The Moderating Effect of Environmental Turbulence in the Relationship between Entrepreneurial Management and Firm Performance

Aluisius Pratono () and Rosli Mahmood

MPRA Paper from University Library of Munich, Germany

Abstract: Contingency theory points out the adaptive management is crucial point to sustainable firm performance. This research aims to determine the relative importance of a set of variables comprising the four entrepreneurial management variables, i.e. strategic orientation, organization culture, organization structure, and reward system, and a set of environmental turbulence variables in predicting firm performance. This research uses firm-level data with observed population of this research is SMEs in Surabaya, Indonesia. Through adopting hierarchical regression approach and partial least square method, this study indicates that moderating effect of environmental turbulence changes the direction of relationship between entrepreneurial management and firm performance. During low environmental turbulence, entrepreneurial management has positive impact on firm performance, but the direction changes. Entrepreneurial management has negative impact on firm performance during high environmental turbulence.

Keywords: firm performance; entrepreneurial management; environmental turbulence (search for similar items in EconPapers)
JEL-codes: M0 M00 M1 M12 M14 M2 M5 M52 (search for similar items in EconPapers)
Date: 2014
New Economics Papers: this item is included in nep-bec, nep-cse, nep-eff, nep-env, nep-sbm and nep-sea
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Published in Universal Journal of Management 2.7(2014): pp. 285-292

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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:58493

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