An Investigation of Entrepreneurial Orientation, Perceived Environmental Hostility, and Strategy Application among Chinese SMEs

Abstract

Little is known about how Chinese small and medium‐sized enterprises (SMEs) respond to their competitive environment. We predict that when industry competition is intense, entrepreneurial Chinese SMEs tend to perceive more environmental hostility than do their nonentrepreneurial peers. The perceived environmental hostility further drives these firms to choose marketing strategies but not cost control or innovation strategies. Data from 170 Chinese SMEs confirm our hypotheses, indicating that though some entrepreneurial orientation (EO) effects transcend different economy types, other EO effects differ significantly as the environment changes.

Notes

1 Deng Xiaoping, the architect of China's economic reform, has expressed the view that, no matter it be a white cat or a black cat, so long as it can catch mice, it is a good cat. This is widely interpreted to mean that whether an approach is communistic, socialistic, or capitalistic, so long as it can make China strong and rich, he will allow it.

Additional information

Notes on contributors

Zhi Tang

Zhi Tang is Assistant Professor and Zutes Faculty Fellow at Rochester Institute of Technology.

Clyde Hull

Clyde Hull is Associate Professor in management and Zutes Faculty Fellow at Rochester Institute of Technology.