The role of organizational competencies in the market‐orientation‐performance relationship

Abstract

Purpose The purpose of this paper is to examine the specific ways in which market orientation of an organization contributes to the creation of organizational competencies that lead to superior performance. Design/methodology/approach Survey data from 159 acute care hospitals were statistically analyzed to test the research hypotheses. Findings Market orientation makes a significant contribution to the creation of a number of organizational competencies which, in turn, lead to superior performance in the areas of cost containment, growth in revenue, success in retaining patients, and success of new services. Originality/value Given the changing competitive landscape in the health care industry, managers of these organizations are increasingly being forced to recognize organizational competencies so that they can leverage them for market success. A set of competencies leads to the organization becoming market orientated. Market orientation, in turn, leads to organizational success in a variety of areas.