The Role of Strategic Orientations on Organizational Performance: the Moderating Effect of Government Regulation (the Case of Ethio Telecom)
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Date
2025-05-17
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A.A.U
Abstract
In today’s dynamic and regulated global markets, strategic orientation is increasingly recognized as a key
determinant of organizational performance, particularly in emerging economies where external constraints such as
government regulation are pronounced. This study investigates The Role of Strategic Orientations on
Organizational Performance: The Moderating Effect of Government Regulation, with a specific focus on Ethio
Telecom. The general objective was to examine how strategic orientations affect performance in public enterprise,
while the specific objectives were: (1) to analyze the effect of Market Orientation, (2) evaluate the influence
Innovation Orientation, (3) assess the influence of Technology Orientation, (4) investigate effect of Entrepreneurial
Orientation, (5) examine the impact of Learning Orientation, and (6) explore the moderating role of Government
Regulation in relationships between strategic orientation and performance. The research was guided by ResourceBased
View (RBV), Dynamic Capability Theory (DCT), and Contingency Theory. The study employed concurrent
triangulation mixed-methods approach. A descriptive and explanatory research design was adopted. The study used
both probability (stratified random sampling) and non probability (purposive) sampling technique to select 196
valid respondents from top, middle, and lower-level managers, complemented by purposive sampling for qualitative
insights a total of seven key informants from HRM, Strategic program, Finance oppression, Marketing, Technology
and Supply chain management departments. Both primary data (structured survey questionnaire and interview
guide) and secondary sources (internal documents and reports) were utilized. Data were analyzed using SPSS (for
descriptive and regression analyses) and PROCESS Macro Model 4 (for Moderation analysis with 5,000 bootstrap
samples). Findings from descriptive analysis revealed Ethio Telecom possesses strong Market Orientation (M =
4.20), particularly in Customer Orientation (M = 4.27) and Inter-functional Coordination (M = 4.25), but lags in
Competitor Orientation (M = 4.09). Innovation Orientation is notable yet constrained by a top-down structure and limited risk tolerance. Technology Orientation (M = 3.97) and Learning Orientation show internal strengths but
weak external knowledge acquisition. Inferential analysis confirmed significant positive effects of all five strategic
orientations on organizational performance (R² = 0.696), with Market Orientation (B = 0.415, p < 0.001) having
the strongest influence. The Moderation analysis revealed that while both strategic orientation (B = 4.168, p <
.001) and government regulation (B = 2.486, p < .001) positively affect performance, the interaction term was
negative and significant (B = –0.665, p < .001), indicating that higher/strict regulation weakens the impact of
strategic orientation. Conditional effects confirmed this diminishing trend across increasing levels of regulation.
Key recommendations include enhancing Competitor Orientation, deepening technology integration, fostering
bottom-up innovation and promoting a learning-based culture as well as adopts performance-based governance
(performance-oriented regulatory framework), enhance strategic autonomy (greater decision-making freedom) and
promote regulatory flexibility (adaptive and sector-sensitive regulations).