The Mediating Role of Entrepreneurial Orientation in the Task Environment–Performance Relationship

Abstract

Despite the importance of the external task environment for firm performance, little is known about the mechanisms that enable firms to benefit from a specific environmental setting. The authors argue that firms adjust their entrepreneurial orientation (EO) to the external environment and use it as a mechanism to transform the advantages provided by the environment into above-average performance levels. Specifically, the authors use meta-analysis supplemented by structural equation modeling to explore the links among environmental munificence, hostility, dynamism and complexity, EO, and firm performance in a mediation model. The results suggest that environmental munificence, dynamism, and complexity affect EO and, in turn, firm performance. The authors discuss the meta-analytical findings with respect to their theoretical contribution and their practical implications.