Does strategic fit matter in measuring organizational performance? An empirical analysis. (9th March 2020) - Farrukh, Muhammad
Abstract: Entrepreneurial orientation (EO) is a valuable organizational asset which is considered to be a driver of superior organizational performance (OP). However, some studies challenge this notion and show a negative link between EO and OP. This deviation may be rooted in the contingent‐theoretic approach, which postulates the need to align an organization's strategic posture with various other factors to achieve strategic fit. Therefore, leaning on contingent‐theoretic approach this research aims to test a direct and synergistic effect of EO and corporate social responsibility (CSR) on OP in the context of developing (Pakistan) and developed (United Kingdom) economies. A survey is conducted and the data are analyzed using partial least squares structural equation modeling (PLS‐SEM). The results show a significant direct effect of EO and CSR on OP. In addition, we found that CSR significantly mediates the impact of EO on OP across both countries. This study suggests that specific strategic actions, such as EO and CSR, should be studied in combination with other strategic actions to provide a holistic understanding of OP.