CHAPTER V CONCLUSION AND DISCUSSION
5.3 Theoretical Contributions
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innovativeness, and autonomy. Their results showed that competitive aggressiveness and autonomy held no firm performance value at the growth stage while in medium and large high-technology and industrial manufacturing firms. (Morgan and Strong, 2003) conceptualized a firm’s strategic orientation with aggressiveness, riskiness, proactiveness, futurity, defensiveness, and analysis. The results indicated that proactiveness and aggressiveness are not related to business performance. Hence, research context determines the choice of EO conceptualization approaches. How each dimension of EO is characterized and why they are crucial for firm performance act as initial steps to explore the research within EO in various settings. Hence, the interdependence effect and inconsistent effects of multidimensional EO among various studies observed. EO researchers should pay attention to the qualitative approach as an initial research method to determine which EO conceptualization approach will suit each context of study. Moreover, researchers should highlight which EO dimension is most important in explaining variations of firm performance.
This case study results also provides a narrative describing why each EO dimension contributes to firm performance based on real-world context. Scholars have highlighted the importance of proactiveness and competitive aggressiveness to firm performance in several approaches (Covin et al., 2006; Lumpkin and Dess, 2001;
Tang et al., 2008; and Hughes and Morgan, 2007) because proactiveness and competitive aggressiveness influence performance differently. This result supports previous empirical findings in various contexts (e.g., Lumpkin and Dess, 2001; Dai et al., 2014). Lumpkin and Dess (2001) suggested that competitive aggressiveness is a response to threats while, proactiveness is a response to opportunities, whereas;
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Chen and Hambrick (1995) further suggested that firm’s proactive and responsive when they face a challenging in technology, innovation, competition, customers change. Proactiveness involves taking the initiative to shape new opportunities in the market; responsiveness involves adapting to competitors.
This research adopts a case study approach to explain the characteristics of knowledge ACAP and provide a rationale on how the roles of knowledge ACAP enhance the dimensions of EO. Cohen and Levinthal (1990a) have argued that the ability of a firm to recognize the value of new, external information, assimilate it, and apply it to commercial ends is critical to its innovation capabilities.
5.3.2 Theoretical Contributions from Survey Result
First, this research firstly assesses specifically which dimensions of EO are most valuable to securing performance. This research suggested that proactiveness is the most important characteristics to enhance firm performance in medical device industry. Proactiveness positively contributes to firm performance. In this research, proactiveness refers to how firms relate to market opportunities by seizing initiatives in the marketplace (Lumpkin and Dess, 1996a)
Second, this study highlights the negative moderating effect of knowledge ACAP on the relationship between proactiveness and firm performance which could explain a distinctiveness of medical device characteristics of medical device firm.
This research points out the importance of knowledge ACAP in explaining how knowledge ACAP decreases firm performance. Scholars found that knowledge ACAP
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is associated with the EO and performance relationship; however, only a small number of researchers investigated this relationship (Hughes and Morgan, 2007;
Wales et al., 2013; Sciascia et al., 2014; Hernandez-Perlines, 2018). This study responds to calls for research on (1) the relationship between EO and firm performance (Lumpkin & Dess, 1996a; Lumpkin and Dess, 2001; Covin et al., 2006;
(Dess et al., 1997, (2) EO scholars’ adoption of the contingency approach to test the EO performance relationship (Lumpkin and Dess, 1996a; Covin and Lumpkin, 2011;
Zellweger and Sieger, 2012), and (3) the link of knowledge ACAP to multidimensional EO and firm performance (Wales et al., 2013; Sciascia et al., 2014;
Hernández-Perlines and Xu, 2018) and knowledge ACAP may have distinctly different effects on multiple dimensions of EO and avenues to firm success (Sciascia et al., 2014; Hernández-Perlines and Xu, 2018). This study confirms that the extent of the independent effects of proactiveness and competitive aggressiveness that influence firm performance and is applied in the studies varies depending on the internal factors, that is, the firm’s knowledge ACAP.
Third, this research supports the theoretical argument on a multidimensional of entrepreneurial orientation (Miller, 1983b). Lumpkin & Dess (1996a) asserted that these dimensions may vary independently of each other and thus should be modeled in some combination which the authors termed “EO.” Based on the survey result, this study argues that proactiveness have a positive effects to firm performance while, competitive aggressiveness vary independently in different direction. Hence, this study confirms that EO dimensions vary independently. Moreover, this present research explained proactiveness and competitive aggressiveness as a unidimensional construct considered to be positively related to performance (Lumpkin and Dess,
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2006). This responds to the call for research on the multidimensional characteristics of EO that separately affect firm performance (Lumpkin and Dess, 2001; Casillas et al., 2011; Hernández-Perlines and Xu, 2018).
Fourth, scholars suggest that resolving the multiple dimensions of EO facilitates the understanding of distinct EO characteristics in various settings of research. Consistent with the suggestion of Huge and Morgan (2007), some scholars do not pay attention on the individual influence of dimensional EO and combine each dimension into a single construct. Moreover, Lumpkin and Dess, (1996a) treated EO as a superordinate construct and each of the five dimensions range from low to high according. Therefore, different research settings found inconsistent results of the effect of each dimension of EO on firm performance. Edwards (2001) posited that multidimensional constructs typically exist in two basic forms: aggregate and superordinate. (Stetz et al., 2000) suggested that the approaches through which the first-order dimensions of EO are operationalized as latent or summate significantly affect analysis. This study supports the arguments of Huges and Morgan (2007) and argues that individual influence of proactiveness and competitive aggressiveness affect to firm performance differently. As a result, multidimensional entrepreneurial orientation construct should be opera ionized as first-order dimensions to observe the individual influence of each dimension.
Fifth, this research argued that the definition of knowledge ACAP by (Cohen and Levinthal, 1990a), defined as “the ability of a firm to recognize the value of new, external information, assimilate it, and apply it to commercial ends,” is suitable when the context of study is knowledge-intensive firms. Because in terms of assessing
181 success in using new external knowledge as the driving force of a firm’s new product development, the indicators relevant in evaluating new products’ success is clearly in terms of sales. Finally, this research indicates that proactiveness and competitive aggressiveness of entrepreneurs may have different effects on firm performance. The differences were particularly apparent in the way firms relate to their knowledge ACAP. In other words, by gaining new knowledge, firms engage in various types of entrepreneurial activities that allow them to successfully exploit new opportunities in markets differently.