Can entrepreneurial orientation improve firm performance in an environment where price dominates quality?

This paper looks at whether businesses in the developed world can utilise the Lumpkin and Dess (1996) entrepreneurial orientation (EO) construct to survive and succeed when faced with nimble, low cost producers from emerging economies such as China. The Australian Automotive Components industry (represented by members of the Federation of Automotive Product Manufacturing) was chosen for this study because it mainly consists of global company subsidiaries. Therefore the results may have global implications. It was found that proactiveness and competitive aggression were prominent strategies, particularly developing alliances in countries with low labour costs. However the entrepreneurial dimensions: innovation and autonomy, were not as prominent as in past studies, suggesting quality solutions to enhance performance outcomes were less important in the current paradigm.