The Moderating Effect of Environmental Turbulence in the Relationship between Entrepreneurial Management and Firm Performance

Pratono, Aluisius Hery and Mahmood, Rosli (2014): The Moderating Effect of Environmental Turbulence in the Relationship between Entrepreneurial Management and Firm Performance. Published in: Universal Journal of Management , Vol. 7, No. 2 (2014): pp. 285-292.

Abstract

Contingency theory points out the adaptive management is crucial point to sustainable firm performance. This research aims to determine the relative importance of a set of variables comprising the four entrepreneurial management variables, i.e. strategic orientation, organization culture, organization structure, and reward system, and a set of environmental turbulence variables in predicting firm performance. This research uses firm-level data with observed population of this research is SMEs in Surabaya, Indonesia. Through adopting hierarchical regression approach and partial least square method, this study indicates that moderating effect of environmental turbulence changes the direction of relationship between entrepreneurial management and firm performance. During low environmental turbulence, entrepreneurial management has positive impact on firm performance, but the direction changes. Entrepreneurial management has negative impact on firm performance during high environmental turbulence.

• Item Type: MPRA Paper
• Language: English
• Keywords: firm performance, entrepreneurial management, environmental turbulence
• Subjects: M - Business Administration and Business Economics ; Marketing ; Accounting ; Personnel Economics > M0 - General; M - Business Administration and Business Economics ; Marketing ; Accounting ; Personnel Economics > M0 - General > M00 - General; M - Business Administration and Business Economics ; Marketing ; Accounting ; Personnel Economics > M1 - Business Administration; M - Business Administration and Business Economics ; Marketing ; Accounting ; Personnel Economics > M1 - Business Administration > M12 - Personnel Management ; Executives; Executive Compensation; M - Business Administration and Business Economics ; Marketing ; Accounting ; Personnel Economics > M1 - Business Administration > M14 - Corporate Culture ; Diversity ; Social Responsibility; M - Business Administration and Business Economics ; Marketing ; Accounting ; Personnel Economics > M2 - Business Economics; M - Business Administration and Business Economics ; Marketing ; Accounting ; Personnel Economics > M5 - Personnel Economics; M - Business Administration and Business Economics ; Marketing ; Accounting ; Personnel Economics > M5 - Personnel Economics > M52 - Compensation and Compensation Methods and Their Effects

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