Multiple organizational capabilities for effective business model innovation and increased performance

Abstract

PurposeThe main purpose of this study is to provide a relatively integrated perspective on the role of market orientation, strategic flexibility and technological capability as multiple organizational capabilities and their potential effectiveness in promoting business model innovation (BMI) and business performance.Design/methodology/approachTo achieve this objective, an empirical survey was conducted among 379 firms in Greece. Initially, exploratory factor analysis and then confirmatory factor analysis were applied. Finally, the structural relationships among the latent factors were determined through structural equation modeling.FindingsThe results show the positive effect of market orientation on strategic flexibility and technological capability. Strategic flexibility drives firms to BMI and then business performance. Furthermore, it is essential that firms build up technological capability to be effective in BMI and business performance.Research limitations/implicationsData were collected at only one point in time from one country, Greece. This might pose limitations on the generalizability of our results. Future research could also explore how organizations develop strategic flexibility and BMI capabilities in different environmental contexts and organizational structures.Practical implicationsThis study sends the message that companies focusing on market orientation and technological capability can led to higher strategic flexibility and BMI capabilities, which in turn act as a catalyst for business improvement.Originality/valueThe proposed model provides plausible guidelines that advance the research on multiple organizational capabilities in companies.