The Effects of Entrepreneurial Proclivity and Market Orientation on Business Performance

The recent literature suggests a potential tension between market orientation and entrepreneurial proclivity in achieving superior business performance. This is unsettling for marketers, because it could mean that being market oriented is detrimental to a firm that is also trying to be entrepreneurial and successful. To examine this unnerving potential, the authors investigate structural influences (both direct and indirect) of entrepreneurial proclivity and market orientation on business performance. The results indicate that entrepreneurial proclivity has not only a positive and direct relationship on market orientation but also an indirect and positive effect on market orientation through the reduction of departmentalization. The results also suggest that entrepreneurial proclivity's performance influence is positive when mediated by market orientation but negative or nonsignificant when not mediated by market orientation. The authors also provide a discussion and future research implications.