The tyranny of the served market: The negative relationship between market orientation and performance among design-driven organizations

As design has been slowly embraced as an element of business research, a number of well-established organizational strategy concepts have been called into question. This article empirically examines the relationship between firm performance and market orientation (MO), one of the most commonly employed variables within business strategy, among design-driven firms. Our findings suggest that the positive relationship between MO and performance present in most business strategy literature does not appear to hold among organizations with a strong strategic focus on design. Design-driven firms seem to actively downplay MO, resulting in a statistically significant negative relationship between the concept and its three sub-factors: customer orientation (CUST), competitor orientation (COMP), and inter-functional coordination (INTER) on two measures of firm performance, project-level success and competitive advantage. Drawing on related literature and follow-up interviews with firm managers, we rationalize these results as evidence of design-driven firms efforts to avoid the so-called ‘tyranny of the served market’ where a narrow focus on current customers and established competitors within incremental markets can lead to myopia and limit innovation. The implications of this study may be to provide support to managers of design-driven organizations to de-emphasize MO’s narrow focus on close industry rivals and well-defined customers as well as much-needed empirical support for anecdotal accounts of how many traditional business strategy variables, such as MO, may be insufficient, or at least incomplete explanations of design-driven organizations.

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Market Orientation And Performance: Does Organizational Strategy Matter?

Journal of Applied Business Research (JABR) ◽

10.19030/jabr.v18i1.2099 ◽

2011 ◽

Vol 18 (1) ◽

Cited By ~ 8

Author(s):

Kamalesh Kumar ◽

Ram Subramanian ◽

Karen Strandholm

Keyword(s):

Firm Performance ◽

Market Orientation ◽

Customer Orientation ◽

Positive Impact ◽

Low Cost ◽

Cost Leadership ◽

Differentiation Strategy ◽

Leadership Strategy ◽

Competitor Orientation ◽

Cost Leadership Strategy

Data from a survey of 159 hospitals was used to test the relationship between market orientation and firm performance for low cost and differentiation strategies. Hospitals pursuing a differentiation strategy had stronger market orientation than those pursuing a cost leadership strategy. Market orientation had a more positive impact on the performance of organizations pursuing a differentiation strategy than on those pursuing a cost leadership strategy. In the cost leader group, the inter-functional coordination component of market orientation significantly affected firm performance, while in the differentiator group the customer orientation and competitor orientation components of market orientation had significant impact on performance. The implications of these findings for managers also are discussed.

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Testing the Applicability of Narver and Slater’s Market Orientation Concept and Firm Performance in Botswana Companies

Journal of Business Theory and Practice ◽

10.22158/jbtp.v2n1p1 ◽

2014 ◽

Vol 2 (1) ◽

pp. 1 ◽

Cited By ~ 1

Author(s):

Olumide Jaiyeoba ◽

Donatus Amanze

Keyword(s):

Firm Performance ◽

Market Orientation ◽

Questionnaire Survey ◽

Business Performance ◽

Customer Orientation ◽

Cross Sectional ◽

Symmetric Component ◽

Sample Data ◽

Result Show ◽

Competitor Orientation

In existing Market orientation research, the components of the market orientation construct are generally theorized to follow the conceptualizations of either Kholi and Jaworski (1990) or Narver and Slater (1990). This study looks into the nature of the correlational relationship between market orientation and firm performance using sample data from firms in Botswana. How Narver and Slater’s scale for measuring the extent of market orientation is investigated, tested, and used for Botswana Context. Two symmetric component measures of market orientation (customer orientation and Competitor orientation) are developed, tested in a cross-sectional questionnaire survey. Result show a positive correlation between market orientation and business performance, and Narver and Slater’s scale was discovered to be better suited for Botswana context, when focusing on the symmetric component measures of customer orientation and competitor orientation. Academicians are thus provided with insights with respect to the content and symmetry of component measures of market orientation construct and their relation to Botswana’s firm Performance.

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Corporate governance, market orientation and performance of Iran’s upscale hotels

Tourism and Hospitality Research ◽

10.1177/14673584211003644 ◽

2021 ◽

pp. 146735842110036

Author(s):

Soheil Kazemian ◽

Hadrian Geri Djajadikerta ◽

Jamaliah Said ◽

Saiyidi Mat Roni ◽

Terri Trireksani ◽

...

Keyword(s):

Corporate Governance ◽

Financial Performance ◽

Market Orientation ◽

Structural Equation ◽

Customer Orientation ◽

Social Performance ◽

Three Dimensions ◽

Equation Modelling ◽

Competitor Orientation ◽

And Performance

Market orientation has been known as an efficient managerial tool to assist in sustaining the performance of organisations. Market orientation has three dimensions, namely customer orientation, competitor orientation and inter-function coordination. This paper evaluates how corporate governance influences the three dimensions of market orientation within Iran's upscale hotels. The impacts of the three dimensions of market orientation on the hotels' social and financial performance are also examined to determine if market orientation mediates the relationships between corporate governance and performance. Partial least squares structural equation modelling (PLS-SEM) is used to analyse the survey data collected from the executives of four- and five-star hotels in Mashhad, Iran. Results show that corporate governance positively influences the three dimensions of market orientation, while overall market orientation influences financial and social performance. Specifically, customer orientation and inter-function coordination significantly reinforce such mediation, whereas the influence of competitor orientation is limited to financial performance.

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Market orientation, performance and the mediating role of innovation in Indonesian SMEs

Asia Pacific Journal of Marketing and Logistics ◽

10.1108/apjml-08-2021-0624 ◽

2021 ◽

Vol ahead-of-print (ahead-of-print) ◽

Author(s):

Clare D'souza ◽

Marthin Nanere ◽

Malliga Marimuthu ◽

Mokhamad Arwani ◽

Ninh Nguyen

Keyword(s):

Firm Performance ◽

Market Orientation ◽

Structural Equation ◽

Customer Orientation ◽

Point Of View ◽

Theoretical Point ◽

Content Type ◽

Mediating Role ◽

Competitor Orientation

PurposeDespite the theoretical advancements of market orientation and firm performance, there is a paucity of research regarding SMEs in Indonesia. Customer and competitor orientation were examined as two distinct constructs as per the literature, as it has been questioned for its robustness. They have been used synonymously, even though customer orientation is operationalised as a component of a market orientation construct. There is support for the argument from a theoretical point of view to keep customer orientation and competitor orientation separate. The objective of this research was to empirically test market orientation concepts on firm performance and assessing customer and competitor orientation separately. Furthermore, it also tests whether innovation plays a mediating role.Design/methodology/approachA sample of 309 small and medium-sized firms was found eligible for this study. Structural Equation Modelling was used to analyze the data. A multi-industry sample of firms was used to strengthen the generalisability of the results. The sample was acquired from two databases of SMEs directory in Kudus and Pati, East Java Indonesia, participants were randomly selected.FindingsThe findings show that innovation mediates the relationship between competitor orientation and firm performance, while competitor orientation had no significant relationship with firm performance. Customer orientation was found to positively influence firm performance.Originality/valueThe role of innovation as a mediator within SMEs in a developing country opens up avenues for further research among other developing countries. By examining both the concepts of customer and competitor orientation separately and establishing relationships, we validate support for this argument both from a methodological and theoretical point of view.

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The Relationship between Strategic Orientation, Service Innovation, and Performance in Hotels in Angola

Sustainability ◽

10.3390/su13116256 ◽

2021 ◽

Vol 13 (11) ◽

pp. 6256

Author(s):

Gerdina Handa Serafim ◽

José Manuel Cristóvão Veríssimo

Keyword(s):

Developing Countries ◽

Customer Orientation ◽

Positive Impact ◽

Group Analysis ◽

Strategic Orientation ◽

New Business ◽

Competitor Orientation ◽

And Performance ◽

Technology Orientation ◽

The Impact

This paper aims to investigate the impacts of customer orientation, competitor orientation, learning orientation, technology orientation, and entrepreneurial orientation on hotel innovation and performance. Data from 69 hotels in four Angolan provinces were analyzed using the partial least squares (PLS) approach and multi group analysis. The results show that learning and entrepreneurial orientations have a positive impact on hotel innovation. As anticipated, innovation has a positive impact on performance. According to the multigroup analysis, only the hotel category has a moderating effect on performance. Results suggest that hotels in developing countries could add value to both customers and shareholders by promoting new services and exploring new business opportunities. To the best of our knowledge, this is one of the few studies that has researched the impact of strategic orientation on hotel innovation and financial performance in developing countries.

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Role of market orientation in sustainable performance

Humanomics ◽

10.1108/h-03-2016-0028 ◽

2016 ◽

Vol 32 (3) ◽

pp. 352-375 ◽

Cited By ~ 2

Author(s):

Soheil Kazemian ◽

Rashidah Abdul Rahman ◽

Zuraidah Mohd Sanusi ◽

Abideen A. Adewale

Keyword(s):

Market Orientation ◽

Structural Equation ◽

Customer Orientation ◽

Partial Least Square ◽

Least Square ◽

Three Dimensions ◽

Equation Modeling ◽

Future Research ◽

Content Type ◽

Competitor Orientation

Purpose Without prejudice to the efficacy of other poverty alleviation mechanisms, micro-financing arguably enjoys relative prominence. However, notwithstanding the remarkable loan repayment rate that the microfinance firms report, they still face the challenge of sustainability. The paper aims to provide insights into how three dimensions of market orientation, namely, customer orientation, competitor orientation and inter-function coordination, affect the two aspects of the sustainability of microfinance institutions (MFIs; management and financial). Design/methodology/approach To achieve this goal, this study focuses on Amanah Ikhtiar Malaysia (AIM), a leading microfinance provider which is also the largest MFI in South East Asia. Data elicited via a survey questionnaire administered on 190 management staff of AIM across Malaysia are subjected to statistical analysis via the partial least square-structural equation modeling using SmartPLS 2.0. Findings The results provide empirical evidences that indicate that management sustainability is significantly influenced by customer orientation and inter-function coordination. However, only customer orientation affects the financial sustainability of AIM. Nevertheless, competitor orientation has non-significant effects on both aspects of sustainability of AIM. Research limitations/implications The result of the paper contributes to the literature in understanding the long-term sustainable financial and social performance-based market orientation. Originality/value Findings are useful for policy makers, management of MFIs, practitioners and academics to enhance microfinance system. Managerial implications, limitation of the study and suggestions for future research are also included.

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Accountability via social and financial performance of the hospitality sector: the role of market orientation

Society and Business Review ◽

10.1108/sbr-04-2020-0061 ◽

2020 ◽

Vol ahead-of-print (ahead-of-print) ◽

Author(s):

Soheil Kazemian ◽

Hadrian Geri Djajadikerta ◽

Saiydi Mat Roni ◽

Terri Trireksani ◽

Zuraidah Mohd-Sanusi

Keyword(s):

Financial Performance ◽

Market Orientation ◽

Customer Orientation ◽

Social Performance ◽

Three Dimensions ◽

Content Type ◽

Top Managers ◽

The Social ◽

Competitor Orientation ◽

Hospitality Sector

Purpose This study aims to examine the three dimensions of market orientation, namely, customer orientation, competitor orientation and inter-function coordination, which influence the accountability in the financial and social performance of tourism operators in large touristic cities. Design/methodology/approach In total, 95 usable questionnaires as the required data were collected from the top managers of four- and five-star hotels in Iran. Findings Partial least squares (PLS) results confirm that customer orientation and inter-function coordination influence both the financial and social performance of the hospitality sector yet reveal that competitor orientation has no significant relationship with social performance. Research limitations/implications These findings not only highlight the compatibility of PLS with various forms of statistical analyzes but also furthers the current understanding of hospitality networks in megacity economies, where literature are scarce. Practical implications The findings of this study can help policymakers, tourism associations and practitioners enhance the accountability and sustainable financial and social performance of the hospitality industry in megacities. This study proposes some unique measurements for the social and financial performance of the hospitality sectors. Originality/value The paper states some new measurements for the social performance of the hospitality sectors. In addition, measuring the impacts of market orientation on the financial and social aspects of hotels is totally unique.

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Linking Market Orientation To Strategy Through Segmentation Complexity

Journal of Business & Economics Research (JBER) ◽

10.19030/jber.v8i9.760 ◽

2010 ◽

Vol 8 (9) ◽

Cited By ~ 1

Author(s):

Mohammad Ali Zolfagharian ◽

Angelica Cortes

Keyword(s):

Market Orientation ◽

Indirect Effects ◽

Customer Orientation ◽

Cost Leadership ◽

Competitor Orientation

Relying on the cultural view of market orientation, we introduce segmentation complexity as a key mediator between market orientation (i.e., customer orientation and competitor orientation) and the strategies of differentiation, cost leadership, and innovation. Customer orientation is positively related to segmentation complexity, differentiation, and innovation, and negatively to cost leadership. Competitor orientation is positively related to all of these strategies. The indirect effects of both customer and competitor orientation are mediated through segmentation complexity, which is positively related to differentiation and innovation, and negatively to cost leadership.

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Measuring Market Orientation: Further Evidence on Narver and Slater's Three-Component Scale

Psychological Reports ◽

10.2466/pr0.2003.93.3f.1070 ◽

2003 ◽

Vol 93 (3_suppl) ◽

pp. 1070-1072 ◽

Cited By ~ 1

Author(s):

Subhra Chakrabarty ◽

Joseph N. Rogé

Keyword(s):

Factor Analysis ◽

Confirmatory Factor Analysis ◽

Market Orientation ◽

Random Sample ◽

Customer Orientation ◽

Factor Model ◽

Mail Survey ◽

Marketing Managers ◽

Confirmatory Factor ◽

Competitor Orientation

A mail survey of a national random sample of 2,000 marketing managers was conducted. The data provided by 222 respondents were analyzed to assess the dimensionality of Narver and Slater's 15-item measure of market orientation. A confirmatory factor analysis, using LISREL 8.53, provided support for each of the separate dimensions of customer orientation, competitor orientation, and interfunctional coordination. However, a combined 3-factor model of market orientation was not supported. Directions for research are suggested.

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Competing Through Knowledge and Information Systems Strategies: A Study of Small and Medium-Sized Firms

Journal of Information & Knowledge Management ◽

10.1142/s0219649216500271 ◽

2016 ◽

Vol 15 (03) ◽

pp. 1650027 ◽

Cited By ~ 1

Author(s):

Yolande E. Chan ◽

James S. Denford ◽

Joyce Y. Jin

Keyword(s):

Information Systems ◽

Firm Performance ◽

Empirical Support ◽

Resource Based View ◽

Knowledge Strategy ◽

Information Systems Strategy ◽

Knowledge Intensive ◽

And Performance ◽

Knowledge Strategies ◽

Innovation Capital

In this study, we investigated strategies that small and medium-sized enterprises (SMEs) in Canada employ to create, transfer, and apply knowledge, and we evaluated the importance of supporting dynamic knowledge capabilities and information systems. To examine the empirical support for a model based on the resource-based view of the firm, we conducted a survey of SMEs operating in knowledge-intensive industries. We tested relationships among knowledge strategy, information systems strategy, dynamic knowledge capabilities, and firm performance. SME performance was measured by their physical and financial capital, as well as four intangible types of capital: structural, human, innovation, and relational. We observed that dynamic knowledge capabilities only partially mediate the link between knowledge strategy and performance in SMEs. However, dynamic knowledge capabilities fully mediate the link between information systems (IS) strategy and performance in the small and medium-sized firms studied. We observed that information systems only indirectly influence firm performance, but they directly support the knowledge and innovation capital of SMEs. Further, our results indicated that, in SMEs, knowledge strategies directly influence IS strategies, and that alignment between knowledge strategies and IS strategies positively impacts dynamic knowledge capabilities, and hence firm performance.

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