Entrepreneurial Orientation, Ambidexterity, the Resource Based View and Performance: Evidence from Micro Entrepreneurs in Trinidad

Abstract

The Entrepreneurial Orientation (EO) construct has been widely adopted within the Entrepreneurship literature, however, the operationalization of the construct has remained a contentious issue. We consider both a unidimensional and multidimensional operationalization of the EO construct and their relative relationship to performance. The effects of the EO dimensions of innovativeness, proactiveness and risk-taking were considered individually and in combination, in relation to performance, in an attempt to uncover hypothesized relationships that are contrary to the generally considered positive linear relationships proposed in the EO literature. Our results show that the dimensions of EO do not co-vary in all instances, and suggests that the risk-taking dimension plays a unique indirect mediation role between the other dimensions and performance. To further extend the body of EO research and drawing from the Resource Based View (RBV) strategic management literature, we proposed EO and its dimensions as an important measure of an organization. EO may serve to enhance the resources and capabilities of the firm by directing the attention of top management to the utilization of the firm’s resources and capabilities towards the joint discovery and exploitation of opportunities, known as ambidexterity. We considered the hypothesized main and moderating effects of ambidexterity in the relationship between EO, its individual dimensions and performance for firms that have high and low levels of ambidexterity. While ambidexterity was discovered to play a significant role as a building block of performance in its own right, we were unable to find any significant moderation effects of ambidexterity in the EO/performance relationship. EO and ambidexterity are considered in a micro firm context due to the greater likelihood of the EO and ambidextrous tendencies of top managers (entrepreneurs) in micro firms (as opposed to managers in larger firms) to be more representative of the overall posture of the firm. Further, we drew the research sample from a population of micro enterprises located in Trinidad, which serves as a novel sample in the study of EO.