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Drawing on the resource-based view of the firm, this study addresses the dynamic capability–generating capacity of market orientation on firm performance. Whereas prior literature has examined environmental turbulence as a contextual condition shaping the market orientation–firm performance relationship, this study takes an internal approach by focusing on existing stocks of resources within the firm while controlling for environmental conditions. A conceptual model is developed that explains how market orientation can be transformed into dynamic capability when complemented by transformational (reconfigurational) constructs, such as innovativeness. The empirical results support the authors' theory that the effect of market orientation on firm performance is strengthened when market orientation is bundled together with internal complementary resources, such as innovativeness. The authors discuss the findings in the context of varying stages of the product life cycle and at different levels of market development.

As customer-organization relationships deepen, consumers increase their expertise in the firm’s product line and industry and develop increased switching costs. This study investigates the effects of customer investment expertise and perceived switching costs on the relationships between technical and functional service quality and customer loyalty. Technical service quality is hypothesized to be a more important determinant of customer loyalty than functional service quality as expertise increases. Both technical and functional service quality are hypothesized to have a reduced relationship with customer loyalty as perceived switching costs increase. Three-way interactions between the main effects of service quality, customer expertise, and perceived switching costs yield additional insight into the change in relative importance of technical and functional service quality in customers’decision to be loyal. Six of eight hypotheses receive support. Implications are discussed for customer relationship management over the relationship life cycle.

proactive environmental strategy, entre-preneurial orientation, resource-based view, legitimacy theory, institutional pressure, stakeholder theory, natural environment,