Entrepreneurial Orientation Theory

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This chapter aims at reviewing theories relating to entrepreneurship i.e. Psychological Entrepreneurship Theories and Sociological theories, Schumpeter’s Innovation Theory, Entrepreneurial Orientation Theory at Individual Level and Entrepreneurial Orientation theory at Firm Level.This review will aid in the understanding of the concept of entrepreneurship, social entrepreneurship and entrepreneurial orientation. This chapter will also show the conceptual framework which will be derived from the theoretical review. Finally, this chapter will cover various empirical studies done by other scholars based on which the operational framework will be formed.
2.2 Conceptual Review
2.2.1 Savings and Credit Co-operative
Savings and Credit Co-operative
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Markets developed internally are negatively associated with profitability. They also found out that products and/or markets developed via merger/acquisition would be associated with entrepreneurial firm performance. Markets developed via merger/acquisition were significant positive predictors of changes in net worth only. Their primary contribution to the study is that unlike other theoretical constructs developed in North America, EO appears to be somewhat globally generalizable to developed countries as a uni-dimensional construct with multiple characteristics rather than a multi-dimensional…show more content…
Wang (2008) found that loading of EO to LO was significant as well as loading from LO to the dependent variable firm performance. Therefore LO mediates the EO performance relationship. EO facets in this context are risk-taking, innovativeness, market pro-activeness and competitive aggressiveness. EO performance relationship was mediated by a firm’s LO. Innovativeness and LO both have a stronger internal orientation towards business processes and self-renewal, whilst pro-activeness and aggressiveness both have stronger external orientation towards the market and the competition. Therefore individuals within the firm are motivated to learn and be more receptive to new information. Innovativeness has a positive significant relationship with firm performance because innovative firm’s often adopt cross-functional teams (Kuratko et al., 2001), rather than traditional authoritarian and hierarchical structures, to facilitate communication that in turn, bring about an organization – wide consensus of goals and direction. Hence, innovative firms instill values of commitment to learning, open mindedness, and should vision which leads to overall improvement of the firms’ performance. Wang (2008) found that risk-taking has a low correlation with LO, particularly shared vision. Risk tolerance is an

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