ENTREPRENEURIAL ORIENTATION AS AN ANTECEDENT TO FIRM PERFORMANCE AND THE INVESTIGATION OF ENVIRONMENTAL TURBULENCE ON THIS RELATIONSHIP: AN EMPIRICAL STUDY OF SMALL TECHNOLOGY FIRMS IN GERMANY

摘要

In the contemporary business environment the firms are continuously facing increased risk, difficulty to forecast, fluid firm and industry boundaries and a managerial mindset that must unlearn traditional management principles. Firms seeking competitive advantage are often advised to develop capabilities. The resource based view of the firm (Wernerfelt 1984 p.171) places a great emphasis on competing on capabilities, both tangible and intangible (Hall 1993). To achieve competitive advantage, businesses must develop capabilities (Prahalad and Hammel, 1990). Capabilities have been defined as: Complex bundles of skills and collective learning, exercised through organisational processes that ensure coordination of functional activities. (Day 1994, p.38) This study investigates the influence of entrepreneurial orientation of the small technology firms on firm performance. About Eight hundred small technology firms were contacted from a list of Berlin chamber of commerce. With a data set of 143, Structural Equation Modelling was carried out to test the impact of entrepreneurial orientation on Firm Performance. Moreover the impact of Environment Turbulence (Market Turbulence and Technology Turbulence) on Entrepreneurial Orientation and the moderation effect of Environmental Turbulence on Firm Performance were tested. In this empirical study EO was found to significantly influence the Firm Performance. Environmental Turbulence was also found to be having a positive relationship with EO. However the moderating impact of Environmental Turbulence was not found to be significant. This study has important implications for both the researchers as well as the practitioners. It highlights the necessity of firms to develop a high degree of EO in the firm as a way of achieving high performance.