Between 27% and 46% of small and medium enterprises that achieve a significant scaling event revert to their prior operational size within three years of that growth (OECD, 2024) [ 1], aFigure figure that is particularly consequential in vehicle-based sectors where capital is locked into depreciating physical assets rather than reconfigurable intangibles. The vehicle-based SME category encompasses a structurally heterogeneous field: passenger transport, freight forwarding, fleet rental, and platform-mediated mobility services share the common constraint of high fixed costs per unit of productive capacity combined with volatile demand cycles that vary by season, fuel price, and regulatory regime. The consequence is that entrepreneurial intent, even when present in founders and managers, does not translate automatically into durable competitive advantage because the asset base itself resists rapid reconfiguration. Scaling attempts in this sector frequently stall at the organizational level, where management practices remain calibrated to single-vehicle or small-fleet operations long after the firm has outgrown them, a pattern Mamaev (2026a) [ 2] documents across a sample of Russian vehicle-based operators.

The human capital dimension of this management deficit has received systematic attention only recently. Ho et al. (2024) [ 3], studying 312 SMEs across multiple sectors, found that strategic human resource management practices are a statistically significant antecedent to both dynamic capabilities and innovation output, operating through a partial mediation structure in which entrepreneurial orientation strengthens the HRM–dynamic capabilities pathway rather than substituting for it. The implication for vehicle-based businesses is pointed: where founders concentrate operational authority and fail to build formalized hiring, training, and performance management routines, the firm's capacity to develop even modest adaptive capabilities is structurally constrained regardless of how high the founder's EO score is. Entrepreneurial orientation measured at the individual level predicts firm-level outcomes only when the organization has sufficient human capital infrastructure to operationalize the founder's strategic intent, which vehicle-based SMEs frequently lack because early-stage growth is funded by deferring exactly those investments. The Ho et al. (2024) [ 3] finding that strategic HRM precedes dynamic capabilities development, rather than following from it, inverts the typical sequencing assumption in the scaling literature and places people management infrastructure at the earliest stage of the entrepreneurial management agenda, not as an administrative supplement to strategic positioning but as its organizational prerequisite.

This relationship has particular operational content in the vehicle-based context. Drivers, dispatchers, and fleet maintenance personnel collectively hold the tacit knowledge on which route efficiency, vehicle utilization rates, and customer retention depend, yet SMEs in this sector consistently underinvest in formalized knowledge retention and skills development relative to capital expenditure on fleet assets. The result is a knowledge concentration risk: when experienced personnel leave, operational efficiency deteriorates faster than in firms where procedures are codified and transferable. Strategic HRM in the vehicle-based context is therefore not primarily a tool for enhancing employee motivation, though the motivational research within Ho et al. (2024) [ 3] confirms positive effects there as well, but a mechanism for converting tacit operational knowledge into institutional process assets that persist through personnel turnover and can be scaled without proportional management overhead.

The established theoretical instruments for analyzing this gap perform unevenly when applied to the operational context of vehicle-based SMEs. Dynamic capabilities theory, as formalized by Teece (2007) [ 4] through the sensing-seizing-reconfiguring framework, was developed and empirically validated primarily in R&D-intensive manufacturing and technology firms where intangible assets constitute the bulk of competitive value. Schilke et al. (2018) [ 5], reviewing over two decades of empirical dynamic capabilities research, conclude that the performance effect of dynamic capabilities is substantially moderated by environmental velocity: in stable or slowly-changing competitive environments, dynamic capabilities show weak or even negative associations with financial performance because the routine disruption they entail imposes costs that exceed the adaptive benefits. Vehicle-based transport markets, particularly in the small and medium segment, are characterized by high operational repetition and comparatively low technological turnover, placing them structurally outside the conditions under which the standard framework predicts positive outcomes. The entrepreneurial orientation literature, whose five-dimensional model Lumpkin and Dess (1996) [ 6] established as the field's canonical instrument, has generated a similarly uneven record: the EO–performance relationship depends on moderating factors including founder education level, network density, and environmental hostility in ways that have not been consistently replicated across sectors (Ferreira et al., 2021) [ 7].

This article examines the conditions under which entrepreneurial management functions as a genuine strategic asset in small and medium vehicle-based businesses rather than as a dispositional attribute of owners orthogonal to firm performance. The argument proceeds through three stages: a critical mapping of the theoretical frameworks that have been applied to this problem and the conditions under which each produces limited results; an analysis of sector-specific mechanisms through which entrepreneurial orientation either converts into competitive advantage or dissipates against structural constraints; and a discussion of the implications for the design of management practice in vehicle-based SMEs, with reference to Mamaev’s (2026b) [ 8] empirical work on scaling strategies in transport businesses as an index of the gap between recommended frameworks and observed practice.

The entrepreneurial orientation literature carries an embedded assumption that the five dimensions Lumpkin and Dess (1996) [ 6] specify, innovativeness, risk-taking, proactiveness, competitive aggressiveness, and autonomy function as a coherent cluster that collectively drives performance. Ferreira et al. (2021) [ 7] tested this assumption directly with a sample of 204 SMEs and found that environmental hostility and founder experience, both variables prior literature predicted would strengthen the EO–performance relationship, showed no significant moderating effect. What did moderate the relationship positively was founder education level and network embeddedness, suggesting that EO converts into firm performance only when the entrepreneur has the cognitive tools to recognize non-obvious opportunities and the relational infrastructure to act on them quickly. In vehicle-based businesses, where entry barriers are comparatively low and competitive interactions are often mediated by platform intermediaries or regulatory licensing rather than strategic differentiation, the proactiveness and competitive aggressiveness dimensions may generate value independently of the innovativeness dimension, because the product transportation from point A to point B, is structurally resistant to meaningful service differentiation.

Kiyabo and Isaga (2020) [ 9] offer a partial resolution by measuring SME performance through both firm growth and personal wealth accumulation simultaneously, finding that competitive advantage fully mediates the EO–performance relationship for both measures. EO does not directly produce financial returns but creates a competitive positioning advantage that is then monetized through growth or wealth extraction depending on the owner's strategic priorities. For vehicle-based SMEs, this framing has direct operational relevance: a firm that deploys proactiveness to secure long-term freight contracts or exclusive route licenses creates a competitive position that is durable under conditions where innovativeness-based strategies would yield no return. Mamaev (2026b) [ 8] documents precisely this pattern among firms that successfully scaled in the Russian light commercial vehicle segment, where contract security rather than service innovation was the primary mechanism through which entrepreneurial management converted into financial performance, and the Kiyabo and Isaga (2020) [ 9] mediating structure provides the theoretical account for what those field observations describe.

The moderation claim from Covin and Slevin (1989) [ 10], drawn from 161 small manufacturers, held that an entrepreneurial strategic posture correlates more strongly with performance under conditions of environmental hostility than under benign conditions. Ferreira et al. (2021) [ 7], using a methodologically controlled sample, could not replicate this moderating effect. The discrepancy is not a measurement artifact but a difference in the type of hostility being measured: Covin and Slevin's (1989) [ 10] hostile environment was defined by competitive intensity and market instability in manufacturing, where firms can differentiate through product quality and operational responsiveness. Regulatory hostility, the form most frequently faced by vehicle-based SMEs, through licensing constraints, safety requirements, and emissions standards, imposes costs uniformly across competitors and does not open the differentiation opportunities that entrepreneurial posture can exploit, unless the entrepreneurially inclined firm achieves compliance at scale before its competitors, at which point first-mover advantages in fleet certification or route licensing become available.

Since approximately 2015, the strategic environment for vehicle-based SMEs has been restructured by platform intermediaries whose scale advantages in demand aggregation systematically erode the market position of independent operators. Zhang et al. (2024) [ 11] analyze the coopetition dynamics between ride-sharing platforms and traditional car-rental firms, finding that platform entry creates a simultaneous competitive threat and a potential distribution channel for SME operators who cannot replicate platform network effects independently. The equilibrium in their model is sensitive to the SME's cost structure: operators with low fixed costs can integrate into platform channels without surrendering enough margin to undermine viability, but operators with high fixed costs face a structural disadvantage in any coopetitive arrangement where the platform controls pricing and customer relationships. Asset-heavy vehicle businesses fall into the latter category by definition.

Sun et al. (2023) [ 12] examined how small and medium-sized platforms in China's ride-hailing market survived against dominant incumbents by pursuing radical differentiation in niche service categories and building alliance networks that extended their effective reach without requiring proportional capital investment. The lesson for non-platform vehicle businesses is conditional on a structural difference: differentiation works when the niche is geographically or service-specifically bounded, but this is the same growth ceiling Mamaev (2026a) [ 2] identifies as a recurring constraint in vehicle-based SMEs. The firms that successfully defend a niche position rarely break through to the next scale tier because the specialization that protects them from platform displacement simultaneously limits the range of strategic moves available. Entrepreneurial management in this context requires the specific capacity to identify when niche protection has become a structural ceiling and to execute a controlled repositioning before scale stagnation sets in, a capability that neither the EO dimensions Lumpkin and Dess (1996) [ 6] specify nor the reconfiguration logic of Teece (2007) [ 4] addresses at the operational level.

The institutionalization mechanism through which entrepreneurial management becomes organizationally durable rather than founder-dependent operates at a more granular level than either the EO literature or dynamic capabilities theory typically specifies. Thomas and Douglas (2021) [ 13] identify scripted operational routines as the primary vehicle through which successful small firms in disrupted industries preserve strategic flexibility: by reducing the cognitive load of recurring operational decisions, formalized routines concentrate management attention on the non-routine strategic choices where entrepreneurial judgment adds genuine value. In vehicle-based businesses, the routines with the highest bandwidth-freeing value cluster around scheduling optimization, vehicle utilization tracking, and customer complaint resolution, all of which are sufficiently definable to be codified but sufficiently important operationally to consume substantial management time when handled reactively. A firm that has scripted these processes to the point of operational automaticity creates the organizational slack necessary for the proactive regulatory monitoring and contract development activities that Mamaev (2026b) [ 8] identifies as the primary performance differentiators in commercial vehicle markets.

The relationship between routine institutionalization and organizational resilience has a second mechanism that OECD (2024) [ 1] addresses at the policy level but that has not been translated adequately into firm-level strategy guidance. Among SMEs that successfully sustained scale after a significant growth event, the distinguishing organizational feature was not the presence of sophisticated strategic planning processes but the depth of operational process documentation and the breadth of management roles that were genuinely separable from the founder's daily involvement. Firms where operations were fully founder-dependent reverted to prior size at substantially higher rates during the follow-on three-year window, which the OECD (2024) [ 1] analysis attributes to succession fragility rather than to any deterioration in market conditions or competitive position. In vehicle-based SMEs, where the founder's tacit knowledge about fleet condition, driver reliability, and customer relationships is frequently the primary competitive asset, the deliberate conversion of that tacit knowledge into transferable organizational process is both the most consequential management task and the one most consistently deferred in favor of operational demands. Kiyabo and Isaga (2020) [ 9] provide indirect support for this mechanism through their finding that competitive advantage fully mediates the EO–performance relationship: the advantage that converts EO into financial returns is positional, meaning it depends on organizational conditions that persist across individual decisions, which is precisely the condition that routine institutionalization creates and founder-dependent management destroys through its inherent fragility.

The fleet management dimension of vehicle-based businesses introduces a further complexity that the EO and dynamic capabilities literatures largely bypass. Gouveia et al. (2025) [ 14] model fleet renewal decisions for SMEs using a fuzzy-logic approach that integrates total cost of operation, emissions compliance requirements, and energy infrastructure constraints simultaneously. In a competitive environment where fleet composition directly determines cost-per-kilometer, service reliability, and regulatory compliance status, this is a strategic limitation with compounding financial consequences: suboptimal fleet composition raises operating costs at a rate that reduces the capital available for market-facing investment, creating a self-reinforcing disadvantage that entrepreneurial orientation alone cannot break.

The strategic dimensions of the fleet renewal problem extend beyond cost optimization into organizational capability development. Gouveia et al. (2025) [ 14] model fleet renewal as a multi-criteria decision problem incorporating total cost of operation, emissions trajectory, and infrastructure compatibility, but the managerial challenge in SMEs is upstream of the optimization model: the data collection and analytical routines required to parameterize such a model are themselves an organizational asset that most small vehicle-based operators have not built. Fleet renewal in practice tends to be reactive in these firms, triggered by breakdown frequency or regulatory enforcement rather than by forward-looking total cost analysis, and this reactive posture is precisely what Teece (2007) [ 4] identifies as the absence of the sensing microfoundation. An operator that monitors fuel cost per kilometer by vehicle, tracks maintenance event patterns, and models replacement timing against residual value curves has operationalized a sensing routine in a domain where the performance payoff is directly calculable, making fleet management a tractable entry point for entrepreneurial management capability development even in firms where the broader organizational conditions for dynamic capability formation are not yet present.

The connection between fleet composition and competitive positioning also runs through the regulatory compliance trajectory that Puumalainen et al. (2023) [ 15] identify as a crisis-period differentiator. Firms that enter a demand shock with modern, compliant fleet composition face lower operating costs per unit of output, retain access to emission-sensitive contract categories, and avoid the enforcement risk that increases during periods of heightened regulatory scrutiny. Building these positional advantages requires capital allocation decisions made years before the competitive benefit materializes, which is exactly the forward-planning horizon that Mamaev (2026b) [ 8] identifies as the distinguishing feature of above-average performers in the Russian commercial vehicle segment. The vehicle-based SME that treats fleet renewal as an administrative maintenance function rather than as a strategic capability investment systematically underproduces the asset base on which future regulatory compliance advantages depend.

One of the more consequential findings in recent SME strategy research concerns the conditions under which entrepreneurial orientation helps or harms firm performance during external disruption. Puumalainen et al. (2023) [ 15], analyzing configurational patterns of EO and crisis response strategies among Finnish SMEs during the COVID-19 period, found that perseverance, retrenchment, and pivoting strategies each interacted differently with EO dimensions, and that no single EO configuration was universally associated with survival. High risk-taking combined with retrenchment produced poor outcomes, and high proactiveness combined with pivoting produced strong outcomes, but only in firms where the entrepreneur had sufficient network resources to identify viable pivot targets. For vehicle-based SMEs, whose service output cannot be digitized and whose demand is tied to physical mobility, pivoting during a demand collapse is structurally more constrained than for knowledge-service firms, which means the crisis-period EO advantage documented in the general SME literature does not transfer equivalently to this sector.

Thomas and Douglas (2021) [ 13], studying small firms in declining industries facing technological disruption, reached a compatible conclusion: strategic entrepreneurship is a necessary but insufficient condition for survival, and the gap between entrepreneurial intent and enacted strategy widens precisely when environmental pressure is highest, because the organizational processes required to convert sensing into action have not been institutionalized in advance. The practical implication for vehicle-based SMEs is that the organizational investment required to make entrepreneurial management reliable must occur before a crisis, not during it; the firms that survive acute demand compression are those whose management routines can execute strategic pivots without relying on the founder's real-time judgment at every decision node.

The analytical tension the literature review exposes is this: entrepreneurial management is theoretically positioned as a strategic asset transferable across firm types and sectors, yet the mechanisms through which it converts into competitive advantage in vehicle-based SMEs are more constrained, more context-specific, and more dependent on organizational infrastructure than the general frameworks assume.

Teece (2007) [ 4] treats dynamic capabilities and entrepreneurial management as nearly synonymous properties of high-performing enterprises, implying that intensely entrepreneurial firms continuously sense, seize, and reconfigure their asset bases as a generic pathway to sustained performance. The evidence from vehicle-based and operationally stable sectors shows a different mechanism: competitive advantage in these contexts derives from the selective development and institutionalization of specific organizational routines, not from continuous reconfiguration. Schilke et al. (2018) [ 5] document this as a moderating effect of environmental dynamism, but the mechanism is more precise than that framing suggests. In asset-heavy transport businesses, reconfiguring the resource base, replacing fleet, retraining drivers, restructuring logistics contracts, carries costs disproportionate to the strategic benefit because the competitive environment does not reward rapid reconfiguration at the pace Teece's framework assumes. Mamaev (2026a) [ 2] shows that above-average returns in vehicle-based SMEs accrue to operators who systematize operational routines to the point where management attention is freed for strategic positioning decisions rather.

Contrary to Covin and Slevin (1989) [ 10], who establish that environmental hostility strengthens the EO–performance relationship in small firms, the nature of hostility in vehicle-based sectors produces the opposite structural logic. Covin and Slevin's (1989) [ 10] hostile environments were characterized by competitive intensity and market instability in manufacturing, where entrepreneurial firms can respond by differentiating on product quality, process speed, or price flexibility. Regulatory hostility, the primary form encountered by vehicle-based SMEs in the form of licensing regimes, emissions compliance mandates, and safety enforcement, bears uniformly on all operators and converts into competitive advantage only through a specific first-mover mechanism: the entrepreneurially inclined firm that achieves compliance at scale before competitors secures durable positional advantages in fleet certification, route licensing, or fuel cost efficiency that are difficult to replicate quickly. Mamaev (2026b) [ 8] traces this mechanism in the Russian commercial vehicle segment, where early investment in tachograph compliance and Euro-emission-standard fleet conversion generated temporary but measurable competitive returns for SMEs that absorbed the upfront cost ahead of regulatory enforcement. The performance benefit derived not from the risk-taking dimension of EO but from the proactiveness dimension applied to regulatory intelligence, a distinction the canonical EO literature conflates under a common measurement instrument.

The platform coopetition findings of Zhang et al. (2024) [ 11] present vehicle-based SMEs with a structural dilemma that entrepreneurial management does not resolve independently. Integration into ride-sharing or freight-matching platforms extends market reach but transfers pricing control and customer relationship ownership to the platform, leaving the SME with operational costs and physical asset risk while the platform captures the margin on demand aggregation. Sun et al.'s (2023) [ 12] evidence that small platform operators in China survived by building differentiated alliance networks points toward a response, but a non-platform vehicle operator cannot replicate network-effect logic without becoming a platform, a capital and organizational threshold that falls outside the SME category under analysis. The available management response is narrower: vehicle-based SMEs must negotiate integration terms that preserve operational margin, which requires contractual and relational competence in platform partner management. This competence receives no dedicated treatment in Teece's (2007) [ 4] sensing-seizing-reconfiguring triad or in the five-dimension EO model of Lumpkin and Dess (1996) [ 6], suggesting both frameworks require extension to address the platform-dependent competitive environment that now characterizes urban vehicle-based business.

The human resource dimension of platform integration readiness compounds this problem in ways the existing literature has not addressed directly. Participating in platform-mediated demand channels requires drivers and operational staff to navigate digital dispatch systems, manage customer-facing rating mechanisms, and adapt service behavior to platform quality standards that differ from the norms established in owner-operator business models. Ho et al. (2024) [ 3] show that strategic HRM practices significantly increase the rate at which SMEs develop the adaptive capabilities needed to respond to external technological change, operating through a mechanism in which formalized onboarding, performance feedback, and skills development create the organizational absorptive capacity that makes capability acquisition faster and less dependent on founder-level intervention. A vehicle-based SME attempting platform integration without that absorptive capacity will absorb the platform's operational requirements slowly, experience higher staff turnover driven by the adjustment costs, and perform at the lower end of platform quality rankings, which in systems with algorithmic dispatch translates directly into reduced demand allocation. The organizational preparation for platform coopetition is therefore not primarily a strategic or contractual challenge but a human capital readiness challenge that precedes the contractual negotiation by at least one investment cycle.

Platform coopetition also introduces a strategic HRM challenge at the managerial level that has no analog in pre-platform vehicle-based business. The analytical competencies required to monitor platform performance data, model margin contribution across integrated and proprietary demand channels, and identify the conditions under which platform dependence is becoming structurally disadvantageous are not present in the management teams of firms that grew through operational rather than analytical means. Mamaev (2026a) [ 2] documents a consistent pattern among Russian vehicle-based SMEs in which above-average financial performance correlates with owner-manager education level and prior experience in analytically demanding roles, a finding that maps onto the Ho et al. (2024) [ 3] result that strategic HRM effects on dynamic capabilities are stronger in firms where the founding team already possesses the cognitive infrastructure to use capability investments strategically. The implication is not that vehicle-based SMEs must hire analysts before they can manage platform relationships competently, but that the structured decision routines Mamaev (2026b) [ 8] associates with scalable performance in this sector serve a cognitive substitution function, converting complex multi-variable competitive decisions into tractable procedural choices that managers without formal analytical training can execute reliably.

The crisis-period configurational evidence from Puumalainen et al. (2023) [ 15] confirms that EO is not a uniformly protective strategic asset. Firms with high risk-taking orientation that pursued retrenchment under acute demand compression produced the worst outcomes in their sample, a combination that describes a substantial portion of vehicle-based SMEs whose response to demand collapse is to cut costs while continuing to hold depreciating fleet assets. The institutionalization point from Thomas and Douglas (2021) [ 13] follows directly: organizations that survive acute disruption are those whose crisis-response protocols have been embedded in management routines before the disruption, rather than those that rely on the founder's entrepreneurial agility to identify the correct response in real time. Owner-manager burnout under sustained operational pressure is a documented pathway to firm exit that the EO literature treats as exogenous but that is properly understood as an organizational design failure, addressable through the same institutionalization of entrepreneurial management practices that produces the performance advantages documented in the growth literature.

The OECD (2024) [ 1] scalers analysis adds a structural dimension to this organizational design argument. Among SMEs that crossed a significant revenue threshold and sustained that scale over a subsequent observation period, the common organizational feature was not a particular EO profile or dynamic capability configuration but the presence of management layers that could execute strategic decisions without direct founder involvement in each operational cycle. This finding runs counter to the popular scaling narrative in which the founding entrepreneur's vision and energy are the primary growth engine, and it redirects attention toward the organizational architecture that makes entrepreneurial judgment portable across the firm rather than concentrated in one person. For vehicle-based businesses specifically, where the complexity of managing fleet condition, driver scheduling, regulatory compliance, and customer contracts simultaneously tends to absorb all available management bandwidth, the delegation of operational authority is not a growth luxury but a precondition for the founder to perform the regulatory monitoring and platform negotiation functions that generate durable competitive advantage. Ferreira et al. (2021) [ 7] confirm that network embeddedness is one of the strongest positive moderators of the EO–performance relationship in SMEs, a result that is organizationally interpretable: network relationships require sustained attention, consistent follow-through, and the capacity to act on relationship-generated information quickly, none of which is available to a founder whose cognitive bandwidth is consumed by daily operational management. The organizational investment in routinized operations therefore has a compounding strategic return: it simultaneously reduces the cost of recurring decisions and increases the quality of the non-routine strategic decisions that competitive positioning depends on.

The evidence now permits a specific answer to what was previously a general question: entrepreneurial management functions as a strategic asset in vehicle-based SMEs when it is institutionalized in organizational routines rather than personalized in the founder, when its proactiveness dimension is directed toward contractual positioning and regulatory foresight rather than service innovation, and when it is supported by decision-support infrastructure that converts strategic intent into analytically grounded capital allocation choices. What remains open is whether a measurement instrument can be developed that distinguishes, at the firm level, between EO profiles that generate institutional routines and those that produce owner-dependent performance that dissipates with succession or burnout; Mamaev's (2026a) [ 2] longitudinal observations in Russian vehicle-based markets provide the empirical foundation on which such an instrument could be built.

The sector-specific reweighting of the EO instrument implied by this analysis has a tractable methodological starting point. Kiyabo and Isaga (2020) [ 9] demonstrate that using firm growth and personal wealth accumulation as simultaneous performance measures reveals mediation structures invisible to single-measure designs, and their competitive advantage mediator maps cleanly onto the regulatory positioning and contract security mechanisms documented in this article. A measurement instrument calibrated for vehicle-based SMEs would weight the proactiveness and autonomy dimensions of Lumpkin and Dess (1996) [ 6] more heavily than innovativeness, since the competitive differentiation available in asset-intensive transport markets flows primarily from anticipatory contract positioning and independent operational judgment rather than from product or service novelty. Risk-taking, the dimension most prominently featured in Covin and Slevin's (1989) [ 10] foundational work, would require reoperationalization to capture the specific risk calculus of fleet investment decisions, where the relevant risk is not market entry uncertainty but asset depreciation timing relative to regulatory transition schedules. Ho et al. (2024) [ 3] provide the methodological template for incorporating HRM infrastructure as a boundary condition variable, rather than as a control, since their evidence that strategic HRM moderates the EO–dynamic capabilities pathway means that EO scores measured without accounting for HRM development stage will systematically mispredict performance in firms at different organizational maturity levels. Longitudinal data from commercial vehicle markets across at least two regulatory transition cycles would be sufficient to estimate these sector-specific weights empirically, and Mamaev's (2026a) [ 2] observation base represents precisely the kind of firm-level longitudinal record from which such calibration could begin.