The Effects of Entrepreneurial Orientation on Firm Performance - Essay Example

In order to tie these people up together, there is a need to focus on the fact that any action needs to be affective first in order to be effective. This is where entrepreneurial orientation comes in. It has been described as a process that integrates personal and organisational goals so as to form a common value base. This act in itself will help in garnering better performance standards through better allocation and optimum utilisation of resources. This paper seeks to reveal the effects of this entrepreneurial orientation on firm performance through a study based on two premises that have to do with entrepreneurial control as well as competitive advantage so as to discuss the internal and external factors that affect firm performance when entrepreneurial orientation is exercised.

The organisation, in the modern day context, has become a body that is made up of its human resource and the quality that this resource base imbibes into the operational sphere of the organisation. The modern day organisation depends to a great extent on the contribution and quality of its human capital. The human capital may be defined as that element of the organisation’s operational sphere that is a living, breathing part of the activities that put the innate resources and factors of production into application.

This application results in profits arising out of the activities of the human capital and the efficiency with which this resource carries out its tasks. This in turn, has a bearing on the achievement of the organisation’s goals in the sense that the organisation is structured according to the quality of the HR within it. Also, it shows the principles that are followed by the management in manning the organisation. The entrepreneurial orientation takes place on the basis of the strategic business plan.

This plan for any organisation depends on its resource