Market Orientation and Alternative Strategic Orientations: A Longitudinal Assessment of Performance Implications

TLDR

Although the merits of maintaining a market orientation have been extensively discussed, empirical studies linking it to performance have shown mixed results. The study investigates how different dimensions of market orientation and alternative strategic orientations affect firm performance over time. Using a longitudinal analysis of shareholder letters in annual reports, the authors assess performance impacts and test whether organizational learning and innovativeness mediate the orientation–performance relationship. Results show that higher levels of competitor orientation, national brand focus, and selling orientation are associated with superior performance.

Abstract

Although the merits of maintaining a market orientation have been extensively discussed in the literature, studies examining the empirical link between market orientation and performance have shown mixed results. The authors explore the relative performance effects of various dimensions of market orientation using a longitudinal approach based on letters to shareholders in corporate annual reports. Furthermore, the authors examine the relative effects of alternative strategic orientations that reflect different managerial priorities for the firm. The authors also extend previous work by considering the mediating effects of organizational learning and innovativeness on the orientation–performance relationship. The results show that firms possessing higher levels of competitor orientation, national brand focus, and selling orientation exhibit superior performance.