The Empirical Research On The Influence Of Ambidextrous Strategy Orientation On Firm Performance

In previous, enterprises only focus on their profit growth, with lowerproduct safety and environmental standards, shoddy work or a blind eye toworking environment for employees, which may be able to bring the marketgrowth in the short term for enterprise development. However, the increasingconcernt about the behavior of corporate social responsibility, and even morein-depth monitoring of media coverage will enlarge and exposure theirresponsible events duing to focus only on short-term profits, which would haveserious adverse effects on firms. For example, the exposure of irresponsibleevents such as Sanlu milk powder, Kumho tires, have threatened the survival ofthe firms seriously. So, the point of view that an enterprise is considered toAdam Smith’s "rational economic man" could not fit the requirements of thetimes, the performance targets to maximize profits is not the only goal of thelong-term development. The pursuit of corporate social performance hasbecome an essential performance goal, the synchronous pursuit to corporatefinancial performance and corporate social performance is the key for long-termsustainable development.Michael Porter’s theory argued that corporate can enhance performance byselecting different competitive strategies for the enterprise, corporate mustintegrate cost-oriented strategy and CSR-oriented strategy to pursue corporatefinancial performance and social performance simultaneously. This requiresthat companies can use the conceptualization of strategic ambidexterity tointegrate cost-oriented strategy and CSR-oriented strategy, we unpack this construct into one with two dimensions we term the balance dimension ofstrategic ambidexterity (BD) and the combined dimension of strategicambidexterity (CD) to achieve corporate financial performance and corporatesocial performance. However, the impact of this strategic orientation onbusiness performance is constrained by external environmental factorsobjectively.In the opinion of contingency theory, we select intensity of marketcompetition and government pressure on CSR as external environmental factorsin the decision to integrate ambidextrous strategy in the Chinese context. Underthe overall framework of the theory of industrial organization, this paperincluded market structure (competitive intensity and government pressure onCSR),market behavior (the integrate of cost-oriented strategy andCSR-oriented strategy) and market performance(corporate financialperformance and corporate social performance) into our research paradigm. Wetaked268Chinese listed companies in various regions and industries as objectsto study the influence of balance and combined dimension of ambidextrousstratege on financial performance and social performance, and the moderatingeffect of competitive intensity and government pressure on CSR. Ous researchprovides theoretical guidance to how to select the integration mode ofambidextrous stratege while promoting financial and social performance underdifferent external environmental conditions.In terms of research on the influence of ambidextrous stratege on financialperformance and social performance in the market and governmentenvironments, we tried to make the following contributions: First of all, weintroduce ambidextrous integration model of competitive strategy. Previousliteratures about ambidexterity focused on the areas of organizational structureand organizational learning, missing research on ambidextrous integration ofcompetitive strategy. Moreover, without a clear and operational integrationparadigm, the ever description of strategy integration is vague. From mutuallyexclusive and complementary angles, we learned form Michael Porter’s theoryof generic competitive strategy, made a new interpretation of ambidextrous integration of competitive strategy with a dialectical view. We use a “juggler”metaphor to describe an ambidextrous strategic orientation, provide operationalmethods to unlock the "black box" of strategy integrate, and useful theoreticalguidance for managers to deal with strategic integration issues.Secondly, previous research literature analysed either the impact ofcost-oriented strategy on firm performance, or the impact of CSR-orientedstrategy on firm performance, lacking a research perspective of ambidextrousstrategic orientation. For solving real problems in enterprise development, ourresearch got rid of the limitations of previous studies, integrating cost-orientedstrategy and CSR-oriented strategy. Our research found the following results:BD is positively related to financial performance; CD is positively related tofinancial performance; BD is negatively related to social performance; CD isnegatively related to social performance.Finally, we provide a theoretical reference for managers to make optimaldecisions when facing with different environmental conditions. Many scholarsput forward their point of view about the relationship between the competitivestrategy and business performance, but they paid little attention to how tochoose the competitive strategy to adapt to changes in market competition andgovernment pressure in the external environment. We found the followingresults: Competitive intensity moderates the relationship between BD and socialperformance, the greater the competitive intensity, the stronger the relationshipbetween BD and social performance. Competitive intensity moderates therelationship between CD and social performance, the greater the competitiveintensity, the weaker the relationship between CD and social performance.Government pressure moderates the relationship between BD and financialperformance, the greater the government pressure, the weaker the relationshipbetween BD and financial performance. Government pressure moderates therelationship between CD and financial performance, the greater the governmentpressure, the stronger the relationship between CD and financial performance.We combined the reality of irresponsible corporate events and academia concern for social performance, to stress the need to pursue financialperformance and social performance simultaneously for sustainabledevelopment. In view of competitive strategy, we emphasize that thecost-oriented strategy and CSR-oriented strategy can lead to businessperformance, we further drawed perspective that corporate must integratecost-oriented strategy and CSR-oriented strategy to pursue corporate financialperformance and social performance simultaneously. Considering institutionalenvironment and competition in the industry, this study explores the influenceof ambidextrous strategic orientation on financial performance and socialperformance.We attempt to convert research findings into decision-makingreference for business managers. In other words, according to changes in theinstitutional environment and the competitive environment of the industry,managers should choose which integrated model to enhance the company’sfinancial performance and social performance simultaneously. Organizationsthat operate in the more intense markets and more stringent CSR regulatoryenvironment can choose the the combined dimension of strategic ambidexterity(CD) to improve financial performance and social performance simultaneously;Organizations that operate in the less intense markets and less stringent CSRregulatory environment can choose the balance dimension of strategicambidexterity (BD) to improve financial performance and social performancesimultaneously; Meanwhile, when the level of competitive intensity andgovernment pressure on CSR is inconsistent, managers may use a dimension ofstrategic ambidexterity to promote one of the firm performance. Organizationsthat operate in the more intense markets and less stringent CSR regulatoryenvironment can choose the balance dimension of strategic ambidexterity (BD)to improve financial performance, and the combined dimension of strategicambidexterity (CD) to improve social performance; Organizations that operatein the less intense markets and more stringent CSR regulatory environment canchoose the the combined dimension of strategic ambidexterity (CD) to improvefinancial performance,and the balance dimension of strategic ambidexterity (BD) to improve social performance.This paper constructs a comprehensive model to investigate the influenceof ambidextrous strategic orientation on financial performance and socialperformance, and discuss how the main effects change under different industryand institutional situations. Our research indicates that the institutionalenvironment and industry competition is an objective reality. In order toimprove financial performance and social performance, managers shoulddevelop an appropriate strategic integration model to match with these externalenvironmental factors. When facing with different competitive environment andinstitutional environment industry, managers should develop differentintegrated model of ambidextrous strategic orientation to improve financialperformance and social performance. This study enriched the literature on theimpacts of competitive strategy on business performance, conduced managersto understand the differences in effects of BD and CD on financial performanceand social performance in the different external environment, providedtheoretical guidance for managers to choose the right integrated model of cost-oriented strategy and csr-oriented strategy.