Ajay K. Kohli & Bernard J. Jaworski
Vol. 54 (April 1990), 1-18
Based on the the field research that consisted of in-depth interviews with 62 managers in four U.S. cities and 10 business academicians at two large U.S. universities, the authors came out with concept definition and propositions..
A standard format generally was followed for the interview. After a brief description of the research
project, each interviewee was asked about four issues along the following lines.
1. What does the term "market/marketing orientation" mean to you? What kinds of things does a market/marketing-oriented company do?
2. What organizational factors foster or discourage this orientation?
3. What are the positive consequences of this orientation? What are the negative consequences?
4. Can you think of business situations in which this orientation may not be very important?
Market orientation is the organization-wide generation of market intelligence pertaining to current and future customer needs, dissemination of the intelligence across departments, and organization-wide responsiveness to it.
Defining market orientation as organizationwide generation, dissemination, and responsiveness to market intelligence addresses the concerns of Barksdale and Darden (1971) by focusing on specific activitiesvrather than philosophical notions, thereby facilitating the operationalization of the marketing concept.
P1a: The greater the variability over time in the gap between top managers' communications and actions relating to a market orientation, the greater the junior managers' ambiguity about the organization's desire to be market oriented.
P1b,: The greater the junior managers' ambiguity about the organization's desire to be market oriented, the lower the market orientation of the organization.
P2: The greater the risk aversion of top managers, the lower the market orientation of the organization.
P3: The greater the senior managers' (1) educational attainment and (2) upward mobility, the greater the market orientation of the organization.
P4: The more positive the senior managers' attitude toward change, the greater the market orientation of the organization.
P5: The greater the ability of top marketing managers to win the confidence of senior nonmarketing managers, the lower the interdepartmental conflict.
P6: The greater the interdepartmental conflict, the lower the market orientation of the organization.
P7: The greater the interdepartmental connectedness, the greater the market orientation of the organization.
P8. The greater the concern for ideas of employees in other departments, the greater the market orientation of the organization.
P9a: The greater the departmentalization, (1) the lower the intelligence generation, dissemination, and response design and (2) the greater the response implementation.
P9b- The greater the formalization, (1) lower the intelligence generation, dissemination, and response design and (2) the greater the response implementation.
P9c: The greater the centralization, (1) the lower the intelligence generation, dissemination, and response design and (2) the greater the response implementation.
P10: The greater the reliance on market-based factors for evaluating and rewarding managers, the greater the market orientation of the organization.
P11: The greater the acceptance of political behavior in an organization, the greater the interdepartmental conflict.
P12a.: The greater the perceived expertise of the source generating market intelligence, the greater the responsiveness to it by the organization.
P12b: The greater the perceived trustworthiness of the source generating market intelligence, the greater the responsiveness to it by the organization.
P12c: The smaller the challenge to the status quo posed by market intelligence, the greater (1) its dissemination and (2) the responsiveness to it by the organization.
P12d: The greater the p>olitical acceptability of market intelligence, the greater (1) its dissemination and (2) the responsiveness to it by the organization.
P13: The greater the market orientation of an organization, the higher its business performance.
P14: The greater the market orientation, the greater the (1) espirit de corps, (2) job satisfaction, and (3) organizational commitment of employees.
P15: The greater the market orientation, (1) the greater the customer satisfaction and (2) the greater the repeat business from customers.
P16: The greater the market turbulence, the stronger the relationship between a market orientation and business performance.
P17: The greater the technological turbulence, the weaker the relationship between a market orientation and business performance.
P18: The greater the competition, the stronger the relationship between a market orientation and business performance.
P19: The weaker the general economy, the stronger the relationship between a market orientation and business performance.
The research suggests that a market orientation may or may not be very desirable for a business, depending on the nature of its supply- and demand-side factors.
The research clearly delineates the factors that can be expected to foster or discourage a market orientation. These factors are largely controllable by managers and therefore can be altered by them to improve the market orientation of their organizations
Senior managers must themselves be convinced of the value of a market orientation and communicate their commitment to junior employees. Junior employees need to witness behaviors and resource allocations that reflect a commitment to a market orientation. Senior managers must develop positive attitudes toward change and a willingness to take calculated risks to initiate changes and projects in response to market intelligence. A market orientation is almost certain to lead to a few projects or programs that do not succeed. The interdepartmental dynamics have to be be managed through appropriate in-house efforts. Interdepartmental variables—conflict, connectedness—clearly have a key role in influencing the dissemination of and responsiveness to market intelligence. Cross-department training programs would help in increasing understanding.
The third set of variables that have relevance are organizationwide systems that have appropriate decentralized and centralized activities to involve all in market orientation as well as to facititate decision making at top level on enterprisewide projects. Senior managers can help foster a market orientation by reward systems at least partly based on market measures (e.g., customer satisfaction, intelligence obtained). Simultaneously, culture has to be changed to facilitate concerted response by the departments to market developments.
The quality of market orientation is also an important characteristic. The quality of market intelligence may be suspect or the quality of execution of marketing programs designed in response to the intelligence may be poor. In such instances, a market orientation may not produce the desired functional consequences. Though, in this paper, the issue is not addressed, the issue of variations in the quality of market intelligence, its dissemination, and organizational response, clearly are important and warrant consideration by both managers and researchers.
Kohli and Jaworski (1990) define a market orientation as composed of three sets of activities: (1) organization-wide generation of market intelligence pertaining to current and future customer needs, (2) dissemination of the intelligence across departments, and (3) organizationwide responsiveness to it. Furthermore the responsiveness component is defined as being composed of two sets of activities—response design (i.e., using market intelligence to develop plans) and response implementation (i.e., executing such plans). This definition focuses on specific behaviors and therefore facilitates
operationalizing the market orientation construct.
Based on the literature subsequently discussed, three sets of antecedents pertaining to top management, interdepartmental factors, and organizational systems are hypothesized to be related to
market orientation, and market orientation is hypothesized to be related to employee commitment, esprit de corps, and business performance. Finally, the link between a market orientation and business performance is hypothesized to be moderated by market turbulence, competitive intensity, and technological turbulence.
Antecedents of Market Orientation
H,: The greater the top management emphasis on a market orientation, the greater the (1) market intelligence generation, (2) intelligence dissemination, and (3) responsiveness of the organization.
H2: The greater the risk aversion of top management, the lower the (1) market intelligence generation, (2) intelligence dissemination, and (3) responsiveness of the organization.
H3: The greater the interdepartmental conflict, the lower the (1) market intelligence dissemination and (2) responsiveness of the organization.
H4: The greater the interdepartmental connectedness, the greater the (1) market intelligence dissemination and (2) responsiveness of the organization.
H5: The greater the formalization, (1) the lower the intelligence generation, dissemination, and response design and (2) the greater the response implementation.
H6: The greater the centralization, (1) the lower the intelligence generation, dissemination, and response design and (2) the greater the response implementation.
H7: The greater the departmentalization, (1) the lower the intelligence generation, dissemination, and response design and (2) the greater the response implementation.
H8: The greater the reliance on market-based factors for evaluating and rewarding managers, the greater the (1) market intelligence generation, (2) intelligence dissemination, and (3) responsiveness of the organization.
Consequences of a Market Orientation
H9: The greater the market orientation of an organization, the higher its business perfonnance.
H1o: The greater the market orientation, the greater the (1) esprit de corps and (2) organizational commitment of employees.
H|,: The greater the market turbulence, the stronger the relationship between a market orientation and business performance.
H]2: The greater the competitive intensity, the stronger the relationship between a market orientation and business perfonnance.
H13: The greater the technological turbulence, the weaker the relationship between a market orientation and business performance.
The first sample was drawn from the member companies of the Marketing Science Institute (MSI) and the top 1000 companies (in sales revenues) listed in the Dun and Bradstreet Million Dollar Directory. A multiple-informant design was employed in this sample
From 54 MSI executives The response rate was 88.9% for the marketing executives and 77.8%
for the nonmarketing executives
A total of 102 companies agreed to participate from D&B top 1000 database, and 229 SBU names were obtained. Names were provided for 206 marketing and 187 nonmarketing executives. The response rate was 79.6% for the marketing executives and 70% for the nonmarketing executives.
These procedures resulted in responses from a total of 222 business units. The market share for these
business units ranges from 1% to 100%, with an average share of 30%. For the purposes of analysis, the responses of the two informants were averaged to obtain scores for each business unit. In the relatively few instances where only one informant provided the data, the responses were used in the original form.
As a second sample A total of 230 responses were obtained, for a response rate of 47.2% from American Management Association roster.
The study used existing scales for measuring the organizational structure constructs of formalization,
centralization, and departmentalization. Market orientation was measured by a 32-item scale. Top management emphasis on market orientation and risk aversion were measured by two separate scales.
The first scale was composed of four items. The risk aversion scale was composed of six items. The two constructs pertaining to interdepartmental dynamics—conflict and connectedness—were each
measured by 7-item scales. Formalization and centralization were measured by the widely used scales developed by Aiken and Hage (1966, 1968). Departmentalization was measured by a count of
the number of departments in the business unit. Reward system orientation was measured by a 6-item
scale that assessed the extent to which customer relations, customer satisfaction, and market-oriented
behaviors were used to evaluate and reward individuals in the organization. Market turbulence, competitive intensity, and technological turbulence were measured by three scales composed of six, six, and five items, respectively. Business performance was measured using two distinct approaches reflected in the literature—^judgmental as well as objective measures. The judgmental measure asked informants for their assessment of the overall perfonnance of the business and its overall
perfonnance relative to major competitors, rated on a 5-point scale ranging from "poor" to "excellent." The objective measure was the dollar share of the served market.Organizational commitment and esprit de corps were measured by two 7-item scales.
List of hypotheses supported has to be added.
Managerial implications and future scope for research have to be added.
Journal of Market-Focused Management (1998), September 1998, Volume 2, Issue 3, pp 241–255
In their synthesis study in which they inductively derive a definition of market orientation, Deshpande and Farley (1997) define it as, “The set of cross functional processes and activities directed at creating and satisfying customers through continuous needs-assessment.”
Empirical analyses to date have found, in general, a positive relationship between market orientation and business performance.
Given the substantial empirical evidence suggesting a positive relationship between market orientation and performance, the logical next question is how a business can best create and increase a market orientation. To the present, there has been little scholarly research on this essential question.
First and foremost, a market orientation must be understood as an organization’s culture (see, e.g., Deshpande and Webster, 1989) and not merely a set of processes and activities separate from the organization’s culture.
A market orientation consists of one overriding value: the commitment by all members of the organization to continuously create superior value for customers. Based on this value, the central principle of a market orientation is that every person in the organization understands that each and every individual and function can, and must, continuously contribute skills and knowledge to creating superior value for customers.
We stress that only in an organization whose core value is the continuous creation of superior value for customers will there be the requisite leadership, incentives, learning, and skills to enable the continuous attraction, retention, and growth of the most profitable customers in each target market.
To promote continuous change, a leader must maintain a “creative tension” in the organization, the tension between the articulated vision and the current reality (Senge, 1990)
Creating a market orientation involves achieving two objectives. The first is to gain the organizational commitment to the core value, and the second is to develop the requisite resources, incentives, skills, and continuous learning to implement the core value
it is only through experiential learning that the key requirements for culture change—congruency with the experience of the members of the group and perception of a superior solution—can be met. By first attaining a clear general understanding of the what, why, and how of a market orientation, the critical experiential learning will be much more effective and efficient.
The first step labeled the “programmatic approach”, is a learning strategy based on the teaching of various “principles” to achieve a critical level of understanding. In general, it consists of teaching individuals the nature and importance of a market orientation and the basic processes, approaches, and skills of creating superior value for customers.
The productive role for a highly focused programmatic approach is to initiate and enhance experiential learning. The programmatic approach needs to be seen as the educational foundation for effective experiential learning.
The second step is a learning strategy focused on continuous experiential learning in how most effectively and profitably to create superior value for customers. In this approach a business adapts its processes, procedures, and structures based on its continuous learning from its actual customer-value-creation performance. The label for this approach is “marketback approach.”
It is only through experiential learning that the culture-change requirement of congruency of the solution with the successful experience of the members of the group and perception of a superior solution can be attained. Assigning people to problem-solving contexts, both current and new, is the key to learning and thereby, the key to changing and reinforcing the culture, that is identifying right solutions to problems.
In the market-back approach the emphasis is on outcomes and on continuous improvement ( “logical incrementalism).” The outcomes in the market-back approach are the performance the business achieves with respect to important short-term “customer-performance” objectives that are within the context of long-term objectives. Experiential learning can include experimentation, simulation and role playing. To repeat, it is only through experiential learning that the culture-change requirement of congruency with the experience of the members of the group and perception of a superior solution can be attained.
The following research propositions are derived from the previous discussions of the two learning objectives and the two learning strategies in creating a market orientation.
RESEARCH PROPOSITION 1: The programmatic approach is positively related to market orientation with a diminishing marginal effect.
RESEARCH PROPOSITION 2: The market-back approach is positively related to market orientation with an increasing marginal effect over a substantial range.
RESEARCH PROPOSITION 3: For businesses with a “low” market orientation, the average effect of the programmatic approach on market orientation will exceed the average effect of the market-back approach on market orientation. For businesses with a “high” market orientation, the average effect of the market-back approach on market orientation will exceed that of the programmatic approach.
RESEARCH PROPOSITION 4: The correlation between the use of the programmatic approach and the use of the market-back approach is higher among low market-orientation businesses than among high market-orientation businesses.
RESEARCH PROPOSITION 5: The combined effect of the programmatic and market-back approaches on market orientation is synergistic.
In addition to the empirical testing of the research propositions that are discussed above, we offer the following research suggestions: 1. Theory suggests that the CEO and top management play an important role in creating a market orientation. A critical question is what styles of CEO and top-management leadership and guidance will best enable an organization’s personnel to accept the norm of market orientation and prepare them for maximum effective learning from market experience? 2. The testing of the relationship between market orientation and the programmatic and market-back approaches in a longitudinal framework would provide insight into probable causation and enable the testing for any dynamic interaction between the two approaches.
JOHN FAHY Department of Management and Marketing, Kemmy Business School, University of Limerick, Limerick, Ireland
JOURNAL OF STRATEGIC MARKETING I2 219–230 (DECEMBER 2004)
Day defines capabilities as ‘complex bundles of skills and collective learning, exercised through organisational processes, that ensure superior co-ordination of functional activities’. One capability is critical in developing a market orientation: the market-sensing capability, which is essentially the ability of the organisation to be aware of change in its market and to forecast accurately responses to its marketing actions (Day, 1994).
Leonard-Barton importantly defines four dimensions to a core capability from a knowledge perspective: employee knowledge and skills; technical systems; managerial systems; and values and norms associated with knowledge creation and control. Day and Van den Bulte (2002), in their recent and critical examination of the customer-linking capability (Day 1994), deconstruct this capability into three components: 1. Information about relationships – the use of data that is trackable, timely and comprehensive to strengthen customer relationships. This approximates to the technical systems dimension (Leonard-Barton, 1992), which covers information databases and procedures. 2. Configuration – the organisational structure, incentives and reward or resource commitments that provide the context within which customer information and knowledge flows are embedded. This, according to Day and Van den Bulte (2002), is likely to be a structure that is focused around customer groups rather than vertical functional hierarchies. There are elements of organisational configuration in the “values and norms” dimension of Leonard-Barton (1992) also. 3. Orientation towards relationships – this relates to relevant values, behavioural norms, shared mental models, and decision criteria. It approximates to the “values and norms” dimension promoted by Leonard-Barton (1992). In their study, Day and Van den Bulte found configuration to be the main component of the customer relating capability, with support from the orientation dimension. Information was found to be less significant:
A capabilities perspective (Day, 1994) will facilitate a more meaningful understanding of the development of market orientation. It is proposed that the market-sensing capability (Day, 1994) in particular, acts as an antecedent to market orientation. In order to identify this key capability, it is necessary to unpack or decompose it, following the precedent of the decomposition of the customer-linking capability (Day and Van den Bulte, 2002). A conceptual framework for the decomposition of the market-sensing capability as an antecedent of market orientation is presented here
It is proposed that the market-sensing capability is comprised of four dimensions, which have specific resonance in market-sensing activities: Organisation Systems, Marketing Information, Organisation Communication, and Learning Orientation (which was operationalised by Sinkula et al. in 1997). Propositions of a positive relationship between these dimensions and market orientation, and ultimately performance, are presented.
Baker and Sinkula (1999) point out that a superior learning environment will leverage the use of all resources, including the behaviours that accompany a market orientation.
Learning Orientation
Proposition 1a: The greater the commitment to learning in the organisation, the greater the market orientation.
Proposition 5a: Learning orientation is positively associated with the market-sensing capability.
Organisation Systems
Proposition 1b: The greater the shared vision in the organisation, the greater the market orientation.
Proposition 2a: The less the degree of centralisation in the organisation, the greater the market orientation.
Proposition 2b: The greater the degree of formalisation in the organisation, the greater the market orientation.
Proposition 2c: The greater the reliance on market-based factors for evaluating and rewarding managers, the greater the market orientation.
Proposition 2d: The greater the use of benchmarking in the organisation, the greater the market orientation.
Marketing Information Organisation Communication
Proposition 3: The more developed the marketing information system in the organisation, the greater the market orientation.
Organisation Communication
Proposition 4a: The greater the degree to which organisational values and norms are customer-oriented, the greater the market orientation
Proposition 4b: The greater the use of decision criteria that facilitate the sharing of information in the organisation, the greater the market orientation.
Proposition 5a: Learning orientation is positively associated with the market-sensing capability.
Proposition 5b: Organisation system is positively associated with the market-sensing capability
Proposition 5c: Marketing information is positively associated with the market-sensing capability.
Proposition 5d: Organisational communication is positively associated with the market-sensing capability.
Proposition 6: The greater the market orientation of an organisation, the higher the business performance.
Proposition 7: The market-sensing capability, though the mediation of market orientation, has a positive effect on business performance.
Aron O’Cass, University of Tasmania, Australia
Journal of Marketing Management Vol. 28, Nos. 1–2, February 2012, 173–187
One focus of the strategic management literature is examining whether resource–capability or capability–capability complementarities exist and whether they help achieve superior firm performance (e.g. Menguc & Auh, 2006; Milgrom & Roberts, 1990; Moorman & Slotegraaf, 1999; Morgan et al., 2009). The underlying rationale for this stream of research is that the firms’ effectiveness and efficiency can benefit from the complementarity of resources and capabilities, which refers to ‘the degree to which the value of an asset is dependent on the level of other assets’ (Moorman & Slotegraaf, 1999, p. 241).
This complementary effect can occur in different forms such as resources–resources, resources–capabilities, and capabilities–capabilities.
In contributing to this stream of research, this study addresses two issues that warrant attention in strategic marketing: (1) the relationship between MO, marketing resources, and marketing capabilities; and (2) the performance impact of the complementarity (i.e. interaction) between marketing resources and marketing capabilities (in addition to main effects).
Building on competitive capability theory (Day, 1994), this study develops a model that links a firm’s MO through marketing resources and marketing capabilities to specific firm performance outcomes.
Marketing resources refers to the extent to which a firm possesses knowledge and resources related to marketing mix activities (e.g. product, price, distribution, and marketing communication). On the other hand, marketing capabilities refers to a firm’s ability to perform marketing routines (e.g. marketing mix activities) through which the firm transforms available resources into valuable outputs (Vorhies & Morgan, 2005).
H1: MO is positively related to (a) higherlevels of marketing resource possession and (b)superior marketing capability deployment.
H2: Marketing resources are positively related to firm performance
H3: Marketing capabilities are positively related to firm performance.
H4: The interaction between marketing resources and marketing capabilities positively influences firm performance (in addition to their main effect).
Anempiricalstudywasdesignedtocollectdatafrommanufacturingandservicefirms in Australia. A sample of 1000 firms was selected from a National Business Database identifying senior executives in single-business firms with >20 employees. A self administrated questionnaire was used asthe primarymeansfor data collection, which followed the procedure adopted by Jaworski and Kohli (1993). In total, 163 useable surveys were returned, producing a response rate of 16.3%.
Partial least squares (PLS) is used to estimate the theoretical model
All hypotheses were supported by the analysis of evidence.
Managerial implications
Managers should recognise that effective resource-allocation decisions should take into account the firm’s need for both outside-in processes (e.g. MO) and inside out processes (e.g. marketing resources and marketing capabilities). In particular, resource-allocation decisions on marketing resources and marketing capabilities are of primary importance in establishing future sales, market share, and profitability, and such decisions should be guided by the firm’s unique know-what information about changing market requirements. This configuration of MO, marketing resources, and marketing capabilities is necessary because it facilitates the linkage between what customers expect from the firm’s marketplace offerings and what is delivered to customers in marketplace offerings.
Journal of Marketing, Vol. 80 (May 2016), 60–78
We develop systematic theory and empirical evidence of how executives should combine MO and MPM to attain high business performance. Our research questions are as follows: Which configurations of MO and MPM lead to (1) high and (2) low business performance in different types of firms?
Equifinality pertains to the existence of multiple configurations that, in parallel, may lead to the same outcome of interest (Doty, Glick, and Huber 1993).
P1a: For large firms, a combination of high MO and comprehensive MPM (across all domains of customer, competitor, and financial performance) is a necessary part of configurations that consistently yield high business performance.
P1b: Forsmallfirms,acombinationofhighMOandselective MPM (i.e., limited use of customer, competitor, and financial performance metrics) is a necessary part of configurations that consistently yield high business performance.
P2a: For market leaders, a combination of high MO and comprehensive MPM (across all domains of customer, competitor, and financial performance) isa necessary part of configurations that consistently yield high business performance.
P2b: For market followers, a combination of high MO and focused MPM in the domains of customer and/or competitor performance is a necessary part of configurations that consistently yield high business performance.
P3a: A combination of low MO and noncomprehensive MPM is not a sufficient configuration to consistently yield low business performance.
P3b: Multiple idiosyncratic configurations of high/low MO and comprehensive/noncomprehensive MPM are sufficient to yield high business performance.
The data used in the study is from a survey conducted in Finland in 2010 and it was complemented it with objective performance data. The survey targeted top management in all Finnish firms with more than five employees (using a database from MicroMedia, a commercial service provider) and resulted in a response rate of 10.9%. The final responses were from 628 individual firms.
Measures. Narver and Slater’s (1990) MKTOR scale is used to measure MO. For MPM items,we use the taxonomy provided by Ambler, Kokkinaki, and Puntoni (2004) as a basis, with six marketing metrics categories covering the most commonly used MPM metrics.
Business performance is captured by a firm’s profit margin (%), acquired from a commercial Voitto+ database provided by Suomen Asiakastieto Oy.
Fuzzy-set qualitative comparative analysis. Fuzzy-set qualitative comparative analysis (fsQCA) is a set-theoretic method for studying organizational configurations using a comparison of cases to differentiate attributes that are related or unrelated to an outcome of interest (Fiss 2011; Ragin2000). The analysis gives sets providing configurations that result in outcome of interest. The conclusions of the study are based on configurations (Cs).
The findings supports P1a and is consistent with the idea that larger firms benefit from MPM more because their organizational structure requires more formal control mechanisms (Jaworski 1988) and because of the economies of scale that help offset the costs related to MPM. In contrast to P1b, however, comprehensive MPM is found to work for smaller market leaders also (C1b).
Compared with C1b (and partly compared with C1a), the MPM in C2 and C3 is more focused, in support of P2a and P2b. This notion supports P2b; indeed, market followers seem to benefit from more focused MPM compared with the configurations available for market leaders.
Finally, the lack of configurations consistently associated with low performance supports P3a. C1a and C1b, as well as C2 and C3, represent equifinal paths for similar firms to reach high performance, in support of P3b.
Chapter 2. The market orientation concept
p. 47-91
CHANGING MARKET RELATIONSHIPS IN THE INTERNET AGE | Jean-Jacques Lambin
http://books.openedition.org/pucl/1648?lang=en
Developing a Market Orientation
Rohit Deshpande
SAGE Publications, 13-Apr-1999 - 328 pages
The Marketing Service Institute's(MSI's) pioneering work on developing a market orientation' has only been available as a series of working papers, is now presented in book form for the first time by Sage Publications. This book demonstrates the importance of market orientation on organizational culture ( the shared set of values in putting customer first), on strategy (creating superior value for a firm's customers), and on tactics (the set of cross-functional activities directed at creating and satisfying customers)
http://books.google.co.in/books?id=WCB1AwAAQBAJ
Ajay K. Kohli & Bernard J. Jaworski
Vol. 54 (April 1990), 1-18
Market orientation: Antecedents and consequences
Jaworski, Bernard J;Kohli, Ajay K Journal of Marketing; Jul 1993; vol. 57, no. 3;
Creating a Market Orientation
Narver, J.C., Slater, S.F. & Tietje, B.
Journal of Market-Focused Management (1998), September 1998, Volume 2, Issue 3, pp 241–255
Towards a further understanding of the development of market orientation in the firm: a conceptual framework based on the market-sensing capability
ANTHONY FOLEY* Waterford Crystal Centre for Marketing Studies, Waterford Institute of Technology, Cork Road, Waterford, Ireland
JOHN FAHY Department of Management and Marketing, Kemmy Business School, University of Limerick, Limerick, Ireland
JOURNAL OF STRATEGIC MARKETING I2 219–230 (DECEMBER 2004)
Performance implications of market orientation, marketing resources,and marketing capabilities
Liem Viet Ngo,The University of New South Wales,Australia
Aron O’Cass, University of Tasmania, Australia
Journal of Marketing Management Vol. 28, Nos. 1–2, February 2012, 173–187
What Counts Versus What Can Be Counted: The Complex Interplay of Market Orientation and Marketing Performance Measurement
Johanna Frosen, JukkaLuoma, MattiJaakkola, Henrikki Tikkanen, & Jaakko Aspara
Journal of Marketing, Vol. 80 (May 2016), 60–78
Updated 9 November 2016, 27 November 2014
Market Orientation: The Construct, Research Propositions, and Managerial Implications
Journal of MarketingVol. 54 (April 1990), 1-18
Based on the the field research that consisted of in-depth interviews with 62 managers in four U.S. cities and 10 business academicians at two large U.S. universities, the authors came out with concept definition and propositions..
A standard format generally was followed for the interview. After a brief description of the research
project, each interviewee was asked about four issues along the following lines.
1. What does the term "market/marketing orientation" mean to you? What kinds of things does a market/marketing-oriented company do?
2. What organizational factors foster or discourage this orientation?
3. What are the positive consequences of this orientation? What are the negative consequences?
4. Can you think of business situations in which this orientation may not be very important?
Formal definition of market orientation.
Market orientation is the organization-wide generation of market intelligence pertaining to current and future customer needs, dissemination of the intelligence across departments, and organization-wide responsiveness to it.
Defining market orientation as organizationwide generation, dissemination, and responsiveness to market intelligence addresses the concerns of Barksdale and Darden (1971) by focusing on specific activitiesvrather than philosophical notions, thereby facilitating the operationalization of the marketing concept.
Market Orientation - Propositions - Kohli and Jaworski
P1a: The greater the variability over time in the gap between top managers' communications and actions relating to a market orientation, the greater the junior managers' ambiguity about the organization's desire to be market oriented.
P1b,: The greater the junior managers' ambiguity about the organization's desire to be market oriented, the lower the market orientation of the organization.
P2: The greater the risk aversion of top managers, the lower the market orientation of the organization.
P3: The greater the senior managers' (1) educational attainment and (2) upward mobility, the greater the market orientation of the organization.
P4: The more positive the senior managers' attitude toward change, the greater the market orientation of the organization.
P5: The greater the ability of top marketing managers to win the confidence of senior nonmarketing managers, the lower the interdepartmental conflict.
P6: The greater the interdepartmental conflict, the lower the market orientation of the organization.
P7: The greater the interdepartmental connectedness, the greater the market orientation of the organization.
P8. The greater the concern for ideas of employees in other departments, the greater the market orientation of the organization.
P9a: The greater the departmentalization, (1) the lower the intelligence generation, dissemination, and response design and (2) the greater the response implementation.
P9b- The greater the formalization, (1) lower the intelligence generation, dissemination, and response design and (2) the greater the response implementation.
P9c: The greater the centralization, (1) the lower the intelligence generation, dissemination, and response design and (2) the greater the response implementation.
P10: The greater the reliance on market-based factors for evaluating and rewarding managers, the greater the market orientation of the organization.
P11: The greater the acceptance of political behavior in an organization, the greater the interdepartmental conflict.
P12a.: The greater the perceived expertise of the source generating market intelligence, the greater the responsiveness to it by the organization.
P12b: The greater the perceived trustworthiness of the source generating market intelligence, the greater the responsiveness to it by the organization.
P12c: The smaller the challenge to the status quo posed by market intelligence, the greater (1) its dissemination and (2) the responsiveness to it by the organization.
P12d: The greater the p>olitical acceptability of market intelligence, the greater (1) its dissemination and (2) the responsiveness to it by the organization.
P13: The greater the market orientation of an organization, the higher its business performance.
P14: The greater the market orientation, the greater the (1) espirit de corps, (2) job satisfaction, and (3) organizational commitment of employees.
P15: The greater the market orientation, (1) the greater the customer satisfaction and (2) the greater the repeat business from customers.
P16: The greater the market turbulence, the stronger the relationship between a market orientation and business performance.
P17: The greater the technological turbulence, the weaker the relationship between a market orientation and business performance.
P18: The greater the competition, the stronger the relationship between a market orientation and business performance.
P19: The weaker the general economy, the stronger the relationship between a market orientation and business performance.
Managerial Implications
The research suggests that a market orientation may or may not be very desirable for a business, depending on the nature of its supply- and demand-side factors.
The research clearly delineates the factors that can be expected to foster or discourage a market orientation. These factors are largely controllable by managers and therefore can be altered by them to improve the market orientation of their organizations
Senior managers must themselves be convinced of the value of a market orientation and communicate their commitment to junior employees. Junior employees need to witness behaviors and resource allocations that reflect a commitment to a market orientation. Senior managers must develop positive attitudes toward change and a willingness to take calculated risks to initiate changes and projects in response to market intelligence. A market orientation is almost certain to lead to a few projects or programs that do not succeed. The interdepartmental dynamics have to be be managed through appropriate in-house efforts. Interdepartmental variables—conflict, connectedness—clearly have a key role in influencing the dissemination of and responsiveness to market intelligence. Cross-department training programs would help in increasing understanding.
The third set of variables that have relevance are organizationwide systems that have appropriate decentralized and centralized activities to involve all in market orientation as well as to facititate decision making at top level on enterprisewide projects. Senior managers can help foster a market orientation by reward systems at least partly based on market measures (e.g., customer satisfaction, intelligence obtained). Simultaneously, culture has to be changed to facilitate concerted response by the departments to market developments.
The Quality of Market Orientation
The quality of market orientation is also an important characteristic. The quality of market intelligence may be suspect or the quality of execution of marketing programs designed in response to the intelligence may be poor. In such instances, a market orientation may not produce the desired functional consequences. Though, in this paper, the issue is not addressed, the issue of variations in the quality of market intelligence, its dissemination, and organizational response, clearly are important and warrant consideration by both managers and researchers.
Market orientation: Antecedents and Consequences
Jaworski, Bernard J;Kohli, Ajay K Journal of Marketing; Jul 1993; vol. 57, no. 3;Kohli and Jaworski (1990) define a market orientation as composed of three sets of activities: (1) organization-wide generation of market intelligence pertaining to current and future customer needs, (2) dissemination of the intelligence across departments, and (3) organizationwide responsiveness to it. Furthermore the responsiveness component is defined as being composed of two sets of activities—response design (i.e., using market intelligence to develop plans) and response implementation (i.e., executing such plans). This definition focuses on specific behaviors and therefore facilitates
operationalizing the market orientation construct.
Based on the literature subsequently discussed, three sets of antecedents pertaining to top management, interdepartmental factors, and organizational systems are hypothesized to be related to
market orientation, and market orientation is hypothesized to be related to employee commitment, esprit de corps, and business performance. Finally, the link between a market orientation and business performance is hypothesized to be moderated by market turbulence, competitive intensity, and technological turbulence.
Antecedents of Market Orientation
H,: The greater the top management emphasis on a market orientation, the greater the (1) market intelligence generation, (2) intelligence dissemination, and (3) responsiveness of the organization.
H2: The greater the risk aversion of top management, the lower the (1) market intelligence generation, (2) intelligence dissemination, and (3) responsiveness of the organization.
H3: The greater the interdepartmental conflict, the lower the (1) market intelligence dissemination and (2) responsiveness of the organization.
H4: The greater the interdepartmental connectedness, the greater the (1) market intelligence dissemination and (2) responsiveness of the organization.
H5: The greater the formalization, (1) the lower the intelligence generation, dissemination, and response design and (2) the greater the response implementation.
H6: The greater the centralization, (1) the lower the intelligence generation, dissemination, and response design and (2) the greater the response implementation.
H7: The greater the departmentalization, (1) the lower the intelligence generation, dissemination, and response design and (2) the greater the response implementation.
H8: The greater the reliance on market-based factors for evaluating and rewarding managers, the greater the (1) market intelligence generation, (2) intelligence dissemination, and (3) responsiveness of the organization.
Consequences of a Market Orientation
H9: The greater the market orientation of an organization, the higher its business perfonnance.
H1o: The greater the market orientation, the greater the (1) esprit de corps and (2) organizational commitment of employees.
H|,: The greater the market turbulence, the stronger the relationship between a market orientation and business performance.
H]2: The greater the competitive intensity, the stronger the relationship between a market orientation and business perfonnance.
H13: The greater the technological turbulence, the weaker the relationship between a market orientation and business performance.
The first sample was drawn from the member companies of the Marketing Science Institute (MSI) and the top 1000 companies (in sales revenues) listed in the Dun and Bradstreet Million Dollar Directory. A multiple-informant design was employed in this sample
From 54 MSI executives The response rate was 88.9% for the marketing executives and 77.8%
for the nonmarketing executives
A total of 102 companies agreed to participate from D&B top 1000 database, and 229 SBU names were obtained. Names were provided for 206 marketing and 187 nonmarketing executives. The response rate was 79.6% for the marketing executives and 70% for the nonmarketing executives.
These procedures resulted in responses from a total of 222 business units. The market share for these
business units ranges from 1% to 100%, with an average share of 30%. For the purposes of analysis, the responses of the two informants were averaged to obtain scores for each business unit. In the relatively few instances where only one informant provided the data, the responses were used in the original form.
As a second sample A total of 230 responses were obtained, for a response rate of 47.2% from American Management Association roster.
The study used existing scales for measuring the organizational structure constructs of formalization,
centralization, and departmentalization. Market orientation was measured by a 32-item scale. Top management emphasis on market orientation and risk aversion were measured by two separate scales.
The first scale was composed of four items. The risk aversion scale was composed of six items. The two constructs pertaining to interdepartmental dynamics—conflict and connectedness—were each
measured by 7-item scales. Formalization and centralization were measured by the widely used scales developed by Aiken and Hage (1966, 1968). Departmentalization was measured by a count of
the number of departments in the business unit. Reward system orientation was measured by a 6-item
scale that assessed the extent to which customer relations, customer satisfaction, and market-oriented
behaviors were used to evaluate and reward individuals in the organization. Market turbulence, competitive intensity, and technological turbulence were measured by three scales composed of six, six, and five items, respectively. Business performance was measured using two distinct approaches reflected in the literature—^judgmental as well as objective measures. The judgmental measure asked informants for their assessment of the overall perfonnance of the business and its overall
perfonnance relative to major competitors, rated on a 5-point scale ranging from "poor" to "excellent." The objective measure was the dollar share of the served market.Organizational commitment and esprit de corps were measured by two 7-item scales.
List of hypotheses supported has to be added.
Managerial implications and future scope for research have to be added.
Creating a Market Orientation
Narver, J.C., Slater, S.F. & Tietje, B.Journal of Market-Focused Management (1998), September 1998, Volume 2, Issue 3, pp 241–255
In their synthesis study in which they inductively derive a definition of market orientation, Deshpande and Farley (1997) define it as, “The set of cross functional processes and activities directed at creating and satisfying customers through continuous needs-assessment.”
Empirical analyses to date have found, in general, a positive relationship between market orientation and business performance.
Given the substantial empirical evidence suggesting a positive relationship between market orientation and performance, the logical next question is how a business can best create and increase a market orientation. To the present, there has been little scholarly research on this essential question.
First and foremost, a market orientation must be understood as an organization’s culture (see, e.g., Deshpande and Webster, 1989) and not merely a set of processes and activities separate from the organization’s culture.
A market orientation consists of one overriding value: the commitment by all members of the organization to continuously create superior value for customers. Based on this value, the central principle of a market orientation is that every person in the organization understands that each and every individual and function can, and must, continuously contribute skills and knowledge to creating superior value for customers.
We stress that only in an organization whose core value is the continuous creation of superior value for customers will there be the requisite leadership, incentives, learning, and skills to enable the continuous attraction, retention, and growth of the most profitable customers in each target market.
To promote continuous change, a leader must maintain a “creative tension” in the organization, the tension between the articulated vision and the current reality (Senge, 1990)
Creating a market orientation involves achieving two objectives. The first is to gain the organizational commitment to the core value, and the second is to develop the requisite resources, incentives, skills, and continuous learning to implement the core value
it is only through experiential learning that the key requirements for culture change—congruency with the experience of the members of the group and perception of a superior solution—can be met. By first attaining a clear general understanding of the what, why, and how of a market orientation, the critical experiential learning will be much more effective and efficient.
Programmatic Approach
The first step labeled the “programmatic approach”, is a learning strategy based on the teaching of various “principles” to achieve a critical level of understanding. In general, it consists of teaching individuals the nature and importance of a market orientation and the basic processes, approaches, and skills of creating superior value for customers.
The productive role for a highly focused programmatic approach is to initiate and enhance experiential learning. The programmatic approach needs to be seen as the educational foundation for effective experiential learning.
The Market-Back Approach or Experiential Approach
The second step is a learning strategy focused on continuous experiential learning in how most effectively and profitably to create superior value for customers. In this approach a business adapts its processes, procedures, and structures based on its continuous learning from its actual customer-value-creation performance. The label for this approach is “marketback approach.”
It is only through experiential learning that the culture-change requirement of congruency of the solution with the successful experience of the members of the group and perception of a superior solution can be attained. Assigning people to problem-solving contexts, both current and new, is the key to learning and thereby, the key to changing and reinforcing the culture, that is identifying right solutions to problems.
In the market-back approach the emphasis is on outcomes and on continuous improvement ( “logical incrementalism).” The outcomes in the market-back approach are the performance the business achieves with respect to important short-term “customer-performance” objectives that are within the context of long-term objectives. Experiential learning can include experimentation, simulation and role playing. To repeat, it is only through experiential learning that the culture-change requirement of congruency with the experience of the members of the group and perception of a superior solution can be attained.
The following research propositions are derived from the previous discussions of the two learning objectives and the two learning strategies in creating a market orientation.
RESEARCH PROPOSITION 1: The programmatic approach is positively related to market orientation with a diminishing marginal effect.
RESEARCH PROPOSITION 2: The market-back approach is positively related to market orientation with an increasing marginal effect over a substantial range.
RESEARCH PROPOSITION 3: For businesses with a “low” market orientation, the average effect of the programmatic approach on market orientation will exceed the average effect of the market-back approach on market orientation. For businesses with a “high” market orientation, the average effect of the market-back approach on market orientation will exceed that of the programmatic approach.
RESEARCH PROPOSITION 4: The correlation between the use of the programmatic approach and the use of the market-back approach is higher among low market-orientation businesses than among high market-orientation businesses.
RESEARCH PROPOSITION 5: The combined effect of the programmatic and market-back approaches on market orientation is synergistic.
Need and Scope for Further Research
In addition to the empirical testing of the research propositions that are discussed above, we offer the following research suggestions: 1. Theory suggests that the CEO and top management play an important role in creating a market orientation. A critical question is what styles of CEO and top-management leadership and guidance will best enable an organization’s personnel to accept the norm of market orientation and prepare them for maximum effective learning from market experience? 2. The testing of the relationship between market orientation and the programmatic and market-back approaches in a longitudinal framework would provide insight into probable causation and enable the testing for any dynamic interaction between the two approaches.
Towards a further understanding of the development of market orientation in the firm: a conceptual framework based on the market-sensing capability
ANTHONY FOLEY* Waterford Crystal Centre for Marketing Studies, Waterford Institute of Technology, Cork Road, Waterford, IrelandJOHN FAHY Department of Management and Marketing, Kemmy Business School, University of Limerick, Limerick, Ireland
JOURNAL OF STRATEGIC MARKETING I2 219–230 (DECEMBER 2004)
Day defines capabilities as ‘complex bundles of skills and collective learning, exercised through organisational processes, that ensure superior co-ordination of functional activities’. One capability is critical in developing a market orientation: the market-sensing capability, which is essentially the ability of the organisation to be aware of change in its market and to forecast accurately responses to its marketing actions (Day, 1994).
Leonard-Barton importantly defines four dimensions to a core capability from a knowledge perspective: employee knowledge and skills; technical systems; managerial systems; and values and norms associated with knowledge creation and control. Day and Van den Bulte (2002), in their recent and critical examination of the customer-linking capability (Day 1994), deconstruct this capability into three components: 1. Information about relationships – the use of data that is trackable, timely and comprehensive to strengthen customer relationships. This approximates to the technical systems dimension (Leonard-Barton, 1992), which covers information databases and procedures. 2. Configuration – the organisational structure, incentives and reward or resource commitments that provide the context within which customer information and knowledge flows are embedded. This, according to Day and Van den Bulte (2002), is likely to be a structure that is focused around customer groups rather than vertical functional hierarchies. There are elements of organisational configuration in the “values and norms” dimension of Leonard-Barton (1992) also. 3. Orientation towards relationships – this relates to relevant values, behavioural norms, shared mental models, and decision criteria. It approximates to the “values and norms” dimension promoted by Leonard-Barton (1992). In their study, Day and Van den Bulte found configuration to be the main component of the customer relating capability, with support from the orientation dimension. Information was found to be less significant:
A capabilities perspective (Day, 1994) will facilitate a more meaningful understanding of the development of market orientation. It is proposed that the market-sensing capability (Day, 1994) in particular, acts as an antecedent to market orientation. In order to identify this key capability, it is necessary to unpack or decompose it, following the precedent of the decomposition of the customer-linking capability (Day and Van den Bulte, 2002). A conceptual framework for the decomposition of the market-sensing capability as an antecedent of market orientation is presented here
It is proposed that the market-sensing capability is comprised of four dimensions, which have specific resonance in market-sensing activities: Organisation Systems, Marketing Information, Organisation Communication, and Learning Orientation (which was operationalised by Sinkula et al. in 1997). Propositions of a positive relationship between these dimensions and market orientation, and ultimately performance, are presented.
Baker and Sinkula (1999) point out that a superior learning environment will leverage the use of all resources, including the behaviours that accompany a market orientation.
Learning Orientation
Proposition 1a: The greater the commitment to learning in the organisation, the greater the market orientation.
Proposition 5a: Learning orientation is positively associated with the market-sensing capability.
Organisation Systems
Proposition 1b: The greater the shared vision in the organisation, the greater the market orientation.
Proposition 2a: The less the degree of centralisation in the organisation, the greater the market orientation.
Proposition 2b: The greater the degree of formalisation in the organisation, the greater the market orientation.
Proposition 2c: The greater the reliance on market-based factors for evaluating and rewarding managers, the greater the market orientation.
Proposition 2d: The greater the use of benchmarking in the organisation, the greater the market orientation.
Marketing Information Organisation Communication
Proposition 3: The more developed the marketing information system in the organisation, the greater the market orientation.
Organisation Communication
Proposition 4a: The greater the degree to which organisational values and norms are customer-oriented, the greater the market orientation
Proposition 4b: The greater the use of decision criteria that facilitate the sharing of information in the organisation, the greater the market orientation.
Proposition 5a: Learning orientation is positively associated with the market-sensing capability.
Proposition 5b: Organisation system is positively associated with the market-sensing capability
Proposition 5c: Marketing information is positively associated with the market-sensing capability.
Proposition 5d: Organisational communication is positively associated with the market-sensing capability.
Proposition 6: The greater the market orientation of an organisation, the higher the business performance.
Proposition 7: The market-sensing capability, though the mediation of market orientation, has a positive effect on business performance.
Performance implications of market orientation, marketing resources,and marketing capabilities
Liem Viet Ngo,The University of New South Wales,AustraliaAron O’Cass, University of Tasmania, Australia
Journal of Marketing Management Vol. 28, Nos. 1–2, February 2012, 173–187
One focus of the strategic management literature is examining whether resource–capability or capability–capability complementarities exist and whether they help achieve superior firm performance (e.g. Menguc & Auh, 2006; Milgrom & Roberts, 1990; Moorman & Slotegraaf, 1999; Morgan et al., 2009). The underlying rationale for this stream of research is that the firms’ effectiveness and efficiency can benefit from the complementarity of resources and capabilities, which refers to ‘the degree to which the value of an asset is dependent on the level of other assets’ (Moorman & Slotegraaf, 1999, p. 241).
This complementary effect can occur in different forms such as resources–resources, resources–capabilities, and capabilities–capabilities.
In contributing to this stream of research, this study addresses two issues that warrant attention in strategic marketing: (1) the relationship between MO, marketing resources, and marketing capabilities; and (2) the performance impact of the complementarity (i.e. interaction) between marketing resources and marketing capabilities (in addition to main effects).
Building on competitive capability theory (Day, 1994), this study develops a model that links a firm’s MO through marketing resources and marketing capabilities to specific firm performance outcomes.
Marketing resources refers to the extent to which a firm possesses knowledge and resources related to marketing mix activities (e.g. product, price, distribution, and marketing communication). On the other hand, marketing capabilities refers to a firm’s ability to perform marketing routines (e.g. marketing mix activities) through which the firm transforms available resources into valuable outputs (Vorhies & Morgan, 2005).
H1: MO is positively related to (a) higherlevels of marketing resource possession and (b)superior marketing capability deployment.
H2: Marketing resources are positively related to firm performance
H3: Marketing capabilities are positively related to firm performance.
H4: The interaction between marketing resources and marketing capabilities positively influences firm performance (in addition to their main effect).
Anempiricalstudywasdesignedtocollectdatafrommanufacturingandservicefirms in Australia. A sample of 1000 firms was selected from a National Business Database identifying senior executives in single-business firms with >20 employees. A self administrated questionnaire was used asthe primarymeansfor data collection, which followed the procedure adopted by Jaworski and Kohli (1993). In total, 163 useable surveys were returned, producing a response rate of 16.3%.
Partial least squares (PLS) is used to estimate the theoretical model
All hypotheses were supported by the analysis of evidence.
Managerial implications
Managers should recognise that effective resource-allocation decisions should take into account the firm’s need for both outside-in processes (e.g. MO) and inside out processes (e.g. marketing resources and marketing capabilities). In particular, resource-allocation decisions on marketing resources and marketing capabilities are of primary importance in establishing future sales, market share, and profitability, and such decisions should be guided by the firm’s unique know-what information about changing market requirements. This configuration of MO, marketing resources, and marketing capabilities is necessary because it facilitates the linkage between what customers expect from the firm’s marketplace offerings and what is delivered to customers in marketplace offerings.
What Counts Versus What Can Be Counted: The Complex Interplay of Market Orientation and Marketing Performance Measurement
Johanna Frosen, JukkaLuoma, MattiJaakkola, Henrikki Tikkanen, & Jaakko AsparaJournal of Marketing, Vol. 80 (May 2016), 60–78
We develop systematic theory and empirical evidence of how executives should combine MO and MPM to attain high business performance. Our research questions are as follows: Which configurations of MO and MPM lead to (1) high and (2) low business performance in different types of firms?
Equifinality pertains to the existence of multiple configurations that, in parallel, may lead to the same outcome of interest (Doty, Glick, and Huber 1993).
P1a: For large firms, a combination of high MO and comprehensive MPM (across all domains of customer, competitor, and financial performance) is a necessary part of configurations that consistently yield high business performance.
P1b: Forsmallfirms,acombinationofhighMOandselective MPM (i.e., limited use of customer, competitor, and financial performance metrics) is a necessary part of configurations that consistently yield high business performance.
P2a: For market leaders, a combination of high MO and comprehensive MPM (across all domains of customer, competitor, and financial performance) isa necessary part of configurations that consistently yield high business performance.
P2b: For market followers, a combination of high MO and focused MPM in the domains of customer and/or competitor performance is a necessary part of configurations that consistently yield high business performance.
P3a: A combination of low MO and noncomprehensive MPM is not a sufficient configuration to consistently yield low business performance.
P3b: Multiple idiosyncratic configurations of high/low MO and comprehensive/noncomprehensive MPM are sufficient to yield high business performance.
The data used in the study is from a survey conducted in Finland in 2010 and it was complemented it with objective performance data. The survey targeted top management in all Finnish firms with more than five employees (using a database from MicroMedia, a commercial service provider) and resulted in a response rate of 10.9%. The final responses were from 628 individual firms.
Measures. Narver and Slater’s (1990) MKTOR scale is used to measure MO. For MPM items,we use the taxonomy provided by Ambler, Kokkinaki, and Puntoni (2004) as a basis, with six marketing metrics categories covering the most commonly used MPM metrics.
Business performance is captured by a firm’s profit margin (%), acquired from a commercial Voitto+ database provided by Suomen Asiakastieto Oy.
Fuzzy-set qualitative comparative analysis. Fuzzy-set qualitative comparative analysis (fsQCA) is a set-theoretic method for studying organizational configurations using a comparison of cases to differentiate attributes that are related or unrelated to an outcome of interest (Fiss 2011; Ragin2000). The analysis gives sets providing configurations that result in outcome of interest. The conclusions of the study are based on configurations (Cs).
The findings supports P1a and is consistent with the idea that larger firms benefit from MPM more because their organizational structure requires more formal control mechanisms (Jaworski 1988) and because of the economies of scale that help offset the costs related to MPM. In contrast to P1b, however, comprehensive MPM is found to work for smaller market leaders also (C1b).
Compared with C1b (and partly compared with C1a), the MPM in C2 and C3 is more focused, in support of P2a and P2b. This notion supports P2b; indeed, market followers seem to benefit from more focused MPM compared with the configurations available for market leaders.
Finally, the lack of configurations consistently associated with low performance supports P3a. C1a and C1b, as well as C2 and C3, represent equifinal paths for similar firms to reach high performance, in support of P3b.
Additional Reading
Chapter 2. The market orientation concept
p. 47-91
CHANGING MARKET RELATIONSHIPS IN THE INTERNET AGE | Jean-Jacques Lambin
http://books.openedition.org/pucl/1648?lang=en
Developing a Market Orientation
Rohit Deshpande
SAGE Publications, 13-Apr-1999 - 328 pages
The Marketing Service Institute's(MSI's) pioneering work on developing a market orientation' has only been available as a series of working papers, is now presented in book form for the first time by Sage Publications. This book demonstrates the importance of market orientation on organizational culture ( the shared set of values in putting customer first), on strategy (creating superior value for a firm's customers), and on tactics (the set of cross-functional activities directed at creating and satisfying customers)
http://books.google.co.in/books?id=WCB1AwAAQBAJ
Paper Presented and Discussed in the Fellow Program Class of 2016-17
Ajay K. Kohli & Bernard J. Jaworski
Market Orientation: The Construct, Research Propositions, and Managerial Implications
Journal of MarketingVol. 54 (April 1990), 1-18
Market orientation: Antecedents and consequences
Jaworski, Bernard J;Kohli, Ajay K Journal of Marketing; Jul 1993; vol. 57, no. 3;
Creating a Market Orientation
Narver, J.C., Slater, S.F. & Tietje, B.
Journal of Market-Focused Management (1998), September 1998, Volume 2, Issue 3, pp 241–255
Towards a further understanding of the development of market orientation in the firm: a conceptual framework based on the market-sensing capability
ANTHONY FOLEY* Waterford Crystal Centre for Marketing Studies, Waterford Institute of Technology, Cork Road, Waterford, Ireland
JOHN FAHY Department of Management and Marketing, Kemmy Business School, University of Limerick, Limerick, Ireland
JOURNAL OF STRATEGIC MARKETING I2 219–230 (DECEMBER 2004)
Performance implications of market orientation, marketing resources,and marketing capabilities
Liem Viet Ngo,The University of New South Wales,Australia
Aron O’Cass, University of Tasmania, Australia
Journal of Marketing Management Vol. 28, Nos. 1–2, February 2012, 173–187
What Counts Versus What Can Be Counted: The Complex Interplay of Market Orientation and Marketing Performance Measurement
Johanna Frosen, JukkaLuoma, MattiJaakkola, Henrikki Tikkanen, & Jaakko Aspara
Journal of Marketing, Vol. 80 (May 2016), 60–78
Updated 9 November 2016, 27 November 2014
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