Academic journal article Academy of Strategic Management Journal

Strategic Orientations and Their Relationship with Performance: A Case of a Mexican Family Firm

Academic journal article Academy of Strategic Management Journal

Strategic Orientations and Their Relationship with Performance: A Case of a Mexican Family Firm

Article excerpt

ABSTRACT

Despite abundant literature on strategic orientations, little has been done regarding qualitative studies that investigate on the nature of the relationships between strategic orientations (market orientation, entrepreneurial orientation, learning orientation and technology orientation) and their linkage with business performance in a family firm. Based on Hakala's (2011) framework for organizing the different approaches to analyze multiple strategic orientations studies, using the resource-based view (RBV) and contingency theory (CT) as theoretical framework, this research presents an exploratory case study that intends to advance the comprehension on how enterprises set a competitive strategy; how top management contributes to set up this competitive strategy and how a firm relates strategic orientations in order to enhance its performance, with an emphasis on technology orientation. A discussion of the findings and some possible future research, as well as conclusions and managerial implications are provided.

Keywords: strategic orientations, technology orientation, market orientation, entrepreneurial orientation, learning orientation, firm performance, innovativeness

INTRODUCTION

Strategic orientations in a firm have attracted the attention of scholars in diverse disciplines like marketing, entrepreneurship and management. They are seen as principles that direct and influence the activities of a business organization in their effort to achieve a better performance in the marketplace and ensure its viability (Noble, Sinha and Kumar, 2002; Hakala, 2011). Having their roots in the strategy research field, the concept of Strategic Orientation of a Business Enterprises (STROBE) has been studied as a multidimensional construct trying to advance in the operationalization of measures that test theoretical relationships proposed by researchers (Venkatraman, 1989; Morgan and Strong, 2003).

Strategy-as an academic field- has been considered as fragmented and lacked of coherence identity (Nag, Hambrick and Chen, 2007); however, strategic management is undoubtedly a successful emerging field producing a rich research line for scholars.

There is a tacit agreement that argues that the strategic management concept can be categorized in a three-level mode: business, corporate and functional (Venkatraman, 1989). According to this, business strategy can be characterized as the manner in which a firm decides to compete (Morgan and Strong, 2003). Several approaches have been used in order to develop a strategy measurement (narrative, classificatory and comparative). For the comparative approach, Venkatraman (1989) specifies six a priori dimensions: aggressiveness, analysis, defensiveness, futurity, proactiveness and riskiness. As an example of the use of this approach, Morgan and Strong (2003) found that firms' emphasis upon analysis, defensiveness and futurity are related to business performance. For a more detailed description of each of the six dimensions, see Venkatraman (1989).

One typology of strategic orientations used in strategy research-that is widely adopted- is suggested by Miles and Snow (1978; cited by Morgan and Strong, 2003):

1. Prospector: firms that conduct externally oriented business.

2. Defender: organizations internally oriented, focusing on efficiency and low cost operations.

3. Analyzer: firms that have the characteristics of prospector as well as defender, depending on the market environment.

4. Reactor: firms that respond to competitive circumstances when they are forced.

Another typology of strategic orientations mainly used in the marketing research area, was proposed by Narver and Slater's (1990) and Slater and Narver's (1994) articles that are considered pioneer studies of the impact of market orientation (MO) on firm performance; Lumpkin and Dess (1996) pioneering entrepreneurial orientation (EO); Gatignon and Xuereb's (1997) technology orientation (TO) and Sinkula, Baker and Noordewier (1997) studying learning orientation. …

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