1 Faculty of Business and Social Sciences, SDU2 Department of Marketing & Management, Faculty of Business and Social Sciences, SDU3 Strategic Organizational Design, Department of Marketing & Management, Faculty of Business and Social Sciences, SDU4 Loughborough University5 Department of Marketing & Management, Faculty of Business and Social Sciences, SDU
This study sheds light on the role that the competitive environment plays in determining how elements of market orientation and elements of entrepreneurial orientation interact to influence business success. We develop a model in which we postulate that market orientation, entrepreneurial orientation, and competitive environment shape business performance via a three-way interaction. We test the model using primary data from the CEOs of 270 CEO of manufacturing firms, together with secondary data on these firms' profit performance. An assessment of the results indicates that customer orientation moderates the positive relationships between the competitiveness element of entrepreneurial orientation and market share and return on assets (ROA): the positive relationships between competitiveness and market share and competitiveness and ROA become stronger the greater the firms' customer orientations. Also, these moderating effects are stronger for firms operating in highly competitive environments. For the innovativeness component of entrepreneurship, however, the positive relationship between innovativeness and ROA decreases as the competitive environment becomes more hostile.