(The) roles of strategic orientation, organizational market learning, and organizational capability in firm performance of Korean suppliers

Abstract

These days, from manufactural and economic perspectives, suppliers play key roles in our society. From the manufactural perspective, roles of suppliers are crucial in supply chain networks. In addition, from the economic perspective, suppliers gigantically influence on the national economy. Meanwhile, it is important for suppliers to understand markets. This is because 1) The number of customers are relatively smaller in B2B markets, but a single amount of purchase is relatively bigger in B2B than B2C markets. That is, losing a customer much more critical for suppliers than their clients, 2) Understanding the customers’ value is much more complex than their customers, because suppliers need to understand not only their customer but also their customers’ customers, and 3) Suppliers should utilize their resources effectively and efficiently, because of limited resources. Strategic orientations are also crucial for suppliers. This is because 1) The majority of suppliers are dependent heavily on their workers, and strategic orientations help organization to change individuals’ expertise and motivation into organizations’ values, and 2) In the case of suppliers, demands fluctuate more than their customers, so supplier should have appropriate strategic orientations in order to handle the fluctuating demands. Although numerous researchers have great attentions on strategic orientations and organizational market learnings, several research gaps exist. First, the previous research that dealt with organizational market learnings have asymmetrically concentrated on business-to-consumer (hereafter B2C) markets compared with business-to-business (hereafter B2B) markets. Second, it is inadequate to explain how strategic orientations and organizational market learnings change into firm performance. In this research organizational capabilities are considered as mediators between organizational market learnings and firm performance, and organizational market learnings are regarded as mediators between strategic orientations and organizational capabilities. Therefore, the major purpose of this research is to comprehensively understand the roles of strategic orientations, organizational market learnings, and organizational capabilities in firm performance from the suppliers’ perspectives in B2B markets. Thus, the current research has extensive literature review in order to comprehensively understand roles of strategic orientations, organizational market learnings, and organizational capabilities in firm performance from the suppliers’ perspectives in B2B markets. In the current research, strategic orientations are categorized as responsive market orientation, proactive market orientation, exploitative innovation orientation, and exploratory innovation orientation. Meanwhile, organizational market learnings are classified as exploitative and exploratory market learnings. Furthermore, organizational capabilities are categorized as marketing and technological capabilities. This research develops twelve hypotheses, which are 1) Responsive market orientated suppliers attempt to improve their products, 2) Responsive market orientated suppliers concentrate on learning current markets, 3) Proactive market orientated suppliers attempt to develop new products, 4) Proactive market orientated suppliers concentrate on learning diverse markets, 5) Exploitative innovation orientation influences positively on suppliers’ exploitative market learning, 6) Exploratory innovation orientation has positively effects on suppliers’ exploratory market learning, 7) Exploitative market learning positively affects suppliers’ marketing capability, 8) Exploitative market learning has an effect positively on suppliers’ technological capability, 9) Exploratory market learning positively affects suppliers’ marketing capability, 10) Exploratory market learning has an effect positively on suppliers’ technological capability, 11) Marketing capability has positively effects on suppliers’ firm performance, and 12) Technological capability positively influences on suppliers’ firm performance. In this research, online and offline surveys are conducted in order to test hypotheses. Reliability and validity are tested through exploratory and confirmatory factor analysis using Statistical Package for the Social Science (hereafter SPSS) and Linear Structural Relationship (hereafter LISREL). Furthermore, twelve hypotheses are tested using LISREL. Furthermore, the structure of nine constructs are analyzed though Structural Equation Model (hereafter SEM) using LISREL. Meanwhile, research targets of the current research are Korean materials & components firms (hereafter MCFs). This is because manufacturing play vital roles in Korea economy. In addition, Korean products are well known, and roles of supplier are important for better products. The online and offline surveys are conducted through Korean Core Industrial Technology Investment Association (hereafter KITIA) from November 3rd to November 23rd in 2016. Through data purification process, among a total of 241 participants, 185 organizations are utilized in order to test hypotheses. The results show that reliability and validity of data set are acceptable. Furthermore, goodness-of-fit also quite acceptable in terms of measurement and structural model. According to results of the current research, all hypotheses are supported except one hypothesis. The rejected hypothesis is that exploitative innovation orientation influences positively on exploitative market learning. However, the results of correlation analysis show that exploitative innovation orientation and exploitative market learning have positive and significant relationship. Therefore, this result is analyzed that although the relationship between exploitative innovation orientation and exploitative market learning are positive, the hypothesis that exploitative innovation orientation influences positively on suppliers’ exploitative market learning is not supported, because of the influences of other constructs. Therefore, this research proposes several implications from managerial and theoretical perspectives. From the managerial perspective, Korean suppliers can effectively and efficiently utilize their resources in order to have strong organizational capabilities by understanding results of the current research. In addition, the Korean final products can have strong competitiveness in the global market with enhancement of Korean suppliers’ capabilities. Furthermore, in the case of Korea, suppliers play key roles in the national economy, thus the current research can contribute to the Korea economy by helping suppliers to improve firm performance. Moreover, from the theoretical perspective, this research suggests new insights for future researchers. This is because in this research, importance of strategic orientations and organizational market learnings are emphasized from the supplier’s perspectives in B2B markets. Furthermore, in this research, mediators between 1) strategic orientations and firm performance, and 2) organizational market learnings and firm performance are suggested. In this research several limitations exist, in spite of managerial and theoretical implications. First, although Korean MCFs are worthwhile to comprehensively understand roles of strategic orientations, organizational market learnings, organizational capabilities in firm performance from the suppliers’ perspectives in B2B markets, the research targets are unique. Therefore, it is necessary to conduct cross country analysis in order to test the generalizability from this research. Second, although the current research proposes comprehensive framework in order to understand roles of strategic orientations, organizational market learnings, and organizational capabilities in firm performance from the suppliers’ perspective in B2B markets, this research does not show the antecedents of proactive and responsive market orientations. Therefore, for the future studies, the antecedents of responsive and proactive market orientation should be revealed.