The Effect Of Entrepreneurial Orientation On New Venture Performance: A Study Based On "Ambidextrous Structure" Entrepreneurial Environment

Based on characteristics of the transition economy we established "dual" system of entrepreneurial environment based on market and regulatory system and analyzed relationship between entrepreneurial orientation and performance in different entrepreneurial environment in China's enterprises on this basis. Research was supported by the National Natural Science Foundation of China (70732005) , using empirical research methods and research framework built on the thesis was examined.Combined with economic environment characteristics and operating mechanism of entrepreneurial environment in Chinese transitional economy, this paper established a "dual" system of entrepreneurial environment in transitional economy, and based on the strength of market and regulatory mechanisms , we divided the entrepreneurial environment into "weak market - weak regulation," " weak market - strong regulation, "" Strong market - weak regulatory system "and" Strong market - strong regulation, "four entrepreneurial environments. And on this basis, we developed the "dual" entrepreneurial environment rating scale. Based on the analysis of characteristics of China's entrepreneurial environment, this paper further studied the relationship between entrepreneurial orientation and performance in different business environments. Put forward the different "dual" business environments, a total of 8 theoretical assumptions between the entrepreneurial orientation and the new enterprise's financial performance and growth performance. Under the support of Key projects, a large scale sample survey was conducted on China's northeast, north and southeast coastal areas and a total of 996 valid samples were collected, and the dual system of entrepreneurial environment was utilized to evaluate the entrepreneurial environment in different regions. At the same time, cluster analysis and regression analysis were used to test China's "dual" entrepreneurial environment types, as well as relationships between entrepreneurial orientation and performance in different types of corporate entrepreneurial environments. Among the eight assumptions, six were supported.The main contents and conclusions of this article are as follows:First of all, this paper constructed a "dual" system of entrepreneurial environment in transitional economy, developing a rating scale which was then examined. In this paper, the current situation of the researches on entrepreneurial environment were summarized and we found that the current study focuses on the environmental characteristics, environmental factors and the environment main body , but through deep-rooted analysis of the driving factors it is not difficult to find that the market and government are two driving forces to push business environment functioning. Combining the characteristics of transition economy, this paper established a "dual" system of entrepreneurial environment based on market and government. Subsequently, the effectiveness and theoretical content of the "dual" system of entrepreneurial environment were verified and we found that the entrepreneurial environment in different regions showing different "dual" character. Furthermore, on the basis of referring to the current researches on business environment we developed the "dual" entrepreneurial environment rating scale. In this paper, based on market and regulatory system to build a "dual" system, surveys were conducted on the entrepreneurial environment of Jilin, Beijing, Fujian and Zhejiang enterprises , and further validated our "dual" structure of entrepreneurial environment. The survey data obtained through the right business environment in different regions were tested, results showed that the "dual" system of entrepreneurial environment has theoretical and practical significance for the analysis of China's regional business environment. At the same time, studies have shown that different regions of China showed a greater difference on the environmental characteristics due to their different economic and social environment .Secondly, this paper discussed the relationship between entrepreneurial orientation and performance and conducted in-depth exploration of the role of entrepreneurial orientation mechanism. At the same time, combined with environmental factors, from "dual" structure point of view, in accordance with the strength of the market and regulation, we put forward a matrix model between entrepreneurial orientation and business performance (see Figure 5-4). In conjunction with the model, this paper argues that in different business environments, the relationship between entrepreneurial orientation and new venture performance have differences. Specific propositions are as follows:(1) In the "weak market - weak system" business environment, the entrepreneurial orientation and financial performance and growth performance have no significant correlation; this shows that in weak market - weak institutional environment, the implementation of the entrepreneurship-oriented strategies do not bring real benefits for the enterprise. Because to implement innovative, risk-taking and pioneering behavior require substantial and sustained investment of resources, as well as organizational change, and the "weak market - weak regulation" business environment can not provide the appropriate support. Thus, when a business or organization can not be supported by the external environment facing business changes, the maintenance of the status quo or taking a conservative business strategy is a better option.(2) In "weak market - Strong regulation" business environment, there are "U"-type relationships between entrepreneurial orientation and financial performance /growth performance. This suggests that in weak market - strong institutional environment, curve relationship exists between entrepreneurial orientation and business performance. Due to market imperfections, the market factor missing resources, less liquidity, which make those who implement a proactive strategy facing with continuous commitment of resources and the dilemma of poor output. However, supportive entrepreneurship policy can provide strong support for entrepreneurship, for example, tax relief ,the provision of government projects. Those in high-level entrepreneurial orientation strategies are able to seize the opportunity to promote the development of enterprise. Therefore, in such an environment, companies can take a high level of entrepreneurial orientation strategy or adopt a conservative strategy to achieve the desired performance results.(3) In "Strong market - Strong regulation" business environment, the relationships between entrepreneurial orientation and financial performance/ growth performance were significantly and positively correlated; This shows that the strong market - strong institutional framework can actively support the enterprises to implement a proactive strategy for a bold venture. A high level of entrepreneurial orientation strategy can bring higher returns, resulting in a positive performance. Thus, in such circumstances firms should take entrepreneurial orientation strategy, keeping the courage to take risks, seize opportunities, and take the initiative to quickly build their own competitive advantage.(4) In the "strong market - weak regulation" business environment, we assume that there are "U"-type relationship between entrepreneurial orientation and financial performance/ growth performance. However, the data showed that in such an environment there is a linear relationship between entrepreneurial orientation and financial performance , and there is no significant correlation between entrepreneurial orientation and growth performance. The empirical results do not therefore support our hypothesis. This reflected in the strong market-weak regulatory business environment, entrepreneurial orientation help to improve the short-term corporate financial performance, due to strong competition in the market environment, despite adopting innovative and pioneering strategy, other companies can also rapid follow-up to imitate. Therefore, the entrepreneurial enterprises can only sustain a short-term advantage. In this environment, companies tend to take rapid innovation, and lacking of institutional protection the long-term risk for innovation. So long-term performance caused by entrepreneurial orientation strategy is not significant.This study shows that the "dual" structure characteristics of business environment make different impacts on the relationships between entrepreneurial orientation and new venture performance to different degrees. At the same time, it further reveals the entrepreneurial orientation depends on corporate decision-making environment, due to dynamic changes in the external environment, businesses need to use contingency thinking in order to better play the function and the role of entrepreneurial orientation. In this paper, the following areas still have certain limitations to be improved.First, the running mechanism of the "dual" entrepreneurial environment remains to be further studied. This study built the "dual" structure in transitional economy which will help to analyze the entrepreneurial environment in transition economy, but because the environment itself is a complex system , the running mechanism of the "dual" entrepreneurial environment has yet to wait for further research and verification by the scholars.Secondly, the "dual" business environment rating scale is to be improved and further examined. This study focuses on the entrepreneurial environment evaluation index reference to the GEM report on the entrepreneurial environment in China, the applicability of its dual structure for the environmental have yet to be further refined and tested by the scholars.Thirdly, entrepreneurial orientation implementation would require changes within the organization and external environment. The impacts of entrepreneurial orientation on firm performance are also influenced doubly by organizational variables and environment variables. Thus, in studying the relationship between entrepreneurial orientation and performance in the "dual" business environment, we should also concern about the organizational characteristics variables and the external scenario variables on entrepreneurial orientation and performance relationship together.Finally, because of the limited research time and cost, this paper adopts a cross-sectional data (cross section data) to test the assumptions and therefore the dynamic relationship between entrepreneurial orientation and long-term performance has not been fully tested. In future research, scholars can take advantage of the vertical (longitudinal) data to test the relationship between entrepreneurial orientation and performance in transitional economy.