Firm’s strategic orientation, market context, and performance: Literature review and opportunities for international strategy research

Abstract

Purpose

The purpose of this paper is to extend the understanding of relationships between entrepreneurial orientation (EO) and performance, and between market orientation (MO) and performance in different market contexts that set boundaries for performance.

Design/methodology/approach

The paper presents a review of studies containing empirical research incorporating EO, MO, market context and firm performance.

Findings

Patterns regarding content of previous studies of the issue are outlined, and crucial research gaps are identified. These concern a lack of focus on relationships between EO/MO and performance of foreign units.

Research limitations/implications

First, further studies on international strategy need to develop EO/MO components that are consistent with foreign units’ value-adding roles. Second, the impact of dynamism originating from competitors in foreign markets needs attention. Third, direct impacts of market dynamism on performance of foreign units, and moderating roles of EO/MO need to be studied.

Practical implications

International competitiveness of the firm as a whole would benefit from higher performance of foreign units that may be achieved through aligning EO/MO with local market contexts.

Originality/value

Meta-analyses show that it is difficult to establish universal direct relationship between EO/MO and performance and that the importance of market context is underestimated. The paper provides opportunities for further studies that may clarify underlying contingency mechanisms.

Citation

Pehrsson, A. (2016), "Firm’s strategic orientation, market context, and performance: Literature review and opportunities for international strategy research", European Business Review, Vol. 28 No. 4, pp. 378-404. https://doi.org/10.1108/EBR-11-2015-0142