Academic journal article Management & Marketing

The Influence of Entrepreneurial Orientation and Market-Based Organizational Learning on the Firm's Strategic Innovation Capability

Academic journal article Management & Marketing

The Influence of Entrepreneurial Orientation and Market-Based Organizational Learning on the Firm's Strategic Innovation Capability

Article excerpt

Abstract. The literature in the field has shown that high levels of entrepreneurial orientation allow a company to develop the ability to innovate, to react quickly to changes in the environment and even to initiate change (Naman and Slevin, 1993). Carneiro (2000) considers organizational learning as an antecedent of innovation. In this paper we explore the impact of entrepreneurial orientation and market-based organizational learning on the strategic innovation capability of companies in the West side of Romania. These relationships were studied using a sample of 61 companies from Timis, Caras-Severin, Arad, Maramures, Satu Mare and Sibiu. These sampled companies operate in the field of production as well as in that of services. In order to proceed with the statistical data analysis we followed these steps: verifying the scale's reliability; determining factor loadings and research hypotheses testing. Testing the research hypotheses led to the result that entrepreneurial orientation and market-based organizational learning have a positive impact on the strategic innovation capability of a company. Compared to previous research, the contributions of this paper are the conceptual model and the development of the research hypotheses based on the literature review.

Keywords: marketing, entrepreneurial orientation, marketbased organizational learning capability, strategic innovation capability, firm.

1. Introduction

In a turbulent economic environment characterized by radical changes in a short time, the company's ability to develop and play a different game is essential. Developing a unique strategy requires high levels of innovation, proactivity, calculated risk-taking and learning through analysis of changes taking place in customer preferences and competitors' behavior.

Shane and Venkataraman (2000) define entrepreneurship as the process of identification, evaluation and exploitation of opportunities. These authors argue that entrepreneurship involves the (1) study of sources of opportunities, (2) the processes of discovery, evaluation and exploitation of opportunities and (3) the set of individuals who discover, evaluate and exploit these opportunities. Fisher's research (2012) provides a critical examination of how effectuation, causation and bricolage in entrepreneurial research translate into individual behavior and whether such behavior is evident in creation and development of new ventures. Entrepreneurial orientation is a strategic orientation of the firm which reflects the priority that the firm applies in identifying and exploiting market opportunities. Entrepreneurial firms own the ability to innovate and initiate change (Naman and Slevin, 1993).

An organization must understand both its customers' needs and the strengths, weaknesses, capabilities and long-term strategies of current and potential competitors. Thus, the company can identify new product ideas to satisfy needs at a higher level or launch new products and brands ahead of the competition. Market-based organizational learning is focused on learning processes from external sources, being a subset of the overall organizational learning activity. The market-based organizational learning capability is related to changes in customer preferences and competitors' actions (Weerawardena, 2003). Organizations must constantly identify opportunities in the external environment in order to satisfy customers. Generating new ideas for products and services through the collection and dissemination of market information is the starting point for developing the innovation process.

Weerawardena (2003) defines innovation as the implementation of new ideas in order to create value either directly for the firm or indirectly for its customer, whether novelty and added value is embodied in products, processes, organizational systems, or marketing systems. Strategic innovation is innovation in the formulation and implementation process of strategy. …

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