Academic journal article European Research Studies

The Influence of Entrepreneurial Orientation and Family Business's Resources and Capabilities on Marketing Performances

Academic journal article European Research Studies

The Influence of Entrepreneurial Orientation and Family Business's Resources and Capabilities on Marketing Performances

Article excerpt

Introduction

Family businesses have played the important role in economic all around the world. it has a significant impact on the economy and employment in several sectors and industries (Habbershon and Pistrui, 2002). Family businesses account for two-thirds of all businesses around the world (Halkias and Adendorff, 2016). According to Osnes (2016), between 50-80 percent of jobs in the majority of countries worldwide are created by family businesses. Family businesses contribute more than 60 percent of the total GDP in the United States. According to Habbershon (2006), more than 90 percent of the businesses are controlled by families in Italy and Spain. According to the Family Business Survey (PwC, 2016), 85 % of China's private enterprises are family owned and, in most countries around the world, family businesses are between 70 and 95% of all business entities.

The purpose of this study is to investigate the influence of entrepreneurial orientation and family business's resources and capabilities toward marketing performances. The article is structured as follows. First, it reviews the relevant literature for entrepreneurial orientation, family business's resources and capabilities, and marketing performance before developing hypotheses on how entrepreneurial orientation, and family business's resources and capabilities affect performances of family businesses. Next, it describes the research design of the empirical study. Afterward, the results of the study are presented, followed by discussion of the research, which concludes with the limitations of the study and suggestions for future research.

2. Literature Review

2.1 Entrepreneurial orientation

The definition of entrepreneurial orientation (EO) is originated by Lumpkin and Dess (1996). According to Lumpkin and Dess (1996), entrepreneurial orientation refers to EO refers to the processes, practices, and decision-making activities that lead to new entry as characterized by one, or more of the following dimensions: a propensity to act autonomously, a willingness to innovate and take-risks, and a tendency to be aggressive toward competitors and proactive relative to marketplace opportunities.

Entrepreneurial orientation (EO) consists of 5 dimensions; namely, Risk taking, Proactiveness, Innovativeness, Autonomy, and Competitive aggressiveness. Rauch, Wiklund, Lumpkin and Frese (2009) describes risk taking as an involvement of taking bold actions by venturing into the unknown, borrowing heavily, and/or committing significant resources to ventures in uncertain environments. Proactiveness is an opportunity-seeking, forward-looking perspective characterized by the introduction of new products and services ahead of the competition and acting in anticipation of future demand. Innovativeness is the predisposition to engage in creativity and experimentation through the introduction of new products/services as well as technological leadership via research and development in new processes. Autonomy is the independent action undertaken by entrepreneurial leaders or teams directed at bringing about a new venture and seeing it to fruition. And, Competitive aggressiveness is the intensity of a firm's effort to outperform rivals and is characterized by a strong offensive posture or aggressive responses to competitive threats (Rauch et al., 2009; Mihola et al., 2016; Robertie, 2016; Theriou, 2015; Firescu and Popescu, 2015).

2.2 Marketing performance

Marketing performance in this study adopted the concept of entrepreneurial performance which is measured in terms of the sum of an organization's innovation, renewal and venturing efforts (Dess and Lumpkin, 2005; Zahra, 1995; Keisidou et al., 2013). In this study, marketing performance is multidimensional construct, which can be split into 3 dimensions; namely, financial and market performance, social performance, and family outcomes. In order to measure the financial and market performance of family business, performance was assessed through eight performance related questions regarding growth in sales, growth in market share, growth in employees, growth in profitability, return in equity, return on total assets, profit margin on sales and the ability to fund growth from profit (Eddleston and Kellermanns, 2007; Sharashkina, 2016). …

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