The Effects of Strategic Orientation on Mass Customization Capacity in Iran: The Mediating Role of Intellectual Capital

Abstract

This study attempts to explore how Entrepreneurial Orientation (EO), Customer Orientation (CO), and Technology Orientation (TEO) affect Mass Customization Capacity (MCC) where the Intellectual Capital (IC) is considered as a mediating variable in this model. Considering that MCC equips companies with the agility, integration, and resource flexibility needed to thrive in a dynamic business landscape, this is the first study which aims to contribute to the dynamic capability theory and resource-based view by developing new conceptual model which incorporates IC as a competitive resource of the firms. This is also the first study that aims to develop a conceptual framework by adding TEO as a key dimension of strategic orientation in order to improve MCC. While prior studies have explored the independent effects of these elements, this work unveils how a firm’s strategic direction can influence the effectiveness of its intellectual capital in bolstering its ability to deliver customized products. This novel framework provides deeper insights into how firms can strategically leverage their intellectual assets to achieve success in the dynamic landscape of mass customization. Cross-sectional data were collected from 175 Iranian manufacturing firms. The Confirmatory Factor Analyses (CFA) is used to check the validity of the multiple-item measures and Structural Equation Modelling (SEM) is applied to test the research hypothesis. The results indicated that EO, CO, and TEO have a positive and significant effect on MCC. It is also found that IC partially mediates the relationships among all dimensions of strategic orientation and MCC. Our findings suggest that a company with higher intellectual capital can improve MCC by choosing the best type of strategy according to the industry in which they are active. Insights from findings also enable policymakers to design policies that encourage innovation in production processes and technologies, investing on research & development in relevant technologies or infrastructure projects that support efficient MC logistics and create regulations that protect consumer data and encourage sustainable practices within MC processes.