Entrepreneurship serves as a growth engine for the rapid development of the country where entrepreneurs plays a vital role providing more employment opportunities and improving the standard of living of the people to a great extent. To encourage the entrepreneurs it is important that there should be higher level of business performance. In this regard, entrepreneurial orientation and competitive advantage play important role in ensuring sound business performance. Entrepreneurial orientation plays an important role in influencing business performance through its three dimensions, which significantly predict an organization’s performance. In this regard, the present study examines the effect of three components of entrepreneurial orientation on business performance through firm’s competitive advantage of small scale industries (SSIs) in Ludhiana. Based upon a sample of 192 manufacturing industries, the study found that among the three dimensions of entrepreneurial oeirntation, proactiveness has a greater positive and significant impact on firm’s competitive advantage. However, this relationship is not so strong.Thus, SSIs should lay more emphasis on proactiveness. In order to be more proactive, SSIs should give greater emphasis on forward-thinking strategic planning, anticipate the future problems, needs and changes. Further, competitive advantage has a positive impact on organizational performance.
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