Research questions
The research questions that were identified from the paper included those that showed the relationship between market orientation and several antecedents and situations. Five examples of the research questions identified include the following:
- Is there a link between market orientation and firm performance?
- Is market orientation correlated with the innovations adopted by a firm?
- What relationship exists between market orientation and the human resource practices?
- What is the relationship between market orientation and competitive advantage?
- What effects does the supplier’s market orientation have on the distributor’s market orientation?
Research hypotheses
H1: Market orientation affects the performance of a firm.
H2: Market orientation does not affect the performance of a firm.
H1: Market orientation strategies have an impact on the innovativeness of an organization.
H2: Market orientation strategies do not have an impact on the innovativeness of an organization.
H1: The market orientation influences the human resource practices of a particular firm.
H2: The market orientation does not influence the human resource practices of a particular firm.
H1: Market orientation affects competitive advantage.
H2: Market orientation does not affect competitive advantage.
H1: The supplier’s market orientation affects the distributor’s market orientation.
H2: The supplier’s market orientation does not affect the distributor’s market orientation.
Dependent and independent variables
The first hypothesis states that market orientation affects the performance of an organization. In this context, the dependent variable is the performance while the independent variable is market orientation. This is the case since it is the market orientation that influences the performance of the firm through specific reasons that would be stated later on in the paper.
For the second hypothesis that states that market orientation strategies have an impact on the innovativeness of an organization, the dependent variable is the innovativeness of the organization while the independent variable is market orientation. This is the case since market orientation is a constant variable that does not change within the context while the innovativeness of an organization is influenced by market orientation and may change depending on the situation.
The third hypothesis states that the market orientation influences the human resource practices of a particular firm. The independent variable, in this case, would be market orientation and the dependent variable would be the human resource practices of the particular firm or organization. An independent variable in a hypothesis is that a variable that is not affected but instead influences the effect of the other variable (dependent variable).
The fourth hypothesis states that market orientation affects competitive advantage. The dependent variable is a competitive advantage is market orientation. This is the case since the competitive advantage is influenced by competitive advantage. For the last hypothesis that indicates that the supplier’s market orientation does affect the distributor’s market orientation, the dependent variable is the distributor’s market orientation while the independent variable is the supplier’s market orientation.
Justification of hypotheses
H1: Market orientation affects the performance of a firm.
Within marketing, market orientation has been described as being an intangible factor that has adverse effects on the performance of a particular organization or firm (Homburg, Krohmer, & Workman, 2003). Firms must always come up with innovations in all areas of the business operations to enable them to be competitive enough and survive in the market place. Several studies have shown that the relevance of market orientation for a firm’s performance depends on the environmental conditions. These environmental conditions play a critical role in the determination of the organizations ability to influence consumer satisfaction.
Several studies have been conducted to show the effects of market orientation and performance. A lot of literature on the same suggests the implementation of market orientation usually leads to an increase in the performance of an organization. In a particular study by Martin and Grbac (2003) asserted that increasing market orientation subsequently yielded increased performance in the firm. They, however, noted that this relationship could be influenced by external forces such as a weakened economy, instability in the market situation and stiff competition.
When market orientation is made to be a culture within the firm or organization, and ensure that customer satisfaction is achieved, then greater value would be realized for the clients and great performance would be realized by the firm. Three environmental properties have been identified as influencing the organization’s performance. One of the characteristics is market turbulence which is the rate of change of the type of customer with the different needs and demands. The other is technological turbulence in the market place. These include the firms that quickly and readily adopt new technologies. Such firms can gain competitive advantage through such innovations.
H1: Market orientation has an impact on the firm’s innovativeness.
The relationship between market orientation and innovation is a rather complex one as described by Martin and Grbac (2003). This relationship has been popular in recent research in business. In highly competitive business environments, organizations usually focus their attention on the needs of their clients to ensure that the goods and services they offer them are of the best quality possible and that the customers are satisfied. This requires the organizations to adopt a strategy that aligns the firm with the customers.
This research question is empirically testable since firm innovativeness is measurable using questionnaires and other market information can be collected and used in the study. The data may be analyzed using statistical packages such as SPSS. Factor analysis and correlation analyses may be used to check the relationships between the variables.
Customer needs change with time and the firm’s ability to constantly deliver goods and services that are of high quality is the responsibility of the evolving market place which is a requirement for the success of the organization. In response to the changing customer demands and needs, this always requires the firm or organization to come up with new products and services through the increase of the innovation capacity of the organization. The moment customers like and rival’s strategies change, there is a need to reconstruct the product to fit their preferences. This calls for firm innovativeness which involves the developments that may touch on newer technologies that are available in the market (Choe, 2003).
H1: The market orientation influences the human resource practices of a particular firm.
Some research done on the above have concluded that market orientation and several employee development behaviors such as their coaching, delegation, and empowerment affect the performance of the individual employee and the whole organization in general. The research question can be empirically tested using data from logistic service providers and by the use of several survey designs. Some employees and managers from each organization can be selected to represent the organization. (Menguc & Auh, 2006).
The results show that market orientation affects the performance of the organization and the behavior and practices of the employees. The results also show that employee performance can be moderated by the use of training. Coaching moderates the performance of the employees and the organization as a whole but empowerment does not moderate any of the above. A firm’s performance is greatly influenced by the employee practices such as those that influence their behavior, attitudes, perceptions and their intellectual well being. It is however correct to state that market orientation and the practices of the employees as forming part of a strategy responsible for the performance of the employees and the organization.
H1: Market orientation affects competitive advantage.
Some studies show that only producing certain products using specific processes would not ensure a competitive advantage in the long run. Dynamic capabilities of an organization are the ability of a firm to bring innovations into a company and manage to profit from it. In the marketing literature, market orientation is an important subject matter as the concerned researchers have concurred with the notion that market orientation is correlated with the performance of the organization. Market orientation directly influences the competitive advantage of an organization and this can be reflected in the performance in terms of performance and innovation.
A market-oriented strategy goes beyond just being able to generate and have knowledge on the consequences of the market information but also needs the dynamism of the strategy to incorporate the strategic effects that strengthen the organization’s competitive advantage within the market. Other researchers have defined strategic orientation as a situation whereby the organization competes and concentrate its resources to achieve competitive advantage (Day, 1994). A learning orientation gives a stable competitive advantage but it is necessary to introduce a market orientation that is important in offering information on culture and behavior.
Some research suggests that an organization’s decision-making process is shaped by its goals, choices and the future expectation of the organization. These are affected by certain processes that would resolve some of the conflicts that come about when the expected or set goals are not attained or reduce and eradicate uncertainty and to look for solutions to such problems. In this context, therefore, the ability of a manager to make wise decisions is seen as a competitive advantage.
H1: The supplier’s market orientation affects the distributor’s market orientation.
An effective way of solving the problems that the suppliers and distributors usually encounter in their interactions is the introduction of a market-oriented strategy. This research question can be empirically tested by the development of a model of the possible outcomes of the effects of the supplier’s market orientation on the distributor’s market orientation. The results would show that a supplier’s market-oriented strategy would have either a direct or an indirect effect on the factors within the chain relationship between the suppliers and the distributors. This would generally be based on the distributor’s side and may include such market-oriented behaviors such as trust and commitments (Penrose, 1959).
References
Choe, J. (2003). The Effect of Environmental Uncertainty and Strategic Applications of IS on a Firm’s Performance. Information and Management, 1-12.
Day, G.S. (1994). The capabilities of market-driven organizations. Journal of Marketing, 58 (4), 37-53.
Homburg, C., Krohmer, H., Workman, J. (2003). A Strategy Implementation Perspective of Market Orientation. Journal of Business Research, 1(5), 21-23.
Martin, J. H.,& Grbac, B. (2003). Using supply chain management to leverage a firm’s market orientation. Industrial Marketing Management, 32(1), 25−38.
Menguc, B., & Auh, S. (2006). Creating a firm-level dynamic capability through capitalizing on market orientation and innovativeness. Journal of the Academy of Marketing Science, 34(1), 63−73.
Penrose, E. T. (1959). The theory of the growth of the firm. New York: Wiley.