Market Orientation and Organizational Performance: Is Innovation a Missing Link?

• Main Authors: HAN, Jin K., KIM, Namwoon, SRIVASTAVA, Rajendra K.
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 1998
• Subjects: corporate performance; innovation; market orientation; marketing; corporate culture; strategic planning; Business; Marketing; Technology and Innovation
• Online Access: https://ink.library.smu.edu.sg/lkcsb_research/2234; https://ink.library.smu.edu.sg/context/lkcsb_research/article/3233/viewcontent/RSrivastavaJmkg1998.pdf
• Institution: Singapore Management University

In recent years, a market-oriented corporate culture increasingly has been considered a key element of superior corporate performance. Although organizational innovativeness is believed to be a potential mediator of this market orientation - corporate performance relationship, much of the evidence to date remains anecdotal or speculative. In this context, a systematic framework is presented to test the postulated market orientation-innovation-performance chain. To this end, the direct causality assumption of market orientation on organizational performance is examined with Narver and Slater's (1990) market orientation framework. Moreover, a componentwise approach is taken, and an examination is conducted of how the 3 core components of market orientation affect the 2 core components organizational innovativeness en route to affecting corporate performance. Using banking industry data, innovation's mediating role in the market orientation-corporate performance relationship is empirically tested and substantiated.