Antecedents to Innovation and Growth: Analyzing the Impact of Entrepreneurial Orientation and Management by Objectives

Abstract

For technology-oriented SME, innovation and growth are important aspects of firm performance. A strategic orientation that emphasizes entrepreneurial behavior (entrepreneurial orientation, EO) may be an effective way to obtain these goals. However, there is little information on the internal organizational processes that link EO to innovation and growth. In this study, the performance implications of Goal-oriented management techniques (GoM) such as Management by Objectives (MbO) on innovation and growth in the context of EO are analyzed on a sample of 165 fast growth technology-based ventures from Germany. The results show that EO has a positive impact on innovation and growth, with innovation being a partial mediator. In addition to that, EO seems to be negatively related to the degree to which GoM is used, while MbO itself has a negative relationship with innovation.

Keywords: Management by Objectives, Innovation, Entrepreneurial Orientation, Entrepreneurship, Goal-Oriented Management, Growth, Innovation, SME