Exploring EO strategic performance measures: value-added versus efficiency outcomes
International Journal of Entrepreneurial Behavior & Research
ISSN: 1355-2554
Article publication date: 21 April 2023
Issue publication date: 4 May 2023
Abstract
Purpose
Research on entrepreneurial orientation (EO) seeks to understand the EO–performance relationship. However, at a strategic level, performance relates to a competitive advantage and comprises both value-added and efficiency measures. Following arguments that performance is context and strategy dependent, the paper argues that EO research needs to clarify and specify the type of performance relationship measured.
Design/methodology/approach
To explore the EO–performance relationship, the research considers the agricultural sector where policy has traditionally encouraged the maximisation of efficiency in production and has only recently promoted entrepreneurship, providing fertile ground to explore different approaches to measuring performance. A survey collected detailed accounting records and context specific EO for 282 commercial farms. The authors estimate two models (Heckman selection regression and stochastic production frontier) that examine the relationships between EO and value-added/efficiency performance outcomes.
Findings
The analysis confirms the EO–value-added performance relationship, with significant positive relationships for the EO components proactiveness and innovativeness and a negative relationship for risk. No EO–efficiency performance relationship was found, despite a robust analysis of technical efficiency using detailed accounting data.
Originality/value
The paper contributes to EO theory by problematizing performance and highlighting the importance of the type of performance measured. This paper contributes empirically with findings relating to a mature industry contributes to entrepreneurship methodology by outlining how EO–performance relationships can be measured in terms of productivity and technical efficiency.
Keywords
Acknowledgements
The authors would like to thank the data collection and processing team at Duchy College, and the farmers, horticulturalists and other rural businesses who provide the confidential data for the Farm Business Survey.
Citation
Newbery, R., Roderick, S., Sauer, J., Gorton, M. and Robbins, K. (2023), "Exploring EO strategic performance measures: value-added versus efficiency outcomes", International Journal of Entrepreneurial Behavior & Research, Vol. 29 No. 4, pp. 1027-1049. https://doi.org/10.1108/IJEBR-01-2022-0022
Publisher
:Emerald Publishing Limited
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