Entrepreneurial Orientation and Dynamic Capabilities

Abstract

Currently, small and medium enterprises that are family businesses (SMEFs) assume an important role in the global economy. Further, innovation and flexibility became vital to firms' survival and prosperity in the market during these volatile times. Firms should not only possess critical resources, but also be able to recombine them. Characterized by resource restrictions, SMEFs can rely on dynamic capabilities to access resources and be competitive in the market. In this regard, networking capabilities (NC) and resource combinations (RC) such as exploitative and explorative product development and on market-related capabilities emerge as key dynamic capabilities. This chapter examines the role of Entrepreneurial Orientation (EO) on NC and RC. Using a qualitative method of in-depth case study, the chapter analyzes 12 Portuguese SMEFs.