Entrepreneurial orientation, firm market power and opportunism in networks

Abstract

Purpose– This study aims to examine the impact of entrepreneurial orientation, firm market power and their interaction on opportunism in horizontal exchange networks. The aim is to investigate how entrepreneurial orientation and market power individually can lead to opportunism, but possessing both characteristics will mitigate such behavior.Design/methodology/approach– Based on an analysis of 108 firms in 25 networks using a panel-corrected standard errors approach, the study tests hypotheses regarding how entrepreneurial orientation, firm market power and their interaction impact opportunism within a focal horizontal network.Findings– The results of the analysis show that entrepreneurial orientation and firm market power are both positively related to network opportunism, but when firms possess both characteristics, opportunism toward fellow network actors is mitigated.Research limitations/implications– Research on entrepreneurial orientation has primarily examined the positive outcomes of the strategic orientation. Firm power has been studied as an antecedent of opportunism and governance mechanisms. This study examines the joint impact of the two and brings new insight to the research streams.Practical implications– Horizontal networks are conduits for resource and knowledge exchange, yet managers need to be concerned about how firms seek competitive advantage. Our framework suggests that managers should be concerned about dealing with network actors with an entrepreneurial orientation philosophy or high market power, but when firms possess both, they are deemed safer partners.Originality/value– The manuscript extends research on entrepreneurial orientation, firm power and horizontal networks. While both entrepreneurial orientation and power may impede networking relationships, this paper shows that firms that possess both may be the best relational partners.