Strategic Orientations, Dynamic Capabilities, and Firm Performance: an Analysis for Knowledge Intensive Business Services

The strategic orientations of a firm are considered crucial for enhancing firm performance and their impact can be even greater when associated with dynamic capabilities, particularly in complex and dynamic environments. This study empirically analyzes the relationship between market, entrepreneurial and learning orientations, dynamic capabilities, and performance using an integrative approach hitherto little explored. Using a sample of 209 knowledge intensive business service firms, this paper applies structural equation modeling to explore both direct effects of strategic orientations and the mediating role of dynamic capabilities on performance. The study demonstrates that learning orientation and one of the dimensions of entrepreneurial orientation have a direct positive effect on performance. On the other hand, dynamic capabilities mediate the relationships between some of the strategic orientations and firm performance. Overall, when dynamic capabilities are combined with the appropriate strategic orientations, they enhance firm performance. This paper contributes to a better understanding of the knowledge economy, given the important role knowledge intensive business services play in such a dynamic and pivotal sector.

Impact of IS/IT Investments on Firm Performance: Does Stakeholder Orientation Matter?

This research project addresses a central question in the IS business value field: Does IS/IT investments impact positively on firm financial performance? IS/IT investments are seen as having an enormous potential impact on the competitive position of the firm, on its performance, and demand an active and motivated participation of several stakeholder groups. Actual research conducted in the Information Systems field, relating IS/IT investments with firm performance use transactions costs economics and resource-based view of the firm to try to explain and understand that relationship. However, it lacks to stress the importance of stakeholder management, as a moderator variable in that relationship. Stakeholder theory sees the firm as the hub centric to the spokes representing various stakeholders who were in essence equidistant to the firm, and survival and continuing profitability of the corporation depend upon its ability to fulfil its economic and social purpose, which is to create and distribute wealth or value sufficient to ensure that each primary stakeholder group continues as part of the corporation’s stakeholder system. Stakeholder theory in its instrumental version, argues that if a firm pays attention to the stakes of all stakeholder groups (and not just shareholders), it will obtain higher levels of financial performance. With this premise in mind, the aim of this paper is to discuss and test the use of stakeholder theory in the IS business value stream of research, in order to achieve a better understanding of the impact of IS/IT investments on firm performance (moderated by stakeholder management). To achieve the expected impact from an IS/IT investment, it is argued that firms need a strong commitment from those stakeholder groups, which lead us to the need of a corporate “stakeholder orientation”. When firm financial performance is measured by returns on assets (ROA), returns on investments (ROI) and returns on sales (ROS), the results show that “stakeholder orientation” impact positively in the relation between IS/IT and firm performance, using a sample of Portuguese large companies.