1), 1-24 McGrath, R. G., Macmillan, I. C. & Scheinberg, S. (1992). Elitists, risk takers, and rugged individualists? An exploratory analysis of cultural differences between entrepreneurs and non-entrepreneurs. Journal of Business Venturing, 7(1), 115-135. Miller, D. & Friesen, P. H. (1982). Innovation in conservative and entrepreneurial firms: two models of strategic momentum. Strategic Management Journal, 3(1), 1-25. Moroz, P. W. & Hindle, K. (2012). Entrepreneurship as a process: Toward harmonizing multiple perspectives. Entrepreneurship Theory and Practice, 36(4), 781-818. Myers, S. & Marquis, D. G. (1969), Successful industrial innovation. Washington DC. National Science Foundation. National Small Business Chamber (NSBC). (2016). Fueling Small Business Growth: National Small Business Chamber. Available from: https://www.nsbc.org.za. Nunnally, J. C. (1978). Psychometric theory, (2nd Ed.). New York: McGraw-Hill. Piispanen, V. V., Paloniemi, K. J. & Simonen, J. (2018). Qualities of the growth-oriented entrepreneur. International Journal of Entrepreneurship and Small Business, 34 (1), 112 – 130. Podsakoff, P. M., Mackenzie, S. B. & Podsakoff, N. P. (2012). Sources of method bias in social science research and recommendations on how to control it. Annual Review of Psychology, 63(5), 539-569. Poon, J. M. L. (2006). Effects of self-concept traits and entrepreneurial orientation on firm performance. International Small Business Journal, 24(1), 61–82. Rauch, A., Wiklund, J., Lumpkin, G. & Frese, M. (2009). Entrepreneurial orientation and business performance: an assessment of past research and suggestions for the future. Entrepreneurship Theory and Practice, 33(3), 761–787. RSA, Republic of South Africa. (2003). National Small Business Act 102 of 1996. Cape Town: Government Printers. Samson, A. T. & Mahmood, R. (2015). The impact of entrepreneurial orientation, reconfiguring capability and moderation of environmental turbulence on export performance of SMEs in Nigeria. Journal of Economics and Behavioral Studies, 7(3), 76-87. Shane, S. & Venkataraman, S. (2000). The promise of entrepreneurship as a field of research. Academy of Management Review, 25(1), 217–226. Shane, S., Locke, E. A. & Collins, C. J. (2003). Entrepreneurial motivation. Human Resource Management Review, 13(2), 257-279. Sheehan, K. B. & McMillan, S. J. (1999). Response variation in e-mail surveys: An exploration. Journal of Advertising Research, 39(4), 45-54. Statistics South Africa. (2014). Gross domestic product, Annual estimates 2004 – 2013, Regional estimates 2004 – 2013. Third quarter 2014. Statistical release P0441, Pretoria. Tang, J. Kacmar, K. M. M. & Busenitz, L. (2012). Entrepreneurial alertness in the pursuit of new opportunities. Journal of Business Venturing, 27(1), 77–94. Ucbasaran, D., Westhead, P., Wright, M. (2001). The focus of entrepreneurial research: contextual and process issues. Entrepreneurship Theory and Practice, 25(1), 34-45. Urban, B. & Hwindingwi, R (2016). Institutional factors in African Emerging Markets influencing MNE corporate strategies. International Journal of Emerging Markets, 11(4), 497-513.
Urban, B. (2007). A framework for understanding the role of culture in entrepreneurship. Acta Commercii, 7(1), 82-95. Urban, B. (2016). Empirical evidence on the influence of the institutional environment on venture innovation performance in South Africa. Journal of Developmental Entrepreneurship, 21(2), 1-14. Venkataraman, S. (1997). The distinctive domain of entrepreneurial research. Advances in Entrepreneurship. Firm Emergence and Growth, 3(1), 119-138. Welter, F. & Small bone, D. (2011). Institutional perspectives on entrepreneurial behavior in challenging environments. Journal of Small Business Management, 49(1), 107-125. Wiklund, J., Patzelt, H. & Shepherd, D. A. (2009). Building an integrative model of small business growth. Small Business Economics, 32(4), 351–375. Wright, M., Roper, S., Hart, M. & Carter, S. (2015). Joining the dots: Building the evidence base for SME growth policy. International Small Business Journal, 33(1), 3-11. Xavier, S. R., Kelley, D., Kew, J., Herrington, M. & Vorderwulbecke, A. (2012). Global Entrepreneurship Monitor 2012 Global Report. London: Global Entrepreneurship Research Association. Zahra, S. (1993). A conceptual model of entrepreneurship as firm behavior: a critique and extension. Entrepreneurship Theory and Practice, 16(1), 5-21. Zahra, S. A. & Covin, J. G. (1995). Contextual influences on the corporate entrepreneurship-performance relationship: A longitudinal analysis. Journal of Business Venturing, 10(1), 43-58.
Published
2018-11-03
How to Cite
Chen, J. Y.-J., & Urban, B. (2018). Behavioral and Environmental Influences on Entrepreneurial Orientation. Journal of Economics and Behavioral Studies, 10(5(J), 73-88. https://doi.org/10.22610/jebs.v10i5(J).2499
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