Investigating the Effects of Entrepreneurship Orientation and Strategic Agility on Firms’ Performance by Considering the Mediating Roles of Business Model Innovation and Learning Capability

Businesses must constantly evaluate their performance in order to determine their position and survive in a dynamic and highly competitive environment. In this environment, achieving superior performance requires the adaptation of companies' services and products to the needs of customers and markets, which can be facilitated by several variables. Recent research shows the positive and critical effect of variables such as business model innovation and organizational learning capability. Through business model innovation, organizations can take the advantage of changing customer demands and expectations. Also organizational learning is an ability to absorb and transform new knowledge and apply it to the development of new products with a competitive advantage and a high production speed. On the other hand, organizations must have a great ability to respond and be willing to provide new products and services that are created through strategic agility and entrepreneurial orientation in order to improve the firm performance directly and indirectly through business model innovation and organizational learning capability. So, they will achieve better performance than their competitors. This study aims at the direct effects of entrepreneurial orientation and strategic agility on the firms’ performance and the indirect effects of these two variables on the firm performance. In this regard, the mediation roles of business model innovation and learning capability are taken into account.

This article is applied in term of purpose and descriptive in term of method. The data collection tool is a questionnaire with 18 specialized items. The managers of 96 production and service companies in Rasht industrial park (Sefidroud) participated in this research. The structural equation modeling (SEM) approach was used to analyze the hypotheses. Also, the Smart PLS-3 software was applied to evaluate the direct and indirect effects of the variables.

Firm performance refers to the companies’ ability to compete with their rivals, improve their market share and gain the competitive advantages. But according to the rapid changes in the external environment, we have to consider more dynamic variables to respond to the chaotic and unpredictable environment so as to improve company’s performance. In this regard, business model innovation can redesign organization’s operations and activities to adopt the key factors of success and gain competitive advantages. Also, organizational learning capability can lead to higher firm performance by making an easier path for a free information flow through creating, transferring and integrating knowledge and experience. This is because finding a solution for the changes of unfavorable conditions needs a flexible and quick reaction that can be solved by these two factors. This study shows the direct effects of business model innovation and   organizational learning capability on firm performance. Moreover, other variables such as strategic agility and entrepreneurial orientation can affect the firm performance directly and indirectly through business model innovation or organization learning capability. In other words, strategic agility is introduced as the best solution to respond to the external environment and the rapid changes because it enables companies to change their competitive characteristics and adapt themselves to market trends. Also, entrepreneurial orientation includes risk-taking, innovativeness, and proactiveness which can provide a better atmosphere for firms to foster an innovation- and change-driven environment in order to pioneer a new business, enter a new market and capture opportunities before their rivals can. The results of this study show that strategic agility and entrepreneurial orientation have positive and direct significant effects on firm performance.  Through these two factors, the condition of adapting to a change gets easier business model innovation and organization learning capability can get a better chance to be accepted by employees. Therefore, strategic agility and entrepreneurial orientation affect the performance of firms indirectly through business model innovation and organization learning capability. These hypotheses are confirmed in this study. 

This study investigated a few critical dynamic variables including business model innovation, learning capability, strategic agility and entrepreneurial orientation in order to maximize the firm performance in an environment with rapid changes. Better performance leads to better market conditions and helps the company to survive or become the leader of its own industry. Therefore, the results of this research can facilitate the path of organizations toward getting superior performance by creating a sustainable competitive advantage, higher market share and inaccessible competitive position. Although this study makes a number of beneficial contributions, it has some limitations. Specific national context is one of the limitations. To generalize the results, we have to apply this research in different cultural contexts. Next, we have not considered the moderating effect of turbulent environments. For future studies, researchers are suggested to consider this variable too. Moreover, a longitudinal study may lead to richer findings.