How environmental turbulence influences firms’ entrepreneurial orientation: the moderating role of network relationships and organizational inertia

Purpose Environmental turbulence represents a double-edged sword, simultaneously fueling and hindering a firm’s entrepreneurial orientation (EO). Drawing on the theories of EO and network relationships, this study aims to develop and test a conceptual model that provides a nuanced account of the relationship between environmental turbulence and firm EO. Design/methodology/approach Data for this study were collected using a survey of high-technology firms in Hsinchu Science Park (HSP) in Taiwan. Questionnaires were mailed to 297 high-technology firms in the semiconductor, photoelectric and communication industries within HSP. Completed questionnaires were received from 94 firms, which included responses from 94 research and development managers and 462 employees. Findings The results reveal that the degree of environmental turbulence exhibits an inverted U-shaped relationship with a firm’s EO. Moreover, this relationship is positively moderated by network relationships between firms, but negatively moderated by organizational inertia. Originality/value The empirical and conceptual findings have important implications for understanding EO, because the findings explain causal relationships that transform a firm’s interactive and inner control capabilities into firm-level results.