Unlocking the relationship between corporate entrepreneurship and performance

Corporate entrepreneurship is the implementation of a value creation process in an organizational setting. Consistent with the Schumpeterian understanding of entrepreneurship, a ldquonew combinationrdquo that should directly affect the performance of the firm is formed; and the process of forming this new combination manifests itself as an outcome of a complex social mechanism affected by internal and external factors. However, in spite of the biasing anecdotal evidence, conventional wisdom, and tendency in favor of entrepreneurship, a ldquoblack boxrdquo between firm-level entrepreneurship and performance has pervaded the relationship. Nevertheless, the model proposed in this study brings a new and distinguishing line of sight into the firm-level entrepreneurship literature: rather than being an equivalent, the entrepreneurial orientation construct is treated as an antecedent of corporate entrepreneurship; moreover the behavioral construct of corporate entrepreneurship is placed in between this strategic posture and performance, to complete ldquothe missingrdquo link between firm-level entrepreneurship and performance. It is proposed that this formulation of roles and meanings attached to both terms, leads to a solid, conclusive, and systematic direct positive relationship between firm level entrepreneurship and performance. Empirical findings confirm this proposal, making this formulation the most important contribution of this study to the firm level entrepreneurship literature.