Entrepreneurial Orientation and Knowledge Creation and Their Impact on Company Performance

This paper summarizes the arguments and counterarguments within the scientific discussion on the issue of entrepreneurship and importance of knowledge. Systematization literary sources and approaches show knowledge has to become the key economic resource. Concept is based on “knowledge-based theory, which considers knowledge as the most strategically significant resource of a firm. Learning and creating knowledge can improve innovation, process effectiveness and competitive advantage. Systematization literary sources and approaches for improving firm performance indicates dependence from different factors. Better understanding of the interaction between entrepreneurial orientation and knowledge creation processes are important. Entrepreneurial orientation refers to the strategy making processes that provide organizations with a basis for entrepreneurial decisions and actions. It is a combination of five dimensions: innovation, risk taking, proactiveness, competitive aggressiveness and autonomy (Lumpkin, Dess, 1996). Knowledge creation is conceptualized as a dialectical process, in which various contradictions are synthesized through dynamic interactions between explicit and tacit knowledge in individual human minds and among individuals, the organization, and the environment. The paper is carried out in the following logical sequences: first chapter is Introduction with basic paper information. Next chapter is Research background and hypothesis. This is theoretical background and discussion about entrepreneurial orientation, knowledge creation and firm performance. We develop three hypotheses: H1: A firm's entrepreneurial orientation is positively associated with its knowledge creation process; H2: A firm's entrepreneurial orientation is positively associated with its performance; H3: A firm's knowledge creation process is positively associated with its performance. In next chapter Research methods, we explain empirical research data, methods. This chapter follow the Analysis and results and next Discussion and conclusion. At the ends is the list of references. Methodological tools of the research methods were SPSS 18 and EQS 6.1 software. Year of research was 1915. The object of research is the chosen SME companies (Slovenia). The paper presents the results of an empirical analysis of 195 Slovenian small and medium-sized enterprises. The research empirically confirms and supported hypotheses H1 and H3. The results of the research can be useful to improve the knowledge and the research gap, support of the resource-advantage theory and add piece of knowledge to a mosaic of research in different countries.