Entrepreneurial orientation in emerging economics: networking as sixth dimension

Abstract

Entrepreneurial Orientation (EO) has been a subject of more than three decades of research and has become a cornerstone of strategic management and corporate entrepreneurship literature. Currently, two prominent conceptualizations of EO exists in literature – the Miller (1983) unidimensional view of EO and the Lumpkin and Dess (1996) multidimensional view of EO. Between these two competing conceptualizations, the Miller (1983) EO concept has been studied extensively and currently forms the major corpus of extant research in EO. On the contrary, despite being present for almost two decades and garnering a large number of citations, empirical studies examining the Lumpkin and Dess (1996) notion of EO have been few. Since co-existence of both the conceptualizations would provide unique insights for EO theory, scholars have called for studies pertaining to a better comprehension of the Lumpkin and Dess (1996) formulation of EO. Simultaneously, the examination of EO phenomena in extant research has mostly been limited to matured western economies and among emerging economies, to China. Scholars suggested that significant insights for the EO theory could be gained by attending to the specific characteristics of other emerging economies like Brazil, India or Russia. Finally, both the dominant conceptualization of EO has been developed in western economies context. Scholars have questioned the valence of such theories when examining entrepreneurial phenomena in emerging economies and have insisted on developing EO conceptualizations based on careful attention to the conditions of such settings. To address these research gaps, this thesis builds on the Lumpkin and Dess’ (1996) ideation of EO and proposes a novel conceptualization of EO for emerging economies. Owing to the substitution for formal institutional mechanisms by informal institutional constraints fostered through networking, as well as recent developments in literature which suggests that networking is entrepreneurial action, we argue that EO for emerging economies includes networking as a salient dimension in addition to the original five dimensions. This thesis then undertakes three related studies to verify this novel theorization of EO empirically. While a suitable instrument for measuring the dimensions of EO was derived in the first study, the second and the third study respectively established networking as a dimension of EO and substantiated the effects of the individual dimensions of EO on firm performance in emerging economies. The first study of this dissertation derived a content adequate EO scale. Content adequacy is the most basic psychometric property that should be assessed of any measurement instrument. However, evidence for content adequacy was not found for any of the few, extant five-dimensional EO scales. Utilizing the methods developed by Schriesheim and colleagues (1993, 1999), a two-stage study was undertaken first to explore and then confirm the content adequacy of a five-dimensional EO scale. The final scale had factor structures in congruence with the theoretical dimensions of interest. Thus, the resultant scale showed fine agreement with theory and was utilized in the subsequent studies of this thesis. In the second study, three sets of hypotheses were drawn to validate networking as the sixth dimension of EO in emerging economies and to test for the enhanced effect of EO on new venture performance due to networking. While the first set of hypotheses aimed at verifying the reliability and validity of the networking construct, the second replicated that for the six-dimensional EO construct. The third set of hypotheses strived to establish that the six-dimensional EO model was a better predictor of new venture performance than the five-dimensional model. Analysis of data, collected from new ventures in India, was done using confirmatory factor analysis and structural equation modeling. The results supported the hypotheses charted out in this study and thus, furnished evidence to assert networking as the sixth dimension of EO in emerging economies. The final study supplemented the findings of the second one by undertaking a deconstructive approach to the examination of the individual dimensions of EO from a universalistic perspective. By analyzing the same set of data, using multiple linear regression, this study tested the Lumpkin and Dess (1996) theory of EO in emerging economies context and highlighted the dimensions of EO that are critical in securing superior firm performance in such settings. Simultaneously, this part also demonstrated that including networking as a dimension of EO enhances its explanatory prowess and thus, presented additional empirical evidence to justify that networking must be a dimension of EO. Through these three studies, this thesis makes contributions to the Lumpkin and Dess’ (1996) conceptualization of EO and the understanding of EO phenomena in emerging economies context. Most significantly, this thesis produces evidence that testifies networking to be the sixth dimension of EO in emerging economies. This novel conceptualization of EO for emerging economies is expected to advance the scholarly discourse towards building a conceptual family of EO constructs. Additionally, implications for researchers and practitioners are also drawn from this thesis. For researchers, the content adequate EO scale is expected to be instrumental in promoting further research in the sparsely studied five-dimensional EO research domain. For entrepreneurs and managers, the findings add relevance for implementing the networking concept and suggesting the key dimensions of EO for success in emerging economies. This thesis thus serves to build a more comprehensive theory of EO.