Strategic orientation and information technological turbulence: Contingency perspective in SMEs

There is an emerging recognition in the strategy field that differences in organization forms represent firms’ capability to gain benefit from investing in technology. This study has intention to add to this stream of research by proposing the technological turbulence (TT) as a primary contingency factor focussing on strategic orientation (SO) as main determinant of firm performance (FP). The purpose of this paper is to provide considerable suggestion on how to match SO with various level of TT.

This study uses quantitative approach with structural equation model to understand the moderating effect of information TT on the relationship between SO and FP. The 390 small and medium enterprises (SMEs) in Indonesia contributes to the research as randomly selected respondents.

The result shows how the TT influences managerial decision-making processes under an opportunity-based paradigm. However, SME managers face lack of capability to deal with high TT.

This study uses cross-section data at the SMEs context in Indonesia.

This study suggest that the initiative to encourage SMEs to adopt information technology (IT) should consider the SME capability to utilize the IT.

The research gap challenges a question from previous literature on how long firms retain a given capability to deal with dynamic environment. This study has intention to add to the stream of research by proposing the information TT as a primary contingency factor focussing on SO as main determinant of FP.