Exploring the relationship between entrepreneurial orientation and corporate performance: The role of competency of executives in entrepreneurial-oriented corporations

Abstract

Purpose

The aim of this study is to explore the mediating role of executive competency in entrepreneurial-orientated corporations between entrepreneurial orientation and corporate performance.

Design/methodology/approach

The authors conducted a survey of entrepreneurial-oriented enterprises mainly located in Beijing, Shanghai, Hangzhou, Shenyang, Dalian, Anshan, Chengdu, Guiyang, Wuhan, Taiyuan, Xi’an, Guangzhou, Shenzhen and so on, areas which cover North China, northeast of China, Yangtze River Delta and Pearl River Delta, and are largely representative of the population as a whole. A total of 300 questionnaires were issued with 276 returns, a response rate of 92 per cent; 248 of these were valid.

Findings

First, executive competency in entrepreneurial-oriented corporations has four dimensions. These are profession features, concept features, interpersonal features and individual internal drive features; 15 competency elements are included in the above dimensions. Second, entrepreneurial orientation does improve corporate performance, and the positive influence is mainly through two dimensions, which are innovation and antecedence. Third, executive competency has a positive influence on corporate performance, thus confirming the effectiveness of executive competency as a dependent variable. Finally, executive competency has a partial mediating influence on the relationship between entrepreneurial orientation and corporate performance, with a full mediating influence on innovation and corporate performance, and a partial mediating influence on antecedence and corporate performance.

Originality/value

The conclusions have important implications. Theoretically, the executive competency model, which fits entrepreneurial orientation, is constructed, and the relationship between entrepreneurial orientation and corporate performance is enriched and extended to include executive competency, which provides a theoretical foundation and empirical support for understanding and explaining entrepreneurial strategy in Chinese corporations. In terms of practical implications, this study helps entrepreneurial-orientated corporations to develop a proper human resources management system to recruit, evaluate, train and develop executives, resulting in continuous performance improvement.

Citation

Jia, J., Wang, G., Zhao, X. and Yu, X. (2014), "Exploring the relationship between entrepreneurial orientation and corporate performance: The role of competency of executives in entrepreneurial-oriented corporations", Nankai Business Review International, Vol. 5 No. 3, pp. 326-344. https://doi.org/10.1108/NBRI-05-2014-0024