This study aims to examine the double-edged effects of market-political orientation ambidexterity (MPOA) on firm growth in transition economies. From the view of institutional logics, we examine the contradictory mechanisms of MPOA on firm growth, opportunity identification versus opportunity exploitation, and explore the moderating roles of internal coordination capability and stakeholder engagement capability.
We used on-site survey data from 238 Chinese firms to test our hypotheses via hierarchical regression analysis. Survey data are appropriate for measuring strategic orientations, which are the strategic philosophies or logics guiding strategic attention and resource allocation for superior performance.
MPOA enhances policy opportunity identification but reduces business model efficiency. Policy opportunity identification and business model efficiency positively contribute to firm growth. The positive effect of MPOA on policy opportunity identification is strengthened by internal coordination capability but weakened by stakeholder engagement capability. The negative effect of MPOA on business model efficiency is weakened by stakeholder engagement capability.
Firms with MPOA are characterized as multifunctional organizations that incorporate elements from both state logic and market logic. From different views of institutional logics, we reveal the synergies and conflicts between state logic and market logic, which indicates a double-edged sword effect of MPOA on firm growth. Furthermore, drawing on dynamic capability theory, we explore the boundary conditions for MPOA in response to how firms can effectively manage “market-political ambidexterity” for growth.
