The relationship between entrepreneurial orientation dynamic capabilities and firm performance: an exploratory study of small Turkish firms

Abstract

Entrepreneurial orientation (EO) and dynamic capabilities (DCs) are widely recognised as an important source of competitive advantage and superior performance of firms. EO is often described as mindset of firms which helps the firms to grow and perform better. EO creates a fertile internal environment which broadens firms’ scope to reconfigure their existing asset base and processes. Hence, drives the building and development of DCs. DCs enable the firms to sustain competitive advantage by creating value and allow the firms to capture entrepreneurial rents. Nonetheless, very few studies have addressed both concepts in the same study. This paper is an attempt to find a link between EO, DCs and small firm performance. To explore this relationship study used a qualitative case study approach. In this explorative study, ten case studies were conducted on high technology firms. Our findings reinforce the existing insights in literature that EO has a positive influence on small firm performance. An interesting finding of our study indicates that EO is fundamental for development of DCs. Further, study reveal that EO has a positive impact on building of DCs that, in turn, positively affects firm performance.