Does Entrepreneurial Orientation Predict Entrepreneurial Behaviour

ABSTRACTThe objective of this study was to find an answer to the key research question raised for the study, "Does entrepreneurial orientation explain actual entrepreneurial behaviour? " Recent interest in entrepreneurial orientation (EO) arose from the failure of personality variables of entrepreneurs to consistently explain entrepreneurial performance. Yet, research suggests that EO itself suffers from conceptual ambiguity that is problematic because it is part thinking-oriented and part action-oriented. As such, its link to performance is dilute. The present study, therefore, positioned the EO construct as an explanatory antecedent to entrepreneurial behaviour within an entrepreneurial performance framework with a view to determining its actual entrepreneurial content. It was found that EO did not play a statistically significant mediating role in performance. Surprisingly, however, EO had a statistically significant explanation for entrepreneurial behaviour. It was suggested that entrepreneurs hip development policy should aim to develop entrepreneurial capacity, self-efficacy, and moderate self confidence. It was also suggested that future research should avoid or reduce same source and mono-method biases.KEYWORDS: Entrepreneurial orientation; entrepreneurial behaviour; small-to-medium sized enterprises; entrepreneurial strategy; social embeddedness theory; entrepreneurial performance.INTRODUCTIONAs the 1980s got underway, numerous signs suggested that, in the years ahead, company prospects for prosperity and growth would become tougher (Kotier and Singh, 1980/1995:6583). It turned out to be so. Thus, business became increasingly competitive, which made marketing scholars (for example, Kotier and Singh, (1995/1980:65-83) to suggest that a decisive factor for success would involve competition-centred strategy or orientation (see also Dev et al., 2009). The focus here is on entrepreneurial behaviour (EO) of the owner-manager, which is strategy or strategic management behaviour for acting entrepreneurially (Chaston 2000; Gilmore and Carson, 2000; Harrington, 2005; Lumpkin and Dess as cited in Gray, 1999; Spillan and Ziemnowicz, 2003; Stokes cited in Mador, 2000; Vitale et al., 2003). According to the upper echelon theory, top management team (TMT) plays a critical role in shaping and positioning the organization strategically to achieve performance, using their demographics to influence organizational dynamics (Hambrick and Mason as cited in Carmeli, 2008). Problem is that demographics are unreliable as explanatory variables for entrepreneurial performance (Jackson et al., 2001). Consequently, in recent times, attention has been turned to entrepreneurial orientation (EO) to account for entrepreneurial performance.Covin and Slevin (as cited in Quince and Whittaker, 2003) suggest that EO is critical to enterprise performance. However, as Wiklund (1998: 222-236) has found, EO performed poorly as a performance-mediating variable, which was not surprising because it is an ambiguous concept that is conceptually problematic. Vitale et al. (2003) found that EO variables have a holistic influence on performance. These inconsistent findings further create a feeling of uncertainty with regard to the role of EO in performance.A guiding key research question, therefore, is, "Does entrepreneurial orientation explain actual entrepreneurial behaviour? " It can be expected that if EO is efficacious in mediating performance, and given that EB is synonymous with performance, then EO should explain EB. Thus, the limited objective of this study is to determine whether EO explains EB. This is done by positioning EO as an explanatory antecedent to EB.The present paper is structured to tackle this task. After the introduction to the study as made above, the researcher reviews the extant literature to gain a thorough grasp of both EO and EB constructs. Subsequently, the researcher explains the methodology of the study. …