Entrepreneurial Orientation and Environmental Hostility: An Assessment of Small, Independent Restaurant Businesses

Abstract

The strategic management literature suggests there is an enduring theoretical tension regarding the idea of particularly appropriate strategy-environment combinations versus the concept of equally viable strategies. This study addresses the question of whether certain entrepreneurial postures are equally effective regardless of the level of environmental hostility and/or whether success is contingent on achieving a match between entrepreneurial posture and environmental hostility. Cluster analysis was used to group a sample of small, independent restaurant businesses into entrepreneurial and conservative types. This classification suggests that restaurateurs emphasize different aspects of entrepreneurship and that this focus is associated with differences in their choice of strategies and performance. In general, entrepreneurial types were associated with higher performance compared with conservative types, which implies that the entrepreneurial and conservative postures are not equally viable strategic approaches. Contrary to normative theory, results suggest that as the environment becomes more hostile, small, independent restaurant businesses tend to adopt conservative strategies and avoid innovative, risk-taking strategies.