A Structural Equation Model for Analyzing the Impact of Environmental Turbulence on Non-Financial Performance

Abstract

Environmental turbulence monitoring mechanisms have been acclaimed in the practitioner and academic literature for their potential to improve organizational performance. And because of the limited previous studies in Middle East area addressing the concept of environmental turbulence (ET) as a whole, and precisely the relation between ET and Non-financial performance (NFP) in mobile telecommunications (TLC) sector; The study aimed to investigate the impact of ET on NFP at firms of Mobile TLC sector in Jordan. To clarify this relationship among their constructs, a Structural Equation Model (SEM) was conducted to examine the model fit and hypotheses. Study population consisted of all firms of Mobile TLC sector in Jordan (ORANGE, UMNIAH and ZAIN). Study sample included all mobile TLC firms in Jordan (the three firms). The Unit of Sampling and Analysis included all managers, assistant managers and heads of departments working within these firms. Descriptive analytical method was used and a questionnaire was constructed for data collection. A number of results were reached: there was a significant impact of ET (Technological Turbulence & Competitive Intensity) on NFP, a significant impact of ET (Market Turbulence & Competitive Intensity) on Customer Satisfaction, and a significant impact of ET (Technological Turbulence & Competitive Intensity) on Market Effectiveness at Jordanian Mobile TLC firms. The study recommended the need for firms under study to enhance the role of environmental screening of the external environment on ongoing basis to keep pace with technological changes, as well as the competition intensity in the Mobile TLC field environment.