Building competitive advantages and business success: the role of learning orientation, reward systems and entrepreneurial orientation
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abstract
Purpose – The complexity of the firm’s external environment, with its constant changes, forces managers to
develop novel strategies that can meet new strategic needs. The purpose of this study is to examine the role of
reward systems (RSs) in strategic management, as well as their relationship to learning and entrepreneurial
orientation (EO), commonly referred to as the driving force behind growth, competitive advantages (CAs) and
improved performance. It also focuses on the study of the relationship between EO and business performance
(BP), the introduction and testing of the possible antecedents of this relationship and potential mediating
factors.
Design/methodology/approach – A conceptual model was tested on a sample of 1,190 Portuguese
firms using a structural equation model.
Findings – It is shown for the first time that learning orientation (LO) is an antecedent of the RSs
and, subsequently, of EO. Additionally, the CAs of differentiation and cost leadership play a
mediating role in the relationship between EO and BP. Furthermore, RSs are also a driving force
behind both CAs.
Originality/value – This study makes several empirical and theoretical contributions, addressing the gap in
the literature about the role of RSs in strategic management. It tests the relationship between LO and the firm’s
performance by taking the mediating effects of RSs, EO and CAs into account. Additionally, we discuss LO as an antecedent strategic variable of human resources practices, in particular, RSs. Finally, we broaden the scope of our research by examining these issues in the context of Portuguese SMEs fromdifferent industries.
