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Entrepreneurial Orientation Insights

Entrepreneurial orientation (EO) refers to a firm's entrepreneurial strategy, culture, and behaviors. EO includes dimensions like innovativeness, risk-taking, and proactiveness. Research shows EO correlates strongly with improved firm performance. EO is typically measured using a 9-item scale developed by Covin and Slevin that captures Miller's view of EO as a combination of innovativeness, proactiveness, and risk-taking. Alternative conceptualizations, like Lumpkin and Dess' addition of competitive aggressiveness and autonomy, also provide value depending on the research question. Overall, EO enhances performance while also increasing variability in outcomes as some entrepreneurial actions fail.

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Sharifah Fathiah WH
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67 views1 page

Entrepreneurial Orientation Insights

Entrepreneurial orientation (EO) refers to a firm's entrepreneurial strategy, culture, and behaviors. EO includes dimensions like innovativeness, risk-taking, and proactiveness. Research shows EO correlates strongly with improved firm performance. EO is typically measured using a 9-item scale developed by Covin and Slevin that captures Miller's view of EO as a combination of innovativeness, proactiveness, and risk-taking. Alternative conceptualizations, like Lumpkin and Dess' addition of competitive aggressiveness and autonomy, also provide value depending on the research question. Overall, EO enhances performance while also increasing variability in outcomes as some entrepreneurial actions fail.

Uploaded by

Sharifah Fathiah WH
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Entrepreneurial orientation (EO) is a firm-level strategic orientation which captures an organization's

strategy-making practices, managerial philosophies, and firm behaviors that are entrepreneurial in nature.
[1]

Entrepreneurial orientation has become one of the most established and researched constructs in the

entrepreneurship literature.[2][3] A general commonality among past conceptualizations of EO is the


inclusion ofinnovativeness, proactiveness, and risk-taking as core defining aspects or dimensions of the
orientation.[4][5] EO has been shown to be a strong predictor of firm performance with a meta-analysis of
past research indicating a correlation in magnitude roughly equivalent to the prescription of taking
sleeping pills and getting better sleep.[4]
Entrepreneurial orientation has most frequently been assessed using a nine-item psychometric instrument
developed by Jeff Covin and Dennis Slevin.[6][7] This instrument captures the perspective of Danny Miller
that EO is a collective catchall construct which represents what it means for a firm to be considered
entrepreneurial across a wide range of contexts.[8] A seminal quote from Miller (1983, p. 780):
In general, theorists would not call a firm entrepreneurial if it changed its technology or product line
simply by directly imitating competitors while refusing to take any risks. Some proactiveness would be
essential as well. By the same token, risk-taking firms that are highly leveraged financially are not
necessarily entrepreneurial. They must also engage in product market or technological innovation.
Reviews of the Entrepreneurial orientation literature indicate that the majority of prior studies have
adopted Miller's perspective of EO as the combination of innovativeness, proactiveness, and risk-taking. [4]
[5]

Lumpkin and Dess[9] offer an alternative view of EO as the combination of five dimensions, those put forth
by Miller/Covin and Slevin as well as competitive aggressiveness and autonomy. Moreover, they suggest
that additional insights stand to be gained from investigating the dimensions independently. Proceeding
research has suggested that there is value in examining EO according to either conceptualization
depending upon the demands of the research question being addressed. [2][10]
Taken together, as a strategic orientation EO enhances firm performance as well as overall variance in a
firms performance. Increased variance occurs as result of the observation that many entrepreneurial
actions ultimately fail to generate an economic return thereby contributing to an increased distribution of
firm performance outcomes.[11][12] As a core firm strategic orientation, the breadth and depth of research on
EO continues to expand as the concept is adopted to understand the effects of being entrepreneurial
across an increasing number of research contexts.[5]

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