Environment Uncertainty – Business Performance Relationship: Mediating Effect of Entrepreneurial Orientation

Abstract

The environment can be broadly described as the totality of social, ecological and economic factors that impacts the functioning of an organization and defines its strategic posture. The study explores the Environmental Uncertainty - Business Performance (EU-BP) relationship. The study applies Structure Equation Modelling on a purposive sample of 509 North Indian firms. Mediation Analysis examines the mediating role of entrepreneurial orientation in EU-BP relationship. The study reveals that environmental uncertainty negatively impacts business performance. Entrepreneurial orientation mediates in Environmental Uncertainty - Business Performance (EU-BP) relationship. The result reveals that entrepreneurial inclination equips a firm with the ability to face the uncertainty of environmental forces and to improve firm performance. The findings may help management practitioners and entrepreneurs in better strategizing the strategic posture of their firm.