Strategic Orientations and Organizational Performance : A Synthesis of Process Theory with IT Asset-based Relational Capabilities

Abstract

This paper suggests structural model that explains the relationship between strategic business orientations and organizational performance. The model was built on the synthesis of process theory and IT resource-based theory. In the model, we assumed that strategic orientations such as market orientation and technology orientation affect on the organizational performance directly or indirectly. The structural model includes two important mediating variables, relational capabilities and process efficiency, between strategic orientations and performance. We measured the relational capabilities with IT assets as CRM(Customer Relationship Management) and SCM(Supply Chain Management) capabilities. To test the model, we gathered 220 company data which was responded by the manager of IT manufacturing and services companies and non-IT manufacturing companies. The empirical test proved that the market orientations affected on performance indirectly through the mediating variables, but technology orientation didn't affect on performance directly or indirectly. The implications of the research results are as follows. For whom to enhance the business performance, not only the market orientations are essential prerequisite, but also the operation level of SCM and CRM system are very important. Especially, for the companies who are in the edge of agile technological and innovative environments, Enhancing IT assets management capabilities as well as building SCM and CRM systems are essential for firm performance. We could conclude that the more a firm has strategic market orientations and invests on IT assets, the more it will have process efficiency through the information system, and finally gets high business performance.