RELATIONSHIP BETWEEN ENTREPRENEURIAL ORIENTATION AND FIRM PERFORMANCE DURING CRISIS: EVIDENCE FROM RUSSIAN FIRMS
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Introduction 6
1. Entrepreneurial orientation: main research directions 9
1.1 The concept of entrepreneurial orientation 9
1.1.1 Definitions of entrepreneurial orientation 9
1.1.2 Evolution of EO studies 12
1.1.3 Measurement approaches of Entrepreneurial Orientation 14
1.2 Analysis of the main directions of studies of the relationship between Entrepreneurial
Orientation and performance indicators of the firm 16
1.2.1 Analysis of studies of the direct relationship between entrepreneurial orientation and
performance indicators 19
1.3 Summary of Chapter 1 30
2. Crisis in the economy and its impact on the companies 31
2.1 Business performance in crisis 31
2.2 Crisis in Russia and its impact on Russian companies 36
2.3 Theoretical model of the study 38
3. The role of entrepreneurial orientation in firm’s ability to overcome the economic crisis: results of
empirical analysis 41
3.1 Research design 41
3.1.1 Description of the data sources 42
3.1.2 Choice of the research sample 44
3.1.3 Process of the empirical study 45
3.2 General information about the cases 47
3.3 Cross-case analysis 51
3.4 Discussion of the findings 74
Conclusions and Implications 81
List of References 85
Appendix. Interview guide 91
1. Entrepreneurial orientation: main research directions 9
1.1 The concept of entrepreneurial orientation 9
1.1.1 Definitions of entrepreneurial orientation 9
1.1.2 Evolution of EO studies 12
1.1.3 Measurement approaches of Entrepreneurial Orientation 14
1.2 Analysis of the main directions of studies of the relationship between Entrepreneurial
Orientation and performance indicators of the firm 16
1.2.1 Analysis of studies of the direct relationship between entrepreneurial orientation and
performance indicators 19
1.3 Summary of Chapter 1 30
2. Crisis in the economy and its impact on the companies 31
2.1 Business performance in crisis 31
2.2 Crisis in Russia and its impact on Russian companies 36
2.3 Theoretical model of the study 38
3. The role of entrepreneurial orientation in firm’s ability to overcome the economic crisis: results of
empirical analysis 41
3.1 Research design 41
3.1.1 Description of the data sources 42
3.1.2 Choice of the research sample 44
3.1.3 Process of the empirical study 45
3.2 General information about the cases 47
3.3 Cross-case analysis 51
3.4 Discussion of the findings 74
Conclusions and Implications 81
List of References 85
Appendix. Interview guide 91
Nowadays the focus of global economic development and therefore the focus of academic interest are moving towards emerging economies. Some experts claim that emerging markets became the engines of global economic development (Maxwell, 2015). Emerging markets have been researched separately from the developed ones because of the economic, political and cultural differences. Due to these differences emerging countries create a suitable environment to test and improve existing theories in different contexts.
In recent research works areas of entrepreneurship and emerging markets development are frequently intercrossed, because entrepreneurship is a necessary factor of growth and modernization through the wide spectrum of innovations, increased competitiveness and unique combination of resources, including both facilities and people resources (Alon, Rottig, 2013).
Businesses in emerging markets perform in a highly uncertain and unpredictable environment. Rapid growth of emerging markets drive businesses to use not only extensive methods of development, increasing their capabilities, but also implementation of innovative approaches to achieve competitive advantages, get increased long-term value, maximize the profit and face growing requirements of the market (Alon, Jiao, Kwong, Cui, 2013).
The development of effective business strategies becomes crucial in order to achieve all these goals. Entrepreneurially oriented strategy is based on building opportunity-seeking behavior, gaining value and creating competitive advantages of the business across the long-term period (Hitt, Ireland, Sirmon, Trahms, 2011). Entrepreneurial orientation refers to the overall strategic philosophy, which determines the features of firm’s behavior on the market (Covin, Slevin, 1991). One of the earliest findings on this topic emphasizes the positive connection between acting entrepreneurially and achieving competitive advantages.
Research gaps in entrepreneurial orientation studies
Many researchers made an input to the understanding of the concept and implementation of entrepreneurial orientation. Research on this topic has existed for more than thirty years. EBSCO database search on the EO topic shows more than 2000 articles in scientific journals. The interest to the topic is increasing year by year (Miller, 2011). However, there are still some gaps in the literature, which may be filled in with future studies.
Business environment in the world is rapidly changing nowadays, at the same time the life cycles of products and businesses are shortening. However, as time goes by, the set of available tangible resources for companies is not increasing tremendously. Therefore, businesses have to rely on intangible resources and techniques to win the competition (such as anticipating consumers’ demand and involving innovative techniques (Ireland, Hitt, Sirmon, 2003, p. 57). Nowadays Russian economy experiences severe crisis. Businesses face the question: how to create a strategy in crisis environment in order to survive and develop? The answer to this question may be the development of entrepreneurially oriented strategy.
There are many empirical evidences, supporting the positive relationship between the high level of entrepreneurial orientation and firm performance in certain conditions. Although it is not correct to assume that this relationship is positive by definition, because certain scholars have found empirical evidences to the presence of weak relationship or even negative nature of the relationship. The degree of the effectiveness of entrepreneurial behavior is highly dependent on different factors, both internal and external (Shepherd, Wiklund, 2005).
Under an influence of different factors the strength and nature of relationship is different. In some cases scholars reveal positive relationship, in some cases they are negative, sometimes they are even non-linear (Shirokova, Bogatyreva, Beliaeva 2015). Different shocks in economy may also shape this relationship somehow. Among the external factors, influencing the EO-performance relationship, scholars studied hostility of the environment, organizational structure of the firm, industry lifecycle, age and size of the firms and many other conditions. However, the effect of crisis was considered by scholars as a factor, which may influence this relationship in the only one study, investigating the role of EO in mitigating the crisis on Finnish market (Soininen, et al., 2012). Crisis is defined as an unexpected, dramatic and unprecedented event that forces any system into chaos (Seeger, Sellnow, Ulmer, 1998). Not every context suggests the scholar suitable environment for studying the crisis.
The implementation of entrepreneurially oriented strategy requires part of scarce resources of the firm to be spent and the effect of crisis on the relationship between entrepreneurial orientation and firm performance and role of entrepreneurial orientation in overcoming the crisis on emerging market is unknown.
Current study is motivated with the necessity to find empirical evidences to the effect of crisis on the relationship between entrepreneurially oriented strategy and the performance of the firm on emerging market. The result of the study will give business insights on whether entrepreneurial orientation may help firm to overcome the crisis and in which way it does it. The contribution of entrepreneurial orientation into firm’s ability to overcome the crisis is evaluated on the base of model EO-performance relationship.
Research question and methodology
Entrepreneurial behavior of the company may transform the paradigm of crisis for the firm from negative perspective to the environment of brilliant opportunities, promising high performance and development to the company. On the other hand, resource-based view suggests an organization to be perceived as a set of unique resources. The implementation of EO requires part of these recourses to be spent on development of innovations, taking risky decisions and pursuing opportunities. During crisis in the economy it’s especially important to allocate the recourses wisely.
Study of the chosen topic will bring evidences to business whether EO is a suitable strategic orientation to develop on times of crisis. With the existing level of uncertainty if the outcomes of implication of EO strategy in crisis in the specific context of Russia brings increased performance, business owners miss the opportunity to improve the performance of their firms. Therefore, business implications of the study are closely related to realities of nowadays situation.
The thesis aims to answer the following research question: “How does entrepreneurial orientation help firms to improve their performance during the crisis in Russian market?” Therefore, the main goal is to investigate the relationship between EO and performance indicators in context of economic crisis in Russian market and understand whether EO helps the company to overcome the crisis. The research question is divided into several sub-questions:
1) How is EO related to the performance indicators under an influence of different factors?
2) How does crisis influence the development of each EO dimension?
3) Which role do EO and each of its dimensions take in overcoming the crisis?
The research design of the empirical part appeals to comparative multiple case-study. Multiple sources technique is implemented with the interview as primary source of the information and additional sources: documentation, open Internet resources and SPARK database. EO is perceived as multi-dimensional concept, consisting of three dimensions: innovativeness, proactiveness and risk-taking. Examined companies in the case study are Russian enterprises from four different industries, experiencing the effect of crisis on their activity.
In recent research works areas of entrepreneurship and emerging markets development are frequently intercrossed, because entrepreneurship is a necessary factor of growth and modernization through the wide spectrum of innovations, increased competitiveness and unique combination of resources, including both facilities and people resources (Alon, Rottig, 2013).
Businesses in emerging markets perform in a highly uncertain and unpredictable environment. Rapid growth of emerging markets drive businesses to use not only extensive methods of development, increasing their capabilities, but also implementation of innovative approaches to achieve competitive advantages, get increased long-term value, maximize the profit and face growing requirements of the market (Alon, Jiao, Kwong, Cui, 2013).
The development of effective business strategies becomes crucial in order to achieve all these goals. Entrepreneurially oriented strategy is based on building opportunity-seeking behavior, gaining value and creating competitive advantages of the business across the long-term period (Hitt, Ireland, Sirmon, Trahms, 2011). Entrepreneurial orientation refers to the overall strategic philosophy, which determines the features of firm’s behavior on the market (Covin, Slevin, 1991). One of the earliest findings on this topic emphasizes the positive connection between acting entrepreneurially and achieving competitive advantages.
Research gaps in entrepreneurial orientation studies
Many researchers made an input to the understanding of the concept and implementation of entrepreneurial orientation. Research on this topic has existed for more than thirty years. EBSCO database search on the EO topic shows more than 2000 articles in scientific journals. The interest to the topic is increasing year by year (Miller, 2011). However, there are still some gaps in the literature, which may be filled in with future studies.
Business environment in the world is rapidly changing nowadays, at the same time the life cycles of products and businesses are shortening. However, as time goes by, the set of available tangible resources for companies is not increasing tremendously. Therefore, businesses have to rely on intangible resources and techniques to win the competition (such as anticipating consumers’ demand and involving innovative techniques (Ireland, Hitt, Sirmon, 2003, p. 57). Nowadays Russian economy experiences severe crisis. Businesses face the question: how to create a strategy in crisis environment in order to survive and develop? The answer to this question may be the development of entrepreneurially oriented strategy.
There are many empirical evidences, supporting the positive relationship between the high level of entrepreneurial orientation and firm performance in certain conditions. Although it is not correct to assume that this relationship is positive by definition, because certain scholars have found empirical evidences to the presence of weak relationship or even negative nature of the relationship. The degree of the effectiveness of entrepreneurial behavior is highly dependent on different factors, both internal and external (Shepherd, Wiklund, 2005).
Under an influence of different factors the strength and nature of relationship is different. In some cases scholars reveal positive relationship, in some cases they are negative, sometimes they are even non-linear (Shirokova, Bogatyreva, Beliaeva 2015). Different shocks in economy may also shape this relationship somehow. Among the external factors, influencing the EO-performance relationship, scholars studied hostility of the environment, organizational structure of the firm, industry lifecycle, age and size of the firms and many other conditions. However, the effect of crisis was considered by scholars as a factor, which may influence this relationship in the only one study, investigating the role of EO in mitigating the crisis on Finnish market (Soininen, et al., 2012). Crisis is defined as an unexpected, dramatic and unprecedented event that forces any system into chaos (Seeger, Sellnow, Ulmer, 1998). Not every context suggests the scholar suitable environment for studying the crisis.
The implementation of entrepreneurially oriented strategy requires part of scarce resources of the firm to be spent and the effect of crisis on the relationship between entrepreneurial orientation and firm performance and role of entrepreneurial orientation in overcoming the crisis on emerging market is unknown.
Current study is motivated with the necessity to find empirical evidences to the effect of crisis on the relationship between entrepreneurially oriented strategy and the performance of the firm on emerging market. The result of the study will give business insights on whether entrepreneurial orientation may help firm to overcome the crisis and in which way it does it. The contribution of entrepreneurial orientation into firm’s ability to overcome the crisis is evaluated on the base of model EO-performance relationship.
Research question and methodology
Entrepreneurial behavior of the company may transform the paradigm of crisis for the firm from negative perspective to the environment of brilliant opportunities, promising high performance and development to the company. On the other hand, resource-based view suggests an organization to be perceived as a set of unique resources. The implementation of EO requires part of these recourses to be spent on development of innovations, taking risky decisions and pursuing opportunities. During crisis in the economy it’s especially important to allocate the recourses wisely.
Study of the chosen topic will bring evidences to business whether EO is a suitable strategic orientation to develop on times of crisis. With the existing level of uncertainty if the outcomes of implication of EO strategy in crisis in the specific context of Russia brings increased performance, business owners miss the opportunity to improve the performance of their firms. Therefore, business implications of the study are closely related to realities of nowadays situation.
The thesis aims to answer the following research question: “How does entrepreneurial orientation help firms to improve their performance during the crisis in Russian market?” Therefore, the main goal is to investigate the relationship between EO and performance indicators in context of economic crisis in Russian market and understand whether EO helps the company to overcome the crisis. The research question is divided into several sub-questions:
1) How is EO related to the performance indicators under an influence of different factors?
2) How does crisis influence the development of each EO dimension?
3) Which role do EO and each of its dimensions take in overcoming the crisis?
The research design of the empirical part appeals to comparative multiple case-study. Multiple sources technique is implemented with the interview as primary source of the information and additional sources: documentation, open Internet resources and SPARK database. EO is perceived as multi-dimensional concept, consisting of three dimensions: innovativeness, proactiveness and risk-taking. Examined companies in the case study are Russian enterprises from four different industries, experiencing the effect of crisis on their activity.
The main goal of the research was to investigate how entrepreneurial orientation and its dimensions may help Russian firms to overcome the crisis. In order to achieve this goal, several sub¬questions were developed in current study. Theoretical investigation of how EO is related to the performance indicators under the influence of different factors was conducted, the comparative multiple case study was completed in order to examine the influence of crisis on the development of each EO dimension, and to make conclusion on the role of EO and each of its dimensions in overcoming the crisis by investigating how does the crisis influence the relationship between EO and performance of the firm.
Theoretical research has shown that the relationship between entrepreneurial orientation and performance indicators of the firm has been studied by different scholars. The majority of studies report positive relationship of different magnitude, dependent on the factors of internal and external environment. Some scholars reveal non-liner relationship, absence of significant influence and even negative relationship between EO and performance under certain circumstances. Theoretical review of studies of the crisis influence on businesses has shown that in most cases crisis events damage the performance of the firms, however, the negative influence may be mitigated by different factors.
The comparative multiple case-study has been utilized in order to find the evidences on whether entrepreneurial orientation may take a role of such factor. The cases of four Russian companies were investigated trough semi-structured interviews and analysis of documents.
The influence of the crisis on each of the dimensions of EO was evaluated along with the analysis of the overall contribution of each of the dimensions of EO in the firm’s ability to overcome the crisis.
The results have supported the theory of Lumpkin and Dess (2001), emphasizing the positive relationship between proactiveness and performance of the firms in hostile and dynamic environments, such as crisis. Besides that, the evidences, suggesting the positive relationship between EO and performance in crisis, described by many authors on the field of entrepreneurial orientation, were obtained in the current study. The destructive influence of the crisis on innovativeness, emphasized by such authors as Bartz and Winkler (2015), Kreiser and Davis (2010) together with the idea of absence of significant relationship between innovativeness and performance in crisis, were also spotted in the analysis. The idea of higher affection of the crisis on the small companies, rather than on the large ones, suggested by Bartz and Winkler, has also found the empirical proof in the current study. Certain case has demonstrated the consistent pattern, offered by Lumpkin and Dess, revealing the negative relationship between risk-taking and performance in hostile environment. The conclusion of meta-analysis of Rauch et al., suggesting that development of the different dimensions and the relationship model is dependent on the industry, has found the reflection in this study. Overall, the view of Covin and Slevin, claiming that entrepreneurial orientation, developed on the high level as a uni-dimensional concept is positively related to the performance of the firm in hostile, turbulent environment, was supported by the evidences from the current study, due to the fact that crisis appears as an environment, combining these features. All in all several conclusions are consistent with the outcomes from the work of Soininen et al., claiming that EO is important in the process of overcoming the crisis by firms. However, some evidences from the current study are different from the data, received by Soininen et al. from Finnish sample, therefore, the studied relationship are context-dependent and complex, meaning that the number of factors must be considered when studying the EO-performance relationship in crisis, namely, the industry firm operates in, the size of the firm, special features of the market and current situation on the market in general.
Theoretical and practical implications
The thesis contributes to studies of the EO domain on Russian market, revealing the role of entrepreneurial orientation for businesses in the context of crisis environment. The study has shown how crisis influences the development of EO dimensions, how each of the dimensions help firms to retain satisfactory performance even during the crisis and what is the role of EO in strategies of Russian firms from different industries.
The outcomes of the study contribute to one of the statements of the theory of unidimensional conceptualization of entrepreneurial orientation by finding evidence to the more significant positive effect from synergy of high level of all three dimensions compared to the effect from the sum of dimensions, developed on different levels. Evaluating each dimension of EO individually, the study contributes to the multidimensional view of EO. The work provides additional witnesses to the model of entrepreneurial orientation - performance relationship and contributes to the course of studies, revealing moderating effect of the external environment of the firm. Empirical evidences to the theories of crisis management in different companies were added. The general contribution to the studies of special features of entrepreneurial orientation and each of its dimensions in the context of emerging market was made.
Besides the theoretical contribution, the thesis results can be applied to the business practice. From the practical point of view the results of the study are holding value for the owners of the small and large businesses, which work in time of economic crisis. Decision-makers are seeking for the effective ways of managing the company in conditions of economic crisis in the country and current analysis of the experience of four firms, working in different industries, give evidences for the issues of utilizing entrepreneurially oriented strategy during the crisis. In general, high level of entrepreneurial orientation plays important role in overcoming the crisis. From the current study the owners of the small firms, working in non-technological industries, can get support for the decision to invest in proactiveness by trying different ways of development of the company and seizing each opportunity the market offers.
The experience of two small firms in the study suggests that in crisis time implementation of radical innovation would not be beneficial for the company, thus the scarce resources should rather be directed on the implementation of large number of sure and reliable projects, able to satisfy desires of the bigger part of the market. The crucial advantage may be achieved by anticipating the demand, which would appear in the nearest future as a result of forthcoming changes in the external environment, such as laws or competitors’ moves. The experience of studied companies suggests that being the first to foresee these changes and address them by changes in the strategy in crisis becomes especially important for the survival of the firms.
Additionally the decision-makers should consider the special features of the industry and the main values of their customers in order to determine whether the risky decision should be taken, but in general the reputational risk is not affordable for businesses in crisis, therefore, it is not recommended to take risk-tolerant position.
However, for the large and medium stable companies the development of all three dimensions both before and during the crisis leads to the increased performance. The experience of the one case proves that this development may not necessarily be expensive for the company in terms of financial investments. Risk-taking and innovativeness for technological companies is highly applicable in time of the crisis. All in all, the study suggests that implementation of the bold carefully calculated project, which combines features of innovativeness, risk-taking and proactiveness, provides the firm increased performance, able to mitigate the negative effect of the crisis and enables further long-term revenue increase and lead the firm to successful results even despite of the effect of recession.
Limitations and further research development
This research has certain limitations. The most important one is getting the data from single person in each company. It may result in an increased level of subjectivity of answers. Furthermore, potential concern is that one person may not be competent enough in every single part of the strategy. However, according to the opinion of Lumpkin, Dess and Lyon, expressed in their study of 2000, such research with the only one respondent from the company can be an appropriate way of getting reliable results if it is performed in a careful way (Lumkin, Dess, Lyon, 2000). Since the respondents, chosen to express the strategy of the company, are highly involved into the activity of the companies and most of them are working in the company from its very beginning, this limitation is not likely to influence reliability of results significantly.
Besides that, the results of the current study cannot explain longitude relationships between studied concepts, because the data is considered from one point of time. Longitude research design would be interesting to implement in future research to follow long-time trends in the studied domain. Also it would be interesting to discover after-crisis effects of Entrepreneurial orientation implementation.
Theoretical research has shown that the relationship between entrepreneurial orientation and performance indicators of the firm has been studied by different scholars. The majority of studies report positive relationship of different magnitude, dependent on the factors of internal and external environment. Some scholars reveal non-liner relationship, absence of significant influence and even negative relationship between EO and performance under certain circumstances. Theoretical review of studies of the crisis influence on businesses has shown that in most cases crisis events damage the performance of the firms, however, the negative influence may be mitigated by different factors.
The comparative multiple case-study has been utilized in order to find the evidences on whether entrepreneurial orientation may take a role of such factor. The cases of four Russian companies were investigated trough semi-structured interviews and analysis of documents.
The influence of the crisis on each of the dimensions of EO was evaluated along with the analysis of the overall contribution of each of the dimensions of EO in the firm’s ability to overcome the crisis.
The results have supported the theory of Lumpkin and Dess (2001), emphasizing the positive relationship between proactiveness and performance of the firms in hostile and dynamic environments, such as crisis. Besides that, the evidences, suggesting the positive relationship between EO and performance in crisis, described by many authors on the field of entrepreneurial orientation, were obtained in the current study. The destructive influence of the crisis on innovativeness, emphasized by such authors as Bartz and Winkler (2015), Kreiser and Davis (2010) together with the idea of absence of significant relationship between innovativeness and performance in crisis, were also spotted in the analysis. The idea of higher affection of the crisis on the small companies, rather than on the large ones, suggested by Bartz and Winkler, has also found the empirical proof in the current study. Certain case has demonstrated the consistent pattern, offered by Lumpkin and Dess, revealing the negative relationship between risk-taking and performance in hostile environment. The conclusion of meta-analysis of Rauch et al., suggesting that development of the different dimensions and the relationship model is dependent on the industry, has found the reflection in this study. Overall, the view of Covin and Slevin, claiming that entrepreneurial orientation, developed on the high level as a uni-dimensional concept is positively related to the performance of the firm in hostile, turbulent environment, was supported by the evidences from the current study, due to the fact that crisis appears as an environment, combining these features. All in all several conclusions are consistent with the outcomes from the work of Soininen et al., claiming that EO is important in the process of overcoming the crisis by firms. However, some evidences from the current study are different from the data, received by Soininen et al. from Finnish sample, therefore, the studied relationship are context-dependent and complex, meaning that the number of factors must be considered when studying the EO-performance relationship in crisis, namely, the industry firm operates in, the size of the firm, special features of the market and current situation on the market in general.
Theoretical and practical implications
The thesis contributes to studies of the EO domain on Russian market, revealing the role of entrepreneurial orientation for businesses in the context of crisis environment. The study has shown how crisis influences the development of EO dimensions, how each of the dimensions help firms to retain satisfactory performance even during the crisis and what is the role of EO in strategies of Russian firms from different industries.
The outcomes of the study contribute to one of the statements of the theory of unidimensional conceptualization of entrepreneurial orientation by finding evidence to the more significant positive effect from synergy of high level of all three dimensions compared to the effect from the sum of dimensions, developed on different levels. Evaluating each dimension of EO individually, the study contributes to the multidimensional view of EO. The work provides additional witnesses to the model of entrepreneurial orientation - performance relationship and contributes to the course of studies, revealing moderating effect of the external environment of the firm. Empirical evidences to the theories of crisis management in different companies were added. The general contribution to the studies of special features of entrepreneurial orientation and each of its dimensions in the context of emerging market was made.
Besides the theoretical contribution, the thesis results can be applied to the business practice. From the practical point of view the results of the study are holding value for the owners of the small and large businesses, which work in time of economic crisis. Decision-makers are seeking for the effective ways of managing the company in conditions of economic crisis in the country and current analysis of the experience of four firms, working in different industries, give evidences for the issues of utilizing entrepreneurially oriented strategy during the crisis. In general, high level of entrepreneurial orientation plays important role in overcoming the crisis. From the current study the owners of the small firms, working in non-technological industries, can get support for the decision to invest in proactiveness by trying different ways of development of the company and seizing each opportunity the market offers.
The experience of two small firms in the study suggests that in crisis time implementation of radical innovation would not be beneficial for the company, thus the scarce resources should rather be directed on the implementation of large number of sure and reliable projects, able to satisfy desires of the bigger part of the market. The crucial advantage may be achieved by anticipating the demand, which would appear in the nearest future as a result of forthcoming changes in the external environment, such as laws or competitors’ moves. The experience of studied companies suggests that being the first to foresee these changes and address them by changes in the strategy in crisis becomes especially important for the survival of the firms.
Additionally the decision-makers should consider the special features of the industry and the main values of their customers in order to determine whether the risky decision should be taken, but in general the reputational risk is not affordable for businesses in crisis, therefore, it is not recommended to take risk-tolerant position.
However, for the large and medium stable companies the development of all three dimensions both before and during the crisis leads to the increased performance. The experience of the one case proves that this development may not necessarily be expensive for the company in terms of financial investments. Risk-taking and innovativeness for technological companies is highly applicable in time of the crisis. All in all, the study suggests that implementation of the bold carefully calculated project, which combines features of innovativeness, risk-taking and proactiveness, provides the firm increased performance, able to mitigate the negative effect of the crisis and enables further long-term revenue increase and lead the firm to successful results even despite of the effect of recession.
Limitations and further research development
This research has certain limitations. The most important one is getting the data from single person in each company. It may result in an increased level of subjectivity of answers. Furthermore, potential concern is that one person may not be competent enough in every single part of the strategy. However, according to the opinion of Lumpkin, Dess and Lyon, expressed in their study of 2000, such research with the only one respondent from the company can be an appropriate way of getting reliable results if it is performed in a careful way (Lumkin, Dess, Lyon, 2000). Since the respondents, chosen to express the strategy of the company, are highly involved into the activity of the companies and most of them are working in the company from its very beginning, this limitation is not likely to influence reliability of results significantly.
Besides that, the results of the current study cannot explain longitude relationships between studied concepts, because the data is considered from one point of time. Longitude research design would be interesting to implement in future research to follow long-time trends in the studied domain. Also it would be interesting to discover after-crisis effects of Entrepreneurial orientation implementation.
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