Strategic Process Effects on the Entrepreneurial Orientation-Sales Growth Rate Relationship

• Published in: Entrepreneurship theory and practice Vol. 30; no. 1; pp. 57 - 81
• Main Authors: Covin, Jeffrey G., Green, Kimberly M., Slevin, Dennis P.
• Format: Journal Article
• Language: English
• Published: Oxford, UK and Malden, USA Blackwell Publishing Ltd 01.01.2006; SAGE Publications; SAGE PUBLICATIONS, INC
• Subjects: Business growth; Business management; Business strategies; Correlation analysis; Decision making; Economic growth; Entrepreneurs; Entrepreneurship; Learning; Manufacturing; Organizational behavior; Sales; Strategic behaviour; Strategic management; Studies
• ISSN: 1042-2587; 1540-6520
• DOI: 10.1111/j.1540-6520.2006.00110.x

This research examined the effects of three strategic process variables—strategic decision–making participativeness, strategy formation mode, and strategic learning from failure—on the entrepreneurial orientation (EO)–firm sales growth rate relationship. Results based on a sample of 110 manufacturing firms indicated a positive effect of EO on sales growth rate. Moreover, the relationship between EO and sales growth rate was more positive among firms that employ autocratic decision making and that exhibit an emergent strategy formation process. Perceptions of proficiency at learning from strategic mistakes differentially affected the growth rates of firms at different ends of the EO continuum, but in manners inconsistent with the hypothesized relationship.