Strategic orientation, strategic flexibility and firm performance: the important role of strategic human resource management

Purpose - Previous investigations into the connection between strategic orientation (SO) and firm performance (FP) have generated inconsistent outcomes. The authors aim to reconcile and explain these varying results through the application of a mediated moderation model. The purpose of this paper is to explore how SO and strategic flexibility (SF) could create the possibility of improving FP. The indirect effect of SO was also tested in this study. Furthermore, by using the moderated mediation model, the authors also investigated the moderating role of strategic human resource management (SHRM). Design/methodology/approach - This study adopted the empirical research method, collecting data through questionnaires by a two-wave and multi-source data collection approach. The sample consisted of 188 firms from Shandong and Fujian Province in China. SPSS was used to test the research hypotheses. Findings - This study examines how and when SO enhances FP by considering SF as a critical mediator and SHRM as an important contingency of the mediation effect. The results revealed that SO positively affects SF and FP in small and medium-sized enterprises (SMEs). Furthermore, the mediating role of SF between the relationships of SO and FP was also confirmed. Moreover, SHRM strengthens the connection between SO, SR and FP. Originality/value - This study contributes to the SO literature by revealing how fi rms translate their SO-based strategies into positive FP through SF and when this indirect effect is most effective.