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Entrepreneurial Orientation

  • Chandra S. Mishra
Chapter
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Abstract

Entrepreneurial organizations are alert, agile, proactive, adaptive, absorptive, and opportunity driven. The entrepreneurial incentives provide the ignition and the value opportunities the fuel for the value creation and appropriation mechanism that creates and sustains the firm’s competitive advantage. Entrepreneurial incentives enhance the value creation and appropriation mechanism underlying the competitive advantage. Entrepreneurial organizations build resources, whereas traditional organizations build on resources. Entrepreneurial organizations employ high pay-performance incentives that provide the managers an entrepreneurial surplus. Entrepreneurial surplus is the excess compensation for the executives when the firm-specific risk exceeds the industry average. Shareholders earn a return on their investment capital commensurate with the firm’s systematic risk; whereas managers earn a reward on their human capital commensurate with the firm’s total risk. The entrepreneurial surplus accrues when the managerial human capital earns a higher rate of return than the shareholder’s investment capital.

Keywords

Firm Performance Entrepreneurial Incentive Dynamic Capability Management Logic Excess Compensation 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

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Copyright information

© The Author(s) 2017

Authors and Affiliations

  • Chandra S. Mishra
    • 1
  1. 1.Florida Atlantic UniversityBoca RatonUSA

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