The journey from market orientation to firm performance

Mike Chen‐ho Chao · John E. Spillan

61 citations0/0 files storedManagement Research Review

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Innovation and Knowledge Management Marketing and Advertising Strategies Quality and Supply Management

Abstract

Purpose This paper aims to investigate the link between market orientation and performance of US and Taiwanese small‐ and medium‐sized enterprises (SMEs). This study is primarily centred on empirically investigating two issues: test the effectiveness of MARKOR (a widely used market orientation measure developed by Kohli et al.) in US and Taiwanese SME contexts, and investigate the factors influencing US and Taiwanese SMEs’ performance. Design/methodology/approach This study's participants were owners or managers from 138 SMEs located in three states in the USA (i.e. Maryland, New York, and Pennsylvania) and 151 SMEs located in Taiwan. A survey was created to collect data: market orientation scale items used in this survey were mainly adopted from MARKOR; performance scale items were adopted directly from previous studies. Structural equation modelling was employed to analyse the data collected. Findings This study finds that neither US and Taiwanese SMEs’ intelligence generation, nor intelligence dissemination had a significant relationship with their firm performance. However, the findings do indicate that there was a significantly positive link between US and Taiwanese SMEs’ responsiveness and their firm performance. Originality/value In almost all previous studies in this field, the primary emphasis has focused on the market orientation of large businesses. Research on market orientation in SMEs has been scarce. Hence, this paper contributes to the extant literature by changing the research direction and studying market orientation in SME context. In addition, this paper provides SME managers with a more understandable guide to specific market‐oriented activities.

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References

1983The Iron Cage Revisited: Institutional Isomorphism and Collective Rationality in Organizational Fields 2004The iron cage revisited institutional isomorphism and collective rationality in organizational fields 1995Institutions and organizations 1990The Effect of a Market Orientation on Business Profitability 1990Market Orientation: The Construct, Research Propositions, and Managerial Implications 1993Market Orientation: Antecedents and Consequences 1994The Capabilities of Market-Driven Organizations 1993Market Orientation: Antecedents and Consequences

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2012The impact of internal and external market orientation on performance in local public organisations 2018Impact of responsive and proactive market orientation on SME performance: The moderating role of economic crisis perception 2019Relating entrepreneurial orientation with operational responsiveness 2015The Mediating role of Market Orientation on Entrepreneurial Orientation, Absorptive Capacity and Technological Innovation Capabilities 2014Examining the Relationships between Organizational Culture, Knowledge Management, and Environmental Responsiveness Capability

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