Strategic Orientation and Business Performance: The Role of Entrepreneurial Orientation

Abstract

Abstract

Strategic orientation is widely acknowledged as a vital determinant of organizational competitiveness and performance. It encompasses the guiding principles that influence a firm’s behaviour and decision-making in the marketplace, including orientations such as market, learning, technology, and entrepreneurial orientation (EO). Among these, EO has gained increasing scholarly attention due to its capacity to explain how firms discover, develop, and capitalize on opportunities in uncertain and dynamic environments. Defined by innovativeness, proactiveness, and risk-taking, EO plays a critical role in transforming strategic intent into measurable business outcomes. This paper reviews the literature on strategic orientation and firm performance with a particular focus on the role of EO. Anchored in theoretical perspectives such as the resource-based view (RBV), dynamic capabilities theory, and contingency theory, the review synthesizes evidence from both developed and emerging markets. While most studies affirm a positive EO–performance link, findings remain mixed, underscoring the importance of mediating and moderating mechanisms, including innovation performance, business model innovation, and strategic alignment. The paper concludes by outlining research gaps, especially within the context of small and medium-sized enterprises (SMEs) in emerging economies, and proposes future directions for integrating EO into broader strategic orientation frameworks.

Keywords: Strategic orientation, entrepreneurial orientation, business performance, innovation, dynamic capabilities, SMEs, competitive advantage.