Dominant Logic and Entrepreneurial Firms' Performance in a Transition Economy

By Obloj, Tomasz; Obloj, Krzysztof et al. | Entrepreneurship: Theory and Practice, January 2010 | Go to article overview

Dominant Logic and Entrepreneurial Firms' Performance in a Transition Economy


Obloj, Tomasz, Obloj, Krzysztof, Pratt, Michael G., Entrepreneurship: Theory and Practice


Dominant logic is the manner in which firms conceptualize and make critical resource-allocation decisions, and over time develop mental maps, business models, and processes that become organizational recipes. This study compares and contrasts the dominant logic of Polish entrepreneurial firms. We find evidence that a dominant logic characterized by external orientation, proactiveness, and simplicity of routines significantly influences the performance of entrepreneurial firms in this emerging economy. These dominant logic characteristics of high performers serve as a key intangible resource in transition economies that are characterized by the absence of strong institutions and resource constraints. Future research in this critical domain should include how dominant logic needs in transition economies evolve over time as the institutional environment matures and market mechanisms become more solidified.

Introduction

It has often been argued that one of the key factors in the success of a new venture is the dominant logic of the firm (Nadkarni & Narayanan, 2007). Dominant logic refers to how firms "conceptualize and make critical resource allocation decisions--be it in technologies, product development, distribution, advertising, or in human resource management" (Prahalad & Bettis, 1986, p. 490). It is "in essence, the DNA of the organization" (Prahalad, 2004, p. 172) and can be seen as one of the key valuable, rare, and difficult-to-imitate resources for the firm (Amit & Schoemaker, 1993; Barney, 1991). However, while the dominant logic concept is intellectually appealing, the empirical support for its impact has been weak to date (Obloj & Pratt, 2005). Moreover, its application has largely been limited to more developed economies. We argue that dominant logics may also play a critical role in emerging economies. In fact, transition economies offer the potential for a strong test of dominant logic and its relevance. In particular, those economies transitioning from a socialist economic system to a market economy offer the potential to test the value of dominant logic and its importance as an intangible resource in the environment where tangible resources are in short supply and institutional support is not well developed (Bruton, Ahstrom, & Obloj, 2008; Kolvereid & Obloj, 1994; Meyer & Peng, 2005).

This research addresses the role of dominant logic in emerging economies and, in doing so, makes four specific contributions to the literature. First, it provides insight into the little examined transition economies of Eastern and Central Europe. Second, it provides empirical support for the importance of dominant logic for the performance of new ventures. Third, the article extends theory in this area by integrating dominant logic with a resource-based perspective. Fourth, this article provides a critical "first test" of an inductive model of the structure of dominant logic of entrepreneurial firms in transition economies (Obloj & Pratt, 2005). Specifically, we develop empirical measures to assess various dimensions of the dominant logic in order to examine the importance of dominant logic as an intangible resource of the firm facilitating resource acquisition and resource deployment. (1) The implications of these findings as a foundation for future research are discussed at the end of the manuscript.

The article is structured as follows. We first propose a theoretical framework where we integrate dominant logic--and a cognitive approach more generally--into a wider, resource-based view of the firm. Next we focus on theory development and propose measures for assessing entrepreneurial dominant logics followed by hypothesis development. In the following section we detail the data selection procedure and model specification and then provide the results of the analysis. We conclude with a discussion on the implications and limitations of our findings.

Theory Foundation and Hypothesis Development

The Dominant Logic, Resource Shortages, and Resource Acquisition

The resource-based view sees organizations as bundles of resources that can generate performance heterogeneity and rent differentials across firms. …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

Dominant Logic and Entrepreneurial Firms' Performance in a Transition Economy
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Author Advanced search

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.