ABSTRACT
Previous research on entrepreneurship has shown that Entrepreneurial Orientation (EO) has a positive relationship with firm performance. However, this research does not explain how EO achieves the performance. By introducing the concept of strategic entrepreneurship, this study argues that there is a need to link EO to capabilities in a certain industry in order to achieve the performance. Thus, this paper aims to empirically investigate the relationship between EO and firm performance in highly regulated industry by identifying specific capabilities as strategic actions to achieve the performance.The proposed model was measured using questionnaire. The units of analysis are Independent Power Producers (IPPs) - project based companies. There were 80 IPPs participating in the survey. The data was analyzed by using Structural Equation Modeling (SEM) LISREL 8.70. The results show that EO has significant influence on network capability, and that capability has significant influence on both project management capability and project performance. Interestingly, EO has less impact on project management capability, and that capability makes no significant contribution to the project performance. Finally, this paper also presents a discussion on implications and directions for future research.
