Effects of Entrepreneurial Orientation on Business Performance: The Mediating Role of Customer Satisfaction—A Formative–Reflective Model Analysis

Héctor Cuevas-Vargas, Neftalí Parga-Montoya and Rudy Fernández-Escobedo
Authors registered in the RePEc Author Service: Rudy Fernandez-Escobedo

SAGE Open, 2019, vol. 9, issue 2, 2158244019859088

Abstract: This empirical study was aimed at deepening the knowledge of the direct and indirect effects of entrepreneurial orientation (EO) on business performance and how industrial organization (IO) influences EO of micro and small firms from a city in a developing country, using the partial least squares structural equation modeling (PLS-SEM). In this study, the satisfaction of the customers was considered as a mediator variable and the IO as a formative construct. The results show enough evidence that IO positively affects EO; EO positively influences business performance and customer satisfaction (CS); likewise, EO impacts business performance in a positive manner both directly and indirectly through CS. Regarding managerial implications, the study provides knowledge to managers over the processes of shaping strategy and decision making, stressing the importance of both encouraging the development of EO capabilities and focusing efforts on CS to improve business performance.

Keywords: entrepreneurial orientation; industrial organization; business performance; customer satisfaction; PLS-SEM (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (7)

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Persistent link: https://EconPapers.repec.org/RePEc:sae:sagope:v:9:y:2019:i:2:p:2158244019859088

DOI: 10.1177/2158244019859088

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