A critical examination of the EO‐performance relationship

The purpose of this paper is to critically analyze the assertion that there is a statistical significant relationship between EO and performance.

In several publications it has been stated that there is a positive relationship between entrepreneurial orientation (EO) and the performance of a firm. These studies have generally used the same core references, and these seminal contributions are examined critically in this article. The EO‐performance relationship is also analyzed in an empirical study, consisting of 172 Swedish SMEs in the manufacturing sector.

The result of the literature review is that the notion of a positive EO‐performance relationship can be questioned. Earlier studies have neglected some important issues, mainly regarding the use of perceptual performance data, common method biases and survival biases. Some of the conclusions presented are supported by the empirical study.

The main point of this paper is to show that the relationship between EO and performance is more complicated than previous studies have implied. More care should be taken when generalizing the results of core references and scholars ought to have a more cautious approach when stating that there is a general correlation between EO and performance.