The Impact Of Strategic Orientation On Firm Performance

With the continuous development of economic globalization, the market environment which Chinese enterprises are facing has undergone tremendous changes. This is an unprecedented time of change with unlimited unknown and potential, which are an opportunity as well as a challenge for Chinese enterprises. With that, how to adjust the strategic orientation to respond to complex market environment have become the major strategy problems for current Chinese enterprises.At the same time, with the background of high competition intensity in the changing market environment, the innovative capability of Chinese enterprises are facing a new strategic paradigm brought by the rise of a major strategic opportunity.This article will start from the corporate strategy level, combine the technological innovation and environmental dynamics related theories, then develop the research by focusing on the topic of "how companies build competitive advantage through strategic orientation", to build a basic model of "Strategic Orientation Innovation Model-Firm Performance" based on leveraging the research of strategic and innovative system analysis, and integrated utilizing series of research methodologies including theory research, interviews, large sample research statistics and mathematical statistics tools such as SPSS, organically combining qualitative analysis and quantitative research. The analysis logic of this article start from literature review to conceptual model and theoretical assumptions, then to empirical analysis, following the layer by layer in-depth sequences, and answer below research questions step by step:1. What are the strategic orientations for business, and what are the relationships between them? 2. Following the different strategic orientations, what is the innovative model that business tends to leverage? 3. Will different strategic orientations and innovative models have significant impacts to the performance of enterprises? 4. With the dynamic changes in the external environment, what kind of changes will happen to the relationship between "exploratory innovation-exploitative innovation model" and performance?Through the answers to above four specific questions, this article has figured out the influencing models of mechanism between strategic orientation, innovation model and firm performance, and formed the following research conclusions: (1) Different strategic orientations and innovative models both have significant positive effects to firm performance. The empirical results of this article show that both the entrepreneurial orientation and market orientation contribute to firm performance improvement. Besides, either exploratory innovation or exploitative innovation will have significant positive effects to firm performance. Exploitative innovation is relatively more focused on current interests, while exploratory innovation is more focused on the future.(2) Strategic orientation indirectly influences firm performance through the mediating role of exploitative and exploratory innovation. This article did the empirical analysis based on the data of 179 enterprises and found out entrepreneurial-oriented enterprises are more focused on fundamental exploratory innovation and emphasis on the breakthrough of innovation results; while market-oriented enterprises are more focused on the incremental exploitative innovation.(3) Environmental dynamism plays an important moderating role in the mechanism that innovation model affects the firm performance. Empirical research has shown that, environmental dynamism plays the positive moderating role in the relationship between exploratory innovation and firm performance, while relatively, environmental dynamism could only plan the negative moderating role in the relationship between exploitative innovation and firm performance.