The Measurement of Strategic Orientation and Its Efficacy In Predicting Financial Performance

Abstract

For decades, the strategic management literature has recognized strategicorientation as an important cultural attribute in the investigation of the link betweenorganizational culture and firm performance. Using three studies, we develop a survey measure of strategic orientation that is unidimensional, reliable, and predictive of financial performance. Our final study uses a sample of 779 respondents from 20 companies and empirically demonstrates a positive relationship between strategic orientation and firm performance. Our results support the notion that managers should both encourage and support behaviors and execute actions that are consistent with our measure of strategic orientation to create a coherent strategic approach, resulting in improved financial performance

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