The impact of entrepreneurial orientation dimensions on firm performance: the moderating role of firm size

This study examines the impact of individual dimensions of Entrepreneurial Orientation (EO), innovativeness, proactiveness, and risk-taking, on Organizational Effectiveness and investigates whether firm size moderates these relationships. While prior research consistently reports a positive association between EO and Organizational Effectiveness, limited attention has been given to what extent each EO dimension operates differently across firm sizes. Drawing on a survey of 127 firms across multiple industries in Indonesia, this study employs Partial Least Squares Structural Equation Modeling (PLS-SEM) and multi-group analysis to compare large enterprises and small and medium-sized enterprises (SMEs). The findings reveal differentiated effects across EO dimensions. Innovativeness positively influences Organizational Effectiveness in both large enterprises and SMEs, with a significantly stronger effect in large firms (β = 0.560 vs. 0.298). Proactiveness emerges as the dominant driver exclusively in SMEs (β = 0.691, f2 = 0.721), representing the largest effect size in the study, while its effect in large enterprises is negligible, indicating that structural agility rather than resource volume drives proactiveness returns. Risk-taking does not generate significant effects in either group, suggesting that discretionary risk exposure alone does not translate into Organizational Effectiveness without enabling governance structures. These results reveal a structural dominance reversal: the primary driver of Organizational Effectiveness shifts from innovativeness in large enterprises to proactiveness in SMEs, while risk-taking fails to generate returns in either context. This study advances EO theory by demonstrating that EO dimensions operate as structurally contingent capability mechanisms whose effectiveness is scale-sensitive rather than universal and extends the Resource-Based View by specifying how capability value realization depends on the organizational infrastructure that firm size provides. By reconceptualizing firm size as a theorized structural boundary condition rather than a statistical control, the findings offer dimension-specific, scale-calibrated strategic guidance for firms navigating emerging economy environments.