Entrepreneurial Orientation and Perceived Financial Performance. Does Environment Always Moderate EO Performance Relation

This paper identifies the role of entrepreneurial orientation (EO) on the perceived financial performance of small and medium sized enterprises, operating within volatile business environments. To this end, we conducted regression analysis on the reported financial results of 117 SMEs operating in volatile and uncertain business environment. Construct validity is tested in the qualitative phase of the research. The study enhances understanding of the context dependent relationship between entrepreneurial orientation and perceived financial performance in such business environments. The findings show that though there is a relationship between EO and perceived financial performance of SMEs, this relationship is not effective. Therefore, the study raises the question of the nature of the relationship between EO and performance and the moderating role of environment.