Age,order of entry,strategic orientation,and organizational performance

This paper proposes an empirical test of several hypotheses linking age, order of entry, and strategic orientations to a firm's performance. Three strategies are defined: cost-leadership strategy, innovative differentiation, and marketing differentiation. The aim is to show that the impact on performance of both age and each of the three strategic orientations may differ according to a firm's order of entry into an industry.Following Lieberman and Montgomery's (1998) evaluation of their major contribution on first mover advantage, we emphasize three points. First, we develop and test hypotheses related to early and late followers' strategic orientations, broadening the scope of traditional studies on pioneers. Second, the model combines the dimensions of a firm's age, order of entry, and strategic orientations, as well as industry conditions (stage of the industry, environmental unpredictability, and technology diffusion), to establish a contingent model of performance analysis. Finally, the empirical study deals chiefly with organizational performance and not market share, which is considered a typical advantage accruing to pioneers.In addition, the scope of the study (582 French manufacturing firms) provides the means to fill a void in empirical studies because it is a broad cross-sectional test on non-U.S. data. The firms are mainly private, small to medium-sized, and single or dominant business firms. Therefore, our assumptions must be understood as particularly applicable to this type of firm.The results reveal important lessons for practitioners. First, we did not find a first-mover advantage in terms of organizational performance. In addition, pioneers' organizational performance is enhanced by the cost leader strategy—contrary to our assumption emphasizing innovative differentiation for these firms. Second, early followers' performance benefits from innovative differentiation and marketing differentiation. Finally, late entrants developing a cost leader strategy have a significantly higher performance. All groups considered, late followers are the firms most sensitive to environmental uncertainty and age effects.Our study clarifies the impact of a firm's age and strategic orientations on its performance depending on the firm's order of entry. The implications of these results are particularly relevant for practitioners and entrepreneurs. First, a cost leadership strategy seems to be a guarantee for a pioneer to increase its organizational performance. New ventures should therefore take into consideration the fact that newness and innovative differentiation might not be the best strategic orientations for high performance in the long run. Second, as a second mover, however, developing a superior product and being able to market it efficiently appear to be the enhancing factors of firm performance. Third, for both pioneers and early followers, age does not significantly reduce their performance. However, the longer a firm waits before entering, the greater is the negative effect of age on its performance. This is due to the difficulty of resisting competitive erosion, because pioneers and early followers drive the changes in the industry. The identification of these effects should help managers and stakeholders to make more effective entry decisions to sustain a firm's advantage, leading to better performance and higher probability of survival.     

How strategic orientations influence the building of dynamic capability in emerging economies

Under the fierce pressures of the fast changing environments that characterize emerging economies, firms must develop dynamic capabilities to survive the competition. This study examines how strategic orientation helps build dynamic capability and its contingencies in China's emerging economy. A survey of 380 firms indicates strategic orientations are important drivers of adaptive capability, a key element of dynamic capabilities. The effectiveness of strategic orientations is contingent on market dynamics. In particular, when market demand becomes increasingly uncertain, customer orientation has a weaker impact, whereas technology orientation has a stronger effect on adaptive capability. As competition intensifies, both competitor and technology orientations build adaptive capability more effectively.     

Where the eyes go,the body follows?: Understanding the impact of strategic orientation on corporate social performance

This research seeks to address two questions with respect to firm corporate social performance (CSP): (1) “do different strategic orientations have differential impacts on a firm's overall CSP?”; and, if so, (2) “is there an effect of a firm's strategic orientation on the types of CSP that a firm implements?” Using a unique dataset that combines survey data on firms' strategic orientations for 115 US-based firms with CSP data from MSCI-ESG, we empirically examine the impacts on CSP levels of four different firm strategic orientations: customer, competitor, interfunctional coordination, and shareholder. Our empirical analysis demonstrates that (1) firms with a stronger orientation toward customers have higher levels of CSP overall, and (2) when firms have a stronger customer orientation, we find that the firm has higher CSP levels in domains dedicated toward secondary stakeholders, while firms with a stronger shareholder orientation exhibit higher levels of CSP dedicated toward primary stakeholders.     

Influence of CEO Demography on Entrepreneurial Orientation: The Moderating Role of Competitive Intensity

Although entrepreneurial orientation has been identified as a key facilitator of a firm’s innovative behaviors, its antecedents, especially the determinant role of the business leader, have yet to be explored. Drawing on strategic leadership theory, which posits the role of CEO in determining a firm’s strategic direction, we examined the influence of CEO demography, specifically age, tenure, and education, on a firm’s entrepreneurial orientation. Based on a sample of 231 Chinese firms, we found firms with a CEO who was younger, higher educated, and with a shorter tenure on the job had a greater extent of entrepreneurial orientation. Moreover, the firm’s competitive environment moderated these relationships.     

Entrepreneurial marketing: a comparative study

This paper uses a comparative study to explore entrepreneurial marketing orientation in small software technology firms, in relation to firm growth. Entrepreneurial Marketing (EM) acknowledges the interface between entrepreneurship, marketing and innovation and, pursuance of customer value. Researchers acknowledge that firms adopting other strategic orientations combined with a market orientation are more likely to outperform their competitors. Currently, there are few comparative studies of knowledge-intensive technology firms and no comparative cross-country studies, which consider firm growth and orientation from the EM perspective. This paper addresses these issues by using an entrepreneurial marketing orientation qualitative framework that consists of 15 dimensions, which allow investigation of entrepreneur and employee activities, attitudes and behaviors in such firms. Using a UK and US sample of firms, this research enables assessment of how and why entrepreneurial marketing orientation may lead to sustainable growth for firms in challenging markets and provides a comparison in two different country contexts.     

When are strategic orientations beneficial for collaborative service innovation?

Despite the importance of collaborative innovation, the existing literature tends to be somewhat vague in identifying when strategic orientations are beneficial for service innovation between a focal firm and its business partners. The purpose of this study is to examine the relative effects of four strategic orientations (market, service, interaction, and learning) on collaborative service innovation performance, while considering the contextual factor of service offerings (basic installed base, maintenance, operational, and professional). Results based on survey data from 362 paired B2B firms show that learning orientation has the strongest effect on collaborative service innovation performance, and is the most effective for basic installed base services and maintenance services. In contrast, interaction orientation best supports those firms with operational services, while market and service orientations are more effective for professional services. Managers are advised to consider alternative strategic orientations individually aligned with service offerings to achieve desired collaborative service innovation outcomes.     

Understanding Market-Driving Behavior: The Role of Entrepreneurship

In recent years, the marketing literature has placed significant emphasis on market-driving and proactive market-driven behavior within firms in attempts to reconceptualize the meaning of "market orientation." For their part, market-driving firms such as Starbucks, Amazon.com, Dell, and Southwest Airlines are demonstrating how business model innovation results in sustainable advantage and superior long-term performance in a wide range of industries. In this paper, we contend that market-driving behavior is distinct from a firm's market orientation, and instead is the essence of entrepreneurial action in the Schumpeterian "creative destruction" sense. It is further argued that the firm's entrepreneurial orientation interacts with other strategic orientations, in the process determining how they are manifested and, in some cases, whether they are manifested. Furthermore, entrepreneurial orientation plays a critical role in determining transitions among various strategic orientations over time. An integrative model illustrates the dynamics of the interface between marketing and entrepreneurship from both a content and process perspective. Two case studies illustrate how trajectories can be identified in the dominant strategic orientations within companies as they evolve.     

Market orientation, competitive advantage, and performance: A demand-based perspective

This study assesses how customer value affects a firm's market orientation and consequently, competitive advantage and organizational performance in a service industry — the global hotel industry. The findings show that if a firm perceives its customers as valuing service, the firm is more likely to adopt both a customer and a competitor orientation; if the firm thinks its customers are price sensitive, the firm tends to develop a competitor orientation. Moreover, the greater a firm's customer orientation, the more the firm is able to develop a competitive advantage based on innovation and market differentiation. In contrast, a competitor orientation has a negative effect on a firm's market differentiation advantage. Finally, innovation and market differentiation advantages lead to greater market performance (e.g., perceived quality, customer satisfaction) and in turn, higher financial performance (e.g., profit, market share).     

Cooperative or competitive in alliance formation: Alliance patterns with respect to rivals

Premised on the assumption that strategic alliance is a type of competitive action toward rivals, this study explores how a firm uses alliances differently with respect to rivals. I distinguish between two types of alliances that directly involve rivals: alliance with a rival and with a rival's partner. The former and the latter reflect cooperative‐ and competitive‐orientations respectively. Further, I investigate what drives a focal firm to adopt a particular alliance rather than another. The findings indicate that the key consideration explaining different alliance patterns is the resource profiles of focal and rival firms. This study contributes to the literature on competitive dynamics and strategic alliance by suggesting a new approach to integrate interfirm competition and cooperation. Copyright © 2016 ASAC. Published by John Wiley & Sons, Ltd.     

Compatibility Under Differentiated Duopoly with Network Externalities

This paper investigates a firm’s equilibrium behavior under product compatibility, product differentiation, and the network effect. We find that a firm with a higher degree of compatibility has a greater competitive disadvantage due to its higher spillover effect with other firms. A firm under Cournot competition can increase its demand and profit by decreasing consumers’ subjective belief about the degree of differentiation between products, when the firm’s product compatibility and/or relative production cost is sufficiently small. When the relative production cost satisfies certain conditions, the principle of maximum differentiation exists. However, the principle of minimum differentiation never exists. Furthermore, when firms can freely determine their own compatibility, each firm will choose the lowest degree of compatibility, in contrast to the social optimum in which both firms choose the highest degree of compatibility. A social dilemma occurs.     

Taking marketing strategy risks with seemingly no expected gains

This paper investigates the competitive rationale for firms to invest in marketing activities aiming to enhance valuation and achieve differentiation and competitive advantage, while carrying the strategic risks of causing unintended negative consequences. We build a stylized theoretical model where firms offering similar (homogenous) products are competing by determining their marketing strategy and pricing. Each firm must choose between several marketing activities that have different potentials of enhancing consumers’ product valuations while carrying some risk of lowering consumer valuation if unintended negative outcomes occur. The stochastic nature of marketing implies that (1) even when both firms invest the same amount of money aiming to enhance product valuations by the same level, there will be a variety of (posterior) vertical differentiation scenarios where the consumers could value either firm’s product as better as or worse than the rival’s. (2) The firms may employ marketing activities that do not even lead to gains in consumer product valuation in expectation. The duopoly model analysis indicates that associated with strategic pricing, even such stochastic marketing activities may constitute desirable strategies for two a priori symmetric firms in order to avoid a Bertrand type competition as the benefit from differentiation is found to be significant enough to offset the unintended negative outcomes. The oligopoly model analysis indicates that there is an increased incentive to take marketing risk when there is a greater level of competitive intensity in the marketplace. Preliminary experimental evidence is presented to support the main findings from theoretical model analyses. The paper thus provides important managerial implications for firms contemplating investment in seemingly risky marketing activities.

     

Learning Orientation and Performance Satisfaction as Predictors of Small Firm Innovation: The Moderating Role of Gender

Research on innovation in the context of small entrepreneurial firms is limited. Limited available studies on innovation in small firms are devoted mostly to firms operating in knowledge-intensive or technology industries and ignore the vast majority of small firms operating in traditional and less knowledge-intensive sectors of the economy. The rapid pace of technological change and the intensifying environmental turbulence in our economy influence all firms, including the majority of small firms that are perishing at a faster rate. Innovation is a key competitive tool for survival in a turbulent environment. Thus, it is important to understand factors influencing innovation in small firms. In this paper, we explore how learning orientation, a small-firm owner’s satisfaction with firm performance, and the firm owner’s gender influence innovation in small firms. We test the proposed model on a sample of small firms located in the United States of America.     

Market Orientation and CSR: Performance Implications

Corporate social responsibility (CSR) has become of great interest to both researchers and practitioners alike with much discussion on whether the costs outweigh the performance implications. CSR has become a firm strategic tool (not only an ethical concept) as firms recognize that the customer value proposition and CSR is integrated with the focus on how to differentiate the firm from the view of the customer. We utilized market orientation (MO) theory as our foundation for our research as it explains how organizations adapt to their customer environment to develop competitive advantages. With the current customer focus on CSR, MO assists the field in identifying a possible firm differentiation. Our research found that firms that ranked high on CSR correlated positively to performance. We also found our theoretically developed constructs of firm customer orientation (CO) and firm market orientation correlated with the firm adopting CSR. The results also indicated that CSR positively mediates CO and MO to firm performance. As past research had mixed results over the direct relation of MO to performance, our research suggests that CSR may be the missing variable to explain the MO/Performance relationship.     

Strategic orientation and firm risk

Entrepreneurial orientation (EO) and market orientation (MO) have received substantial conceptual and empirical attention in the marketing and management literature and both orientations have consistently been linked to stronger financial performance. Yet the way in which market-oriented firms seek to achieve superior rents is substantively different from that of entrepreneurially oriented firms which could lead to differential impacts of EO and MO on firm risk. In this study, the authors employ a text mining technique to assess firms' EO and MO and examine the impact of these two strategic orientations on shareholder risk outcomes. The results show that while EO increases idiosyncratic risk, MO decreases it. However, only EO decreases systematic risk. Overall, the results of this study demonstrate that a firm's decisions regarding strategic orientation should be examined in light of both likely risks and returns in order to make appropriate resource allocation decisions.     

Strategic orientation of high-technology firms in a transitional economy

Strategic orientation is a critical factor for a firm's competitiveness in a transitional economy context but it is understudied in the current literature. This article examines the antecedents of strategic orientation from both the socio-cognitive and resource-based view perspectives. The study posits that the strategic orientations of firms in a transitional economy context are influenced by the top managers’ cognitions and organizational resources. Based on a national survey of high-technology firms in China, the study finds that a stronger market-focused strategic orientation was facilitated by managerial cognitions about the future of the industry and current operation and performance of the firm, as well as organizational resources including an R&D infrastructure, technological alliance, and top managers' foreign experience. The study confirms that strategic orientations should be examined from multiple theoretical perspectives.     

Endogenous Market Structures in the Presence of a Socially Responsible Firm

We consider the endogenous selection of strategic contracts in an asymmetric duopoly with substitutable goods. the duopoly comprises a typical managerial firm with a sales delegation and a socially responsible firm (CSR firm) with a linear combination of social welfare and quantity as its managerial delegation contract. In particular, we examine how the equilibrium market structure changes from the case wthere both firms adopt sales delegation contracts to the case wthere one of the firms becomes a CSR firm, after the owners of the firms select their strategic contracts. We show that two market structures that are asymmetric with respect to their strategic contracts can become equilibrium market structures under the pure strategic contract class. Furthermore, we consider a unique mixed strategy equilibrium to examine how the risk domination between the two asymmetric equilibrium market structures affects equilibrium selection. there, we find that the competition wthere the firm with the sales delegation and the CSR firm have a price contract and a quantity contract, respectively, risk-dominates the competition wthere the firms have a quantity contract and a price contract, respectively. Finally, by deriving the order of social welfare among the four subgames, we show that the social incentive does not coincide with the private incentive in the robust equilibrium with respect to risk domination in the endogenous selection game of the strategic contracts of the asymmetric duopoly with the firm with a sales delegation and the CSR firm.     

How foreign firms achieve competitive advantage in the Chinese emerging economy: Managerial ties and market orientation

As China experience unprecedented changes in its social, legal, and economic institutions, on what should foreign firms focus more to overcome this challenge, managerial ties or market orientation? This study investigates how managerial ties and market orientation affect competitive advantage and, consequently, firm performance in China. On the basis of a survey of 179 foreign firms in China, we find that both managerial ties and market orientation can lead to firm success—but in different ways. Market orientation enhances firm performance by providing differentiation and cost advantages, whereas managerial ties improve performance through an institutional advantage (i.e., superiority in securing scarce resources and institutional support). Institutional advantage, in turn, leads to differentiation and cost advantages and consequently superior performance.     

Linking two dimensions of entrepreneurial orientation to firm performance: The moderating role of environment and industry life cycle

The term “entrepreneurial orientation” has been used to refer to the strategy-making processes and styles of firms that engage in entrepreneurial activities. A popular model of entrepreneurial orientation (EO) suggests that there are five dimensions of EO—autonomy, innovativeness, risk taking, proactiveness, and competitive aggressiveness (Lumpkin and Dess 1996). This paper reports on two of those dimensions—proactiveness and competitive aggressiveness. Proactiveness refers to how firms relate to market opportunities by seizing initiative in the marketplace; competitive aggressiveness refers to how firms react to competitive trends and demands that already exist in the marketplace. Despite these distinctions, prior research has tended to equate these two concepts and argued that they have a similar effect on firm performance. This paper investigates how these two approaches are related to each other, how they are related to performance, and how their function differs in the environments in which firms exhibit these approaches to strategy making. These distinctions are important because proactiveness and competitive aggressiveness represent distinctly different avenues to entrepreneurial success.A field study was conducted in which 124 executives from 94 firms were surveyed. These were executives from non-affiliated, non-diversified firms who were actively involved in strategic decision making at the top level of the firm. All firms reporting had at least one respondent who was an owner. Analysis of the data was conducted in two phases. In phase 1, factor analysis was used to examine the distinctions between different dimensions of EO. Proactiveness and competitive aggressiveness emerged as two separate factors indicating that these two strategy-making modes were perceived differently by the executives in the study. In the second phase, the relationship of these two dimensions to performance was analyzed in various contexts. Initial tests found that proactiveness was positively related to performance but competitive aggressiveness tended to be poorly associated with performance.Subsequent tests of the EO-performance relationship indicated that the stage of industry life cycle tended to favor one entrepreneurial orientation over another. The performance of firms in the early stages of industry development was stronger when their strategy making was proactively oriented. In contrast, a competitively aggressive frame of mind was helpful to firms in more mature stages of industry development. These findings were supported by other tests of the business environment. In dynamic environments, characterized by rapid change and uncertainty, proactive firms had higher performance relative to competitively aggressive firms. In hostile environments, where competition is intense and resources are constrained, competitively aggressive firms had stronger performance.The findings suggest that these two different approaches to entrepreneurial decision making may have different effects on firm performance. The differences were particularly apparent in the way firms relate to their external environment. Proactiveness—a response to opportunities—is an appropriate mode for firms in dynamic environments or in growth stage industries where conditions are rapidly changing and opportunities for advancement are numerous. But such environments may not favor the kind of combative posturing typical of competitive aggressiveness. Firms in hostile environments, or in mature industries where competition for customers and resources is intense, are more likely to benefit from competitive aggressiveness—a response to threats. A further implication of this research is that the dimensions of an entrepreneurial orientation, often considered to be positively related to performance under all conditions, may not always be associated with successful outcomes. This study indicates that the dimensions of EO often vary independently rather than covary, suggesting that the extent to which an entrepreneurial approach to strategy making is useful will frequently depend on the organizational or environmental conditions under which such decisions are made.     

The intermediating role of big data analytics capability between responsive and proactive market orientations and firm performance in the retail industry

Big data analytics capability (BDAC) is the key resource for competitive advantage in the drastically changing market. Although some studies have investigated the impacts on firm performance, there is limited understanding of how firms enhance their BDAC. This study draws on organisational culture and investigates the effects of responsive and proactive market orientations on BDAC and firm performance. The results show that both responsive and proactive market orientations increase BDAC. Further, BDAC fully mediates the relationship between these two market orientations and firm performance. Our findings suggest that BDAC researchers should focus on market orientations that enhance BDAC.