The moderating role of environmental munificence on innovativeness in B2B markets

Abstract

Purpose: The purpose of this paper is to understand the relationship between two business orientations, namely, entrepreneurial orientation and market orientation, and innovativeness taking into account the moderating influence of environmental munificence. Design/methodology/approach: This is a multiple respondent quantitative study. A total of 312 marketing managers middle level and above from 79 firms participated in the survey. Multiple regression and hierarchical multiple regression was the method of choice for data analysis. Findings: Findings indicate that environmental munificence moderates the entrepreneurial orientation – innovativeness relationship. Findings reveal that even though a significant impact of entrepreneurial orientation is not present on innovativeness, this insignificance may be due to environmental munificence. Market orientation has a direct positive impact on innovativeness, and environmental munificence negatively moderates this relationship suggesting that when the environment is less munificent, the market orientation – innovation link becomes stronger. Practical implications: Managers should be aware that the more munificent an environment becomes, having an entrepreneurial orientation will be more important for innovativeness. In addition, results of this study suggest that being market oriented more strongly impacts a firm’s ability to innovate in non-munificent environments where growth opportunities are undesirable. Originality/value: This study is unique in that it is a multi-respondent study with respondents from different layers of each participating organization, incorporating the moderating impact of the business environment’s munificence on business orientations–innovativeness relationship.