Entrepreneurial orientation

Entrepreneurial orientation (EO) is a company-level strategic orientation assessment which captures an organization's strategy-making practices, managerial philosophies, and firm behaviors that are entrepreneurial in nature.[1] [2] Establishing entrepreneurial orientation within the organization is therefore considered a prerequisite for implementing organizational change intelligence. [3]

## History

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By 2015, Entrepreneurial orientation had become one of the established and researched constructs in the entrepreneurship literature.[4][5][6] A general commonality among past conceptualizations of EO is the inclusion of innovativeness, proactiveness, and risk-taking as core defining aspects or dimensions of the orientation.[7][8]

EO has been shown to be a strong predictor of firm performance with a meta-analysis of past research indicating a correlation in magnitude roughly equivalent to the prescription of taking sleeping pills and getting better sleep.[7] Still, some research has argued that EO does not enhance the performance for all firms.[9] Instead, EO can be argued not to be a simple performance enhancing attribute but rather enhancing if it is applied under the right circumstances of the firm.[10] In some cases, EO can even be disadvantageous for firms, if the situation of the firm does not fit with applying EO. Different situations (also known as context) can be the environment that the firm is situated within or internal situations such as structure and strategy.[9]

## Goals

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Entrepreneurial orientation serves as a guiding principle for the actions of individuals and organizations. [11] Farooq and Salam (2024) connected green entrepreneurial orientation and cleaner production practices (Farooq and Salam, 2024). [12] The entrepreneurial orientation of the organizational framework is particularly important in the context of digital transformation, since in a volatile, complex and dynamic context, entrepreneurial orientation strongly correlates with success, meaning that those companies that exhibit high values in this area are more successful when transforming. [13] [14]

## Assessment

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Entrepreneurial orientation has most frequently been assessed using a nine-item psychometric instrument developed by Jeff Covin and Dennis Slevin.[15][16] This instrument captures the perspective of Danny Miller that EO is a ‘collective catchall’ construct which represents what it means for a firm to be considered entrepreneurial across a wide range of contexts.[17] A seminal quote from Miller (1983, p. 780):

“In general, theorists would not call a firm entrepreneurial if it changed its technology or product line simply by directly imitating competitors while refusing to take any risks. Some proactiveness would be essential as well. By the same token, risk-taking firms that are highly leveraged financially are not necessarily entrepreneurial. They must also engage in product market or technological innovation.”

Reviews of the Entrepreneurial orientation literature indicate that the majority of prior studies have adopted Miller's perspective of EO as the combination of innovativeness, proactiveness, and risk-taking.[7][8]

Lumpkin and Dess[18] offer an alternative view of EO as the combination of five dimensions, those put forth by Miller/Covin and Slevin as well as competitive aggressiveness and autonomy. Moreover, they suggest that additional insights stand to be gained from investigating the dimensions independently. Proceeding research has suggested that there is value in examining EO according to either conceptualization depending upon the demands of the research question being addressed.[5][19] Research on the individual dimensions of risk-taking, proactiveness and innovativeness has found that the dimensions can combine in different ways to form configurations.[20]

Taken together, as a strategic orientation EO enhances firm performance as well as overall variance in a firm’s performance. Increased variance occurs as result of the observation that many entrepreneurial actions ultimately fail to generate an economic return thereby contributing to an increased distribution of firm performance outcomes.[21][22] As a core firm strategic orientation, the breadth and depth of research on EO continues to expand as the concept is adopted to understand the effects of being entrepreneurial across an increasing number of research contexts.[8]

The recent study has extended into green entrepreneurial orientation, which highlights the green technological leadership, green products, green administrative techniques, and green operation technology.[23][24]

However, the traditional use of EO has been focused on explanations, such as those within natural science, combined with a conception of entrepreneurs as possessing exceptional traits or exceptional risk-takers,[25] as heroic individuals: these perspectives are incorrect.[26][27][28] Recent studies propose a critical process re-conceptualization of EO[26] aimed at opportunity designing in uncertain contexts as well as (proto) organizational projects. The major contributions are theoretical frameworks or empirical works under a process perspective that brings together research fields that have been isolated for too long,[29] focusing on the interplay between routines and artifacts (as rules), agency and structure, sense-making and decision-making.[citation needed]

## References

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1. ^ Farooq, M.S., Salam, M., 2025. Entrepreneurial orientation dimensions and production process innovation: secondary appraisal view of organizational learning capability and organizational differentiation strategy. The Bottom Line. https://doi.org/10.1108/BL-05-2024-0055
2. ^ Anderson, Brian; Covin, Jeffrey; Slevin, Dennis (2009). "Understanding the Relationship between Entrepreneurial Orientation and Strategic Learning Capability: An Empirical Investigation". Strategic Entrepreneurship Journal. 3 (3): 218–40\. doi:10.1002/sej.72.
3. ^ Farooq, M.S., Salam, M., 2025. Entrepreneurial orientation dimensions and production process innovation: secondary appraisal view of organizational learning capability and organizational differentiation strategy. The Bottom Line. https://doi.org/10.1108/BL-05-2024-0055
4. ^ Wales, William (2015). "Entrepreneurial orientation: A review and synthesis of promising research directions". International Small Business Journal. 34 (1): 3–15\. doi:10.1177/0266242615613840. S2CID 155817673.
5. ^ a b Covin, Jeffrey; Lumpkin, G. T. (2011). "Entrepreneurial Orientation Theory and Research: Reflections on a Needed Construct". Entrepreneurship Theory and Practice. 35 (5): 855–872\. doi:10.1111/j.1540-6520.2011.00482.x. S2CID 145142439.
6. ^ Wales, William (2013), "Entrepreneurial Orientation", Encyclopedia of Management Theory, Thousand Oaks: SAGE Publications, Ltd., pp. 243–245, doi:10.4135/9781452276090, ISBN 9781412997829, retrieved 2021-07-10
7. ^ a b c Rauch, Andreas; Wiklund, Johan; Lumpkin, G. T.; Frese, Michael (2009). "Entrepreneurial Orientation and Business Performance: An Assessment of Past Research and Suggestions for the Future". Entrepreneurship Theory and Practice. 33 (3): 761–787\. doi:10.1111/j.1540-6520.2009.00308.x. hdl:10036/4249. S2CID 9182720.
8. ^ a b c Wales, William; Gupta, Vishal; Mousa, Fariss (2013). "Empirical research on entrepreneurial orientation: An assessment and suggestions for future research". International Small Business Journal. 31 (4): 357–383\. doi:10.1177/0266242611418261. S2CID 154263404.
9. ^ a b Linton, Gabriel (2016). Entrepreneurial orientation: reflections from a contingency perspective. Örebro, Sweden: Örebro University. ISBN 978-91-7529-117-8.
10. ^ Chirico, Francesco; Sirmon, David G.; Sciascia, Salvatore; Mazzola, Pietro (2011). "Resource orchestration in family firms: investigating how entrepreneurial orientation, generational involvement, and participative strategy affect performance: Resource Orchestration in Family Firms". Strategic Entrepreneurship Journal. 5 (4): 307–326\. doi:10.1002/sej.121. S2CID 59484978.
11. ^ Farooq, M.S., Salam, M., 2024. Moderated-mediation of competitive aggressiveness and green supply chain learning in the relationship between green entrepreneurial orientation and cleaner production practices. Social Responsibility Journal 21, 572–596. https://doi.org/10.1108/SRJ-05-2024-0320
12. ^ Farooq, M.S., Salam, M., 2024. Moderated-mediation of competitive aggressiveness and green supply chain learning in the relationship between green entrepreneurial orientation and cleaner production practices. Social Responsibility Journal 21, 572–596. https://doi.org/10.1108/SRJ-05-2024-0320
13. ^ Salam, M., Farooq, M.S., Shahzad, M., Ali, A., Rehman, S. ur, 2025. Unified MOOC utilization model (UMUM) for exploring computer-supported learning with educational technology in terms of MOOC utilization in higher education. Interactive Learning Environments 0, 1–37. https://doi.org/10.1080/10494820.2025.2530631
14. ^ Farooq, M.S., Salam, M., 2025. Entrepreneurial orientation dimensions and production process innovation: secondary appraisal view of organizational learning capability and organizational differentiation strategy. The Bottom Line. https://doi.org/10.1108/BL-05-2024-0055
15. ^ Covin, Jeffrey; Slevin, Dennis (1989). "Strategic Management of Small Firms in Hostile and Benign Environments". Strategic Management Journal. 10 (1): 75–87\. doi:10.1002/smj.4250100107.
16. ^ Wales, William. "Entrepreneurial Orientation". Research on Entrepreneurial Orientation. Archived from the original on 2015-02-05. Retrieved 2015-02-05.
17. ^ Miller, Danny (1983). "The Correlates of Entrepreneurship in Three Types of Firms". Management Science. 29 (7): 770–791\. doi:10.1287/mnsc.29.7.770.
18. ^ Lumpkin, G. T.; Dess, Gregory (1996). "Clarifying the Entrepreneurial Orientation Construct and Linking It to Performance". Academy of Management Review. 21 (1): 135–172\. CiteSeerX 10.1.1.499.7571. doi:10.5465/AMR.1996.9602161568.
19. ^ Covin, Jeffrey; Wales, William (2012). "The Measurement of Entrepreneurial Orientation". Entrepreneurship Theory and Practice. 36 (4): 677–702\. doi:10.1111/j.1540-6520.2010.00432.x. S2CID 144175516.
20. ^ Linton, Gabriel; Kask, Johan (2017). "Configurations of entrepreneurial orientation and competitive strategy for high performance". Journal of Business Research. 70: 168–176\. doi:10.1016/j.jbusres.2016.08.022.
21. ^ Wiklund, Johan; Shepherd, Dean (2011). "Where to from Here? Eo-as-Experimentation, Failure, and Distribution of Outcomes". Entrepreneurship Theory and Practice. 35 (5): 925–946\. doi:10.1111/j.1540-6520.2011.00454.x. S2CID 154754919.
22. ^ Wales, William; Patel, Pankaj; Lumpkin, G. T. (2013). "In Pursuit of Greatness: Ceo Narcissism, Entrepreneurial Orientation, and Firm Performance Variance". Journal of Management Studies. 50 (6): 1041–1069\. doi:10.1111/joms.12034. S2CID 143093645.
23. ^ Pratono, A.H.; Darmasetiawan, N.K.; Jeong, B.G.o (2019). "Achieving sustainable competitive advantage through green entrepreneurial orientation and market orientation: The role of inter-organizational learning". The Bottom Line. doi:10.1108/BL-10-2018-0045. S2CID 159250144.
24. ^ Jiang, Wenbo; Chai, Huaqi; Shao, Jing; Feng, Taiwen (2018-10-10). "Green entrepreneurial orientation for enhancing firm performance: A dynamic capability perspective". Journal of Cleaner Production. 198: 1311–1323\. doi:10.1016/j.jclepro.2018.07.104. ISSN 0959-6526. S2CID 158485714.
25. ^ Duening, Thomas N. (January 2010). "Five Minds for the Entrepreneurial Future". The Journal of Entrepreneurship. 19 (1): 1–22\. doi:10.1177/097135570901900101. ISSN 0971-3557. S2CID 154769748.
26. ^ a b Wiklund, Johan; Shepherd, Dean A. (2011-05-25). "Where to From Here? EO-as-Experimentation, Failure, and Distribution of Outcomes". Entrepreneurship Theory and Practice. 35 (5): 925–946\. doi:10.1111/j.1540-6520.2011.00454.x. ISSN 1042-2587. S2CID 154754919.
27. ^ Rauch, Andreas; Wiklund, Johan; Lumpkin, G.T.; Frese, Michael (May 2009). "Entrepreneurial Orientation and Business Performance: An Assessment of Past Research and Suggestions for the Future". Entrepreneurship Theory and Practice. 33 (3): 761–787\. doi:10.1111/j.1540-6520.2009.00308.x. hdl:10036/4249. ISSN 1042-2587. S2CID 9182720.
28. ^ Sarasvathy, Saras D. (April 2001). "Causation and Effectuation: Toward a Theoretical Shift from Economic Inevitability to Entrepreneurial Contingency". Academy of Management Review. 26 (2): 243–263\. doi:10.5465/amr.2001.4378020. ISSN 0363-7425.
29. ^ Hjorth, Daniel; Holt, Robin; Steyaert, Chris (2015-08-20). "Entrepreneurship and process studies". International Small Business Journal: Researching Entrepreneurship. 33 (6): 599–611\. doi:10.1177/0266242615583566. ISSN 0266-2426.