The Relationship between Environmental Dynamism and Small Firm Structure, Strategy, and Performance

Moderating Influences on the Firm's Strategic Orientation-Performance Relationship

“…However, in benign environments, the adoption of risk-taking and aggressive behaviors to gain or maintain competitive advantage is not necessary. Consistent with the above reasoning, several studies indicate that the relationship between strategic orientation and firm performance is moderated by environmental conditions Slevin, 1989, 1991;Covin and Covin, 1990;Zahra, 1991;Lumpkin and Dess, 1996;Miles et al, 2000;Ibeh, 2003). In highly complex, dynamic, and hostile environments, a strategic orientation helps to raise the level of firm performance because the adoption of risk-taking and proactive behaviors may be necessary for survival in these environments (Mintzberg, 1973;Covin and Slevin, 1989).…”

“…Although some previous studies have analyzed the effects of particular dimensions of strategic orientation on performance (Bromiley, 1991;Doyle and Hooley, 1992;Wright et al, 1995;Goll and Rasheed, 1997), generally researchers agree that firm's strategic orientation is represented by the aggregated sum of its dimensions (Covin and Slevin, 1989;Wiklund, 1999;Miles et al, 2000;Kreiser et al, 2002). According to these authors, a firm with a strong strategic orientation is characterized by aggressive competitive behavior, the acquisition and analysis of information to improve decision-making, proactive attitudes, a future-oriented vision, and a strong propensity for risk-taking.…”

“…Empirical evidence and conceptual arguments suggest that more strongly strategic orientations are not equally suitable to all kinds of environments (Covin and Slevin, 1989;Miles et al, 2000). Organizations operating in hostile environments often obtain better results when they respond to challenging environmental conditions by taking risks, exhibiting proactive behaviors, and planning to cope effectively with the adverse forces prevalent in dynamic and complex environments (Miles et al, 2000).…”

“…However, the idea that a strategic orientation is universally beneficial may be overly simplistic. Many studies have acknowledged the importance of considering contingent influences to model the strategic orientation-performance relationship effectively (Covin and Slevin, 1991;Zahra, 1991;Dess, 1996, 2001;Miles et al, 2000;Entrialgo et al, 2001, among others). Contingency theory suggests that congruence or fit among key variables (external and internal) is critical for obtaining better performance levels.…”

The Influences of Company Characteristics, Entrepreneurship Behavior and Bank Relationship Toward Small and Medium Enterprises (Smes) Performance

“…That is based on the perceptions of all of the staff and managers in various dimensions of corporate performance measurement. According to Miles et al (2000), performance measurement is subjectively chosen for several reasons: First, companies are very cautious and keep the financial data of their company tightly.…”