Exploring the Effects of Entrepreneurial and Digital Orientations on the Competitive Advantage of Saudi Firms: Is Strategic Agility the Missing Link?

Abstract

This study explores the intricate relationships between entrepreneurial orientation (EO), digital orientation (DO), strategic agility (SA), and competitive advantage (CA) in Saudi firms. We investigate whether strategic agility serves as the missing link in these relationships. We examine direct and indirect effects among these constructs using structural equation modeling on data collected from 307 Saudi firms. The results confirm the direct positive links between EO and SA with CA. However, the findings also reveal a surprising result—there is no direct link between DO and CA. At the same time, both DO and EO exerted significant positive influences on SA. This study emphasizes the mediating role of SA. We find that SA partially mediates the relationship between EO and CA, underlining the importance of EO while pointing out the additional value given to this relationship by SA. Additionally, SA fully mediates the relationship between DO and CA, suggesting that firms must develop SA to translate their digital capabilities into CA. These results contribute to the strategic management literature by explaining the interplay between strategic orientations, agility, and competitive advantage in the Saudi context. They also provide practical implications for managers seeking to enhance the competitiveness of their firms during this digital age by showing that investing in SA in conjunction with entrepreneurial and digital resources is of paramount importance.

Keywords

• digital orientation
• entrepreneurial orientation
• strategic agility
• competitive advantage
• Saudi Arabia