An Empirical Research On The Relationships Among Entrepreneurial Orientation, Dynamic Capacities And The Enterprise Growth Of SMEs In Taiwan

Small amd Medium enterprises are the economic arteries of Taiwan which had norich nature resources but full of human resource. SMEs of Taiwan not only support theeconomy of this island, but afford various kinds of jobs. Therefore, how to fosterSMES to grow up and become big international enterprises is the most important issuefor scholars and left space for them to study.Entrepreneurship orientation is a strategic choice mode for an enterprise to getnew entry for a new market, new industry and so on. It is also the building vision ofthe owner that he wishes what kind of company will going to be and obtain success. Inorder to obtain competition advantage in markets, entrepreneurship orientationbecomes more and more important not only for new enterprises, but also forestablished companies in operation directions when the pressure of competition of themarket becomes more serious than ever.The internal entrepreneur is different from new entrepreneur and it is the way forcompanies to push innovation from inside of the enterprises. The intrapreneurship,therefore, is a good method to rise up the competition advantage. According to theviews of scholars, the meanings of entrepreueurs were no longer limited in personalbehaviors. The organisations of the companies can be the subjec of entrepreneurshiporientation. Innovation can be produced and managed from an authorized action oforganizations of the companies.The meanings and contents of the innovation can benew porducts, different processes, or other any technical sides. The ultimate aim ofentrepreneurship orientation, or intrapreneurship, is companies’growth.The contents of entrepreneurship orientation can be divided to three dimensions,innovation, pro-activeness, and risk-taking. Even now there is no coherence for howmany dimensions of entrepreneurship orientation should be. Scholars had differentideas for the dimensions of entrepreneurship orientation. Miller mentioned threedimensions, innovation, pro-activeness, and risk-taking. Lumpkin and Dess put twomore dimensions. However, the three dimensions is the most common way to test entrepreneurship orientation.Innovation is a new products or new service that is used for the requirement fromthe markets. These products or services have to make profits and then can be calledinnovation.Pro-activeness is a company can produce new goods or services before itscompetitors. A company with pro-activeness can be the leader of the markets, but thismay not really bring profits to the company as the company expected.Risk-taking is the nature of entrepreneurship orientation. Any item that companies cannot control during operating business is risk-taking. The risk can be separated as threecategories, risk unknown, lots of resources injected, and the risk of borrowing. Theway to test risk-taking is to interview the managers of the company and then will knowthe affordable of the company for risk-taking.The environment is important for SMEs to maintain growing. The changing of theenvironment is floating and unpredicatable. The situation could be stable, butcharacterized some times. The market that SMEs faced is complicated, so SMEs needto be very adaptable.components of the competitive advantages. Besides strategicresources, the companies need ability to de-allocate and recreate resources when facingunstable environment to let the competitive advantages expend and develop. Theseabilities called dynamic capabilities inside the companies.Dynamic capabilities help companies to make the best choice withentrepreneurship orientation by complying with the changing of environment. Thesecan formate companies’ core competences and get advantage of markets. It issometimes hard to explain how entrepreneurship orientation makes companies’ growthby only simple linear relationship. Scholars found the relationship of entrepreneurshiporientation and companies’growth is complicate.The dynamic capabilities can fulfillthe shortage of the explanations how entrepreneurship orientation drove companies’growth.How many dimensions that dynamic capabilities has is still controversial. Scholarshave different definitions for dynamic capabilities. The most important ideas for thedimensions of dynamic capabilities were mentioned in the article written by Teece,Pisano&Shuen. The components of dynamic capabilities could be cataloged toprocedure, position, and path which show them through companies’ organizations.According to the situation of SMEs in Taiwan, this paper decided to use environmentwatching ability, organization flexible ability, and technical flexible ability to be thecontents of dynamic capabilities. The environment watching ability is to know the changing of businessenvironment. This can help companies to take necessary step to manage the changing.Normally, the changing is a sign from markets. Companies had to be sensitive aboutthe changing. Organization flexible ability is that the companies’ organization cancatch up the requirements of the market changing and manage team. Companies had todecide what kind of organizations to make. The benefits of uniform or flexible onecould be chosen by the manage team. This ability can help company to reach the targetof the company in growth.The technical flexible ability is that the technical skill of the company has canreach the requirement of manage team when the market needs. Any new ideas needgood skills to make it come true. Without technical flexible ability, innovation is just adream never come true.Company’s growth is a floating idea for scholars to define. The first onementioned company’s growth is the book, the wealth of Nations, written by AdamSmith. This is a great book talking about how the procidures of work could be dividedto many simple actions. By these actions, the purpose of growth could be fulfilledthrough workers’ practice and cost down. The following scholars developed AdamSmith’s idea to deeper and wider range about companies’ growth.There are many scholars had different meanings about conpany’s growth. Amongthem, resource-based theory is an important one for growth concept. This theory saidthat growth is a process that the company produced the products that market needs byits own resources. The most famous scholar is Penrose and her book, firm growingtheory. She thought that the resources the company had was the basis company todecide company’s ability. That is the ability came from inside of company. Thefollowing scholars developed more and more ideas for company’s growth.However, how to test company’s growth is controversial, too. The financial digitalis the most easy way to see the growth. This is not enough for estimating company’sgrowth. There the other factors need to be considered. Such as the numbers of labors,the scale of company, and the size of the franchise can be taken into considering.Therefore, we need two dimensions when we test conpany’s growth. One isfinancial index, and the other is multiple figures from all sides of companies. Onlyfocusing on financial side of companies will lead companies to unbalancedevelopment.According to the conclusions of scholars, companies’ growth becomes to becomplicate and need to watch from every part of companies. The passion of scholars to study the owners of companies had faded since theyhad turned their attention from owners to the behaviors of entrepreneur. However, theimportance of the owners to companies still stays at the same position. That was notaffected by the scholars’ research directions. We can see this quite clear especially forEast Asia where the companies used to be operated by paternalism. Therefore,to studythe factors affected conpanies’ growth should include entrepreneurship orientation,dynamic capabilities, and the owners of the companies. The influence of the owners ofcompanies can not be ignored and scholars can obtain more complete conclusions. Thestudy will test the wills and behaviors of the owners and how deep of the moderationgeffects on the relationship between enprepreneurship orientation and dynamiccapabilities. The structure of companies’ organizations, the way of organizationoperate, also have effects on the relationship between entrepreneurship orientation anddynamic capabilities. Especially when the level of entrepreneurship orientation hadbeen expended from owner to manage team and organizations, the arrangments ofstudy should be wider than before. This paper, therefore, study and discuss both, theowners and organizations.The dynamic development of environment affects SMEs’ development deeply.Unlike big companies, SMEs need more cautious than big companies when they facedynamic markets. Limit resources SMEs have is the key reason for them to be carefulto deal with environment changing. All operations need to comply with the dynamicenvironment and then produce proper strategy to make the companies grow up.The main targets for research are SMEs in Taiwan, so anything relates toTaiwanese SMEs becomes important for this paper. The environment for SMEs inTaiwan is crucial for this paper. There are some special items need to be discussed first.The definition for SMEs is needed to be defined first. The size and the amount oflabors can be seemed as a standard to define what the meaning of SMEs. The papergives some standards of different countries to be references to find out what SMEs is.Because the key point is SMEs in Taiwan, this paper use the standards of Taiwanesegovernment to define the meanings of SMEs. These can be conparisons among thedefinitions of Taiwan and the other countries.The environment of SMEs in Taiwan is also important for this paper to discuss.This paper checked the figures afforded by Taiwanese government and used them asthe base for all analysis.By the results of this statistic analysis of this paper, the deepest factor affectscompanies’ growth is dynamic capability. This shows the inside abilities of the companies were the most important characters for companies. Besides that, thedynamic capabilities and companies’ growth have different results in different places.This paper chose SMEs in Taiwan to test the relative research and make up thshortageof relative studies.This paper analysis the relations among entrepreneurship orientation, dynamiccapabilities and companies growth of SMEs in Taiwan. The owners and organizationsof the SMEs also includes in this analysis. The other moderating effect, dynamicenvironment, was included in this analysis as well. This paper constructured therelating models and researching hypothesis for these five variables.Questionnaire wasthe main way to collect data and used it to analysis and then got the conclusions.First of all, the effect of entrepreneurship orientation on companies growth isproved. The three dimensions of entrepreneurship orientation, innovation,proactiveness and risk-taking, not all past the test. Risk-taking did not pass the test butthe other two dimensions did. This conclusion shows that it needs serious estimatebefore companies decide to do risk-taking action.The second, entrepreneurship orientation and its threedimensions have effects ondynamic capabilities and thedimensions are proved.In the meanwhile, the test of the effects of dynamic capabilities and its threedimensions on the companies’ growth is proved.Forth, the mediate effects of dynamic capabilities and its three dimensions on therelationships of entreprenership orientation and companies’ growth are all proved.Itshowed that the importance of dynamic capabilities to the relationship betweenentrepreneurship orientation and companies’ growth. It also fulfill the shortage howentrepreneurship orientation can increase companies’ growth.Fifth, the test of companies’ owners and organizations’ characters had moderate effectson the relationship between entrepreneurship orientation and dynamic capabilities wereapproved.There were some items of the characters of the owners not past. This can bediscussed more detail. Sexual, age, working years and organization chatacters had pastthe test, but education and job positions are not past the test.Finally, the test that dynamic environment had moderat effects on the relationshipbetween dynamic capabilities and companies’growth was proved.The shortage of this paper could be improved by the meanings as following:The quantity of questionnaires collected could be more than this paper hadbecause the research could be deeper and wider than this paper did. The watching time could be longer and then could obtain better results. Moreover, there was one factorthis paper did not use was industry types. Different tpyes of industries had differentmeaning in research. The conclusions could be more interesting than this paper.This paper riched the study of the relationships among entrepreneurshiporientation, dynamic capabilities and companies’ growth by the research SMEs ofTaiwan. This can help the comparison for different regions study for similar variables.Besides that, the conclusion of this paper can afford a certain data for the developmentof SMEs to become big international companies. The conclusions also wish to give anidea for Taiwanese government to build up a developing model for SMEs and helpthem step on an evergreen life cycle.