Capturing Emerging Business Opportunities through Entrepreneurial Orientation and Innovation Behavior: The Moderating Role of Leader-Member Exchange

Abstract

In the changing market environment due to the fourth industrial revolution, entrepreneurial orientation and innovation can accelerate the company’s sustainable growth, and performance improvement through the mutual relationship between leaders and members is essential. This study investigated the effect of the innovation behavior of entrepreneurial orientation on job performance by focusing on the conditional indirect effect of leader-member exchange (LMX) in the mediated relationship. To this end, research data were collected from 324 employees from different SMEs in South Korea. Based on the results, entrepreneurial orientation had a positive effect on innovation behavior and job performance. In addition, it was found that innovation behavior had a positive effect on job performance and partially mediated the relationship between entrepreneurial orientation and job performance. LMX showed a conditional indirect effect in the mediated model and moderated the relationship between risk-taking and job performance. The results have significant implications for SMEs pursuing entrepreneurial orientation, which was discussed. This study has significant implications in that high performance can be achieved by realizing the importance of employees’ innovation behavior and LMX within the company for sustainable management.