Author:Ogbari, Mercy Ejovwokeoghene
Position:Report - Statistical data


In the world of business today, where the assurance of the business cycle as well the environment is chocked with unprecedented uncertainties and risks, companies desiring to remain in business and competitive must learn how to navigate more strategically. This being the bane to organization success has attracted the need for managers who are loaded with strategic skills. Strategic orientation is seen as principles that direct and influence the activities of a business management in their effort to achieve a better performance in the marketplace and ensure its viability (Hakala, 2011). These are policies in a business which are responsible for the direction of a company towards achieving its goal. Strategic orientation has come to the attention of some scholars in different disciplines like marketing, entrepreneurship and management who has invested so much time and intellectual strength in its study. After several studies on customers, production and technology, it has come to notice that firms place emphases on the strategic orientation since organizations should intermittently strategize because of the intensity of the business environment as an aftereffect of the complexities in the commercial center; (Miles & Snow, 1978; Morgan & Strong, 2003; Ogbari et al., 2016).


Many researchers give various definitions on strategic orientation, all of which, however, mention the same final goal of strategic orientation, namely to improve performance or to achieve superior performance. According to Zhou et al. (2005) strategic orientation is the company's strategic direction in creating the proper behavior so as to achieve superior performance; both market and innovation are the most strategic orientations for the company to achieve superior performance over a long term. Strategic orientations are ones consisting of four dimensions, namely market, learning, entrepreneurship and employee orientations. These dimensions have a positive effect on the company's performance (Grinstein, 2008). Meanwhile, Liu & Revell (2009) define the strategic orientation as a concept widely used in research on the management of strategy, entrepreneurship and marketing. A strategic orientation of a company reflects a strategic direction which is implemented by the company to create proper behavior for the continuously superior performance in business. The definition of strategic orientation explained by Grawe et al. (2009) covers the orientation of market, entrepreneurship, customer, cost, innovation, competitor, learning, employee and interaction.

Marketing researchers determine various dimensions of strategic orientation when they study them. Voss & Voss (2000) use the orientation dimension of customer, competitor and technological products. Meanwhile, the dimensions used by Antonio, Emilio & Jose (2005) are technology, area of innovation, implementation flexibility, human resource system and training investment. Then, Racelis (2006) states the strategic orientations consist of marketing focus, main competence, investment strategy and innovation. Dimensions of strategy orientation consist of orientation of customer, entrepreneurship, learner and innovation (Altindag et al., 2011; Usta, 2011) adds variables of internal marketing and management information. Then, Lau (2011) describes that dimensions of strategic orientations consist of orientation of team, managerial competence, social networking, local institutional support, low-cost orientation and product innovation. Venkatraman (1989) proposed an arrangement of key introduction variables that are pertinent at the business level. They are: aggressiveness, analysis, defensiveness, futurity, proactiveness and risk.


At this point, business operators must smartly possess the ability to engage organizational resources in executing aggressive strategies and the pursuit of increased market share as a means to achieving business unit profitability; recognizing the fact that every firm seek higher market share ahead of competitors (Abiodun, 2009). This strategy takes the form of cost leadership (Porter, 1980; Miller, 1988; Wright et al., 1992; Thompson & Strickland, 1999; Hitt et al., 2007) explosion and expansion strategy described by Wissema et al. (1980), product innovation (Schuler & Jackson, 1987; Miller, 1988), price and image differentiation (Mintzberg, 1988; Bordean, 2011).


This refers to the ability to investigate deeply into the foundational causes of problems and develop the best alternative solution as a way of problem-solving. It relates to the maintenance of internal consistency in the resource allocation strategies towards the achievement of corporate objectives. The alignment of resource allocation and competitive intelligence are important issues of consideration (Abiodun & Ibidunni, 2014).


Reflects the firm's emphasizes on defense strategies over its core technology and product-market domain through the use of cost minimization and techniques that achieve operational efficiency. This posture is related to the defender trait described by Miles & Snow (1978), defensive actions (Miles & Cameron, 1982), niche marketers (Miller, 1988), cost reduction (Schuler & Jackson, 1987) and niche differentiation (Ward et al., 1996).


This is the extent to which decisions that relate to possible future occurrences are seriously engaged. It reflects issues like sales forecast, possible changes in customer preference and tracking of environmental changes. It is manifested by a firm's incorporation of its vision of the vision as a strategic concern (Stambaugh et al., 2011).


Reflects the firm's constant engagement in the search for new market opportunities; the first mover in the introduction of new products, while old products are strategically withdrawn from markets; it shows the degree of the firm's experimentation with marketing research responses (Venkatraman, 1989). It explains a firm's drive for first mover position in the market (Chang et al., 2003) and a search for new opportunities (Miles & Snow, 1978) and the pursuit of new markets through the engagement of value innovations.


It captures the extent of riskiness of the firm. This is reflected in its choice and criteria over resource allocation decisions and the general pattern of decision making. Firms characterized with high risk strategies may be trading-off with lower profits than expected (Soderbom, 2012). Although R and D investment is important in the new product development (Kotler, 2003) due to the small sophistication of small businesses in the area of Ogun State

Strategic Orientation Based Model of SME Performance

Existing literature reveals that strategic orientations have been used in many prior studies to explain the performance of SMEs. But prior researchers have used different orientations separately or combination of two orientations as predictors of SME performance (Ledwith & Dwyer, 2009; Li et al., 2008; Gao et al., 2010; Kropp et al., 2006; Santos- Vijande et al., 2005; Worlu et al., 2016). As (Hakala & Kohtamaki, 2011; Kropp et al., 2006) pointed out that the effect of orientations on performance has been investigated individually or single orientation coupled with other factors.

Strategic orientations have been considered as organizational resources (Hoq & Chauhan, 2011; Barney, 1991). Valuable and unique resources are the source of the competitive advantages in SMEs (Amit & Schoemaker, 1993). (Hoq & Chauhan, 2011; Inmyxai & Takahashi, 2009) argue that lack of resources and capabilities in SMEs is a barrier for them to develop their own markets and to use the experience, economies of scale and scope for achieving competitive advantage. Recent research findings have concluded that interrelation among different strategic orientations provides sustainable competitive advantage for organizations (Hult et al., 2004) and firms that continue balancing different strategic orientations perform better (Bhuian et al., 2005; Nobel et al., 2002). It is also evident that strategic orientations are very important for the organizations in developing countries (Keskim, 2006). Dharmasiri (2009) emphasized the importance of strategic orientation for the success of the organizations in developing countries. Chandrakumara et al. (2011) also have suggested the need of investigations of the impact of mixed orientations on firm performance in developing countries.

Dharmasiri (2009) stressed the significance of vital introduction for the accomplishment of the organizations in developing nations. Chandrakumara et al. (2011) additionally have proposed the need of examinations of the effect of blended introductions on firm performance in developing nations. Likewise, taking into account the accessible writing, it can be contended that vital introductions qualify as indicators of SME performance in an examination model. Sequel to this line of thoughts, we formulate the following hypothesis:

Hypothesis One:

[H.sub.01]: Market share for a small and medium business can be influenced by aggressive marketing.

[H.sub.a1]: Market share for a small and medium business cannot be influenced by aggressive marketing.

Hypothesis Two:

[H.sub.02]: There is a significant relationship between research and development and customer patronage.

[H.sub.a2]: There is no significant relationship between research and development and customer patronage.

Hypothesis Three:

[H.sub.03]: Product innovation affects the revenue turnover of a small and medium company.

[H.sub.a3]: Product innovation does not affect the revenue turnover of a small and medium company.

Hypothesis Four:

[H.sub.04]: There is a significant relationship between technological innovation and return on investment of a small and medium company.

[H.sub.a4]: There is no significant relationship between technological innovation and return on investment of a small and medium company.

SMEs are...

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