Exploring the operationalization of market sensing in a higher education organization

• Main Author: BHARDWAJ, Ashish
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2023
• Subjects: Market sensing; Market orientation; Dynamic capabilities; Competitive advantage; Business performance; Higher education; Strategic action; Operationalization; Business Administration, Management, and Operations; Higher Education; Marketing
• Online Access: https://ink.library.smu.edu.sg/etd_coll/535; https://ink.library.smu.edu.sg/context/etd_coll/article/1533/viewcontent/GPGM_AY2017_PhD_Ashish_Bhardwaj.pdf
• Institution: Singapore Management University

Market sensing is a dynamic capability of an organization that enables management to understand the market environment and develop strategic plans that best position the organization to continue to be relevant to the marketplace and sustain an advantaged competitive position. Extant research has explored the difference between ordinary and dynamic capabilities and proposed the role of dynamic capabilities as enabling the configuration and reconfiguration of the organization’s assets in response to or in anticipation of a rapidly evolving market environment, to maintain competitive advantage. Market sensing dynamic capability has been hypothesized to consist of three key organizational processes – sensing, sense-making, and articulation of transformational response. Past research has explored a) the relationship between an organization’s market orientation culture and its market sensing dynamic capability, b) the influence of the organization’s learning processes and c) the role of its managers as entrepreneurs to affect the organization’s market sensing dynamic capability. However, there has been limited research on the operationalization of market sensing as a dynamic capability. Drawing on research from the fields of market orientation, dynamic capabilities and organizational responsiveness, this study proposes a model that incorporates strategic action as a component of market sensing dynamic capability, and studies the relationship between the market sensing dynamic capability and business performance. This research introduces a strategic action variable “Experimentation” to the dynamic capability framework, and it is described in terms of two sub-components, “Exploitation” and “Exploration”, to describe market-driven and market-driving strategic actions respectively, pursued by the organization. Additionally, the study examines the relationship between the proposed sub-component processes, i.e., market research, insight gathering, internal communication, shared interpretation, exploitation, and exploration respectively, and business performance. The proposed research model was tested through a two-stage research design. The first stage was semi structured interviews with 10 business leaders at higher education organizations in different parts of the world, and the second stage was a survey instrument used to gather data from 125 managers at higher education organizations worldwide. All hypotheses were statistically supported. However, it was concluded that sense-making could be dropped as an independent variable as it did not contribute any additional predictive value to the model. The study adds to the extant research on market sensing as a dynamic capability by proposing and investigating a strategic action orientation in the research model as part of the dynamic capability. Further, this study conceptualizes two sub-components of Experimentation, i.e., Exploitation and Exploration. The examination of the relationship between the type of strategic action and business performance and the significance of the positive relationships found is an enhancement of the theoretical frameworks posited in extant research. This research advances the case for small, calibrated actions, or experiments to adapt to or take advantage of change in the market. This practical insight is put forth as a potential mechanism for delivering superior business performance.