- Research Article
- Published:
Proactiveness, legitimation via ISO certification and the growth of SMEs in China
Frontiers of Business Research in China volume 4, pages 283–305 (2010)
Abstract
According to the literature on entrepreneurial orientation (EO), proactive firms are more likely to achieve first-mover advantage and higher performance. The neoinstitutionalism, however, suggests that enterprises with more legitimacy will acquire more growth opportunities. Usually, the first mover might face more legitimacy obstacles. To date, there has been little research on how proactive firms cope with legitimacy constraints and achieve firm growth. Integrating the legitimacy perspective and the EO literature, this research examines the roles of ISO certification as a strategy for seeking legitimacy of small and medium-sized enterprises (SMEs) in emerging economies, and the relationship between proactiveness and firm performance. In particular, it hypothesizes that ISO certification has a mediating effect on the relationship between proactiveness and firm growth. We test the hypothesis using a sample of 632 firms collected from a nationwide survey on SMEs conducted by the Chinese SME Association. The results reveal that ISO certification partially mediates the relationship between proactiveness and firm growth, suggesting that proactive firms tend to use legitimation via ISO certification to enhance firm growth. Our paper contributes to the literature by shedding light on the important relationship between seeking legitimacy, entrepreneurial orientation and firm growth in SMEs in an emerging economy.
References
Aderson J C, Gerbing D W (1988). Structural equation modeling in practice: A review and recommended two step approach. Psychological Bulletin, 103(3): 411–423
Ashforth B E, Gibbs B W (1990). The double-edge of organizational legitimation. Organization Science, 1(2): 177–194
Baker W E, Sinkula J M (2009). The complementary effects of market orientation and entrepreneurial orientation on profitability in small businesses. Journal of Small Business Management, 47(4): 443–464
Baron R M, Kenny D A (1986). The moderator mediator variable distinction in social psychological research: Conceptual, strategic, and statistical considerations. Journal of Personality and Social Psychology, 51(6): 173–182
Baum J R, Locke E A, Smith K G (2001). A multidimensional model of venture growth. The Academy of Management Journal, 44(2): 292–303
Boiral O (2003). ISO 9000: Outside the iron cage. Organization Science, 14(6): 720–737
Bourgeois L J (1980). Strategy and environment: A conceptual integration. Academy of Management Review, 5: 25–39
Chin W, Newsted P (1999). Structural equation modeling analysis with small sampling using partial least squares, In: Rick Hoyle (ed.), Statistical Strategies for Small Sample Research. CA: Sage Publications, 307–341
Covin J G, Slevin D P (1989). Strategic management of small firms in hostile and benign environments. Strategic Management Journal, 10(1): 75–87
Covin J G, Slevin D P (1991). A conceptual model of entrepreneurship as firm behavior. Entrepreneurship: Theory and Practice, 16(1): 7–24
Deephouse D L (1996). Does isomorphism legitimate? The Academy of Management Journal, 39(4): 1024–1039
Delmar F, Shane S (2004). Legitimating first: Organizing activities and the survival of new ventures. Journal of Business Venturing, 19: 385–410
Dess G, Lumpkin T (2005). The role of entrepreneurial orientation in stimulating effective corporate entrepreneurship. Academy of Management Executive, 19(1): 147–156
Dess G, Lumpkin T, Covin J G (1997). Entrepreneurial strategy making and firm performance: Tests of contingency and configurational models. Strategic Management Journal, 18: 677–695
DiMaggio P J, Powell W (1983). The iron cage revisited: Institutional isomorphism and collective rationality in organizational fields. American Sociological Review, 48(2): 147–160
DiMaggio P J, Powell W (1991). Introduction to the New Institutionalism in Organization Studies. Chicago: The University of Chicago Press
Dowling J, Pfeffer J (1975). Organizational legitimacy: Social values and organizational behavior. The Pacific Sociological Review, 18(1): 122–136
Gefen D, Straub D, Boudreau M (2000). Structural equation modeling and regression: Guidelines for research practice. Communications of the Association for Information Systems, 4(7): 1–77
Hargadon A B, Douglas Y (2001). When innovations meet institutions: Edison and the design of the electric light. Administrative of Science Quarterly, 46: 476–501
Haunschild P R, Miner A S (1997). Modes of interorganizational imitation: The effects of outcome salience and uncertainty. Administrative Science Quarterly, 42(3): 472–500
Hu L, Bentler P M, Kano Y (1992). Can test statistics in covariance structure analysis be trusted? Psychological Bulletin, 112: 351–362
Judd C M, Kenny D A (1981). Process analysis: Estimating mediation in treatment evaluations. Evaluation Review, 5(5): 602–619
Li Y, Zhao Y B, Tan J, Liu Y (2008). Moderating effects of entrepreneurial orientation on market orientation-performance linkage: Evidence from Chinese small firms. Journal of Small Business Management, 46(1): 113–133
Lieberman M B, Montgomery D B (1988). First-mover advantages. Strategic Management Journal, 9: 41–58
Lieberman M B, Montgomery D B (1998). First-mover (dis)advantages: Retrospective and link with the resource-based view. Strategic Management Journal, 19(12): 1111–1125
Lumpkin T, Dess G (1996). Clarifying the entrepreneurial orientation construct and linking it to performance. The Academy of Management Review, 21(1): 135–172
Maurer J G (1971). Readings in Organizational Theory: Open System Approaches. New York: Random House
Meyer J, Rowan B (1977). Institutional organizations: Formal structure as myth and ceremony. The American Journal of Sociology, 83(2): 340–363
Miller D (1983). The correlates of entrepreneurship in three types of firms. Management Science, 29(7): 770–791
Miller D, Friesen P H (1983). Strategy-making and environment: The third link. Strategic Management Journal, 4(3): 221–235
Nadkarni S, Narayanan V K (2007). Strategic schemas, strategic flexibility and firm performance: The moderating role of industry clock speed. Strategic Management Journal, 28: 243–270
Oliver C (1991). Strategic responses to institutional processes. Academy of Management Review, 16(1): 145–179
Parsons T (1960). Structure and Process in Modern Societies. Glencoe, IL: Free Press
Pfeffer J, Salancik G R (1978). The External Control of Organizations: A Resource Dependence Perspective. New York: Harper & Row
Podsakoff P, Organ D (1986). Self reports in organizational leader reward and punishment behavior and research: Problems and prospects. Journal of Management, 12(4): 531–544
Ruef M, Scott W R (1998). A multidimensional model of organizational legitimacy: Hospital survival in changing institutional environments. Administrative Science Quarterly, 43(4): 877–904
Scott W R (1995). Institutions and Organizations. Thousand Oaks, CA: Sage
Shepherd D A, Zacharkis A (2003). A new venture’s cognitive legitimacy: An assessment by customer. Journal of Small Business Management, 41(2): 148–167
Singh J V, Tucker D J, House R J (1986). Organizational legitimacy and the liability of newness. Administrative Science Quarterly, 31(2): 171–193
Stam W, Elfring T (2008). Entrepreneurial orientation and new venture performance: The moderating role of intra-and extraindustry social capital. Academy of Management Journal, 51(1): 97–111
Stinchcombe A L (1965). Organizations and Social Structure. In: James G March (ed.), Handbook of Organizations. Chicago: Rand-McNally, 142–193
Stuart T, Hoang H, Hybels R (1999). Inter-organizational endorsements and the performance of entrepreneurial ventures. Administrative Science Quarterly, 44(2): 315–349
Suchman M C (1995). Managing legitimacy: Strategic and institutional approaches. Academy of Management Review, 20(3): 571–610
Teece D J (1986). Profiting from technological innovation: Implications for integration, collaboration, licensing and public policy. Research Policy, 15: 285–305
Terreberry S (1968). The evolution of organizational environments. Administrative Science Quarterly, 12: 590–613
Tornikoski E T, Newbert S L (2007). Exploring the determinants of organizational emergence: A legitimacy perspective. Journal of Business Venturing, 22: 311–335
Weber M (1958). The Protestant Ethic and the Spirit of Capitalism. New York: Scribners
Weber M (1968). Economy and Society: An Interpretive Sociology, Guenther Roth and Claus Wittich (eds.). New York: Bedminister Press
Wiklund J, Shepherd D (2003). Knowledge-based resources, entrepreneurial orientation, and the performance of small and medium-sized businesses. Strategic Management Journal, 24: 1307–1314
Zimmerman M A, Zeitz G J (2002). Beyond survival: Achieving new venture growth by building legitimacy. Academy of Management Review, 27(3): 414–431
Zott C, Huy Q N (2007). How entrepreneurs use symbolic management to acquire resources. Administrative Science Quarterly, 52(1): 70–105
Zucker L G (1983). Organizations as institutions. In: Research in the Sociology of Organizations, vol. 2, Bacharach S B (eds.). Greenwich, CT: JAI Press, 1–42
侯 杰泰, 温 忠麟, 成 子娟 (Hau Kit-Tai, Wen Zhonglin, Cheng Zijuan) (2004). 结构方程模型及其应用 (Structural Equation Model and Its Applications). 北京: 教育科学出版社
李 乾文 (Li Qianwen) (2007). 公司创业导向的差异分析—基于环渤海地区企业所有权差异的实证研究 (Difference analysis of corporate entrepreneurial orientation: Empirical research based on enterprise ownership difference of Bohai sea region). 科学学研究, 25(4): 708–710
Author information
Authors and Affiliations
Corresponding author
Additional information
__________
Translated from Guanli Shijie 管理世界 (Management World), 2008, (12): 126–138
Rights and permissions
About this article
Cite this article
Du, Y., Ren, B., Chen, Z. et al. Proactiveness, legitimation via ISO certification and the growth of SMEs in China. Front. Bus. Res. China 4, 283–305 (2010). https://doi.org/10.1007/s11782-010-0013-3
Published:
Issue Date:
DOI: https://doi.org/10.1007/s11782-010-0013-3