Relating entrepreneurial orientation with operational responsiveness

Abstract

PurposePremised on dynamic capability theory, the purpose of this paper is to explore the link between entrepreneurial orientation (EO) and operational responsiveness (OR). In addition, grounded in contingency theory, the authors examine the roles of competitive intensity and technological turbulence in affecting the entrepreneurial orientation and OR link.Design/methodology/approachThis study proposes that firms’ entrepreneurial initiatives in terms of innovativeness, proactiveness and risk-taking significantly affect their responsiveness. Competitive intensity and technological turbulence moderate the EO and OR relationship. Using hierarchical regression analysis, the authors analyze the data generated from a sample of 164 small-and-medium enterprises in the USA.FindingsThe findings show that entrepreneurial initiatives are instrumental in responding to market requirements, which in turn results in superior performance. The authors also find that the interactive effects of innovativeness/risk-taking and competitive intensity are significant and positive, while those of innovativeness/proactiveness and technological turbulence on responsiveness are significant but negative. These findings imply that OR is effective when the level of competitive intensity is high while technological turbulence is low.Research limitations/implicationsThe authors conclude the paper by suggesting that entrepreneurial actions are pre-requisites for OR, which becomes effective only when the market experiences a moderate level of competition and a low level of technological change. The study provides implications for cross-functional research in the areas of entrepreneurship and operations management (OM) and also suggests future directions in this research stream.Originality/valueAlthough responsiveness has been recognized as a critical competitive capability in the OM literature, its relationship with EO is not fully understood and has not been empirically tested. Moreover, the interplay between EO and competitive intensity/technological turbulence and their effects on effective OR have not been gauged in the past.