Market orientation and performance: a meta‐analysis

Abstract

Purpose -To assess quantitatively the impact of market orientation on the performance of the firm. While much empirical work has centered on market orientation, the generalizability of its impact on performance has been under-researched. Design/methodology/approach -A substantive meta-analysis quantitatively summarizes the results of empirical studies of the direct and indirect impact of market orientation on three outcomes. A second, methodological meta-analysis assessed the influence of methodological variables on explained variance in performance. Findings -The direct, indirect, and total impacts of market orientation on performance were all significant. Additionally, the geographic location of the study and the performance measure used (but not the scale) affected explained variance. Research limitations/implications -First, across study contexts, market orientation affects performance. Second, its impact might be stronger than previously thought due to the indirect paths not considered in previous research. Third, the strength of its impact depends on the country in which it was implemented; managers should expect higher payoffs in less developed countries. Originality/value -The findings of this study significantly refine the body of knowledge concerning the impact of market orientation on the performance of the firm, and thereby offer an improved conceptual framework for marketing planners.

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.…”

“…Several scholars (Ellis, 2006;Homburg and Pflesser, 2000;Singh, 2004;Slater and Narver, 1995) highlight the potential importance of culture in this context. Shoham et al (2005) state that the location of the study has a significant impact on market orientation. Similarly, Kirca et al (2005) conclude that the relationship between market orientation and firm performance is stronger in low power distance and uncertainty-avoidance cultures.…”

“…A majority of scholars in this field either use Kohli and Jaworski's (1990) or Narver and Slater's (1990) frameworks of market orientation, or an adapted form of their constructs (Langerak, 2003;Shoham et al, 2005). Carrillat, Jaramillo and Locander (2004), amongst others, categorize Narver and Slater's (1990) framework as the cultural approach to market orientation, which focuses on fundamental organizational characteristics.…”

“…This seminal work inspired many scholars to test and analyse market orientation in different sectors (e.g. Appiah-Adu, 1998;Grinstein, 2008;Schlosser and McNaughton, 2007;Shoham, Rose, and Kropp, 2005;Webster, 2005). In a paper reviewing and integrating the contributions to date, Von Raaij and Stoelhorst (2008) conclude that some of the most influential definitions of market orientation share the same strong client-focus.…”

“…According to Day (1999), the positive impact of market orientation manifests in superior cost and investment efficiency, employee satisfaction, price premium, sales and revenue growth, and competitive pre-emption. Cano, Carrillat, and Jaramillo (2004), Grinstein (2008), Kirca et al (2005), and Shoham et al (2005) perform detailed meta-analyses on market orientation studies and the impact of market orientation on firm performance. For example, Cano et al (2004, p.193) provide a metaanalysis of 53 empirical studies on market orientation from 23 countries, across five continents with a combined total sample size of 12,043 respondents, and state: "market orientation is a critical component of business performance and offers evidence of the effectiveness of the implementation of the marketing concept".…”