The Effect of Strategic Orientation on Performance of Plastic Manufacturing Organizations in Ethiopia: The Moderating Role of Innovation Culture
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Date
2024-10-13
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A.A.U
Abstract
Nowadays manufacturing organizations should be in the position to produce quality products and services at lower cost to stay competitive in the current volatile market. As a result, improving the performance philosophy and being strategically oriented has to be a key strategic concern of the manufacturing sector in general and Ethiopian plastic manufacturing firms in particular. Organizations have to adopt a culture that fosters innovation as a long-term corporate development and competitiveness strategy. The study aims to examine the effect of strategic orientation dimensions on the performance of plastic manufacturing organizations in Ethiopia with innovation culture as a moderating factor. Data was collected through survey questionnaires from 133 top & middle level managers and senior professionals of 20 plastic manufacturing organizations which are members of Ethiopian Plastic and Rubber Association. The analysis was conducted using SPSS v 29 to understand the direct effect of market, entrepreneurial, technology, learning and environmental orientation and the moderating effect of innovation culture on firm performance. The results showed that there is a significant and positive relationship between technology (0.275, p<0.001), entrepreneurial (0.258, p<0.001), market (0.345, p<0.001), and learning (0.185,p<0.001) orientation and performance of plastic manufacturing firms in Ethiopia. However, no significant relationship was found between environmental orientation (β=-0.077, p =0.125) and firm performance. Moreover, the results showed that innovation culture doesn’t moderate the relationship between strategic orientation and firm performance as the interaction effect of innovation culture with market, entrepreneurial, technology, learning and environmental orientation was found to be insignificant (p=0.264, 0.451, 0.733, 0.882, 0.408 respectively). Innovation culture however mediated the relationship between market, entrepreneurial, technology, learning and environmental orientation with firm performance. The Findings of this study help managers of manufacturing firms by highlighting the importance of strategic orientation to improve performance and help managers to understand the importance of fostering an innovative culture in enhancing the impact of strategic decisions