Do types of strategic orientations make a difference? A study of MNCs’ performance in foreign markets
ISSN: 0955-534X
Article publication date: 10 January 2020
Issue publication date: 17 January 2020
Abstract
Purpose
The purpose of this paper is to create a new research direction within the domain of firms’ strategic orientations.
Design/methodology/approach
Based on data from Swedish multinational corporations (MNCs), this paper identifies types, i.e. configurations, of strategic orientations involving the components of entrepreneurial orientation and market orientation, and examines relationships with performance in foreign markets. Cluster analysis identifies types, and linear regression analysis examines relationships with performance in foreign markets.
Findings
Four types of orientations were found: conservative; entrepreneurial; maximizing; and irresolute. Furthermore, it was found that the relationship with performance in foreign markets is most positive for the maximizing followed by the conservative and irresolute.
Research limitations/implications
First, it is established that entrepreneurial orientation and market orientation do not operate in isolation but are mutually supportive. Second, by establishing that type of orientations makes a difference for performance, this paper goes beyond the predominant view saying that just degrees matter. Third, the findings contribute to resource-advantage theory by establishing that competitive advantage results from resources being complementary in nature.
Practical implications
Instead of solely relying only on entrepreneurial orientation, or market orientation, corporations are advised to carefully evaluate their configuration of orientations. The evaluation is decisive because it cites implications for performance.
Originality/value
The study contributes to the literature on strategic orientation in a unique way as it captures performance implications stemming from types of strategic orientations.
Keywords
Acknowledgements
The author is grateful to Roger Schweizer, Mikael Hilmersson, Taylan Mavruk and members at the Centre for International Business Studies (CIBS) at the University of Gothenburg for their valuable comments during earlier versions of the paper. The study has benefitted from the feedback received at the European International Business Academy conference (EIBA) in Milan, and the McGill International Entrepreneurship conference in Vaasa. The author greatly appreciates the guidance offered by David Eriksson editing the manuscript and for reviewer comments.
Citation
Pehrsson, T. (2020), "Do types of strategic orientations make a difference? A study of MNCs’ performance in foreign markets", European Business Review, Vol. 32 No. 1, pp. 26-45. https://doi.org/10.1108/EBR-03-2018-0071
Publisher
:Emerald Publishing Limited
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