Examining the Strategic Alignment Effect Between Strategic Orientation and Market Orientation on Business Performance

Abstract

With the highly changing market environments, enterprises must understand market trends and customers’ needs, they should develop and adjust business activities with market demands as well to create values for customers. In this vein, enterprises should develop the capabilities to acquire the market information in accordance with their business strategy to compete in the market in order to achieve the aim of the company. So far, although many studies tried to examine the effect of market orientation and strategy orientation on performance, there has been the contradiction in the findings because of the neglect of the alignment effect. Therefore, according to strategic alignment perspective, this study proposed and examined the strategic alignment effect between strategic orientation and market orientation on business performance. For testing the alignment model, fit as covariation was used to validate the hypothesis. A number of 140 respondents were collected from Taiwan’s companies. The findings showed that the alignment relationship between strategic orientation and market orientation is confirmed and demonstrated a significant effect on business performance.