Nonlinear Effects of Entrepreneurial Orientation on Small Firm Performance: The Moderating Role of Resource Orchestration Capabilities

This research examines the nature of the relationship between entrepreneurial orientation (EO) and small firm performance. The results from a sample of 258 Swedish small firms indicate an inverted U-shaped relationship between EO and small firm performance. Drawing upon resource orchestration theory, we theorize that information and communication technology capability and network capability help small firms overcome their resource-related ‘liabilities of smallness’ and observe these capabilities to increase the optimal levels and performance-related returns from EO. In the absence of these capabilities, returns to firm performance from increasing EO were observed to reach harmful levels. The study implications are discussed. Copyright © 2013 Strategic Management Society.

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