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Market-oriented firms are committed to understanding their customers' evolving expectations and meeting their needs, while outwitting competitors, to achieve a sustainable competitive advantage and improve performance. This paper develops a measure for market orientation based on textual analysis of 10-K filings. It utilizes a bag-of-words method to identify relevant information from the management's disclosure that underpins the corporate traits measured by the MKTOR scale, a renowned survey instrument for measuring market orientation. Unlike previous studies that rely extensively on small-scale survey data to estimate market orientation, this novel method leverages instead on the use of big public archival data. We empirically establish strong construct validity for the measures of market orientation and its components, namely customer orientation and competitor orientation. Furthermore, our analyses demonstrate that firms' performance is positively affected by market orientation and that this relationship is more pronounced in competitive environments. We contribute to the literature by developing an elegant measure of market orientation, which allows for conducting large-scale longitudinal analyses of its antecedents and consequences.
This paper provides evidence on the impact of transient (short‐term) institutional investors on a firm's thrust to compete. A firm's thrust to compete, as an attribute of corporate culture, captures the relative importance of corporate values that push a firm to achieve shareholder value in the short term by emphasizing goal achievement, fast response to external information and enhanced competitiveness. We find that greater ownership by transient investors results in firms intensifying their future thrust to compete, suggesting that firms respond to these investors’ preferences and competitive pressures for achieving short‐term value creation. In line with our expectations, this effect is not observed for firms with greater ownership by long‐horizon institutional investors, who are incentivized to place their emphasis on long‐term firm value over short‐term gains. Our findings reveal that the composition of institutional ownership influences the organizational culture of firms in a non‐homogeneous way. As such, we provide significant empirical insights for the ongoing debate on the implications arising from the behind‐the‐scenes engagement of institutional investors with management.
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