Knowledge‐based theory, entrepreneurial orientation, stakeholder engagement, and firm performance

Abstract

Research Summary Our understanding of entrepreneurial orientation (EO) is limited by the inattention to why a firm arranges itself to give rise to EO, what sets its strategic intent, and what affects its contribution to performance. These omissions have led to calls for a causally adjacent theory of EO. Grounded in knowledge‐based theory, we investigated (a) how knowledge production gives rise to EO, (b) how the relationship between EO and profitability is mediated by knowledge use, and (c) how this relationship between EO and knowledge use is moderated by stakeholder engagement. Using multirespondent, multisource data from small‐size and mid‐size enterprises in two economically distinct East Asian countries, Taiwan and Japan, empirical evidence supports our theory. Our findings are consistent across both studies. We contribute a knowledge‐based theory of EO. Managerial Summary Why do some firms organize to be entrepreneurial while others do not, and why do some entrepreneurially oriented firms profit more financially than others? We find that those firms that organize processes to accumulate, aggregate, activate, store, manage, and distribute knowledge become more entrepreneurial oriented as the means to create wealth from this “knowledge production.” In other words, knowledge production can affect perceptions of opportunities and resources, leading to choices about organizational arrangements to best use knowledge. However, we find that the firm also needs to be adept at knowledge use to profit financially from its entrepreneurial endeavors, and leading firms utilize stakeholder engagement to strengthen the relationship between entrepreneurial behavior and knowledge use on the route to greater profitability.

Entrepreneurial Orientation in Embedding Knowledge-Based Resources in the Organization

“…Based on this relationship, long-term strategic attitudes are created. According to Hughes et al (2021), EO modifies organizational forms and stimulates organizational behaviour in order to better use the knowledge initially dispersed among people.…”

Sustainable management of electronic waste: Empirical evidences from a stakeholders' perspective

“…Stakeholders are individuals or groups that affect or are influenced by the achievement of organizational goals. Stakeholder engagement explains the connection between the actions and the consequences (Hughes et al, 2021). Indeed, stakeholder engagement influences the economic and social values of the organization in the medium and long term (Cillo et al, 2019; Singh et al, 2020).…”

Exploring the role of external pressure, environmental sustainability commitment, engagement, alliance and circular supply chain capability in circular economy performance

“…, 2019). Stakeholder engagement promotes the development of collaboration with stakeholders (Sharma and Henriques, 2005), and allows access to new information and knowledge (Hughes et al. , 2021).…”

“…Relational collaboration helps SMEs to better engage supply chain partners to facilitate the implementation of CE principles such as refurbish, repair, remanufacture and resell/reuse (Jabbour et al, 2019). Stakeholder engagement promotes the development of collaboration with stakeholders (Sharma and Henriques, 2005), and allows access to new information and knowledge (Hughes et al, 2021).…”