Strategic orientation and performance of small businesses in a crisis environment

Literature on entrepreneurship and strategic management suggests the positive effect of strategic orientation on company performance in hostile environments; nevertheless, these results are based on large companies from developed countries, under circumstances of economic and social stability, where the hostile environment is due to technological, industrial or market factors. The aim of this study is to analyze the performance of small handicraft businesses as a result of the owners' strategic orientation in a context of crisis caused by economic decline, social instability and climate change in Oaxaca, Mexico. Pearson bivariate correlation and multiple linear regressions are used to analyze data from 101 handicraft businesses. Results indicate the positive effect of innovation and proactivity on performance. Contrary to expectations, a negative effect of competitive aggressiveness on performance was found. Conclusions are that, although the craft business owners engage in three dimensions of strategic orientation to improve performance, not all of them have an effect, nor do they modify performance in the same way, due to contextual conditions.