Effects of Strategic Orientation on Firm Performance in Banking Sector: The Moderating Role of Environmental Turbulence in Ethiopian Banking Sector.
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Date
2024-10-15
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A.A.U
Abstract
In the modern world, business is too dynamic and highly volatile. There is high competition
among business firms, and to survive, firms have to make extra efforts .the objective of this
study is to analyze the effects of strategic orientation on firm performance with the moderating
role of environmental turbulence. To investigate this research, four dimensions of strategic
orientation (market, technology, entrepreneur, and learning orientation) were assessed. For this
study, explanatory research design methods and quantitative research approaches were used. 252
questionnaire were distributed in person using multistage cluster sampling technique, and 242
were returned. Pearson correlation and multiple linear regression analysis methods were used to
identify the relationship between independent, dependent, and moderating variables. The result
of the study shows that technology orientation and entrepreneur orientation have a positive and
significant effect on firm performance, with p value 0.022, and 0.002 respectively. On the other
hand, market orientation and learning orientation have no significant effect on firm performance
with p value 0.128 and 0.29 respectively. For this study, the results of multiple linear regression
analysis also indicate that environmental turbulence moderates the relationship between market
orientation with firm performance, and entrepreneur orientation with firm performance. On the
other hand, the results of the study prove that environmental turbulence did not moderate the
relationship between technology orientation and firm performance. Similarly, the relation
between learning orientation and firm performance is not statistically significant for the
moderating variable (environmental turbulence) (β = 0.187, P = 0.261, which is larger than 0.05).
From the result of the research, the researcher wants to recommend that the banks will give
better attention to new and latest technologies, and top managers will be open-minded to
accepting diverse viewpoints from employees, and middle-level managers. For this study the
data were collected at one time and the geographical location is limited only in Addis Ababa may have its own impact on the result of the study.