Configurations and entrepreneurial orientation of young firms

Abstract

Purpose – Extant literature highlights the inadequacy of using just four domains – leadership, strategy, structure, and environment – for identifying firms’ configurations. The purpose of this paper is to answer the questions – what firm-level and external elements should be used to identify young firms’ configurations? Which among these is the core element? Design/methodology/approach – This paper relies on literatures on configuration approach and entrepreneurial orientation (EO) to build the assertions concerning the issue of theoretical specification used for generating young firms’ configurations, and its core element. Crisp-set qualitative comparative analysis (CS-QCA) of the data collected from 70 young firms supports the arguments. Various robustness analyses reaffirm these assertions. Findings – Literature review reveals that EO represents a firm’s decision-making proclivity concerning new entry and proactive risk-taking. CS-QCA supports the assertions that: inclusion of EO improves the configurational explanation of young firms’ performance; EO is the core element of young firms’ configurations; and market orientation or social capital cannot substitute EO in configurational studies of young firms’ performance. CS-QCA serves as a tool to support an alternative theoretical stance that questions the adequacy of extant domains used to identify configurations. Originality/value – This paper theorizes for inclusion of EO as an additional domain for identifying young firms’ configurations, and exploits novel capability of set theoretic methods of CS-QCA to explore the issues of model specification and conjunctural causation, and ascertain the core element of configurations.