Configurations of entrepreneurial‐ customer‐ and technology orientation

Evidence that firms combining several strategic orientations perform better than those focusing solely on customer orientation is provided, and support is found for a proposal that software companies can be divided into three groups featuring different configurations of customer, technology and entrepreneurial orientation.

Abstract

Purpose The purpose of this paper is to identify groups of companies using different configurations of orientations, and compare the groups for differences in their performance and organizational learning capability. The paper proposes that organizational learning capability enables firms to utilize several strategic orientations simultaneously. Design/methodology/approach A sample of 164 Finnish software companies is clustered on the basis of their mix of customer (CO), technology (TO) and entrepreneurial orientation (EO). After validating the clusters, an analysis of variance is performed to detect differences in measures of performance and learning capability. Findings The paper provides evidence that firms combining several strategic orientations perform better than those focusing solely on customer orientation. The paper finds support for a proposal that software companies can be divided into three groups featuring different configurations of customer, technology and entrepreneurial orientation. The groups are termed: servants (high CO, low TO and low EO), players (intermediate levels of CO, TO and EO) and integrators (high levels of CO, TO and EO). Furthermore, the paper shows that these groups demonstrate differences in their organizational learning capability and performance. Research limitations/implications The paper refers to an empirical study of software companies in Finland. Further research in other countries and industry settings is needed to confirm and extend the results. Practical implications The identification of a successful mix of strategic orientations is a major challenge to management. The results urge software company managers to develop a culture that nurtures organizational learning. The paper suggests that managers should utilize aspects from several strategic orientations and create an appropriate mix of orientations that enables adaptation to dynamic business environments. Originality/value The paper provides insights into viable combinations of strategic orientations in the software industry and provides evidence for the differences in learning and performance for software company groups classified on the basis of their mix of orientations.