Abstract
Purpose: This study seeks to model the nexus between environmental dynamism, environmental hostility, five sub-dimensions of entrepreneurial orientation (EO) (innovativeness, pro-activeness, risk-taking, competitive aggressiveness and autonomy) and employment growth.Design/methodology/approach: Based on a positivist research philosophy, this study adopts a quantitative methodological approach, which entails an online survey. Data is obtained through probability sampling of 1031 small, medium and micro enterprise businesses (SMMEs) and analysed using structural equation modelling (SEM).Findings/results: The findings reveal only four dimensions namely proactive-innovation, risk-taking, competitive aggressiveness, and autonomy as statistically visible, which is contrary to five as postulated in theory. In addition, it was found that the relationships between environmental hostility, environmental dynamism and the dimensions of EO were statistically significant. Conversely, the relationships between the dimensions of EO and employment growth were statistically insignificant except within the category of medium-sized businesses (MSBs) in which proactive-innovation and competitive aggressiveness indicated a statistically significant negative association with employment growth.Practical implications: A dynamic and hostile environment is essential to increased entrepreneurial intensity among SMMEs, but the size of the firm can be a determinant in their capacity for employment generation.Originality/value: The association between EO and employment growth has attracted less attention in research despite its theoretical and practical significance. Furthermore, studies on the antecedents of EO such as its relationship with environmental dynamism and hostility are limited. Following a multidimensional approach to EO, this empirical study illustrates its relationship with employment growth incorporating the component of the business environment. Regarding the plausibility of these associations, it distinguishes MSBs from the other categories of businesses within the SMME cohort.
Highlights
According to Bogatyreva, Beliaeva, Shirokova and Puffer (2017, p. 338), the environment within which a business operates often stimulates its strategic behaviour
The analysis revealed that employment growth (EG) indicated by the annual growth rate of employees (G) were loaded separately as one variable
As the relationships hypothesised between environmental dynamism (ED) and environmental hostility (EH) and PA-INNV, RT, competitive aggressiveness (CA) and AN were statistically significant in the positive direction, it implies that increased ED and EH can be related to higher entrepreneurial behaviour
Summary
According to Bogatyreva, Beliaeva, Shirokova and Puffer (2017, p. 338), the environment within which a business operates often stimulates its strategic behaviour. According to Bogatyreva, Beliaeva, Shirokova and Puffer 338), the environment within which a business operates often stimulates its strategic behaviour. The external environment of business presents myriad opportunities, along with competition and regulation, constituting a mix that impacts its competitiveness and survival The environment can limit exploitable opportunities available to the business and threaten its survival. 64; Rauch, Wiklund, Lumpkin, & Frese, 2009, p. Given this complexity, the entrepreneurial orientation (EO) of a firm can be considered a critical factor because it influences strategic decision-making and overall firm competitiveness 200; Rauch et al, 2009, p. EO as a consolidated construct is empirically confirmed to have a largely positive relationship with business performance by using both financial and non-financial indicators (Al-Mamary et al, 2020, p. 200; Rauch et al, 2009, p. 761)
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a call
