The Performance Implications of Entrepreneurial Proclivity: A Dynamic Capabilities Approach

Abstract

This study uses the concept of dynamiccapabilities to study the management orientation of entrepreneurial proclivity.Dynamic capability refers to the continual modification of resources tocreate difficult-to-imitate competencies that give a firm competitive advantagein the marketplace. Understanding of retailer dynamic capabilities is limitedby two aspects: (1) little empirical research focuses on retailer's ability toconvert knowledge resources to develop specific capabilities, and (2) mostmodels fail to integrate management orientations, which drive the accumulationof knowledge and development of dynamic capabilities. A model was developed that represents the effects of entrepreneurialproclivity on knowledge resources and their employment. Entrepreneurialproclivity is theorized to be prior to a retailer's knowledge of (1) customers,competitors, suppliers, and governing agencies. The model was tested through asurvey of 269 small retailers. Results confirm that a retailer's management orientation to entrepreneurialproclivity (1) provides a basis for the development of knowledge resources andinfluences the process of creating dynamic market responsiveness, and (2)influences the conversion of supplier and regulatory knowledge into the dynamiccapability of market responsiveness. Overall, the study shows the central roleof entrepreneurial proclivity in retailers' development and use of knowledgeresources. (TNM)

Keywords: Dynamic capabilities, Information utilization, Knowledge management, Knowledge production, Environmental scanning, Managers, Market orientation, Retail industry, Entrepreneurial orientation, Firm performance, Information acquisition