Study On The Effect Of Entrepreneurial Orientation On Performance: Network Capabilities As Moderator Variables

In the 1980's, due to the complex and changing external environment, the organizational structure of the original enterprise, system, products and technology often can not adapt to this environment, which led to elimination. Company facing such an environment enters new markets, develops new products and new services, and changes the form of organization to face the competition. In this situation, scholars have studied this area to solve problems. After research, many scholars found venture is ongoing, which enable companies to survive and improve performance(Miller, 1983; Zahra, 1993).Then Corporate Entrepreneurship(CE) becomes the means of re-development strategy and the way to seize market opportunities.With the development of the theory of CE, scholars found that entrepreneurial-oriented firms often can achieve good performance (Zahra and Covin, 1995; Wiklund and Shepherd, 2005). Therefore, the relationship between the entrepreneurial orientation and business performance become focus area in the field of entrepreneurial research.However, when the company wants to start up, they are based on different resource. Relationship between entrepreneurial orientation and business performance are needed to continue to verify it in a particular circumstance. (Lumpkin and Dess, 1996). Covin and Slevin (1991) hold that the relationship between entrepreneurial orientation and business performance are affected by a number of mederator Variable, in particular, by Network Capabilities(NC).NC is one of the important capabilities of company. Company has better network capacity with good performance. NC can maintain the use of the network to ensure the competitiveness of company. Covin and Slevin (1991) hold that NC composed by organizational behavior and resource can be viewed as strategic assets to enhance the process , and then will conduct a more innovative and advanced operations of the key factors. NC can also affect a variety of organizational behavior, and adjusts other resources to the influence of performance (Achim, Michael and Thomas, 1996). All this shows NC matching EO can lead to the better business performance.Entrepreneurial Orientation is a strategy. It is different between the Strategic Orientation and Market Orientation. Strategic orientation includes Entrepreneurial Orientation and Market Orientation. Market Orientation means that company will regard the market as a direction of business. But the Entrepreneurial Orientation tends to affect the Market Orientation.The main function is to combine the Enrepreneurial Orientation and entrepreneurial behavior.The study showes that enterprises having positive the innovativeness, risk taking and proactiveness often able to achieve good performance (Lumpkin and Dess, 1996).To dimensions of Entrepreneurial Orientation of SMEs, Aloulou & Fayolle (2005) divides into innovativeness, risk taking, proactiveness. And Covin and Slevin (1986) used these three dimensions to measure the Entrepreneurial Orientation. The innovativeness means to supply services and provides a creative ability to meet customer need and perferences.The risk taking means to willing to take risks or accept the risks of practice.The proactiveness stress that action should be ahead of other enterprises ,meanwhile rapidly insight into market opportunities,rapid implementation of the plan's willingness and ability (Lieberman & Montgomery, 1998).To sub-dimensions of entrepreneurial orientation and its relationship with business performance, some scholars believe that the Entrepreneurial Orientation have a positive role in promoting the business performance (Collins & Moore, 1970; Covin & Slevin, 1991).But other scholars believe that the entrepreneurial orientation have nothing to do with business performance (Lee et al.2001). This paper attempts to demonstrate NC has postive influences on the relationship between the Entrepreneurial Orientation and business performance. At the same time, this article seeks to demonstrate Innovativeness, risk taking and proactiveness has postive effect on the businesss performance.Therefore, this study not only verified overseas research, and enhance the business performance of domestic SMEs, but also to provide a viable option.NC having a good effect on the relationship between EO and business performance was recognized by many scholars.NC matching the EO can lead to good the performance. At present, the research on the theory of NC is still relatively rare in China. Also, NC having the good effect on the relationship between EO and business performance was paid an attention by scholars. last century,networks has become an important form of organization. How to manage the network and play an active role in the network has become critical problem.NC reflect the ability of the corporate maintenance and use of network.NC enable enterprises to quickly start the process easily to obtain the necessary resources, and to improve enterprise business process efficiency and effectiveness. Therefore, the purpose of the study has the very ground of theoretical and practical significance.The survey of SMEs in the northest of china shows that Entrepreneurial Orientation has a positive effect on business performance. Meanwhile, sub-dimensions of entrepreneurial orientation also has positive role on performance: The innovationess is positively related with business performance; The risk taking has positive role on the business performance; proactiveness has positive effect on the business performance. That means that the Entrepreneurial Orientation will help improve business performance improvement. The Meanwhile, enterprises should continue to cultivate their sense of innovation. Enterprises should pay attention to the corporate network ability to continuously strengthen coordination mechanisms for internal communication and networking. It can help company to improve business performance. North-East SMEs in China play an important role in the revival of northeast old industrial base. Enterprises in the Northeast are often in the interrelated networks. Rational allocation of resources plays an important role in the entrepreneurial process. Therefore, SMEs should continuously pay attention to its NC, which enable enterprises to get good business results in the entrepreneurial process.