Interaction effect of entrepreneurial orientation and stakeholder orientation on the business performance of firms in the steel fabrication industry in Thailand

Abstract

Purpose The purpose of this paper is to explore the interaction effect of entrepreneurial orientation and stakeholder orientation on the business performance of small and medium enterprises. In particular, four components of stakeholder orientation including customer orientation, competitor orientation, employee orientation and shareholder orientation were considered as the moderating factors to analyze the interaction effect between each of these stakeholder groups and the entrepreneurial orientation on firms’ performance. This research used resources-based views of firms and stakeholder theory as an integrated theoretical framework to explain the interaction effect of entrepreneurial orientation and stakeholder orientation on firms’ performance. Design/methodology/approach Survey data were collected from 370 small and medium firms in the steel fabrication industry in Thailand using probability sampling. Partial least-squares structural equation modeling was used for model estimation. Findings The results significantly supported a positive contribution of entrepreneurial orientation to firms’ performance. The moderating effect analysis additionally found that the contribution of entrepreneurial orientation to firms’ performance was positively moderated by customer orientation but negatively moderated by shareholder orientation. Originality/value This research extended prior studies on entrepreneurial orientation by using resource-based views of firms and stakeholder theory as an integrated theoretical framework to explain the interaction effect of entrepreneurial orientation and stakeholder orientation on firms’ performance.