Research On The Relationship Of Entrepreneural Orientation, Guanxi Utilization And Ventures’ Performance Under The Background Of Transitional Economy

In the current studies of entrepreneurial orientation, most scholars are more likely based on western mature market economies. Entrepreneurial orientation related theory proposed has mainly from the mature western theoretical background, and service in the market economic system, the study of entrepreneurial orientation under the background of transitional economy is lack of concern. Transitional economy as an important driving force for world economic development at present plays a more and more important role in the world economy, and also to attract more people’s attention. The most typical representative is China. The rapid growth of GDP leads the growth of world economy. But under Chinese transitional economy, ventures are faced with various unique environments, making the differences happened when they implement entrepreneurial orientation strategy compare with mature economy. For example, the implementation of entrepreneurial orientation needs to invest a lot of resources and energy. In western mature market economies, elements of the market are perfectly distributed, and resources are relatively easy to acquire. However, it has opposite effects in Chinese transitional economy, the capital market is not perfectly allocated, the government for a series of factors of scarce resources control makes the implementation of entrepreneurial orientation has a series of unique problems. There is no study to explore these issues. Therefore, in order to reveal the mechanism of entrepreneurship orientation strategy of the non-market economy system, an in-depth study about the theory of entrepreneurial orientation under transitional economy is urgently needed.This study in-depth discusses the relationship between entrepreneurial orientation and guan xi. entrepreneurial orientation and performance, guan xi and performance, under the background of Chinese transitional economy. The data analysis of Chang Chun area shows that entrepreneurial orientation has a positive impact on new ventures’ performance, but different dimensions of entrepreneurial orientation have different impacts on new ventures’performance. Innovation and risk-taking have significantly positive effect on new ventures’ performance, but the effect of pro-activenesson new ventures" performance is not significant. At the same time, this study also verified that business ties and government ties will positively mediate the relationship between entrepreneurial orientation and performance. The result of data analysis shows that business ties partially and positively mediate the relationship between entrepreneurial orientation and performance. On the dimensions view of entrepreneurial orientation, business ties perfectly and positively mediate the relationship between innovation and performance, and business ties partially mediate the relationship between risk-taking and performance, but the effect of business ties mediate the relationship between pro-activeness and performance is not significant. Government ties partially and positively mediate the relationship between entrepreneurial orientation and performance. On the dimensions view of entrepreneurial orientation, government ties perfectly and positively mediate the relationship between innovation and performance, and government ties partially mediate the relationship between risk-taking and performance, but the effect of government ties mediate the relationship between proactiveness and performance is not significant.The results of this study indicate that there are great differences in Chinese context and foreign mature economies when new ventures implemententrepreneurial orientation strategy. Factors such as incompletion of regulations, the lack of resources, protections of property rights and so on and so forth, are all limited the effect of implement entrepreneurial orientation strategy. Therefore, the use of different types of guan xi is necessary when managers of new ventures implement entrepreneurial orientation, business ties and government ties are exclusively included.The existing studies of entrepreneurial orientation are mainly focus on mature venture, and the relevant theories are mostly based on the background of western mature economies, few of them pay attention on the background of transitional economies. This study, takes on the view of system theory and social network theory, proposed that guan xi utilization is the key path to transform performance from entrepreneurial orientation under transitional economies. To verify the theoretical model and the hypothesis, a large number of samples with large-scale questionnaire survey of new ventures in Chang Chun are collected. Results show that the theoretical model and hypothesis which this study proposed are all supported. Therefore, the important theoretical innovations proposed by this study are mainly reflected in the following aspects. (1) The existing study of entrepreneurial orientation related theory is lack of research under the background of transitional economy, this study based on system theory and social network theory, constructs the model of relationship of entrepreneurial orientation, guan xi utilization and performance theory in transitional economy background, fills the gap of entrepreneurial orientation related theory. Study of entrepreneurial orientation has been the main concern of large-scale and mature firms, and also related theories are based on the background of present western mature economy, however, for the study of entrepreneurial orientation under the background of institutional transformation, especially new ventures which implement entrepreneurial orientation is obviously insufficient. Transition economies as a new impetus to the development of the world economy, the role played is increasingly prominent, and the lack of research on background of transitional economy will hinder the further development of entrepreneurial orientation theory to a great extent. In this study, based on the existing researches, constructs the model of entrepreneurial orientation, guan xi theory and performance on the view of system theory and social network theory. This study also promotes that guan xi utilization is the critical path to transform performance from entrepreneurial orientation, so as to make up for the deficiency of the theory of entrepreneurial orientation under the background of transitional economy.(2) On the basis of in-depth analysis Chinese transitional economy background, the transformation that from entrepreneurial orientation to performance needs different types of network relationship, business and government relationship between entrepreneurial orientation and performance play as an intermediary roles, thus the study expands the mechanism of the transformation of entrepreneurial orientation under the transitional economy background. Under the background of Chinese transitional economy, imperfect system, lack of stability, market system is incomplete, that make it hard for the allocation of resources through market mechanism. Therefore, during the process of set up and early growth of new-ventures’ facing serious resource constraints. As entrepreneurial orientation to promote the development of new ventures, the strategy itself, as a kind of resource consumption, in the process of implementation requires constant resource input, and the unique background of transitional economy to new ventures face a dilemma in the process of implementing entrepreneurial orientation strategy. Therefore, as a formal system of network, namely the new ventures in the process of implementation of entrepreneurial orientation tend to use different types of network to solve the plight of resources. Due to the background of transitional economy, the new venture’s business and government relations are its legitimacy key resources, such as access to capital, information and important channel, and the corresponding cost is relatively low. Therefore, this study exploratory proposed that under the background of transitional economy. new:ventures in the process of the implementation of entrepreneurial orientation, business and government relations play a key intermediary role, to expand the mechanism of entrepreneurial orientation transformation.(3) As a sample of new ventures in Chang Chun area, through a massive questionnaire surveys and a case study, to verify the inner relationship of entrepreneurial orientation, guan xi utilization and performance under the background of transitional economy, to figure out that business relationship and government relationship have different effects on performance, and the mediate role of business relationship and government relationship played on different dimensions of new venture’s entrepreneurial orientation are different, that deepen the existing scholars understandings of network relationship. This study on the basis of summarizing the existing theory and literatures, proposes that entrepreneurial orientation and guan xi utilization (business and government relations) have positive impacts to new ventures’ performance, entrepreneurial orientation for different types of guan xi also plays a positive role, and business and government relations mediate the relationship between entrepreneurial orientation and new venture performance. For testing the theoretical model and hypothesis, this study collects a large scale surveys in Chang Chun area. The data analysis of the sample shows that entrepreneurial orientation and guan xi utilization to new venture performance have a positive impact, at the same time, guan xi utilization is the critical path to transform new venture performance from entrepreneurial orientation. Both business relationship and government relationship positively mediate entrepreneurial orientation and new venture performance.However. the roles they played in transformation from different dimensions of entrepreneurial orientation to new venture performance exists differences. This study deepens the existing scholars understandings of network relationship. New ventures are mainly included small and medium-sized ventures, through the implementation of innovation, risk-taking and proactiveness may help them to get rid of the defect of new entrants, to get out of the survival period and fast growth. But entrepreneurial orientation is a resource consumption strategy; the implementation requires managers to invest a lot of energy, organize resources continuously, which makes a certain cost for the process. Under the background of transitional economy, the market system is not fully established, and the discontinuity of the policy, making the external environment changes quickly, it is difficult for new ventures to obtain resources through effective market. Therefore, new ventures to carry out the strategy of entrepreneurial orientation are facing the dilemma of more serious resource requirements. That is to say, if the new venture is unable to efficiently provide the resources required for implementation of entrepreneurial orientation strategy, then the entrepreneurial orientation would not bring the benefits it desired. On the contrary, it could drag backward for new ventures. To implement entrepreneurial orientation strategy under the mature economies are faced with different external environments. System is more robust, allowing ventures to acquire resource through the improved market system, ensure the proper implementation of entrepreneurial orientation strategy, and lead to a higher performance.By the period of implementation of entrepreneurial orientation strategy under transitional economy, new venture has a high demand of guan xi utilization. The effective utilization of business relationship and government relationship are the key successful factors for new venture to survival. Guan xi can be used as an informal institution to cover the imperfections of existing formal system. The value of business relationship is important to obtain market information, financial resources, key technologies, and promote learning generation during implementing entrepreneurial oriented strategy. These are the "scarce resources" of new ventures. Therefore, the support of partners, the power of business relationship as a guarantee are needed when new ventures implement innovation, risk-taking and proactiveness in order to actively enhance business performance. Under the background of transitional economy, government relationship is particularly important. By the support of government relationship, new ventures can easily obtain policy information, policy support, fast gain legitimacy and get some "strategic resources (such as credit)." These are the key strength of new ventures to gain competitive advantage and performance. If a new venture has government support and uses government relationship properly, then it will quickly bring the venturehigh performance during the implementation of entrepreneurial orientation. Therefore, new ventures in China need more efficiently scan the external environment, by the time of implementing entrepreneurial orientation strategy, take more support of business relationship and government relationship to get a higher payback.