Risk-taking orientation and entrepreneurial strategy as drivers of business performance: evidence from private childcare centres in Indonesia
Bimmo Dwi Baskoro, Rafisah Mat RadziPurpose
Entrepreneurial orientation (EO) is a recognised driver of firm performance, yet findings remain inconsistent and the mechanisms linking entrepreneurial behaviour to performance are underexplored in socially sensitive service sectors. This study examines whether risk-taking orientation affects business performance in private childcare centres in Indonesia via entrepreneurial strategy as a mediator.
Design/methodology/approach
A quantitative survey of 338 owners and managers of registered private childcare centres was conducted via cluster sampling from a population of 2,775 centres. 315 valid responses (93.2%) were analysed using partial least squares–structural equation Modelling with 5,000-resample bootstrapping.
Findings
Risk-taking orientation is positively associated with business performance, although this direct effect is comparatively modest. Entrepreneurial strategy shows a substantially stronger association with performance and partially mediates the risk-taking–performance relationship, suggesting that formalised strategic action represents a crucial structural path through which risk-taking orientation is associated with performance gains. Together, the two constructs account for a large share of the variance in business performance, and the measurement model demonstrates adequate discriminant validity and predictive relevance.
Originality/value
This study extends strategic entrepreneurship theory to a regulated, trust-based service sector, highlighting that strategic formalisation appears to play a more prominent role than risk appetite alone in accounting for performance variations. It guides childcare entrepreneurs on balancing risk-taking with strategic structuring, and informs policymakers on strategic capability development in early childhood services.