Market orientation has emerged as a significant antecedent of performance and is presumed to contribute to long-term success. To investigate the impact of this predictor, a meta-analysis was conducted and findings suggest that the relationship between market orientation and business performance is positive and consistent worldwide. One of the unique contributions of this research is a sample that includes studies conducted in 23 countries spanning five continents. The moderating effects of business objective (profit, not-for-profit), industry type (manufacturing, service), socioeconomic development [gross domestic product (GDP) per capita, Human Development Index (HDI)), and Hofstede's individualism cultural dimension] are examined. Stronger correlations between market orientation and business performance were found for not-for-profit compared to profit firms and service compared to manufacturing firms.
In today's highly competitive global markets, managers seek to improve organizational effectiveness by identifying organizational metrics linked to business performance. Market orientation is one such metric that has emerged as a significant predictor of performance and is presumed to contribute to long-term success (Deshpandé & Farley, 1999). Market orientation is heavily influenced by the marketing concept Drucker, 1954, McCarthy, 1960 and McKitterick, 1957, and is the cornerstone of the marketing management and marketing strategy paradigms (Hunt, 2002). The Marketing Science Institute has recognized the importance of market orientation for many years, and today it remains a research priority. Over time, scholars have acknowledged that market orientation research has significantly influenced the development of marketing knowledge Biggadike, 1981, Day, 1999 and Kohli & Jaworski, 1990.
Scholars agree that meta-analysis is an important tool for conducting marketing research across different countries (Deshpandé & Farley, 1999). Early studies of the relationship between market orientation and business performance are limited to research conducted in the United States and, to a lesser extent, the United Kingdom Bhuian, 1998, Deshpandé & Farley, 1999 and Subramanian & Gopalakrishna, 2001. Empirical studies incorporating samples from multiple countries are sparse (e.g., Deshpandé et al., 1997, Hooley et al., 2000 and Saini et al., 2002). Efforts aimed at studying the relationship between market orientation and business performance across countries have been hampered by methodological differences Mavondo, 1999a and Shoham & Rose, 2001. Moreover, international studies in marketing most often compare developed, rather than developing countries. Marketing scholars recognize this limitation and called for the extension of research to an international context Deshpandé et al., 1997, Homburg & Pflesser, 2000 and Kohli et al., 1993. This meta-analysis serves to bridge this gap in the literature by investigating studies of the relationship between market orientation and business performance conducted worldwide.
The notion that market orientation has a positive impact on business performance is well documented in scholarly research (e.g., Baker & Sinkula, 1999, Harris, 2001 and Matsuno & Mentzer, 2000). Although a few studies report a negative or non-significant relationship (e.g., Grewal & Tansuhaj, 2001, Han et al., 1998 and Siguaw & Honeycutt, 1995), overwhelming evidence shows a positive relationship between market orientation and business performance (Table 1). This study seeks to go beyond the assessment of the existence and the direction of this relationship by investigating two important research questions: (1) What is the strength of the relationship between market orientation and business performance? (2) What is the impact of contextual and methodological moderators on this relationship? For this purpose, a meta-analysis, which is appropriate to integrate research (Deshpandé & Farley, 1998), was conducted. Fifty-three (53) empirical studies representing an overall sample size of 12,043 respondents from 23 countries, across five continents, were included. This is the first such study to be undertaken.
The findings of this study support the widely held marketing notion that the attainment of organizational goals is achieved by satisfying the needs of customers more efficiently and effectively than competitors. A rapidly changing environment requires quick and continual adaptation by management, whose ability to enhance operational efficiencies may lie in their ability to develop and embrace an organization-wide commitment to market orientation (Wood, Bhuian, and Kiecker, 2000).
The results of this meta-analysis support Sheth's (2001) argument that powerful macroeconomic forces are reshaping the world and national boundaries are becoming obsolete in determining differential marketing practices. Regional integration, ideology-free world, technology advances, and borderless markets (Sheth, 2001) contribute to the findings that, across countries, the relationship between market orientation and business performance is significantly positive and not influenced by the various degrees of socioeconomic development and national culture (i.e., individualism). The movement to a borderless world brings forward the importance of defining other elements that impact the relationship between market orientation and business performance. Two such elements are uncovered in this meta-analysis: organizational objective (profit, not-for-profit) and industry type (service, manufacturing). The fact that the relationship between market orientation and business performance is stronger in a service setting than in a manufacturing setting and stronger for not-for-profit organizations compared to profit organizations brings support to the broadening of the marketing concept (Kotler & Levy, 1969). However, a limitation of this study is that due to the high correlation between industry type and organization objective (ρ=0.62), this study cannot determine which one of the two variables is the true moderator.
