The Measurement of Strategic Orientation and Its Efficacy In Predicting Financial Performance

Abstract

For decades, the strategic management literature has recognized strategicorientation as an important cultural attribute in the investigation of the link betweenorganizational culture and firm performance. Using three studies, we develop a surveymeasure of strategic orientation that is unidimensional, reliable, and predictiveof financial performance. Our final study uses a sample of 779 respondents from 20companies and empirically demonstrates a positive relationship between strategicorientation and firm performance. Our results support the notion that managersshould both encourage and support behaviors and execute actions that are consistentwith our measure of strategic orientation to create a coherent strategic approach,resulting in improved financial performance.