Strategic orientations, marketing capabilities and firm performance: An empirical investigation in the context of frontline managers in service organizations

This study develops and empirically tests a model that links alternative strategic orientations with firm performance, through the mediating effect of marketing capabilities. The influence of environmental forces and organizational characteristics on the decision to pursue lucrative strategic orientations is also examined. Using data collected from 316 bank branch managers, the authors find that market turbulence, intensity of competition, and decentralization in decision making play a pivotal role in determining managerial strategic priorities. Moreover, competitor orientation and innovation orientation contribute significantly to the development of marketing capabilities. In turn, marketing capabilities have a positive impact on firm performance. The authors discuss the managerial implications of study findings and offer directions for future research.

► This study examines a chain of effects that link strategic orientations, marketing capabilities, and firm performance.
► Market turbulence, intensity of competition, and decentralization determine managerial strategic priorities.
► Competitor orientation and innovation orientation contribute significantly to the development of marketing capabilities.
► Marketing capabilities have a positive impact on firm performance.