Market, entrepreneurial, and technology orientations: impact on innovation and firm performance

Abstract

PurposeThe purpose of this paper is to examine the effects of market, technology, and entrepreneurial orientations (EOs) on both innovation and firm performance. It analyzes the mediating effects of incremental and radical innovation within the context of entrepreneurial firms in Turkey, an emerging economy.Design/methodology/approachThis study empirically analyses the impact of strategic orientations on firm performance through innovation with a sample of 818 small and medium enterprises in Turkey. To test the proposed model, LISREL is used.FindingsProactive market orientation (MO) and technology orientation (TO) lead to radical innovation, while responsive MO strongly affects incremental innovation. EO impacts performance directly and indirectly via both incremental and radical innovation.Practical implicationsFinding suggests that senior management of firms, especially in emerging economies should encourage marketing managers to focus on key trends of markets, both existing and emerging. These marketing managers should find and work with lead users to improve radical product development. This means that those managing marketing need to be well schooled in technology, and they should also possess a proactive MO.Originality/valueThe present study employs a two-part view of the MO construct (responsive and proactive MO). This conceptualization provides a greater degree of precision in the use of the MO concept which was rarely employed in prior studies. Moreover, this paper views strategic orientations as drivers of innovation and examines how radical and incremental innovation mediate the effects of MO, EO and TO on firm performance. Finally, this is one of the few studies to look at all of these factors simultaneously and to include the two-part view of MO.