TY - JOUR
T1 - Strategic orientation and firm risk
AU - Bhattacharya, Abhi
AU - Misra, Shekhar
AU - Sardashti, Hanieh
PY - 2019/12/1
Y1 - 2019/12/1
N2 - Entrepreneurial orientation (EO) and market orientation (MO) have received substantial conceptual and empirical attention in the marketing and management literature and both orientations have consistently been linked to stronger financial performance. Yet the way in which market-oriented firms seek to achieve superior rents is substantively different from that of entrepreneurially oriented firms which could lead to differential impacts of EO and MO on firm risk. In this study, the authors employ a text mining technique to assess firms' EO and MO and examine the impact of these two strategic orientations on shareholder risk outcomes. The results show that while EO increases idiosyncratic risk, MO decreases it. However, only EO decreases systematic risk. Overall, the results of this study demonstrate that a firm's decisions regarding strategic orientation should be examined in light of both likely risks and returns in order to make appropriate resource allocation decisions.
AB - Entrepreneurial orientation (EO) and market orientation (MO) have received substantial conceptual and empirical attention in the marketing and management literature and both orientations have consistently been linked to stronger financial performance. Yet the way in which market-oriented firms seek to achieve superior rents is substantively different from that of entrepreneurially oriented firms which could lead to differential impacts of EO and MO on firm risk. In this study, the authors employ a text mining technique to assess firms' EO and MO and examine the impact of these two strategic orientations on shareholder risk outcomes. The results show that while EO increases idiosyncratic risk, MO decreases it. However, only EO decreases systematic risk. Overall, the results of this study demonstrate that a firm's decisions regarding strategic orientation should be examined in light of both likely risks and returns in order to make appropriate resource allocation decisions.
KW - Entrepreneurial orientation; Firm risk; Market orientation; Shareholder return; Text analysis
UR - https://doi.org/10.1016/j.ijresmar.2019.01.004
U2 - 10.1016/j.ijresmar.2019.01.004
DO - 10.1016/j.ijresmar.2019.01.004
M3 - Article
SN - 0167-8116
VL - 36
SP - 509
EP - 527
JO - International Journal of Research in Marketing
JF - International Journal of Research in Marketing
IS - 4
ER -