Configurations of entrepreneurial orientation and competitive strategy for high performance

Abstract

Entrepreneurial orientation (EO) – that is risk-taking, proactiveness and innovativeness – and Porter's generic competitive strategies have become core constructs within entrepreneurship and management research; still, little is known about how they act in combination to influence performance. A configurational view of contingency fit is used to craft a typology of three ideal types. A qualitative comparative analysis of 67 small firms in Sweden empirically supports the hypothesis that two ideal types are associated with high firm performance: one focuses on differentiation strategy combined with innovativeness and proactiveness; and one focuses on a mixed strategy with risk aversion, reactiveness, and low innovativeness. The paper contributes to the current literature by showing how EO sub-dimensions in a non-linear way facilitate firm performance when in fit with competitive strategies, and supports the research stream that sees EO as a formative construct.