THE EFFECT OF CORPORATE FRUGALITY ON CRISIS PREPAREDNESS: THE MEDIATING ROLE OF ENTREPRENEURIAL ORIENTATION

Hussein-Elhakim Al Issa, Mai Thi Thanh Thai (), Mohammed Mispah Said Omar () and Farouk Mahmud Frnana ()
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Hussein-Elhakim Al Issa: Department of Entrepreneurship and Innovation, HEC Montreal, Canada
Mai Thi Thanh Thai: Department of Entrepreneurship and Innovation, HEC Montreal, Canada
Mohammed Mispah Said Omar: College of Business Administration, University of Bahrain, Kingdom of Bahrain
Farouk Mahmud Frnana: Cyprus Health and Social Sciences University, Güzelyurt, Northern Cyprus

Journal of Developmental Entrepreneurship (JDE), 2023, vol. 28, issue 01, 1-18

Abstract: This study explores relationships between Corporate Frugality (CF), Entrepreneurial Orientation (EO) and Crisis Preparedness (CP). CP was proposed as the surrogate measure for firm performance during actual crises. EO is also examined as a potential mediator in the CF-CP association. The hypotheses were tested using partial least squares structural equation modeling with data collected from randomly selected small businesses operating in the Tripolitania region of northwestern Libya during the current economic instability caused by civil unrest. Further, COVID-19 pandemic cases had significantly risen among the population at the time of the study. The findings show that CF can be instrumental in responding to market crisis requirements, while innovativeness only results in better CP and partially mediates the CF-CP association. These findings validate the CF construct, but entrepreneurs must cautiously proceed when exercising EO in response to crises. Furthermore, the study casts new light on how the association between EO dimensions and performance can differ across contexts. Building on the resource-based view and pecking order theory and integrating them with contingency theory, this study is the first to explore the effect of EO and its dimensions as the mediator between CF and CP.

Keywords: Entrepreneurial orientation; risk-taking; innovativeness; proactiveness; corporate frugality; crisis preparedness (search for similar items in EconPapers)
Date: 2023
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DOI: 10.1142/S1084946723500012

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