Benefiting from economic crisis? Strategic orientation effects, trade-offs, and configurations with resource availability on SME performance

Abstract

While there is growing interest in exploring strategic orientations, their interaction, and impact on firm performance, most research has been conducted within stable economic environments. Taking into consideration economic instability, it is timely to develop a more nuanced understanding of how economic crises may affect key strategic orientation prescriptions. In this research, we examine entrepreneurial and market orientations as means through which firms may operate within an economic crisis to seize available opportunities.Additionally, we consider how increasing financial resource availability during macroeconomic constraint may affect these relationships. Based on a rare, and robust national random sample of 612 Russian small to medium-sized enterprises (SMEs) collected during a recent period of economic crisis in 2015-2016, our results reveal a positive effect of entrepreneurial orientation and a non-significant effect of market orientation. Moreover, we demonstrate how financial resource availability in concert with firms' strategic orientations yields distinctly more, and less, productive configurations.

Strategic Entrepreneurship in Russia during Economic Crisis

“…In such periods, entrepreneurs face serious threats that affect their financial situation and, ultimately, their very survival [Kunc, Bhandari, 2011;Pal et al, 2014]. However, deep economic shocks also create new opportunities [Beliaeva et al, 2018;Laskovaia et al, 2019;Pearce, Michael, 2006] oped and emerging markets indicate that increased economic pressure often helps a firm make creative decisions that positively affect companies' financial performance [Beliaeva et al, 2018;Hausman, Johnston, 2014]. Players who rely on innovation also strengthen their market positions and leadership [Drickhamer, 2003;Guellec, Wunsch-Vincent, 2009;Pearce, Michael, 2006].…”

“…Plus, SMEs are more dependent on external resources [Baum, Oliver, 1996] and become hostages to the modest scale of their operations [Audretsch, Mahmood, 1994]. However, crises also open potential opportunities for SMEs [Beliaeva et al, 2018;Soininen et al, 2012].…”

“…Focusing on the strategic management of resources and making use of competitive advantages increases SMEs' chances of maintaining profit margins despite the falling sales and financial instability. Though most companies see economic crises as a threat, some, especially those in the SME group, use them to take advantage of newly emerging opportunities and expand their operations [Beliaeva et al, 2018;Kunc, Bhandari, 2011]. They see turbulence as a source of new business opportunities, including maintaining their competitiveness or identifying new sources of competitive advantages, for example, by procuring their competitors or suppliers [Wan, Yiu, 2009].…”

Technological capabilities and internationalization of high‐tech ventures: The moderating role of strategic orientations

“…Top managers' attention to the external environment, in general, increases the degree of internationalization (Levy, 2005). Information on markets, customers, and competitors provides important clues to new business opportunities (Beliaeva, Shirokova, Wales, & Gafforova, 2020; Martin, Javalgi, & Ciravegna, 2020; Zahra, 2005). Understanding the external environment can lead to higher value creation when firms possess adequate internal capabilities (Lee, Lee, & Pennings, 2001).…”

STRATEGIC ORIENTATIONS, THE MEDIATING EFFECT OF ABSORPTIVE CAPACITY AND INNOVATION: A STUDY AMONG MALAYSIAN MANUFACTURING SMEs

“…Previous studies have identified various types of SO dimensions including market orientation (MO), customer orientation (CO), and entrepreneurial orientation (EO) all of which play a vital role for firms in acquiring superior performance (Beliaeva et al, 2018;Engelen et al, 2015;Jaworski and Kohli, 1993;Morgan et al, 2009;Sisay et al, 2017;Zhang and Yang, 2018). SO, in such context, refers to the processes, principles, practices, and decision-making techniques that direct organisational activities (Herath and Mahmood, 2014;Zhou and Li, 2010).…”