Academic journal article Journal of Economic and Social Development

Demographic Variables Influencing Individual Entrepreneurial Orientation and Strategic Thinking Capability

Academic journal article Journal of Economic and Social Development

Demographic Variables Influencing Individual Entrepreneurial Orientation and Strategic Thinking Capability

Article excerpt

"The most valuable 100 people to bring into a deteriorating society would not be economists, or politicians, or engineers, but rather 100 entrepreneurs" Abraham Maslow

1. INTRODUCTION

The research of entrepreneurial orientation is well established in literature. The expending research bridges toward strategic entrepreneurship and toward strategic management or more refining strategic thinking using cognition and contextual setting in order to explain phenomena of entrepreneur establishing, growing, failing and sustaining her/his business. The essence of entrepreneurs, is as suggested by Bolton & Thompson (2000, p.5), as people who habitually creates and innovates to build something of recognized value around perceived opportunities. They are a particular type of person whose risk-taking and innovative prowess lends itself to identifying and exploiting profitable opportunities resulting in organizational and economic growth (Kuratko, 2007; Lumpkin & Dess, 1996). In our earlier study, we use a previously unstudied element of the cognitive frame (strategic thinking capability) and individual entrepreneurial orientation. Our larger research agenda will attempt to link individual entrepreneurial orientation with firm EO and then to firm performance.

Results from that study indicated that strategic thinking capability (STC) was positively associated individual entrepreneurial behavior. This means that entrepreneurs who used these thinking skills more often also exhibited individual entrepreneurial behaviors more often than entrepreneurs who use these thinking skills less often. Furthermore, proactiveness was positively associated with reflecting, reframing, systems thinking, and STC; meaning that the more often the entrepreneurs use these strategic thinking skills the higher is their score on proactiveness. Two other dimensions of STC - Systems thinking and reframing - were positively associated with risk-taking, meaning that the more often the entrepreneurs use these skills the more risk they are willing to assume. Interestingly, only reframing was significantly associated with innovativeness.

The current study asks are these relationships moderated by alterable and unalterable demographic and contextual variables. Both the initial and the current studies were based on the premise that each of the constructs- individual entrepreneurial orientation and strategic thinking capability - were multidimensional constructs based on elements that act independently and in concert with one another. This paper further investigates this premise by developing the notion that there a number of demographic variables that shape the behavior of each particular elements of entrepreneurial orientation and strategic component of each entrepreneur. Demographic variables that demonstrate that they play a significant moderating role are identified and will be used in further research.

The study is significant because it delves into variables that have not been studied previously. First, it is possible that we can gain insight into how entrepreneurs think and how use of these thinking skills relates to their own entrepreneurial orientation. This linkage has not been studied thus far. Additionally, it also provides insight as to how demographic variables can be considered as moderators in the relation between individual entrepreneurial orientation and strategic thinking.

2. THEORY DEVELOPMENT

Theory development is discussed in the following paragraphs discussed from point of view of two constructs; individual entrepreneurial orientation and strategic thinking. The paper also explores ways demographics influence both constructs of individual entrepreneurial orientation and strategic thinking capabilities.

Individual entrepreneurial orientation

Individual entrepreneurial orientation derives from a vast entrepreneurial orientation literature easily grouped in four different groups of research.

The entrepreneurial orientation (EO) tradition measures a firm's inclination toward entrepreneurial behaviors. …

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