A basic premise of marketing is that organisational performance is improved by satis-fying customers. In the light of this proclamation, the present paper examines evidence sug-gesting that the adoption of a marketing-led approach to business actually imp
Table of Contents
1 Introduction
2 The Importance of Market Orientation
3 The Nature of the Market Orientation Construct
4 Empirical Evidence
4.1 Market Orientation and Performance
4.2 Environment Influences on Performance
4.3 Moderators of the Market Orientation-Performance Relationship
4.4 Limitations
5 Conclusion
Research Objectives and Key Topics
The primary objective of this paper is to evaluate the existing empirical evidence regarding the impact of a market-led business approach on overall organizational performance. It investigates whether the adoption of market orientation strategies consistently leads to improved corporate outcomes and explores the theoretical frameworks underpinning this relationship.
- The importance of market orientation within organizational philosophy
- Comparative analysis of the Kohli & Jaworski and Narver & Slater constructs
- Empirical assessment of the correlation between market orientation and business performance
- The role of environmental moderating variables and their influence on performance outcomes
- Methodological limitations in current research and suggestions for future longitudinal studies
Excerpt from the Book
4.1 Market Orientation and Performance
The theory of the market orientation-performance relationship, presented by Kohli and Jaworski (1990), originated from an extensive search of the literature, and preliminary interviews with 47 US companies. One of their conclusion was that the greater the level of market orientation of an organisation, the higher its performance. This conclusion roots in the premise, that "... a market orientation appears to provide a unifying focus for the efforts and projects of individuals and departments within organisations, thereby leading to superior performance." (Kohli and Jaworski, 1990, p. 13) This hypothesis, was consequently investigated in the US by Jaworksi and Kohli (1993), Pelham and Wilson (1996), Narver and Slater (1990) and Slater and Narver (1994). Empirical evidence for the UK is provided by Greenley (1995) and Diamantopoulos and Hart (1993). However, the study by Hart and Diamantopoulos investigated market orientation and performance only within a modified data set drawn from an earlier UK study with a different research objective.
Evidence in relation to the market orientation-performance relationship is not conclusive and often contradictory. This is not surprising, taken into account the different measures of performance employed by individual researchers. Narver and Slater (1990) identified a positive association between market orientation and return on assets. Similar results were provided by Slater and Narver (1994) who report a positive association with return of assets, sales growth and new product success as measures of organisational performance. A study by Pelham and Wilson (1996), also shows that market orientation significantly and positively influences increases in profitability for small firms. Partial support comes from Jaworski and Kohli (1993) who found that market orientation is significantly related to business performance when overall performance is assessed using judgmental measures. By contrast, a market orientation does not appear to be related to performance using the more objective measure of market share. For the UK, only weak evidence for a positive association between market orientation and performance was found by Hart and Diamantopoulos (1993). Moreover, Greenley (1995) demonstrates that, in the UK, market orientation does not have a direct affect on performance.
Summary of Chapters
1 Introduction: Introduces the basic marketing premise that satisfying customer needs improves organizational performance and outlines the structure of the paper.
2 The Importance of Market Orientation: Establishes the relationship between the marketing concept and market-oriented firm behavior, emphasizing that this construct is not limited to the marketing department.
3 The Nature of the Market Orientation Construct: Describes the two major conceptual frameworks by Kohli and Jaworski and Narver and Slater, which serve as the foundation for modern empirical research.
4 Empirical Evidence: Analyzes various studies regarding the correlation between market orientation and performance, investigates environmental influences, identifies moderating factors, and discusses inherent research limitations.
5 Conclusion: Summarizes that while most research points toward a positive link between market orientation and performance, findings remain inconclusive due to methodological heterogeneity.
Key Terms
Market Orientation, Organizational Performance, Marketing Concept, Customer Orientation, Competitor Orientation, Inter-functional Co-ordination, Market Intelligence, Business Philosophy, Competitive Advantage, Environmental Turbulence, Cross-sectional Design, Behavioral Approach
Frequently Asked Questions
What is the core focus of this paper?
The paper examines the extent to which adopting a market-led business approach genuinely enhances organizational performance by reviewing existing empirical literature.
What are the primary thematic areas covered?
The key themes include the conceptual definitions of market orientation, the frameworks proposed by leading scholars, empirical evidence of performance outcomes, and the impact of environmental variables.
What is the main research objective?
The objective is to synthesize findings from various studies to determine if a consistent positive correlation exists between being market-oriented and achieving superior business performance.
Which research methodology is employed?
The paper utilizes a systematic review and comparative analysis of existing literature and academic studies published by researchers such as Kohli, Jaworski, Narver, and Slater.
What does the main body discuss?
It covers the definition of the market orientation construct, the evidence for its impact on performance, the role of environmental factors like market turbulence, and methodological challenges in current research.
Which keywords best describe this study?
Essential keywords include Market Orientation, Business Performance, Strategic Marketing, and Organizational Intelligence.
How do the Kohli & Jaworski and Narver & Slater frameworks differ?
While they overlap significantly, Kohli and Jaworski focus on market intelligence generation, dissemination, and responsiveness, whereas Narver and Slater emphasize customer and competitor orientation combined with inter-functional coordination.
Why are the findings regarding market orientation inconclusive?
The results are considered inconclusive because researchers use different measures for both market orientation and organizational performance, making direct comparisons difficult across studies.
What is the significance of the "moderating variables" discussed?
The paper evaluates whether factors such as market turbulence, competitive intensity, and technological change influence the strength of the relationship between market orientation and performance.
What are the primary limitations mentioned in the research?
The author highlights the reliance on cross-sectional designs, the potential bias of subjective performance measures, and the exclusion of unobservable phenomena like organizational culture or beliefs.
- Citar trabajo
- Dr. Klaus Schöfer (Autor), 1998, To what extent is there evidence to suggest that the adoption of a marketing-led approach to business actually does improve organizational performance?, Múnich, GRIN Verlag, https://www.grin.com/document/185875
