Fostering entrepreneurial orientation as a source of sustainable competitive advantage: role of external environment

PurposeThe ability to create and sustain competitive advantages depends on cultivating employee's capabilities. Entrepreneurial orientation (EO) can foster an organisation-wide culture of exploring new opportunities and creating new learnings. Sustainable competitive advantages should be based on long-term behavioural changes rather than ad hoc adjustments made for short-term gains, enabling employees to become a source of unique and inimitable advantages. This study aims to explore how each external environment impacts the dimensions of EO. The study also introduces environmental jolts as a dimension of the external environment.Design/methodology/approachThe authors considered a sample of 39 organisations in IT companies from India to study the external environment's effect on their EO. Using covariance-based structural equation modelling, the authors measured the impact of external environment variables on EO. A total of 250 responses were found suitable for analysis.FindingsCertain crucial factors were identified through an extensive analysis of the relationships between individual factors of the external environment and EO. Technological opportunities showed a strong positive association with all factors of EO, whereas dynamism of the environment had a positive relationship with innovativeness and proactiveness. Environmental jolts showed a negative impact on innovativeness and risk-taking propensity.Research limitations/implicationsEO has been developed and researched extensively in the Western context as a unidimensional construct. In the present study, the relationship between the external environment factors and each dimension of EO has been analysed individually, thus following a multidimensional approach. Moreover, environment jolts as a factor of the external environment have been introduced, and their effect on the dimension of EO has been studied. Finally, the implications of encouraging entrepreneurial behaviours to develop sustainable competitive advantages have been discussed.Originality/valueThe research explores the multidimensionality of the EO construct and also introduces environmental jolts as a dimension of the external environment.