Market orientation: relation to structure and performance

Kenneth W. Green · R. Anthony Inman · Gene Brown · T. Hillman Willis

102 citations0/0 files storedJournal of Business and Industrial Marketing

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Innovation and Knowledge Management Marketing and Advertising Strategies Organizational Management and Innovation

Abstract

Abstract Purpose – Organizational structure dimensions have been theorized as antecedents to and organizational performance as a consequence of market orientation. Multiple studies have investigated the theorized relationships and returned inconsistent results. The purpose of this study is to identify and resolve the inconsistencies. Design/methodology/approach – Results from prior studies were summarized and a structural equation modeling approach was used to analyze new data collected from 173 manufacturing organizations. Findings – Of the structure dimensions (formalization, specialization, decentralization, integration) tested, only formalization was found to be a positive predictor of market orientation. Market orientation was found to be a positive predictor of both financial and marketing performance. Research limitations/implications – The body of evidence assembled does not support the proposition that organizational structure impacts market orientation. It does, however, support the proposition that a market orientation positively impacts organizational performance. Practical implications – It is not necessary for practicing managers to adopt a particular structural combination in preparation for implementation of a marketing orientation. Managers can, however, expect improved financial and marketing performance following the adoption of a market orientation. Originality/value – Past inconsistencies related to the antecedent impact of organizational structure on a market orientation and a market orientation on performance are resolved. The evidence indicates that structure does not have the impact originally proposed.

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References

1986Self-Reports in Organizational Research: Problems and Prospects 1977Estimating Nonresponse Bias in Mail Surveys 1990Market Orientation: The Construct, Research Propositions, and Managerial Implications 1993Market Orientation: Antecedents and Consequences 2015A Beginner's Guide to Structural Equation Modeling 1993MARKOR: A Measure of Market Orientation 2002The Effects of Entrepreneurial Proclivity and Market Orientation on Business Performance 1991Stale in the Saddle: CEO Tenure and the Match Between Organization and Environment

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