Result Orientation’s Moderation of Organizational Capabilities: A Comparative Study of Portuguese and Chinese SMEs

Dynamic capabilities (DCs) are determinant to operational capabilities (OCs), which impact firm performance. Clarifying how result orientation moderates these relationships in different institutional landscapes allows firms to improve the design of their capability ecosystem. We survey Portuguese and Chinese SMEs, modeling performance as dependent on OCs, and these on DCs, with both relationships moderated by result orientation and its square. We use PLS-SEM, with a multigroup analysis. We are the first study to address the moderation of result orientation; furthermore, in a multi-institutional setting. We identify that not all relationships behave alike in both settings. Result orientation is always a linearly positive moderator and always a quadratically negative one in the DCs/OCs relationship. However, we do not always observe the quadratic effect on the OCs/GP relationship. These findings affect how the firm’s capability ecosystem is understood and how organizational culture and institutional climate factor in these relationships.