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

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 st...

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Main Authors: Héctor Cuevas-Vargas, Neftalí Parga-Montoya, Rudy Fernández-Escobedo
Format: Article
Language:English
Published: SAGE Publishing 2019-06-01
Series:SAGE Open
Online Access:https://doi.org/10.1177/2158244019859088
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author Héctor Cuevas-Vargas
Neftalí Parga-Montoya
Rudy Fernández-Escobedo
author_facet Héctor Cuevas-Vargas
Neftalí Parga-Montoya
Rudy Fernández-Escobedo
author_sort Héctor Cuevas-Vargas
collection DOAJ
description 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.
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spelling doaj.art-3879c43c5b2e4bf6a4eebe4abb82f96e2022-12-21T18:38:41ZengSAGE PublishingSAGE Open2158-24402019-06-01910.1177/2158244019859088Effects of Entrepreneurial Orientation on Business Performance: The Mediating Role of Customer Satisfaction—A Formative–Reflective Model AnalysisHéctor Cuevas-Vargas0Neftalí Parga-Montoya1Rudy Fernández-Escobedo2Universidad Tecnológica del Suroeste de Guanajuato, Valle de Santiago, Guanajuato, MéxicoUniversidad Autónoma de Aguascalientes, MéxicoRF&A Consulting, Durango, MéxicoThis 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.https://doi.org/10.1177/2158244019859088
spellingShingle Héctor Cuevas-Vargas
Neftalí Parga-Montoya
Rudy Fernández-Escobedo
Effects of Entrepreneurial Orientation on Business Performance: The Mediating Role of Customer Satisfaction—A Formative–Reflective Model Analysis
SAGE Open
title Effects of Entrepreneurial Orientation on Business Performance: The Mediating Role of Customer Satisfaction—A Formative–Reflective Model Analysis
title_full Effects of Entrepreneurial Orientation on Business Performance: The Mediating Role of Customer Satisfaction—A Formative–Reflective Model Analysis
title_fullStr Effects of Entrepreneurial Orientation on Business Performance: The Mediating Role of Customer Satisfaction—A Formative–Reflective Model Analysis
title_full_unstemmed Effects of Entrepreneurial Orientation on Business Performance: The Mediating Role of Customer Satisfaction—A Formative–Reflective Model Analysis
title_short Effects of Entrepreneurial Orientation on Business Performance: The Mediating Role of Customer Satisfaction—A Formative–Reflective Model Analysis
title_sort effects of entrepreneurial orientation on business performance the mediating role of customer satisfaction a formative reflective model analysis
url https://doi.org/10.1177/2158244019859088
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