Being Uncertain: The Relationship Between Entrepreneurial Orientation And Environmental Uncertainty

Abstract

The manner in which the key managers of entrepreneurial firms perceive the environment of the firm has important implications for decisions regarding organizational structure, processes and performance. Entrepreneurial behavior has traditionally been characterized as one type of strategic response to uncertain environments. This research takes a unique position in exploring how the entrepreneurial orientation of the firm's key manager may in fact influence managerial perceptions of the environment. Utilizing survey data drawn from more than 800 key managers in three countries this study proposes and tests a model of perceived uncertainty. The results suggest that the greater the entrepreneurial orientation of the key manager the more likely he or she is to characterize the environment of the firm as uncertain. Although this relationship holds true in general the results also suggest that there are strong differences in the relationship across countries and industries and that certain firm characteristics have a potential impact on managerial perceptions.