10 Entrepreneurial orientation Thomas H. Hawver and Jeffrey M. Pollack Entrepreneurial orientation (EO), introduced in the literature by Khandwalla (1977), is defined as reflecting ‘the organizational processes, methods, and styles that firms use to act entrepreneurially’ (Lumpkin and Dess, 1996: 139). Originally this concept grew from research that centered on corporate entrepreneurship but has grown to include new, smaller firms. The majority of the research on EO has been conducted at the firm level in the hope of better predicting firm performance through strategic components of the firm. The interest stems from how the behavior of the firm coalesces with the specific marketplace and how the firm participates in activities designed for firm survival, renewal, or innovation (Covin and Slevin, 1986; Davidsson, 2007; Lumpkin and Dess, 1996). For both new and existing firms, participating in activities to generate revenues is a crucial element for business survival. Activities such as new product development, product improvement and strategic planning all aid the survival and growth of businesses. Though these elements are common in most firms, the degree to which they are capitalized on varies from firm to firm. For example, a fast-food franchise may focus more on existing product improvement, while a firm entering the commercial printing industry may place their efforts in new product development. The mature firm, alternatively, in either of these industries may focus their efforts on strategic planning. Clearly, the efforts toward survival may differ depending on several factors such as industry and stage of growth, though all...
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