The Theory and Practice of Entrepreneurship

The Theory and Practice of Entrepreneurship

Frontiers in European Entrepreneurship Research

Edited by David Smallbone, João Leitão, Mário Raposo and Friederike Welter

This timely book provides a fresh perspective on contemporary research in the field of entrepreneurship and small business, considering both theory and application.

Chapter 13: Entrepreneurial Orientation and Performance in Micro-sized Firms: Comparing Agricultural and Non-agricultural Firms

Jorunn Grande

Subjects: business and management, entrepreneurship, research methods in business and management, research methods, research methods in business and management


Jorunn Grande INTRODUCTION This study investigates the importance of entrepreneurial orientation (EO) and firm specific resources to the performance of micro-sized firms.1 Entrepreneurial orientation has emerged as an important concept for describing and measuring entrepreneurial efforts and attitudes in firms (Covin and Slevin 1989; Green et al. 2008; Lumpkin and Dess 1996). The EO concept looks at the firm’s tendency to innovate, take on risk and be proactive in developing and marketing the firm. Substantial research within this area suggests that firms with a greater EO tend to perform better in terms of sales growth, new products, and so on (Madsen 2007; Wiklund 1999; Wiklund and Shepherd 2005). However, some studies have questioned this relationship (Hart 1992; Smart and Conant 1994) suggesting that embracing EO activities may not be inherently beneficial to all firms. As stated in the early work of Lumpkin and Dess (1996) and Covin and Slevin (1989), organizational and environmental factors are likely to have a significant influence on this relationship. As Gartner (1985, p. 697) explains: ‘entrepreneurs and their firms vary widely; the actions they take or do not take and the environments they operate in and respond to are equally diverse – and all these elements form complex and unique combinations in the creation of each new venture’. This means that both internal and external contexts within which the firms operate are likely to be of great importance to the relationship between EO and performance. In their important conceptual work, Lumpkin and Dess (1996) addressed four...

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