Strategic-hybrid orientations and perceived business performance in medium/high-tech SMEs

Strategic-hybrid orientations and perceived business performance in medium/high-tech SMEs Antonio Manuel Magalhães-Teixeira,Jos e L. Rold an and Antonio Genaro Leal Mill an Department of Business Management and Marketing, Faculty of Economics and Business Sciences, University of Sevilla, Sevilla, Spain Abstract Purpose –This paper aims to investigate the direct and combined impacts of entrepreneurial orientation (EO) and conservative orientation (CO) on perceived business performance (PBP) of smalland medium-sized enterprises (SMEs) under strategic-hybrid orientation (SHO) theory. Design/methodology/approach –The data collected from the SABI NEO international database has 90 companies in 13 medium-to-high and high-tech activity sectors. The authors used partial least squares structural equation modelling to test the research model. Findings –Business strategies match a SHO that includes both orientations, i.e. EO and CO. Moreover, as expected, the authors found evidence that each orientation produces performance-related sign-opposite significant impacts. Finally, the hypothesis regarding the positive synergistic effect of both orientations (EO and CO) on PBP was also supported. Research limitations/implications –One stems from the study’s cross-sectional nature, requiring a longitudinal approach. Another one resides in the absence of further examinations concerning multigroup analysis. Another restraint is the limitedness of data, focused on firms with med/high-tech intensity. For last, while the use of results in the initial stages of theory development can be beneficial, it is important to note that such results cannot be simply extrapolated or generalized to other industrial sectors without careful consideration of the contextual factors at play. Social implications –This study humbly endeavours to contribute to the finality of SMEs’more steady and prosperous existence concerning the consciousness of the need to improve labour stability and wage fairness, conditions such as requiring a continuous commitment. Originality/value –In this study, the authors aimed to investigate the impact of SHO on SMEs’PBP. To this end, the authors simultaneously used two different strategic orientations (SOs): EO, which is widely studied in the literature, and CO, which has been less researched. The authors also examined their synergistic effects on PBP. The authors’approach is based on Venkatraman’s strategic orientation of business enterprises model and the comparative paradigm of SOs. Keywords Conservative orientation, Entrepreneurial orientation, Strategic-hybrid orientation, Perceived business performance, Strategic orientation, Strategic orientation of business enterprises (STROBE), Partial least squares structural equation modelling (PLS-SEM) Paper type Research paper © Antonio Manuel Magalhães-Teixeira, Jos e L. Rold an and Antonio Genaro Leal Mill an. Published by Emerald Publishing Limited. This article is published under the Creative Commons Attribution (CC BY 4.0) licence. Anyone may reproduce, distribute, translate and create derivative works of this article (for both commercial and non-commercial purposes), subject to full attribution to the original publication and authors. The full terms of this licence may be seen at http://creativecommons.org/ licences/by/4.0/legalcode Perceived business performance 49 Received9 September 2023 Revised 19 February 2024 Accepted2 April 2024 European Business Review Vol. 37 No. 1, 2025 pp. 49-81 Emerald Publishing Limited 0955-534X DOI 10.1108/EBR-09-2023-0272 The current issue and full text archive of this journal is available on Emerald Insight at: https://www.emerald.com/insight/0955-534X.htm 1. Introduction Innovation, creativity and fast process adaptation are attributes the extant literature recognises as entrepreneurship characterising and the leading firms’arguments for dealing with unpredictable, discontinuous, hypercompetitive markets (Day and Schoemaker, 2016; Sarooghi et al., 2015). However, the smalland medium-sized enterprises’(SMEs’) fulfilment of these arguments has become challenging (Prasanna et al., 2019). When intending strategies to achieve entrepreneurial character, SMEs deal with distinct strategic choices in a way dissimilar to large firms (Kumar et al.,2012). SMEs cope with dilemmas of their own, e.g. resource scarcity, financial shortage or lack of benefit from scale economics due to size insufficiency. Whenever activity is capital-intensive, such as in the medium-high tech industries, most proactive SMEs balance their entrepreneurship’s differentiation/innovation outcomes with needing internal gains on flexibility and market readiness improvements, all by thorough cost management. Specialised literature designates “hybrid strategy” (Birkinshaw and Gibson, 2004;Cao et al., 2009;Raisch et al.,2009) or strategic-hybrid orientation (SHO) as a way of balancing entrepreneurship with another strategy of a contradictive nature, kind of similar to cost-focus (Porter, 1980). The SHO appears quite effective when maintaining any competitive advantage for as long as possible, although, conceptually, it remains pretty poorly held in SMEs’literature. It is common knowledge that today’s market environments are mostly fast-changing, hypercompetitive, discontinuous and volatile (Kleber and Volkova, 2017). To cope successfully with such deterministic environments (Donaldson, 2001), the strategic management literature stresses that firms must fit into their surroundings by becoming effective, efficient, flexible and focused (Smith and Tushman, 2005). However, despite living in similar environmental coercivity, firms attain different performances from encompassing distinct action steps (Dess and Davis, 1984), i.e. distinct content options about strategies’ conceiving and deployment. Various designations qualify those options: strategic fit, strategic choice or, more commonly, strategic orientations (SOs) (Manu and Sriram, 1996). Of the three methodological approaches SO offers (Hakala, 2011;Ho, 2014), the comparative method is literature-recognised to be the one most qualified for measuring firms’business strategy (Murray, 2012;Speed, 1993). By embedding the SOs’comparative method, Venkatraman’s (1989a)“strategic orientation of business enterprises”(STROBE) model is a multi-dimensional construct that allows disaggregating a firm’s variations felt through several dimensions, recognised as essential for strategic characterisation. One of the SHO theory’s key holdings this study encloses is considering the STROBE model’s dimensions concerning two critical higher-order concepts in modern-day SMEs: “entrepreneurial orientation”(EO) and “conservative orientation”(CO). The paper provides theoretical explanations and reasoning to support the notion of what some research literature applying the STROBE model for SO measuring has previously suggested - the need to distribute all STROBE dimensions according to two higher-order SOs (e.g. Gupta and Basu, 2014), soever not identifying which orientations nor theory. Scholarly research has mainly used the EO’s approach (e.g. Covin and Slevin, 1991)as the pivotal framework for explaining firms’outperformance (Anderson et al.,2014) when operating within such an environment. In that vein, our approach to SME strategy relies on the entrepreneurship SO (Covin et al.,2006;Lumpkin and Dess, 1996). Furthermore, our perspective also ingrains another SO all SMEs deal with, the CO (Byrd et al.,2006;Eggers et al.,2013;Lukas et al., 2001). This orientation (Lukas et al.,2001;Venkatraman, 1989b) has not received proper attention compared to the one given to EO. However, a more proper causal explanation for steady upper performance will require complementary insight aside from EO, such as that one the CO may offer while independent variable, this sight coinciding EBR 37,1 50 with the SO concept. Under SO’s perspective, not integrating this conservative stance will be like considering any entrepreneurial firm in a permanent creative euphoria, with the entrepreneurship an insulated explanation for the performance, which impoverishes the explanatory ability of models due to the incompleteness of examining causal mechanisms (Olson et al., 2005). Most strategic management scholars’view about CO stays researchscrutinised under two main theoretical approaches, one linked to typologies such as Mintzberg’s“adaptive”organisation (Mintzberg, 1973) or Miles’s“defender”firms (Miles and Snow, 1978). The other view relies on Covin’s entrepreneurial literature (Covin, 1991; Covin and Slevin, 1989), which places this strategy concept under a continuum ranging from conservative to entrepreneurial position, i.e. CO matches the opposite of entrepreneurial posture. However, any of these CO views are primarily associated with high rivalry markets, occasionally stagnant or uncertain, where firms tend to compete on price by cost-lowering to defend their market share, a classic notion of CO. More recent research (e.g. Helfat et al., 2007;Martin and Javalgi, 2016) consider CO an adaptive stance by dealing with the rise of flexibility in the value-generation processes. Other scholars relate it to improving response readiness at core-critical operations (Wilden et al., 2013). Finally, it is also linked to moderating any further advancements on risky ventures of highly uncertain return (Wiklund and Shepherd, 2005). Notwithstanding, to date and the extent of our knowledge, SME research has yet to consider both orientations’coexistence as built from all dimensions of the STROBE model, a gap we intend to fill with this study. The SHO concept we developed supports the model conception, which we found familiar among mediumto high-tech SMEs. Although we consider previous works concerning the SHO (e.g. Anees-Ur-Rehman et al., 2017), the concept developed mainly relies on the strategic management literature related to the hybrid perspective and the SO theory. The “hybridity” of firms is literature-explained throughout two main theoretical flows. One is the resourcebased ambidexterity paradigm (Birkinshaw et al., 2016;Cao et al.,2009); the other is the hybrid strategy paradigm (Pertusa-Ortega et al., 2009;Spanos et al.,2004;Sumer and Bayraktar, 2012). Under the business management view, the second literature stream is SHO (Anees-Ur-Rehman et al.,2017). It must enclose two contradicting but cardinal business strategies, e.g. EO and CO; it considers that performance may be steadier and more strengthened from their synergistic effects, a conclusion confirmed by more recent studies (Alnoor et al., 2022). Concomitantly, developing EO and CO, as we did, relates to a configurational perspective whose dimensions rest on the STROBE model. We collapsed Venkatraman’s strands into two opposite, independent constructs for detecting and assessing SHO: EO entails the concept of entrepreneurship (Shane and Venkataraman, 2000); CO comprises adaptiveness throughout flexibility and processes’market-readiness and risk-excessiveness avoidance (Miller and Friesen, 1978;Morgan and Strong, 2003). To summarise, we noted several literature insufficiencies conducive to raising research questions. Research questions rely on the following facts: the SMEs’SHO research scarcity, the lack of SME studies analysing both the EO and CO strands and the COs’low attention given by literature on SMEs. The first question addresses how EO and CO may causally impact performance while independent constructs composing SHO: Q1. What effects do EO and CO have on the performance of high-to-medium tech SMEs? When both orientations exist simultaneously, the synergistic effect concerns combining them to measure their resulting causality on firms’performance. It has roots in the contingency theory (Donaldson and Joffe, 2014) by dealing with fit by moderation (Chan and Perceived business performance 51 Huff, 1993). The “fit by moderation”concept has been long established by Venkatraman (1989a), among others, and according to Chan and Huff (1993), it encloses fit (meaning alignment) and moderation (meaning interaction). By “fit by moderation”, the theory explains as being the relationship between the dependent variable (PBP) and an independent one (EO) that comes contingent upon the moderating effect of a third one (CO) onto the said relationship. Therefore, once the second variable (CO) is aligned (or fitted) with the independent one (EO), the resulting interaction effect can increase the dependent variable’s (PBP) predictive power (R 2 ) and so its value. The importance of measuring synergistic effects from the presence of both orientations (EO and CO) must be emphasised, as it is the proper way to detect and assess extensively any SHO. This approach allows a deeper understanding of SHO by including the synergistic effects of two opposing SOs (He and Wong, 2004;Henderson and Clark, 1990), EO and CO. Then, the question is, “What is the synergistic effect of the two orientations’interaction on performance?”. Finally, we include a few of the study’s most relevant achievements, adequately reported in the sixth chapter of this paper. One of the foremost findings relates to the impacts on PBP accruing individually from positive EO effect and negative CO effect, both essential for that jointly may generate a final positive synergistic effect to cause PBP boosting. Further, we overcome the STROBE’s difficulty with two problematic components –aggressiveness and riskiness –giving birth to a new way for the said model’s appliance. Several other findings reinforce the theoretical completeness of the study, such as the model’s full out-of-sample predictive power or performance gains as of entrepreneurial behaviour when the CO is EO’s aligned with (i.e. fit by moderation). Finally, it must be emphasised that SMEs’CO comes viewed in a specific and dissimilar way from the usual conservative way large firms interpret it. The study proceeds as follows. Section 2 provides a theoretical background and describes the research model. Section 3 relates to the hypotheses to test. Section 4 explains the research method, and Section 5 provides the results. Section 6 discusses the results, and Section 7 ends with study limitations and future research streams. 2. Theoretical background The study’s purpose regards how SHO may impact the firms’performance. The concept of “hybridity”has been of growing interest to the academy for quite a while. That partly happens because the research on firms’characterisation throughout one generic strategy (Porter, 1980), typology (Miles and Snow, 1978) or intended behaviour (Covin and Slevin, 1989;Kohli and Jaworski, 1990;Lumpkin and Dess, 1996;Narver and Slater, 1990) became increasingly drained when searching firms’performance causations based on a single starting strategic assumption. According to what the comparative advantage theory (Hunt and Morgan, 1995) long proclaims, it becomes apparent that there are growing firms’ difficulties in sustaining competitive advantages, becoming increasingly prone to transience. That leads proactive organisations to new organisational forms instilled by dissimilar strategic conceptions, such as the “hybrid”organisational framings (Battilana and Lee, 2014;Bauwens et al.,2020). From “hybridity”pour two significant concepts and research flows. The former, named “ambidexterity”(Birkinshaw et al.,2016;Birkinshaw and Gibson, 2004), is theoretically well grounded by the resource-based theory (Barney, 2001; Peteraf, 1993;Wernerfelt, 1984). It regards the strategic management of bundles of organisational capabilities and resources (Luo et al., 2017) whose uniqueness/rareness and scarcity characteristics, and the seemingly concurrent way exploring and exploiting them in conceiving new products/processes-markets will generate causal ambiguity to competitors (Barney, 1991;McIver and Lengnick-Hall, 2018;Priem and Butler, 2001) besides rising EBR 37,1 52 performance gains. The latter, called hybrid strategies, accrue from earlier criticisms against Porter’s typologies (Datta, 2009;Hendry, 1990;Miller and Friesen,1986b, 1986a;Sumer and Bayraktar, 2012). Literature designates them as hybrid, mixed, integrated or combination strategies (Acquaah and Yasai-Ardekani, 2008;Kim et al., 2004;Leitner and Güldenberg, 2009;Miller and Dess, 1993). Some studies remark that firms pursuing a differentiation strategy may also be able to combine it with a low-cost position through an increase in value-generating processes’efficiencies (Acquaah and Yasai-Ardekani, 2008)orby processes’agility and flexibility gains (Leitner and Güldenberg, 2009). Those latter structural attributes become critical for SMEs once they do not dispose of scale economics efficiencies. Therefore, the “hybrid strategies”have compelling theoretical fundamentals long enough established to be considered –what we did. This paper proposes to extend SO’s well-established theory by permeating it with the concept of hybrid strategies, which broadens its application scope and makes it more suitable for SMEs. To achieve this, we found it most adequate to consider two opposing orientations critical in SME strategic management: the entrepreneurial and conservative orientations, i.e. EO and CO. Once EO is one of the most studied orientations, evidenced by a growing pile of studies, CO is one of the least used in studies related to realistic, stable SOs successful SMEs may hold. As it is viewed now, CO packs internal adaptive stances to the external environment (Helfat et al.,2007), flexibility in value-generation processes (Martin and Javalgi, 2016)and response readiness at core-critical operations (Wilden et al.,2013), while also avoiding further advancements on risky ventures of highly uncertain return (Wiklund and Shepherd, 2005). Of the SO paradigms, the comparative one (Venkatraman, 1989a), which the STROBE model relies on, allows our study to capture strategic outcomes from both EO and CO. This chapter proceeds with the theory review for the model’s constructs and the theoretical reasoning supporting the relations’hypotheses with PBP, including the theoretical explanandum and hypothesis on PBP causation from the synergistic effects. 2.1 Strategic-hybrid orientation SHO is literature-interpreted as resulting from more proactive or conservative but simultaneous behaviours (Francis and Collins-Dodd, 2000). A few research found the two orientations to be sufficiently distinct, suggesting they were separate constructs (Francis and Collins-Dodd, 2000). Either way, by accepting both orientations as a continuum or as different behaviours, one infers a firm can use either or exhibit both orientations concurrently. For example, Miller and Friesen (1982) consider a conservative innovation model accruing from the EO at strategically more conservative firms. Others (e.g. Wales, 2016) consider that some firms swing between higher and lower EO periods, the latter related to occasions where they benefit from emphasising CO. Some studies highlight EO being not homogeneous throughout the entire firm once a more CO may turn advantageous for specific organisational areas (Wales, Monsen, et al., 2011). Hence, whatever the approach, literature recognises such orientations combining as those of SHO, also referred to as integrated strategy (Acquaah, 2007;Spanos et al.,2004) or combination strategy (Leitner and Güldenberg, 2009). According to Miller (1987), SHO’s theory underlines positive relationships with profitability, but only a few empirical studies approach the topic (ClaverCort es et al., 2012;Pertusa-Ortega et al.,2009;Spanos et al.,2004). Further, any SME studies enclosing such orientations’synergistic effects are, to date, unknown. By considering the dimensions’coverage of the STROBE model, we will analyse its ability to capture both orientations –EO and CO –and so, under the SHO‘s perspective, to analyse their hypothesised individual and synergistic effects on performance. Perceived business performance 53 2.2 Strategic orientation of business enterprises model approach The STROBE model (Venkatraman, 1989a) measures firms’strategy through six dimensions one finds in any organisation (Morgan and Strong, 2003), described next as to their original interpretations. “Analysis”refers to the ability of organisational learning when, under a problem-solving posture (Morgan and Strong, 2003), one finds the best possible solution (Miller and Friesen, 1978) backed by management techniques and control systems (Talke, 2007). “Defensiveness”concerns a firm’s emphasis on efficiency-seeking to improve operational strategies’outcomes (Miller, 1989;Venkatraman, 1989a), product/ systems’quality improvements and value-creation management techniques (Venkatraman, 1989a). “Futurity”relates to firms’interest in anticipating competitive conditions and positioning accordingly (James, 2008), emphasising effectiveness rather than efficiency considerations (Grant and King, 1982;Venkatraman, 1989a). “Proactiveness”is central to a firm’s innovative behaviour (Akman and Yilmaz, 2008;Miles and Snow, 1978) and is considered an enabler for competitive advantage in pursuing new products/markets. “Aggressiveness”relates to resource allocation for market positions’improvement faster than competitors, strongly linked to sales and market orientation (Miles, 1982;Miller and Friesen, 1984). Finally, “Riskiness”involves resource allocation to high-risk ventures (Miller and Friesen, 1978;Venkatraman, 1989a). Despite its potential, research-critical issues emerged with mixed results for aggressiveness and riskiness. Such snags left out these traits in subsequent research, opening the path for another conceptualisation of business strategy measure –the EO –a concept that elapsed from the works of Covin and Slevin (1991) and Lumpkin and Dess (1996). Among other facets, EO concerns innovation and experimentalism (Teece, 2007), growth (Sexton, 1997) and exploration (Shane and Venkataraman, 2000). However, when looking at each of the measure instruments’descriptives, we find considerable commonalities with Venkatraman’s operationalisation in both authors’approaches to EO, which happens due to all those concepts having roots in the same previous seminal works (Cooper et al.,1986;Miles and Snow, 1978;D.Miller, 1987;Miller and Friesen, 1978; Mintzberg, 1978;Mintzberg et al.,1976). Given that, one must reckon Venkatraman’s model discloses a similar ability for EO assessment. To enrich our argument in favour of the STROBE model’s ability for EO and CO assessment, a few research (e.g. Lukas et al., 2001), supported in previous studies measuring SO (Conant et al.,1990;Dess and Davis, 1984) contends that such model becomes better characterised through two principal orientations standing out repeatedly in strategic conceptualisations: a prospective orientation and a protective orientation. Following Lukas and colleagues’discussion of two main orientations, we also analysed the traits literature to find the best dimension combination for the two principal orientations that better adjust to SMEs. 2.2.1 Strategic orientation of business enterprises’entrepreneurial orientation. The EO’s compounds. We analysed the remaining dimensions –analysis, defensiveness, futurity and proactiveness –based on the EO concept descriptive premises (Covin and Slevin, 1991; Lumpkin and Dess, 1996;Miller, 1987;Shane and Venkataraman, 2000). Based on the literature’s sum-up of the main theoretical and research insights on entrepreneurship (Basso et al., 2009), we argue that while these four dimensions may entail complementary views of the concept in different proportions, they may provide a practical approach to EO. According to some literature (Covin and Slevin, 1989;Miller, 1983;Miller and Friesen, 1982), “entrepreneurship”is a multidimensional concept encompassing the firm’s actions related to product-market and technological innovation, risk-taking and proactiveness. Looking back at STROBE’s dimensions definitions, entrepreneurship mostly overlaps proactiveness EBR 37,1 54 (innovative behaviour, new products/markets pursuance) and futurity (boost effectiveness on competitive conditions to overcome competitors). By turn, Basso and colleagues’review (2009) underlines the Lumpkin and Dess (1996) concept’s reframing, by which EO’s premises are extended to the processes, practices and decision-making activities. Given these EO’s last more encompassing assumptions, we find their matching on defensiveness (methods to improve operational strategies’effectiveness) and analysis (internal organisation learning and endeavouring the best problem solution). After careful review, it is evident that the EO concept has evolved to encompass a broader scope. Rather than solely relying on new product offerings or alternative entry points, EO’s principles now extend to internal processes, strategic management, technological innovation and fostering creativity and growth. As such, we firmly believe that the four STROBE dimensions provide ample framework for defining and measuring EO. 2.2.2 Strategic orientation of business enterprises’conservative orientation. Past research (Gupta and Basu, 2014;Morgan and Strong, 2003;Venkatraman, 1989a) found mixed results for “aggressiveness”and “riskiness”traits, while the other dimensions were validated. Some works define “aggressiveness”as rivalry between firms (Clark and Montgomery, 1996), connoting it with sales orientation (Lumpkin and Dess, 1996) as a way for sales growth and profitability increase (Covin and Slevin, 1991). Others describe “riskiness”as venturesome decisions on resource allocation and product/market choices involving substantial investment (Covin and Slevin, 1991;Gupta and Basu, 2014). It seems intuitive for both views, entailing affinity with performance gains based on reactive competitiveness increase through risky expansion of their business activities –a typical path for large companies. So, despite aggressiveness and riskiness being recognised in SMEs, their current meanings will undoubtedly differ from the initial ones described above: The scope of aggressiveness. Unlike its initial interpretation (Clark and Montgomery, 1996;Covin and Slevin, 1991), we find aggressiveness regarding an upper overarching conservative dimension (Gatignon and Xuereb, 1997;Lukas et al., 2001; Venkatraman, 1989b). Instead of processes’rigidity and struggling with competitors, SMEs’literature relates aggressiveness to an adaptive stance based on flexibility and response readiness/agility (Helfat et al., 2007;Martin and Javalgi, 2016). Such features relate to improving internal processes to fulfil the market’s requisites, given a desired market share expansion (Liao et al., 2003) or clients’ needs/desires that best allow retaining them. However, costs’increases in the exploitation of functional processes are likely to occur because of the tricky problem of the misfit between strategy and the operational structure (Donaldson, 2001; Donaldson and Joffe, 2014). Therefore, one may expect adverse impacts on performance. The riskiness trait role. Its primary meaning relates to decisions on allocating substantial resources and investments supporting aggressive behaviours in highrisk markets (Lumpkin and Dess, 1996;Wiklund and Shepherd, 2005). So, extant literature bonds riskiness with aggressiveness rather than with any other of the remaining traits, which is confirmed in the seminal research (Venkatraman, 1989a): “... it is clear that aggressiveness ... is not significantly related to the other dimensions, except riskiness”(p. 956). Although the propensity for risk-taking is associated with innovativeness, SMEs’excessive risk-taking exposure may jeopardise sustainability and erode profits in highly uncertain and hostile environments (Kreiser et al., 2002). Under a dominant EO, the riskiness dimension can relate to broader risks beyond those such orientation implies, like unceasing Perceived business performance 55 enhancements of launched innovations, never-ending product development or recurring investments in modifying processes for flexibility and agility gains. Hence, firms must set up containment measures (i.e. conservative ones), such as imposing a cutline on spending resources with internal procedure changes and product development/enhancement. Entrepreneurship literature associates this endeavour with moderating any further advancements on risky ventures of far higher uncertainty on return (Lumpkin and Dess, 1996;Wiklund and Shepherd, 2005). In sum, adopting conservative strategic measures to limit adverse impacts from excessive uncertainty will not avoid performance undermining. The CO’s compound. The SO theory has been viewing the STROBE model’s “aggressiveness”and “riskiness”traits (Miller and Friesen, 1984) as performance compensators (Covin and Slevin, 1991) when firms adopt highly competitive behaviours (Clark and Montgomery, 1996). Their unrelatedness with the other strands made us consider them the only construct’s components. Such an approach of dividing STROBE’s dimensions into two higher-order constructs, one of them as conservative, has been considered in a few research (Francis and Collins-Dodd, 2000; Leitner and Güldenberg, 2009;Lukas et al., 2001). Therefore, considering riskiness and aggressiveness under the same construct makes sense, characterising such outcomes as a CO. 2.3 Perceived business performance Perceived business performance (PBP) relates to the performance’s subjective assessment through two measures: the firm’s growth and profitability. The literature recognises an organisation’s“business performance”as a broad concept involving the firm’sfinancial results and economic contribution (Andersson et al.,2022). However, disagreement persists among scholars when it comes to evaluating intangible resources, namely capabilities (Riggs et al.,2024). The conventional assessment of business performance emphasises profitability (Morgan and Strong, 2003), measured by return on investment as the ultimate test of success (Reese and Cool, 1978). Sharp criticisms of that measure’s validity as the sole indicator (Jacobson, 1987) led research to use alternative financial indicators. However, some authors have observed the multidimensional nature of business performance and the misleading accounting measures due to inadequate intangibles handling and sources sub-evaluating competitive advantage (Bharadwaj et al.,1993), suggesting assessments based on companies’growth (Clark, 1999). Regarding SMEs, there is no agreement on measuring performance (Day and Wensley, 1988), though there is a preference for subjective measures (R. Gupta and Basu, 2014). One being aware of SMEs’subjectivism, the firms’performance assessment must include profitability and growth perceptions. Thus, the performance measurement by Venkatraman (1989a) was applied. 3. Hypotheses 3.1 Relationship between entrepreneurial orientation and perceived business performance Performance is the most critical dependent variable of interest (Wales, Gupta, et al.,2011), closely related to the strategic effectiveness of management methods (Basso et al.,2009), making it crucial for EO’s research (Gupta and Wales, 2017). Backed up by various studies, inherent literature generically supports the EO’s positive contributions to performance (Rauch et al.,2009;Zahra and Covin, 1995). EBR 37,1 56 Some scholars, e.g. Dess et al. (1999), emphasise that the advantages of any entrepreneurial strategy supporting innovation are not immediately apparent. So, due to endogenous limitations, not all SMEs achieve a stable, balanced overlap with the successive most critical new environmental requirements. That led researchers to collect, at times, negative results on performance (Frank et al., 2010;Wiklund and Shepherd, 2005), no significant impacts (Hughes and Morgan, 2007;Messersmith and Wales, 2013) or favourable outcomes in one of the performance dimensions (e.g. growth) (Lee et al.,2001) while becoming adverse in another (e.g. profitability) (Chakravarthy, 1986). However, Miller and Friesen (1982), among others, found that EO favours firms’profits/overall performance, mainly those operating in highly uncertain environments with shortened life cycles in products/business models (Rauch et al., 2009). In conclusion, we conceived EO as a higher-order multidimensional construct composed of several dimensions (Covin and Wales, 2011;Miller, 1983) corresponding to four STROBEspecific traits (analysis, defensiveness, futurity and proactiveness), which have shown theoretical consistency and significant positive impacts on performance over time (Ho, 2014; Laukkanen et al., 2013;Pour and Asarian, 2019). The SMEs’literature outlines the positive direct effects on PBP resulting from entrepreneurial propensity, especially regarding growth and profitability (Herath and Mahmood, 2014;Walker et al.,2015). Therefore, it is expected for EO to be positively related to performance. Accordingly, we state that: H1. The EO positively impacts the PBP. 3.2 Relationship between conservative orientation and perceived business performance Research tackling CO, specifically within the SMEs’SO literature, is undeniably scant. A few research (Eggers et al., 2013;Francis and Collins-Dodd, 2000) signal that a CO conceptualised as an independent construct will, at best, be benign. The results of both studies support the hypothesis that CO negatively impacts performance, and such conclusions coincide with the ones we are looking for. This study takes CO as an independent construct from EO, comprising the “aggressiveness”and “riskiness” dimensions. Matching today’s view, SMEs’aggressiveness concerns the adaptiveness of internal resources/processes to become flexible, ensuring response readiness/agility gains enough to allow expansion on markets and customer retention. Despite the changes/ improvement in the value chain’s structure towards such pursued gains, the contingency literature (Luo and Donaldson, 2013) stresses the negative short-term impact on performance from the internal reorganisation. Such corresponds to a hardly surmountable imbalance between structure and contingency, i.e. the structure’s difficulty in reaching a satisfactory quasi-fit enough to match the strategy contingency’s level. In other words, a company may not fully offset increased exploration costs from structural and process changes aiming for gains in flexibility and agility to improve market effectiveness. The research literature indicates that in the context of SME’s riskiness dimension, a firm’s exposure propensity is often associated with innovativeness, an essential aspect of entrepreneurial behaviour. This association extends beyond the typical risks firms face, highlighting the inherent link between aggressiveness and risk (Venkatraman, 1989a). It is worth noting that entrepreneurial SMEs often bear excessive risk due to a mismatch between the effectiveness of their resources when wanting to adjust to the requirements of the innovation process, i.e., they tend to worsen operations’inefficiencies from technological process changes. Therefore, the risk becomes an undeniable factor the SME must contend with. Under risk-excessiveness, SMEs will set up conservative containment measures by imposing restrictions on internal process changes and further resource investments. On the Perceived business performance 57 Table 3. Construct reliability and validity Construct/dimension/indicator Weights Loadings Jöreskog’s rho_C Convergent validity AVE EO (MC) (composite mode A) 0.893 0.676 Analysis (composite mode A) 0.325 0.880 0.785 0.558 Information systems provide support for decision-making 0.261 0.647 When confronted with a major decision, we usually try to develop a thorough analysis 0.180 0.620 Workforce planning and performance appraisal of senior managers 0.771 0.933 Defensiveness (composite mode A) 0.247 0.807 0.881 0.713 Use of cost control systems for monitoring the performance of value-generating activities 0.218 0.797 Use of production management techniques for value-generation activities 0.372 0.840 Emphasis on product quality through the use of quality circles 0.576 0.892 Futurity (composite mode A) 0.334 0.838 0.811 0.598 We emphasise basic research to provide us with future competitive edge 0.603 0.893 Formal tracking of significant general trends 0.105 0.534 Forecasting key indicators of operations 0.481 0.843 Proactiveness (composite mode A) 0.310 0.759 0.833 0.633 Usually. the first ones to introduce new brands or products/services in the market 0.432 0.844 Constantly on the lookout for businesses that can be acquired 0.611 0.926 Operations in larger stages of the life cycle are strategically eliminated 0.120 0.575 CO (MC) (composite mode A) 0.712 0.552 Aggressiveness (composite mode A) 0.673 0.744 0.876 0.703 Cutting prices to increase market share 0.449 0.875 Setting prices below the competition 0.308 0.737 Seeking market share position at the expense of cash flow and profitability 0.424 0.895 Risklessness (composite mode A) 0.672 0.743 0.870 0.769 We seem to adopt a rather conservative view when making major decisions 0.610 0.895 A tendency to trigger or support projects where the expected returns are more reliable/ certain 0.529 0.858 PBP (MC) (composite mode A) 0.923 0.857 Growth (composite mode A) 0.581 0.937 0.902 0.756 Sales growth position relative to competition 0.413 0.885 Satisfaction with sales growth rate 0.263 0.771 Market share gains relative to competition 0.458 0.943 Profitability (composite mode A) 0.499 0.914 0.889 0.800 Satisfaction with return on sales 0.610 0.915 Advantageous financial liquidity position relative to competition 0.506 0.873 Notes: r C¼composite reliability. AVE ¼average variance extracted. MC ¼multidimensional construct Source: Table by authors EBR 37,1 64 the saturated model’sfit by measuring the external validity of its primary constructs (EO and CO). The proceedings relate to a two-tailed bootstrap for the assessment of HI95 and HI99 percentiles of SRMR (standardised root means squared residual), d_ULS (unweighted least squares discrepancy) and d_G (geodesic discrepancy). Results point out that the measurement model cannot be rejected as their fits are lower than HI95 and HI99, meaning that composites act within a nomological net rather than as individual manifest variables (Henseler, 2017) (see Table 5). 5.2 Structural model The study of the structural model corresponds, in fact, to two models. The first one (Model 1 or “the model”) is sequential to the generic model and an essential requirement for Model 2, the latter contemplating the synergistic effect of interaction between the CO and EO constructs. Thus, once structural Model 1 is fully validated, Model 2 extensively expresses the SHO theory applied to SMEs we intend to test. Regarding graphical representation, we only display Model 2. According to the literature (Benitez et al., 2020;Henseler, 2021), we assessed the estimated model’sfit by repeating equivalent proceedings as applied to the saturated measurement model’sfit assessment. Table 5 shows that the estimated model cannot Table 5. Model fit Value HI95 HI99 Saturated model SRMR 0.051 0.074 0.085 dULS 0.173 0.362 0.481 dG 0.079 0.143 0.183 Hypothesised model (Estimated) SRMR 0.054 0.074 0.086 dULS 0.195 0.366 0.484 dG 0.082 0.143 0.183 Note: It regards model 1 Source: Table by authors Table 4. Constructs’ assessment – discriminant validity* (HTMT 1 and Fornell–Larker criterion) EO CO PBP AGE SIZE TEC.INT EO 0.822 0.312 0.499 0.118 0.150 0.151 CO 0.018 0.743 0.768 0.307 0.163 0.238 PBP 0.423 0.312 0.926 0.041 0.062 0.097 AGE 0.110 0.080 0.012 n.a. 0.296 0.128 SIZE 0.142 0.008 0.060 0.296 n.a. 0.043 TEC.INT 0.132 0.104 0.085 0.128 0.043 n.a. Notes: *Above diagonal: HTMT ratio (in italics) for all constructs. Down under diagonal (included): Fornell–Larker criterion for all constructs. n.a. ¼non-applicable; 1 HTMT 0.85 threshold according to Franke and Sarstedt (2019),Hair et al. (2017),Henseler et al. (2014), It regards model 1 Source: Table by authors Perceived business performance 65 equally be rejected as their fits are lower than HI95 and HI99. As the estimated model accomplishes such pre-requirement, we can equally infer, as before for the saturated model, that the composites act within a nomological net rather than as individual manifest variables (Henseler, 2017). For measuring the structural model, the specified steps ensued by the literature were followed (Hair et al., 2022), firstly looking for potential collinearity issues through the VIF test that may occur when any of the antecedent variables of the endogenous construct shows a value surpassing the 3,3 thresholds. Table 6 shows that the highest VIF attains 1.064 (1.068 at Model 2), confirming the absence of any collinearity issues. The next step was accomplished by measuring the explained variance (R 2 )(Falk and Miller, 1992) of the endogenous construct PBP, the hypothesised direct effects and the synergistic effect in the model. As can be noticed (see Table 6 and Figure 2), EO is the main contributor to PBP variance (Model 1–19.3%; Model 2–19.8%). Hypotheses were measured by a one-tailed bootstrap of 10,000 subsamples, providing t-values and confidence intervals to assess the relationships’statistical significance (Rold an and S anchez-Franco, 2012). The two hypothesised direct relationships (H1 and H2)were supported in both models. The exogenous variables (EO and CO) have moderate and small effects on PBP in Model 1, as stated by the f 2 value representing the effect size of latent variables acting over the dependent constructs (Cohen, 1992), as well in Model 2. We also tested Model 2 to the significance of H3 concerning the interaction effects of both strategy dimensions over PBP. Following the current literature recommending the two-step approach for the interaction assessment (Hair et al.,2022) concerning its significance, we conducted a one-tailed bootstrap confirming the validity and significance of said hypothesis at the 0.05 p value level. Its strength, evaluated by Cohen’s test of the effect size (Cohen, 1988), shows a value of 0.063 which is considered small (0.02#f 2 <0.15). The explanatory power of our model was equally assessed by one examining the level of the coefficient of determination (R 2 Model 1: 0.299; Model 2: 0.341), resulting that with interaction effects, R 2 increases by about 14% becoming a piece of worthy information for the supporting arguments of the SHO theory up here exhibited. Furthermore, we tested the model using PLS predict to assess the model’s predictive performance. Literature (Shmueli and Koppius, 2011) points out that a model needs to be tested out-of-sample to detect predictive power. For the assessment, all procedures used in prior research (Rold an et al., 2018)were followed by applying the said algorithm (Shmueli et al.,2019). As shown in Table 7 below, the three steps were fulfilled, resulting in both models’high predictive power confirmed by PBP dimensions GRW and PRF. 6. Discussion This study analyses how SHO impact the firms’PBP. The STROBE model’s full dimensions allowed us to define the EO and CO, two higher-order constructs essential for SHO’s builtup. Unsatisfactory results from several studies after Venkatraman led researchers to discharge some of the dimensions (Basu and Gupta, 2013;Morgan and Strong, 2003) or the STROBE model itself, while others applied a few dimensions as a measuring instrument of entrepreneurship (Gupta and Wales, 2017;Wales, Gupta, et al., 2011) alternative to Covin/ Slavin or Lumpkin/Dess approaches. However, beyond some works on ambidexterity (He and Wong, 2004;Henderson and Clark, 1990), studies have yet to be discovered using STROBE dimensions’whole set configuring an SHO approach by two higher-order opposing orientations. EBR 37,1 66 Model 1 Direct effect p-value t-value BCCI Support VIF Explained variance % f 2 PBP (R 2 ¼0.299/Q 2predict ¼0.163) 5% 95% H1 (þ): EO 0.456 0.000 5.829 [0.329 ; 0.585] Yes 1.064 19.3 0.279 medium H2 (): CO 0.316 0.000 3.365 [0.462 ; 0.160] Yes 1.021 9.9 0.140 small Control variables: 2.5% 97.5% SIZE 0.037 0.667 0.431 [0.220 ; 0.116] AGE 0.085 0.447 0.760 [0.147 ; 0.292] TEC.INT 0.216 0.267 1.110 [0.620 ; 0.138] Model 2 (with synergistic effects) PBP (R 2 ¼0.341/Q 2predict ¼0.185) 5% 95% H1 (þ): EO 0.469 0.000 5.848 [0.341 ; 0.605] Yes 1.068 19.8 0.313 medium H2 (): CO 0.289 0.001 3.145 [0.434 ; 0.139] Yes 1.040 9.0 0.122 small H3 (þ): CO EO 0.216 0.015 2.183 [0.016 ; 0.342] Yes 1.060 4.7 0.063 small Control variables: 2.5% 97.5% SIZE 0.042 0.628 0.484 [0.223 ; 0.116] AGE 0.046 0.686 0.404 [0.179 ; 0.269] TEC.INT 0.217 0.255 1.137 [0.625 ; 0.119] Notes: EO ¼entrepreneurial orientation; CO ¼conservative orientation, TEC.INT ¼technological intensity. BCCI bias-corrected confidence interval Bootstrapping, based on n¼10,000 subsamples. Hypothesised effects were assessed by applying a one-tailed test for a tstudent distribution (CI 90%). Effects from the control variables were evaluated by applying a two-tailed test (CI 95%) Source: Table by authors Table 6. Structural models assessment Perceived business performance 67 At the time, the STROBE model seemed to suggest to most researchers/practitioners the existence of a whole set of dimensions that, to some degree and put together, would boost performance. It made sense in the last century, the 90s, when large firmswerethe protagonists of economic relevance by joining processes’efficiency through scale economics and market effectiveness through differentiation’s uniqueness. The turn-down Figure 2. Structural model 2 0,469*** [0,341 : 0,605] f2= 0,313 ENTREPRENEURIAL ORIENTATION EO CONSERVATIVE ORIENTATION CO PERCEIVED BUSINESS PERFORMANCE PBP R2= 0,341 SYNERGISTIC EFFECTS CO x EO SIZE AGE TEC.INT -0,289** [-0,434 : -0,139] f2= 0,122 0,216* [0,016 : 0,342] f2= 0,063 – 0,042ns 0,046ns – 0,217ns Notes: *p < 0,05; **p < 0,01; ***p < 0,001; ns = non-significant, based on t (9999), one-tailed test. A two-tailed test assessed the control variables’ significance Sources: Figure by authors. Table 7. Models’out-ofsample predictive power PLS-Predict out-of-sample Q 2 predict Skewness PLS-SEM_ RMSE LM_ RMSE Error diff. Model 1 GRW 0.166 0.395 0.934 0.970 0.036 PRF 0.101 0.380 0.960 1.018 0.058 1st. Step: Q 2 all positive 2nd. Step: jskewnessj< 1!RMSE otherwise MAE 3rd. Step: PLS-SEM <LM for both indicators Model 2 GRW 0.186 0.551 0.922 0.970 0.048 PRF 0.113 0.436 0.954 1.018 0.064 1st. Step: Q 2 all positive 2nd. Step: jskewnessj< 1!RMSE otherwise MAE 3rd. Step: PLS-SEM <LM for both indicators Notes: GRW ¼economic growth; PRF ¼financial performance Source: Table by authors EBR 37,1 68 to the 21st century dictated success’s critical factors of entrepreneurship, innovation, processes’flexibility and market readiness, legitimating SMEs as new leading protagonists. By such a cornerstone, we unfolded a strategic model’s arguments to explain why SMEs operating in disruptive, fast-changing environments perform successfully by combining entrepreneurial behaviour, adaptive flexibility, processes’ response readiness and protective conduct against higher-risk uncertainty innovation. To that, we reinterpreted risk and aggressiveness, finding arguing for an explanandum about how the defensive behaviour of the CO sums up. To catch SHO’s essence at SMEs, we developed EO and CO constructs representing both the entrepreneurial and opposite approaches. Our results show the extreme significance of the impact of exogenous higher-order constructs, EO and CO, on PBP, with opposite effects, supporting hypotheses H1 and H2. However, having apparent contradicting strategic effects on performance does not qualify a firm as a hybrid strategy performer; the sum-up of both strategies’results must generate benefits increase. To this extent, the measurement of SHO’s effectiveness should necessarily comprise both strategic constructs’interaction, CO  EO, acting on PBP. In the aftermath, the inherent H3 hypothesis was validated, meaning there occurs fit enough between CO and EO to raise performance, as demonstrated by the increase of PBP’s predictive power. 6.1 Theoretical implications This study offers essential contributions to a management theory applied to SMEs. A comprehensive assessment of theoretical reasons and empirical evidence identifies five key theoretical developments. Firstly, we assessed and validated all SO strands by reinterpreting the “aggressiveness” and “riskiness”dimensions (Gupta and Basu, 2014;Venkatraman, 1989a). Further, a theoretical comprehensive reasoning in supporting a new STROBE configuration that captures the EO and CO composing is offered, those being the two critical SOs with which most proactive SMEs deal. Secondly, the new configurational approach (Deutscher et al.,2016) to the STROBE model and the theoretical reasoning built up from the contingency theory allow the unveiling of SMEs’SHO through synergistic interaction of fit by moderation (Donaldson and Joffe, 2014). We successfully tested the SHOs’existence (Claver-Cort es et al., 2012;Hill, 1988;Lukas et al., 2001;Spanos et al.,2004), which come from individual effects of both dimensions on PBP added to their synergistic interaction. A third contribution of more confirmatory usefulness accrues from what EO’s intensity allows concerning the innovative processes/products. Results evidence that at high-tech intensity sectors, EO from SMEs operating shows being the leading dimension at the core of strategic behaviour, which, according to entrepreneurship literature, remains focused on the markets surrounding, i.e. contingently determined (Gupta et al.,2013). Its proactiveness favours innovation and experimentalism, significantly impacting performance despite a risk-oriented escalation. That means the higher the EO, the higher the risk-taking; such a conclusion aligns with most of the research on EO (Cacciolatti and Lee, 2016;Morgan and Strong, 2003;Sarooghi et al.,2015;Zhou and Li, 2010). Our fourth contribution emerges from the finding, not reported till now, of the coexistence of another strategic dimension CO, composed of aggressiveness and risk containment orientation, remaining essentially focused on market-adaptive competitiveness through better balancing the processes’flexibility and the market-readiness. The cornerstone is not allowing inefficiencies to scale up wildly, compromising cost gains gathered in critical tasks. At the same time, one expects economic growth enough from Perceived business performance 69 innovativeness to more than pay off the contingent increase in processes’costs. The harmful unavoidability of CO was fully supported by H2 validation. Our theoretical build-up for supporting this dimension’s existence is based on past work (Helfat et al.,2007;Lukas et al., 2001;Martin and Javalgi, 2016), and empirical results also go with previous research (Leitner and Güldenberg, 2009;Parnell et al., 2004;Wu et al.,2007). On the other hand, the collected interaction results discussed below help explain how SMEs may successfully turn the CO dimension’s adverse effects into positive ones. Our last contribution stems from the interaction study, in which CO EO collusion effects over the PBP are significant. The literature on strategy has named hybrid strategies, or SHO, to the aggregate impacts of both contradictive strategic dimensions (Acquaah and Yasai-Ardekani, 2008;Claver-Cort es et al.,2012;Spanos et al., 2004), to which we add now their synergistic interaction which conforms a valuable contribution to the strategy literature. SHO’s roots belong to the approach to firms’competition from the hybrid strategy paradigm (Hakala, 2011;Pertusa-Ortega et al., 2009;Sumer and Bayraktar, 2012). According to the extant research, hybrid strategies may develop in dynamic environments where external pressures and competition force organisations to abandon the dominance of mechanistic forms to become flexible through more organic structures (Schilling and Steensma, 2001;Uotila, 2017). When considering the synergistic effects on PBP, the findings reveal increased in-sample predictiveness power (R 2 ) and out-sample predictiveness power (PLS Predict ). That means that by prevailing EO as the primary orientation and despite the negative CO’s effect, the impact of EO with the CO moderation jointly yields an increase in performance at growth and profitability levels, besides confirming the trustfulness of the model for applying to other data (companies/sectors). To conclude, one found enough evidence for the existence of SHO in entrepreneurial SMEs, and we disclosed the relevant impact of the EO CO synergistic combined effect. 6.2 Implications for practitioners A set of recommendations is disclosed. We address SME managers needing to re-orient firms to new directions, turning them into more proactive, innovative and performant ones through the rise of value generation, which provides growth, and by increasing added-value retaining, which amplifies profitability. Firstly, innovation generally pays off at the process level and through new product generation. EO is the best strategy to respond convincingly to fast-changing/volatile markets. It must constitute the dominant endeavour for an SME to succeed and progress. Secondly, when the market environment is consistently more fast-changing, disruptive and volatile, it will require improved capacities to streamline flexibility gains with the response readiness at core-critical operations that generate most of the value-added. Improving the processes’agility will convey response readiness and higher aptitude to markets’requirements, whether B2B or B2C. That may more than compensate efficiency losses from the absence of economic scale. Finally, improvements in internal processes aiming for agility gains must be considered only in a way that supports the firm’s main endeavour - the EO. This trait must be carefully considered concerning its synergy with EO, which may capitalise or hamper performance. Suppose the management view primarily relies on a discretionary short-term conservative behaviour by prioritising operative costs contention upon flexibility and market-readiness requirements. In that case, CO may become a severe contingency to EO due to the binding of investments to a spend containment criteria, which de-correlates it from EO. That way, ROI may be severely hampered by one not reaching a coveted rebalance on the effectiveness of the new processes because the gains at the market’s operations level only partially EBR 37,1 70 compensate for the rise of the costs of the new operative processes. On the other hand, a CO primarily headed on granting all entrepreneurial requirements may equally hamper performance. That is because of the permanent creative euphoria that entrepreneurship may cause by generating internal processes’sunk costs due to the never-ending exploitation of products/processes’betterment. What will become a genuinely well-balanced relationship between EO and CO, enabling them to capitalise on performance by uplifting it, is the EO primacy as the firm’s primary characterising. That will determine the need for flexibility improvements and processes’agility gains that CO must grant. One adds that the CO’s risk containment strand must follow up thoroughly on cost escalation in that proper preplanning about expenditure limits must exist to set up the EO’s border. 6.3 Implications for society Finally, we also address society. From a sociological perspective, it is undeniable that scholars belonging to such a thinking strand increasingly apply the term post-industrialism, related to a concept which defines the current shifts societies are experiencing in the reconfiguration of capitalism and class (Stevens, 2019). Other approaches (Murphy, 2017)ofa more regional nature, i.e. American, advoke the existence of what they call “autoindustrialism”as the defining term for societies’present way of living as resulting from the DIY-capitalism (i.e. do-it-yourself capitalism). Definitions apart, what may characterise the concept is the consciousness of a reality, never experienced, of a growingly complex world, where the growing resource scarcity due to its finitude contrasts with the human soaring ability for more complex problem-solving each time in what allows an increase of resourceusing efficiency (Tainter, 1988). All this leads us to the Jevons paradox (i.e. the growth of resource scarcity despite its more efficient use). In sum, concerning firms and society, asymmetries among countries’regions and between people representing capital and labour keep growing (Gherhes, 2018), driving the increase of work precarity (Stevens, 2019) and poverty (Boulding, 1980). Therefore, to attempt to invert such a dismal and dystopic future prognosis from sociological scholars, the management sciences have significant challenges in providing reliable solutions to support firms’resilience and welfare. This study humbly endeavours to contribute to the finality of SMEs’more steady and prosperous existence concerning the consciousness of the need to improve labour stability and wage fairness, conditions such as requiring a continuous commitment. The cornerstone of our rationale here rests on the owners’/managers’liabilities to society in measuring what each work placement will represent, the opportunity for welfare-live improvement of involved people. Better firms that thrive through managers’steady actions may more fairly redistribute rents and concede labour stability, allowing better living conditions for workers and families under their responsibility. We hope for that and encourage us to share this study. 6.4 Limitations and future research We mention some limitations to consider when extrapolating conclusions. One stems from the study’s cross-sectional nature, requiring a longitudinal approach. Another one resides in the absence of further examinations concerning multigroup analysis. Another restraint is the limitedness of data, focused on firms with med/high-tech intensity. Though advantageous in the early stages of theory development, results cannot be freely extrapolated or generalised to other industrial sectors. Finally, we recommend caution at the time to extrapolate conclusions to other countries due to the economic specificities of the country (Portugal) from where data was collected. Perceived business performance 71 References Acquaah, M. (2007), “Managerial social capital, strategic orientation, and organizational performance in an emerging economy”,Strategic Management Journal, Vol. 28 No. 12, pp. 1235-1255. Acquaah, M. and Yasai-Ardekani, M. (2008), “Does the implementation of a combination competitive strategy yield incremental performance benefits? A new perspective from a transition economy in Sub-Saharan Africa”,Journal of Business Research, Vol. 61 No. 4, pp. 346-354. Akman, G. and Yilmaz, C. (2008), “Innovative capability, innovation strategy and market orientation: an empirical analysis in Turkish software industry”,International Journal of Innovation Management, Vol. 12 No. 1, pp. 69-111. Alnoor, A., Khaw, K.W., Al-Abrrow, H. and Alharbi, R.K. (2022), “The hybrid strategy on the basis of miles and snow and porter’s strategies: an overview of the current state-of-the-art of research”, International Journal of Engineering Business Management, Vol. 14 Anderson, B.S., Kreiser, P.M., Kuratko, D.F., Hornsby, J.S. and Eshima, Y. (2014), “Reconceptualizing entrepreneurial orientation”,Strategic Management Journal, Vol. 36 No. 10, pp. 1579-1596. Andersson, S., Svensson, G., Molina-Castillo, F.J., Otero-Neira, C., Lindgren, J., Karlsson, N.P.E. and Laurell, H. (2022), “Sustainable development—direct and indirect effects between economic, social, and environmental dimensions in business practices”,Corporate Social Responsibility and Environmental Management, Vol. 29 No. 5, pp. 1158-1172. Anees-Ur-Rehman, M., Saraniemi, S., Ulkuniemi, P. and Hurmelinna-Laukkanen, P. (2017), “The strategic hybrid orientation and brand performance of B2B SMEs”,Journal of Small Business and Enterprise Development, Vol. 24 No. 3, pp. 585-606. Barney, J.B. (1991), “Firm resources and sustained competitive advantage”,Journal of Management, Vol. 17 No. 1, pp. 99-120. Barney, J.B. (2001), “Resource-based theories of competitive advantage: a ten-year retrospective on the resource-based view”,Journal of Management, Vol. 27 No. 6, pp. 643-650. Basso, O., Fayolle, A. and Bouchard, V. (2009), “Entrepreneurial orientation: the making of a concept”, The International Journal of Entrepreneurship and Innovation, Vol. 10 No. 4, pp. 313-321. Basu, S. and Gupta, R. (2013), “Explorations of strategic orientation (so) dimensions on small firm growth and the challenge of resources”,European Journal of Business and Management, Vol. 5 No. 20, available at: www.iiste.org Battilana, J. and Lee, M. (2014), “Advancing research on hybrid organizing –Insights from the study of social enterprises”,Academy of Management Annals, Vol. 8 No. 1, pp. 397-441. Bauwens, T., Huybrechts, B. and Dufays, F. (2020), “Understanding the diverse scaling strategies of social enterprises as hybrid organizations: the case of renewable energy cooperatives”, Organization and Environment, Vol. 33 No. 2, pp. 195-219. Becker, J.-M., Rai, A. and Rigdon, E. (2013), “Predictive validity and formative measurement in structural equation modeling: embracing practical relevance”,Thirty Fourth International Conference on Information Systems, pp. 1-19. Benitez, J., Henseler, J., Castillo, A. and Schuberth, F. (2020), “How to perform and report an impactful analysis using partial least squares: guidelines for confirmatory and explanatory is research”, Information and Management, Vol. 57 No. 2, Bharadwaj, S.G., Varadarajan, P.R. and Fahy, J. (1993), “Sustainable competitive advantage in service industries: a conceptual model and research propositions”,Journal of Marketing, Vol. 57 No. 4, pp. 83-99. Birkinshaw, J. and Gibson, C.B. (2004), “Building ambidexterity into an organization”,MIT Sloan Management Review, Vol. 45 No. 4, pp. 47-55. Birkinshaw, J., Zimmermann, A. and Raisch, S. (2016), “How do firms adapt to discontinuous change? Bridging the dynamic capabilities and ambidexterity perspectives”,California Management Review, Vol. 58 No. 4, pp. 36-58. EBR 37,1 72 Block, J.H., Fisch, C. and Hirschmann, M. (2022), “The determinants of bootstrap financing in crises: evidence from entrepreneurial ventures in the COVID-19 pandemic”,Small Business Economics, Vol. 58 No. 2, pp. 867-885. Boulding, K.E. (1980), “Equilibrium-entropy-development and autopoiesis: towards a disequilibrium economics”,Eastern Economic Journal, Vol. 3 No. 4, pp. 179-188. Burns, T. and Stalker, G.M. (1961), Mechanistic and Organic Systems, Classics of Organizational Theory, C. Brooks/Cole, Pacific. Byrd, A.T., Lewis, B.R. and Bryan, R.W. (2006), “The leveraging influence of strategic alignment on IT investment: an empirical examination”,Information and Management, Vol. 43 No. 3, pp. 308-321. Cacciolatti, L. and Lee, S.H. (2016), “Revisiting the relationship between marketing capabilities and firm performance: the moderating role of market orientation, marketing strategy and organisational power”,Journal of Business Research, Vol. 69 No. 12, pp. 5597-5610. Cao, Q., Gedajlovic, E. and Zhang, H. (2009), “Unpacking organizational ambidexterity: dimensions, contingencies, and synergistic effects”,Organization Science, Vol. 20 No. 4, pp. 781-796. Carmines, E.G. and Zeller, R.A. (1979), Reliability and Validity Assessment, in Carmines, E. and Zeller, R., (Eds), Sage publications, London. Cepeda-Carri on, G., Henseler, J., Ringle, C.M. and Rold an, J.L. (2016), “Prediction-oriented modeling in business research by means of PLS path modeling: introduction to a JBR special section”, Journal of Business Research, Vol. 69 No. 10, pp. 4545-4551. Chakravarthy, B.S. (1986), “Measuring strategic performance”,Strategic Management Journal, Vol. 7 No. 5, pp. 7-458. Chan, Y.E. and Huff, S.L. (1993), “Investigating information systems strategic alignment”,ICIS – International Conference on Information Systems, Vol. 45, pp. 345-363. Chan, Y.E., Huff, S.L., Barclay, D.W. and Copeland, D.G. (1997), “Business strategic orientation, information systems strategic orientation, and strategic alignment”,Information Systems Research, Vol. 8 No. 2, pp. 125-150. Chin, W.W., Marcolin, B.L. and Newsted, P.R. (2003), “A partial least squares latent variable modeling approach for measuring interaction effects: results from a Monte Carlo simulation study and an electronic-mail emotion/ adoption study”,Information Systems Research, Vol. 14 No. 2, pp. 189-217. Clark, B.H. (1999), “Marketing performance measures: history and interrelationships”,Journal of Marketing Management, Vol. 15 No. 8, pp. 711-732. Clark, B.H. and Montgomery, D.B. (1996), “Perceiving competitive reactions: the value of accuracy (and paranoia)”,Marketing Letters, Vol. 7 No. 2, pp. 115-129. Claver-Cort es, E., Pertusa-Ortega, E.M. and Molina-Azorín, J.F. (2012), “Characteristics of organizational structure relating to hybrid competitive strategy: implications for performance”, Journal of Business Research, Vol. 65 No. 7, pp. 993-1002. Cohen, J. (1988), Statistical Power Analysis for the Behavioral Sciences, Lawrence Erlbaum Associates, Hillsdale. Cohen, J. (1992), “A power primer”,Psychological Bulletin, Vol. 112 No. 1, pp. 155-159. Conant, J.S., Mokwa, M.P. and Rajan Varadarajan, P. (1990), “Strategic types, distinctive marketing competencies and organizational performance: a multiple measures-based study”,Strategic Management Journal, Vol. 11 No. 5. Cooper, A.C., Willard, G.E. and Woo, C.Y. (1986), “Strategies of high performing new and small firms: a reexamination of the niche concept”,Journal of Business Venturing, Vol. 1 No. 3, pp. 247-260. Covin, J.G. (1991), “Entrepreneurial versus conservative firms: a comparison of strategies and performance”,Journal of Management Studies, Vol. 28 No. 5, pp. 439-463. Covin, J.G. and Slevin, D.P. (1989), “Strategic management of small firms in hostile and benign environments”,Strategic Management Journal, Vol. 10 No. 1, pp. 75-87. Perceived business performance 73 Sumer, K. and Bayraktar, C.A. (2012), “Business strategies and gaps in porter’s typology: a literature review”,Journal of Management Research, Vol. 4 No. 3, pp. 100-119, doi: 10.5296/ jmr.v4i3.1721. Tainter, J.A. (1988), The Collapse of Complex Societies, (Renfrew, C. and Sabloff, J., Eds; 1st ed., Press Syndicate of the University of Cambridge, Cambridge. Talke, K. (2007), “Corporate mindset of innovating firms: influences on new product performance”, Journal of Engineering and Technology Management, Vol. 24 Nos 1/2, pp. 76-91. Teece, D.J. (2007), “Explicating dynamic capabilities: the nature and microfoundations of (sustainable) enterprise performance”,Strategic Management Journal, Vol. 28 No. 13, pp. 1319-1350. Uotila, J. (2017), “Exploratory and exploitative adaptation in turbulent and complex landscapes”, European Management Review, Vol. 15 No. 4, pp. 505-519. Urbach, N. and Ahlemann, F. (2010), “Structural equation modeling in information systems research using partial least squares”,JITTA: Journal of Information, Vol. 11 No. 2, pp. 5-40. Venkatraman, N. (1989a), “Strategic orientation of business enterprises the construct, dimensionality”, Management Science, Vol. 35 No. 8, pp. 942-962. Venkatraman, N. (1989b), “The concept of fit in strategy research: towards verbal and statistical correspondence”,The Academy of Management Review, Vol. 14 No. 3, pp. 423-444. Wales, W.J. (2016), “Entrepreneurial orientation: a review and synthesis of promising research directions”, International Small Business Journal: Researching Entrepreneurship,Vol.34No.1,pp.3-15. Wales, W.J., Gupta, V.K. and Mousa, F.-T. (2011), “Empirical research on entrepreneurial orientation: an assessment and suggestions for future research”,International Small Business Journal: Researching Entrepreneurship, Vol. 31 No. 4, pp. 357-383. Wales, W.J., Monsen, E. and Mckelvie, A. (2011), “The organizational pervasiveness of entrepreneurial orientation”,Entrepreneurship Theory and Practice, Vol. 35 No. 5, pp. 895-923. Walker, R.M., Chen, J. and Aravind, D. (2015), “Management innovation and firm performance: an integration of research findings”,European Management Journal, Vol. 33 No. 5, pp. 407-422. Wei, Z., Zhao, J. and Zhang, C. (2014), “Organizational ambidexterity, market orientation, and firm performance”,Journal of Engineering and Technology Management, Vol. 33, pp. 134-153. Wernerfelt, B. (1984), “A resource-based view of the firm”,Strategic Management Journal, Vol. 5 No. 2, pp. 171-180. Werts, C.E., Rock, D.R., Linn, R.L. and Jöreskog, K.G. (1978), “A general method of estimating the reliability of a composite”,Educational and Psychological Measurement, Vol. 38 No. 4, pp. 933-938. Wiklund, J. and Shepherd, D. (2005), “Entrepreneurial orientation and small business performance: a configurational approach”,Journal of Business Venturing, Vol. 20 No. 1, pp. 71-91. Wilden, R., Gudergan, S.P., Nielsen, B.B. and Lings, I. (2013), “Dynamic capabilities and performance: strategy, structure and environment”,Long Range Planning,Vol.46No.1-2, pp. 72-96. Wright, C.D.E., Thatcher, J.B. and Roberts, N. (2012), “Operationalizing multidimensional constructs in structural equation modeling: recommendations for is research”,Comunications of the Association for Information System, Vol. 30, pp. 367-412. Wu, H.L., Lin, B.W. and Chen, C.J. (2007), “Contingency view on technological differentiation and firm performance: evidence in an economic downturn”,R&D Management,Vol.37No.1, pp. 75-88. Yu, X., Schuberth, F. and Henseler, J. (2023), “Specifying composites in structural equation modeling: a refinement of the Henseler–Ogasawara specification”,Statistical Analysis and Data Mining: The ASA Data Science Journal, Vol. 16 No. 4. EBR 37,1 80 Yu, X., Zaza, S., Schuberth, F. and Henseler, J. (2021), “Counterpoint: representing forged concepts as emergent variables using composite-based structural equation modeling”,ACM SIGMIS Database: The DATABASE for Advances in Information Systems, Vol. 52 No. SI, pp. 114-130. Zahra, S.A. and Covin, J.G. (1995), “Contextual influences on the corporate entrepreneurshipperformance relationship: a longitudinal analysis”,Journal of Business Venturing, Vol. 10 No. 1, pp. 43-58. Zhou, K.Z. and Li, C.B. (2010), “How strategic orientations influence the building of dynamic capability in emerging economies”,Journal of Business Research, Vol. 63 No. 3, pp. 224-231. Corresponding author Antonio Manuel Magalhães-Teixeira can be contacted at: [email protected] For instructions on how to order reprints of this article, please visit our website: www.emeraldgrouppublishing.com/licensing/reprints.htm Or contact us for further details: [email protected] Perceived business performance 81