ENTREPRENEURIAL ORIENTATION, MARKET ORIENTATION AND NETWORKING: IMPACT ON INNOVATION AND FIRM PERFORMANCE

Abstract

The study examines the relationships among entrepreneurial orientation, market orientation and networking on firm performance with radical and incremental innovation as the mediator. The present study draws on the resource-based view theory to provide insights about intangible resources and capabilities among SMEs. The study adopts a subjectivist approach and is based on multiple case study method by conducting interviews with 7 SMEs purposively operating in different sectors. The research findings seem to support both proactive and responsive market orientation (PMO, RMO), entrepreneurial orientation (EO) and networking have positive relationships on firm performance with radical and incremental innovation as the mediator. It appears firms initiating radical innovation take longer for new product performance because of lack of information about customer needs in the market but networking assists in providing market information that enables commercialization of new products. Further, networking among firms drives performance while strong ties are practiced to a lesser extent.