Entrepreneurial orientation in a conflict environment: An analysis of high and low entrepreneurial SMEs

This paper investigates impact of the conflict environment on the five dimensions of entrepreneurial orientation. Using a mixed methodology, this paper reports the findings from a survey of 110 SMEs followed by 16 semi-structured interviews from the troubled area of North West of Pakistan. We classify our sample firms into: (a) High entrepreneurial firms (HEFs) and; (b) Low entrepreneurial firms (LEFs) on the basis of their growth and entrepreneurial performance prior to the conflict. We find that during the pre-conflict period, HEFs are likely to be more innovative, proactive, risk takers, and show greater competitive aggressiveness than LEFs, but interestingly, LEFs believe in greater employees’ autonomy and team work as compared to HEFs. Furthermore, the conflict environment negatively affected innovativeness, opportunity recognition, risk-taking capability and competitive aggressiveness. However entrepreneurs further empowered their employees by increasing their autonomy during the conflict; suggesting managements’ greater trust and confidence in employees to cope with the situation. To our knowledge this study is the first one that investigates the impact of conflict environment on EO dimensions. Unlike most of previous literature, we consider competitive aggressiveness and employees’ autonomy as important EO dimensions.