Strategic business performance through network capability and structural flexibility

Abstract

PurposeThe present study aims to develop a strategic business performance (SBP) model for larger firms by examining the mediating role of structural flexibility in the network capability–SBP link, as well as testing the moderating role of entrepreneurial orientation in the relationship between structural flexibility and SBP.Design/methodology/approachData were collected from 929 senior managers/owners of large textile sector firms operating in Pakistan. Regression and bootstrapping techniques were used to test the proposed relationships.FindingsThe results revealed that network capability positively shapes firms' structural flexibility, which, in turn, helps firms achieve SBP. The present work also showed that entrepreneurial orientation strengthens the positive relationship between structural flexibility and SBP.Research limitations/implicationsThis study is based on the cross-sectional data, and data were collected from the textile sector firms operating in Pakistan.Practical implicationsThe findings suggest that managers should focus on developing firms' network capability, which positively shapes structural flexibility and helps firms achieve SBP. Entrepreneurial orientation can also play an imperative role for strengthening the link between structural flexibility and SBP.Originality/valueThe value of the present work rests on the deeper understanding of the network capability–SBP link that it offered by examining the relationships of the network capability dimensions with SBP through structural flexibility. Moreover, by bringing to the fore firms' entrepreneurial orientation as a moderator of the structural flexibility–SBP relationship, the study provided a new vantage point to uncover the complexities involved in the links between network capability, structural flexibility, and SBP.