Drivers of market orientation and performance in service firms

Abstract

Service industries are undeniably important in the USA. They account for 72 percent of GNP and 76 percent of employment. In recent years, service firms have been experiencing a changing and increasingly competitive market place. Until now, few top management teams (TMTs) of service businesses have accorded all three aspects of market orientation (customer‐orientation, competitive orientation, and interfunctional co‐ordination) as much importance as have their colleagues in manufacturing. Using data obtained from a diverse set of service industries, e.g. law firms, accounting firms, automobile glass replacement specialists, medical group practices, and advertising companies, a structural equations model was developed and analyzed. Results revealed: a strong positive relationship between top management team (TMT) cohesiveness and market orientation; a strong positive relationship between both low environmental munificence and high dynamism with market orientation, and most significantly, a strong positive relationship between market orientation and organizational performance. The implications for service firms are clear: cohesive top management teams committed to implementing the marketing concept will have a competitive advantage ‐ no matter how unstable the competitive environment.

Managing in an economic crisis: The role of market orientation in an international law firm

“…Within LawCo and its individual practice groups, a strong and positive correlation exists between MO and subjective performance. This finding is similar to other research (Cano et al, 2004;Esteban et al, 2002;Grinstein, 2008;Kirca et al, 2005;Shoham et al, 2005;Van Egeren and O'Connor, 1998). However, just as Cano et al (2004) find, the relationship is stronger for subjective performance measures than for objective performance measures in LawCo.…”

“…Not much research focuses on the role of market orientation within the professional services sector, although Van Egeren and O'Connor (1998) do publish a study showing a positive relationship between market orientation and performance in service firms. The rise of the professional services sector is a fairly recent development (Hitt, Bierman, Uhlenbruck, and Shimizu, 2006;Muzio and Ackroyd, 2005;Reihlen and Apel, 2007), which may explain why only limited efforts are thus far targeting this specific segment of organizations.…”

Towards a further understanding of the development of market orientation in the firm: a conceptual framework based on the market-sensing capability

“…Han et al, 1998;Van Egeren and O'Connor, 1998). However, Gray and Hooley (2002) maintain that the evidence, particularly in the services sector, is equivocal, and that relatively little analysis has been done of the moderating effect of the environment on the construct.…”

Relações quantitativas entre orientação para o mercado, desempenho organizacional e a percepção externa de sucesso em instituições de pesquisas tecnológicas afiliadas à ABIPTI

“…Na grande maioria dessas propostas, a relação entre orientação para o mercado e desempenho encontrada é frequente e comprovadamente positiva (Appiah-Adu, 1998; Avlonitis & Gounaris;1997;Baker & Sinkula, 1999;Becker & Homburg, 1999;Caruana, Ramaseshan, & Ewing, 1996;Didonet, 2007;Egeren & O'Connor, 1998;Horng & Chen, 1998;Kumar, Subramanian, & Yauger, 1997;Narver & Slater, 1990;Pelham, 1997;Pelham & Wilson, 1996;Pitt, Caruana, & Berthon, 1996;Raju, Lonial, & Gupta, 1995;Slater & Narver, 1994). Nessas investigações, os resultados revelaram que a orientação para o mercado proporciona, com raras exceções, melhorias no desempenho da empresa.…”