Entrepreneurial Orientation, Innovation and Performance of Value-system Actors

Abstract

The purpose of this study was to explore entrepreneurial orientation as a cognitive construct attributable to individuals and its relationship with innovation and performance from an industry ecosystem perspective. The study adopted a mixed design approach involving exploration of the factors and a diagnosis of their hypothesized relationships. A mixed sampling of members of a leather industry association and the linked industry institutions was carried out with a 76% response rate achieved. Quantitative data was collected from key decision-makers as informants of firms in Kenya’s leather industry using a questionnaire for guided interviews. The Delphi Technique and a pilot study (Cronbach’s Alpha 0.700 – 0.772) were used to establish instrument reliability. Factor analysis was performed on the study variables using Principal Component Analysis before inferential analysis. Entrepreneurial orientation showed validity as a second-order latent construct comprising three cognitive dimensions, namely vision for growth, opportunity recognition and calculated risk-taking. Entrepreneurial orientation and its antecedents were established as determinants of performance of value-system actors in an industry (R²=0.422, F=13.417, p=0.000). It further showed that this relationship is partially mediated by innovation by the firms (Sobel test Z-value = 3.30449610, p=0.00095147). The study recommends extension of this research to other industries.