The Moderating Effect of Employee Education and Professional Skills on the Relationship between Entrepreneurial Orientation and Performance

Jokull Johannesson, Per-Joakim

Abstract

The effects of entrepreneurial orientation on firm performance are grounded and well established. However, when accounting for potential factors having a moderating effect on this relationship, most scholarly attention has been given environmental factors, thus consequently, potential organizational implications on this relationship have been neglected. In response, this article discusses what role specific organizational factors play in moderating the relationship between entrepreneurial orientation and labor and sales growth. The dataset was collected from the World Bank’s Enterprise Survey which uses a stratified random sampling to select German firms used as data sources. The sample consisted of a total of 1196 firms (N=1196). After we adjusted for missing values and firms having more than 250 employees, the final sample size were 459 firms with complete data (n=459). We developed a conceptual framework, based on Lumpkin and Dess (1996), explaining the relationships between entrepreneurial orientation, performance and firm resources. The findings presented suggest that a firm’s intellectual resources, in terms of professional employees and skilled workers, positively and significantly influence the entrepreneurial orientation-performance relationship in small and medium-sized enterprises in Germany.