Strategic orientation and firm risk

Abhi Bhattacharya*, Shekhar Misra, Hanieh Sardashti

*Corresponding author for this work

    Research output: Contribution to journalArticleAcademicpeer-review

    9 Citations (Scopus)
    32 Downloads (Pure)

    Abstract

    Entrepreneurial orientation (EO) and market orientation (MO) have received substantial conceptual and empirical attention in the marketing and management literature and both orientations have consistently been linked to stronger financial performance. Yet the way in which market-oriented firms seek to achieve superior rents is substantively different from that of entrepreneurially oriented firms which could lead to differential impacts of EO and MO on firm risk. In this study, the authors employ a text mining technique to assess firms' EO and MO and examine the impact of these two strategic orientations on shareholder risk outcomes. The results show that while EO increases idiosyncratic risk, MO decreases it. However, only EO decreases systematic risk. Overall, the results of this study demonstrate that a firm's decisions regarding strategic orientation should be examined in light of both likely risks and returns in order to make appropriate resource allocation decisions. (C) 2019 Elsevier B.V. All rights reserved,

    Original languageEnglish
    Pages (from-to)509-527
    Number of pages19
    JournalInternational Journal of Research in Marketing
    Volume36
    Issue number4
    Early online date29-Jan-2019
    DOIs
    Publication statusPublished - Dec-2019

    Keywords

    • Market orientation
    • Entrepreneurial orientation
    • Shareholder return
    • Firm risk
    • Text analysis
    • PROACTIVE MARKET ORIENTATION
    • RESEARCH-AND-DEVELOPMENT
    • RESOURCE-BASED VIEW
    • ENTREPRENEURIAL ORIENTATION
    • CUSTOMER SATISFACTION
    • PERFORMANCE RELATIONSHIP
    • COMPETITIVE ADVANTAGE
    • BUSINESS PERFORMANCE
    • ABSORPTIVE-CAPACITY
    • SHAREHOLDER VALUE

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