Describe the five tendencies that determine entrepreneurial orientation.

Question

What will be an ideal response?

Answer 1

Entrepreneurial orientation is determined by five tendencies:

1.    Independent action-The organization grants individuals and teams the freedom to exercise their creativity, champion promising ideas, and carry them through to completion.
2.    Innovativeness-The firm supports new ideas, experimentation, and creative processes that can lead to new products or processes; it is willing to depart from existing practices and venture beyond the status quo.
3.    Risk taking-The organization is willing to commit significant resources and perhaps borrow heavily, to venture into the unknown. The tendency to take risks can be assessed by considering whether people are bold or cautious, whether they require high levels of certainty before taking or allowing action, and whether they tend to follow tried-and-true paths.
4.    Proactiveness-The organization acts in anticipation of future problems and opportunities. A proactive firm changes the competitive landscape; other firms merely react. Proactive firms, like proactive individuals, are forward-thinking and fast to act, and are leaders rather than followers. Proactive firms encourage and allow individuals and teams to be proactive.
5.    Competitive aggressiveness-The firm tends to challenge competitors directly and intensely to achieve entry or improve its position. In other words, it has a competitive tendency to outperform its rivals in the marketplace. This might involve striking fast to beat competitors to the punch, tackle them head-to-head, and analyze and target competitors' weaknesses.