Purpose -The purpose of this study is to provide new insights into the link between market orientation (MO) and strategic performance by disaggregating the MO construct. With a focus on responsiveness, a crucial element of MO, this research explores antecedents as well as outcomes in the strategic business units (SBUs) of MNCs. The decision-making structure of the firm was modeled as a moderator of the link between responsiveness and performance. Design/methodology/approach -Survey data from upper level managers employed by 126 MNC SBUs representing 23 industries were collected. Findings -The key findings indicate that: responsiveness mediates the link between intelligence generation and strategic performance; responsiveness also mediates the link between resource flexibility and strategic performance; and the link between responsiveness and strategic performance is moderated by the SBU's decision-making structure (i.e. centralization). Originality/value -This study contributes to the conceptual precision of the composite construct MO, and also illustrates an avenue to increase strategic performance. Managerially, it provides managers with prescriptive suggestions for leveraging the value of the elements of MO with respect to the firm's decision-making structure.
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SBU's strategic performanceMany studies (e.g. Kirca et al., 2005) have treated MO as a composite construct, and explored its relationship with other variables. However, recent studies (e.g. Cadogan, 2012; Chung, 2012) indicate that we may overlook significant relationships by simply investigating MO at the composite level. These studies call for research exploring the effects of the individual MO dimensions on performance. Very few studies have modeled the individual components of MO and investigated their impact on performance (e.g. Chung, 2012). Interestingly, when a disaggregation of the MO components has been used, mixed findings have been reported. For example, market intelligence generation or/and dissemination have been found to have little or no effect on performance, while the responsiveness component has been revealed to have a strong and significant impact on firm performance (e.g. Murray et al., 2007;Sørensen, 2009). Cadogan (2012 argues that the aggregation of MO into a composite can be problematic, because the internal correlation between the dimensions and the individual effects of these dimensions on performance cannot be diagnosed. Further investigation of the relationship between these dimensions is necessary to advance the theory of MO, and practitioner level direction will be greatly enhanced by the exploration of the effects of these individual components.Within the MO construct, responsiveness is considered to be the component most directly related to performance (e.
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