Innovative effect of environmental turbulence and strategic orientation on firm performance: Evidence from the field

This paper analyzes how environmental uncertainty and strategic orientation (includes market orientation andinnovation orientation) influence product innovation. The research also examines the effect of productinnovation on firm performance. Confirmatory factor analysis (CFA), correlation and Structural EquationModeling (SEM) technique using PLS statistical software were employed to test of the research model andhypotheses. The results of our empirical analysis, based on a sample of 23 Iranian pharmaceutical firms, suggestthat: (1) environmental turbulences positively influence market orientation, innovation orientation and productinnovation; (2) market orientation and innovation orientation positively affect product innovation. And finally,(3) product innovation significantly influence firm performance.

Keywords:

Strategic orientation , Product innovation , Environmental uncertainty , Business performance