Knowledge‐based resources, entrepreneurial orientation, and the performance of small and medium‐sized businesses

TLDR

Management discretion in resource manipulation can create competitive advantage, yet resource‑based research and entrepreneurship studies have largely overlooked how internal resources interact with a firm’s organizational structure and entrepreneurial orientation. The study argues that entrepreneurial orientation reflects a key organizational dimension. Knowledge‑based resources that support discovery and exploitation are positively linked to performance, and entrepreneurial orientation strengthens this link. © 2003 John Wiley & Sons, Ltd.

Abstract

Abstract While theory suggests that management has discretion in manipulating resources in order to build competitive advantage, resource‐based research has focused on the characteristics of resources, paying less attention to the relationship between those resources and the way firms are organized. In explaining performance, entrepreneurship scholars have focused on a firm's entrepreneurial strategic orientation (EO), leaving its interrelationship with internal characteristics aside. We argue that EO captures an important aspect of the way a firm is organized. Our findings suggest that knowledge‐based resources (applicable to discovery and exploitation of opportunities) are positively related to firm performance and that EO enhances this relationship. Copyright © 2003 John Wiley & Sons, Ltd.