The quality of market orientated behaviours: conceptualisation and impact on company performance

Abstract

The behavioural perspective of market orientation views the construct as comprising of three core processes; the generation and dissemination of, and responsiveness to, market information. While past research on market orientation has primarily focused on the extent to which a firm engages in these three processes, more recent articles in the market orientation literature have suggested that it is important to ask whether these processes are being executed well or poorly in an organisation. Thus, the aim of this research was to investigate the quality of the generation, dissemination, and responsiveness processes, an area which to has to date has been neglected in the market orientation literature. In order to achieve this objective, sub-components of the market information generation, dissemination, and responsiveness processes were identified from a cross-disciplinary review of the relevant marketing, management, and information use literatures. Altogether, 24 behavioural sub-components of market orientation were explicated. It was hypothesised that each of the identified sub-components of market information generation, dissemination, and responsiveness were related, respectively, to the constructs of market information generation quality, dissemination quality, and responsiveness quality. Additionally, it was hypothesised that the generation, dissemination, and responsiveness quality dimensions were interrelated, and that responsiveness quality was related to overall company performance. Quantitative empirical research was conducted to test the outlined hypotheses, and a mail survey questionnaire was developed, utilising measures that were created based on past empirical research from the relevant literatures. Altogether, managers from 253 New Zealand companies participated in the research. The proposed hypotheses were tested using multiple regression and moderated regression analyses. There was support for the majority of the hypotheses relating the behavioural sub-components of market orientation to their respective quality dimensions. Support was also found for the majority of the hypothesised interrelationships between generation quality, dissemination quality, responsiveness quality and company performance. Specifically, it was found that the quality of the market information generation process impacted positively and directly on both the quality of the dissemination process and on the quality of the responsiveness process. The quality of the dissemination process was found to also impact directly on the quality of responsiveness activities, while responsiveness quality was significantly related to seven out of nine of the company performance measures used in this study. Theoretical and managerial implications arising from these findings were discussed, and recommendations for best practice were given. These included the suggestion that managers should measure the levels of market orientated sub-components in their organisation as, while it may be useful to look at the extent of a company's overall market orientation, measuring the individual sub-components of generation, dissemination, and responsiveness could help identify specific areas of improvement for managers. Potential limitations to this research were also outlined, and avenues for future study in this area of market orientation were highlighted.