Strategic Orientation of Business Enterprises: The Construct, Dimensionality and Measurement

Strategic Orientation of Business Enterprises: The Construct, Dimensionality and Measurement

May 1986 | N. Venkatraman
This paper presents the results of research aimed at conceptualizing and developing valid measurements of key dimensions of the strategic orientation of business enterprises (STROBE). The construct is defined by addressing four important questions in terms of six key dimensions. The operational measures developed largely satisfied the criteria for unidimensionality, convergent validity, discriminant validity, and predictive validity. The study outlines implications and lines of extension. Strategic management research is at a critical juncture, with a shift from case-based origins to mid-range theories. The success of this transition depends on systematic measurement of key strategy concepts. Schendel and Hofer emphasized the need for a definition of strategy that is acceptable, usable, and measurable. The STROBE construct is defined as the general pattern of various means employed to achieve business goals, with a focus on the business-unit level. The study identifies six key dimensions of strategic orientation: aggressiveness, analysis, defensiveness, futurity, proactiveness, and riskiness. These dimensions are validated through various measurement properties, including internal consistency, convergent validity, discriminant validity, and predictive validity. The study used a structured questionnaire to collect data from 202 managers, with a response rate of over 30%. Data analysis involved exploratory and confirmatory factor analysis to assess the dimensionality and validity of the construct. The results indicated that each of the six dimensions achieved unidimensionality and convergent validity. The study also examined the relationships between the STROBE dimensions and business performance, focusing on growth and profitability. The results showed that analytical orientation had a positive effect on both growth and profitability, while defensiveness had a positive effect on profitability but not on growth. Proactiveness had a positive effect on both growth and profitability, while riskiness had a negative effect on profitability. The study concludes that the measures developed for the STROBE construct are valid and reliable. The research provides a foundation for further studies aimed at developing and applying validated measures in testing substantive relationships. The study also suggests several lines of extension, including replication and refinement, multiple informants, use of different methods, and towards a richer taxonomy.This paper presents the results of research aimed at conceptualizing and developing valid measurements of key dimensions of the strategic orientation of business enterprises (STROBE). The construct is defined by addressing four important questions in terms of six key dimensions. The operational measures developed largely satisfied the criteria for unidimensionality, convergent validity, discriminant validity, and predictive validity. The study outlines implications and lines of extension. Strategic management research is at a critical juncture, with a shift from case-based origins to mid-range theories. The success of this transition depends on systematic measurement of key strategy concepts. Schendel and Hofer emphasized the need for a definition of strategy that is acceptable, usable, and measurable. The STROBE construct is defined as the general pattern of various means employed to achieve business goals, with a focus on the business-unit level. The study identifies six key dimensions of strategic orientation: aggressiveness, analysis, defensiveness, futurity, proactiveness, and riskiness. These dimensions are validated through various measurement properties, including internal consistency, convergent validity, discriminant validity, and predictive validity. The study used a structured questionnaire to collect data from 202 managers, with a response rate of over 30%. Data analysis involved exploratory and confirmatory factor analysis to assess the dimensionality and validity of the construct. The results indicated that each of the six dimensions achieved unidimensionality and convergent validity. The study also examined the relationships between the STROBE dimensions and business performance, focusing on growth and profitability. The results showed that analytical orientation had a positive effect on both growth and profitability, while defensiveness had a positive effect on profitability but not on growth. Proactiveness had a positive effect on both growth and profitability, while riskiness had a negative effect on profitability. The study concludes that the measures developed for the STROBE construct are valid and reliable. The research provides a foundation for further studies aimed at developing and applying validated measures in testing substantive relationships. The study also suggests several lines of extension, including replication and refinement, multiple informants, use of different methods, and towards a richer taxonomy.
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