Towards a further understanding of the development of market orientation in the firm: a conceptual framework based on the market-sensing capability

Abstract

While the relationship between market orientation and performance has been examined extensively in the literature, relatively little attention has been given to the antecedents of market orientation. So the basic question of how to develop a market-driven organisation remains to a large extent unanswered. The capabilities framework provides a useful conduit through which this issue can be approached, since it recognises that firms are innately heterogeneous because the different resources or capabilities they possess. However, this area has been accused of being tautological in nature, and requires further extensive empirical analysis. This paper presents a theoretical framework that uses the decomposition of the market-sensing capability as a way to facilitate understanding of the creation of market orientation. Thus it will not only add to the literature on the antecedents of market orientation, but also offers an empirical analysis of a significant capability. Furthermore, this model addresses the question of the relationship between market orientation and learning orientation, and proposes that a learning orientation precedes a market orientation.

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