Does market orientation matter?: a test of the relationship between positional advantage and performance

TLDR

Recent literature suggests that developing a market orientation may add value to organizational success. The study tests whether market orientation enhances success when combined with other capabilities. Using a resource‑based view, the authors examine how market orientation, entrepreneurship, innovativeness, and organizational learning jointly create positional advantages in 181 large multinational corporations. Positional advantages from the combined capabilities positively affect MNC performance over five years, confirming that market orientation boosts success within a broader context. © 2001 John Wiley & Sons, Ltd.

Abstract

Abstract A recent series of articles in the Strategic Management Journal has discussed the potential value of an organization developing a market orientation in its quest to achieve success. We posit that market orientation can enhance success, but that its potential value should not be considered in isolation. Specifically, we draw on the resource‐based view of the firm to suggest that four capabilities—market orientation, entrepreneurship, innovativeness, and organizational learning—each contribute to the creation of positional advantages for some firms. The data used are drawn from 181 large multinational corporations (MNC). The results indicate that positional advantages arising from the confluence of market orientation, entrepreneurship, innovativeness, and organizational learning have a positive effect on MNC performance (five‐year average change in ROI, income, and stock price). Overall, the results support the contention that market orientation can enhance success, albeit within the context of other important phenomena. Copyright © 2001 John Wiley & Sons, Ltd.