Abstract
Contingency theory points out the adaptive management is crucial point to sustainable firm performance. This research aims to determine the relative importance of a set of variables comprising the four entrepreneurial management variables, i.e. strategic orientation, organization culture, organization structure, and reward system, and a set of environmental turbulence variables in predicting firm performance. This research uses firm-level data with observed population of this research is SMEs in Surabaya, Indonesia. Through adopting hierarchical regression approach and partial least square method, this study indicates that moderating effect of environmental turbulence changes the direction of relationship between entrepreneurial management and firm performance. During low environmental turbulence, entrepreneurial management has positive impact on firm performance, but the direction changes. Entrepreneurial management has negative impact on firm performance during high environmental turbulence.
Highlights
IntroductionOne of the most popular views consider that entrepreneurs refers to self-employed people or small business
There is warm glow of academic debate over the concept of entrepreneur
The study contributes to debate at the contingency theory, which lays emphasis on the capacity of SMEs to respond environmental turbulence
Summary
One of the most popular views consider that entrepreneurs refers to self-employed people or small business. Small businesses provide some advantages, including job creation, strong personal relationship within the small organization structure, entrepreneurial culture which enable innovation and success story for the future (Longenecker et al, 2013). Another view considers that entrepreneur is associated with innovator and incorporate it in high-growth business. This concept indicates that an economy with small business tends to be stagnant. The business remains small because they are stuck in
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