Abstract:
Entrepreneurial Orientation is widely used to determine the entrepreneurial
behavior of an entrepreneur. Although, the Entrepreneurial Orientation (EO) is
recognized as a key determinant, yet there are many inconsistencies in the nexus
between EO and Organizational Performance (OP). Organizational innovation
was considered as the mediating variable to address the empirical gap. The study
was based on small and medium scale manufacturing enterprises established in
Southern Province of Sri Lanka. 240 questionnaires were administered for the
purpose of primary data. A strong positive relationship between entrepreneurial
orientation and organizational performance was confirmed by the study among
the manufacturing SMEs in southern Sri Lanka. The study underlined
entrepreneurial orientation as one of the main elements of organizational
capability to achieve competitive advantage, growth, and success. More, the
study confirms an indirect effect in the nexus between EO and OP via
organizational innovation. Practitioners are advised to understand the capability
of organizational innovativeness and proactiveness. Also, entrepreneurs and
strategic formulation bodies are needed to create an innovative entrepreneurial
culture to enhance entrepreneurial capabilities and minimize the potential risk of
entrepreneurs.
