Firm's propensity to risk taking in entrepreneurial strategy making: An empirical study based on China's transitional economy

Entrepreneurial strategy making has been referred to the process, practices, and decision making styles of firms that engage in entrepreneurial activities. This paper employs entrepreneurial orientation(EO) as conceptualization of entrepreneurial strategy making, namely,five dimensions of EO-autonomy, innovativeness, risk taking, proactiveness, and competitive aggressiveness-are used to operationalize entrepreneurial strategy making process. This study explores firm's entrepreneurial strategy making style in the People's Republic of China (mainland) and the independence of two dimensions of entrepreneurial orientation-innovativeness and risk taking, which has failed to be-tested in the prior research. Based on a survey of high executives and middle managers of 112 firms competing in diverse industries, it was found that in current transitional environment, Chinese firms exhibited a salient propensity to risk taking in their entrepreneurial strategy making process. It was also found that two dimensions of entrepreneurial orientation-innovativeness and risk taking- are two distinct constructs and differently related to performance. Findings of the study should provide some empirical evidence from China and improve our understanding of corporate entrepreneurship issues in China's transitional environment.