The performance effect of network and managerial capabilities of entrepreneurial firms

Abstract

Building on the organizational capabilities view, this study explores the impact of network and managerial capabilities on the performance of entrepreneurial firms in the architecture and real estate sector. We apply an extended organizational capabilities model by integrating Porter's value chain model and Grant's hierarchy of organizational capabilities. Starting from differences in entrepreneurial orientation between architecture and real estate development firms, we argue that under higher environmental uncertainty, network capabilities are more important for the performance of architecture firms whereas managerial capabilities are more important for the performance of real estate development firms. Employing data from Austria, Germany, and Switzerland, the research results support the hypotheses. This study integrates Porter's value chain concept and the organizational capabilities model and delivers a contribution to the organizational capability theory. In addition, it contributes to the entrepreneurship literature by showing that network capabilities are more important for creating competitive advantage in entrepreneurial firms than in other firms.

Balanced scorecard in SMEs: effects on innovation and financial performance

“…Additionally, by highlighting the characteristics of BSC that provide innovation efficiency, our research illustrates a highly diffused managerial practice that can offer the necessary conditions for decentralized decision-making managed via formal structures and written plans that support superior ability to innovate (Cosh et al 2012;Srećković 2017).…”

“…However, in SMEs, the flatter structure, faster communication and greater informality of routines and procedures (Srećković 2017) make it more difficult to identify those attributes of the use of BSC that stimulate the development of exploratory innovations in large firms.…”

Skills combinations and firm performance

“…Management skills are particularly difficult to measure as they are fundamentally intangible, and overlap with managerial practices or activities, but not completely (O'Gorman et al 2005). Consequently managerial efficacy, or managerial skills, are often proxied by the use of specific managerial practices (see for instance Haber and Reichel 2007;Srećković 2018), for instance the use or development of management skills, namely the introduction of new business practices for organising work procedures, or new methods of organising work responsibilities and decision making.…”

The Role of Networking Capability on Organization Performance: A Perspective of Private Universities in Kenya

“…Networking capability is positively correlated with business performance [11]. It is also alluded that networking capability improves firm performance [18][19].…”

“…Further, a study seeking to determine the networking capability related factors that improved the performance of German, Chinese, and Turkish companies concluded that factors affecting performance varied across countries [18]. On the other hand, it was concluded that in cases of environmental uncertainties, network capability help improve the performance of architectural companies while managerial capability help in the real estate firm's performance [19].…”