Presentation in ISBE about market orientation

1. Market Orientation and SMEs Performance in
Developing Countries: A review of the literature
Syed Mohsin Ali Shah
Birmingham City Business School, UK
Abdul Wali Khan University, Pakistan
Dr Hatem El-Gohary
Birmingham City Business School, UK
Cairo University Business School, Egypt
Dr Javed Ghulam Hussain
Birmingham City Business School, UK

2. Agenda
Introduction to the study.
Key elements of the research.
Aim and Objectives.
The research methodology.
Key results.
Conclusion.
Limitation and directions for future research.

3. Introduction to the study
This research build a structured literature review of the field
of Market Orientation (MO) in:
Large firms and Small and Medium Enterprises (SMEs).
Developed and Developing economies.
After reviewing 252 MO articles, the authors identified:
Some Antecedents of MO.
Moderators of MO-Performance relationship.
Additionally, suggestions have been made to:
Thoroughly understand how MO influence SMEs performance
Employ the most appropriate research methodology
The study ends with limitations, implications, and directions
for future research

4. Market Orientation (MO) – What is it?
MO represents the implementation of marketing concept
within firms (Kohli and Jaworski, 1990).
The literature on MO has engendered two main theoretical
conceptualizations of MO:
Cultural approach by Narver and Slater (1990)
“the organization culture that most effectively and efficiently creates the necessary
behaviours for the creation of superior value for buyers and, thus, continuous superior
performance for the business” (Narver and Slater, 1990, p.21).
Behavioural approach by Kohli and Jaworski (1990)
“the organization wide generation of market intelligence pertaining to current and
future customer needs, dissemination of the intelligence across departments, and
organization wide responsiveness to it” (Kohli and Jaworski, 1990, p.6).

5. Definition of Small and Medium
Enterprises (SMEs)
Country Size No. of employees Other Criteria
Australia
Small
Manufacturing: less than 100 employees Services: less
than 20 employees
None
Medium
Manufacturing:100-499 employees
Services: 20-499 employees
None
Canada
Small
Manufacturing: Less than 100 employees
Services: Less than 50 employees
Manufacturing & Services: Less than
CDN$ 5 million in sales.
Medium
Manufacturing: Between100-500 employees Services:
Between 20-500 employees
Manufacturing & Services: Sales
between CDN$ 5-20 million.
European
Union
Small Employees < 50
Turnover < 10 million Euro OR balance
sheet total < 10 million Euro
Medium Employees < 250
Turnover < 50 million Euro OR balance
sheet total < 43 million Euro
Indonesia
Small Employees 5 to 19
Annual turnover < Rp 1 billion and
Assets < Rp 200 million
Medium Employees 20 to 99
Annual turnover > Rp 1 billion and assets
< Rp 10 billion
Malaysia
Small Employees < 50 Turnover < RM 10 million
Medium Employees < 150 Turnover < RM 25 million
Thailand
Small Employees < 50 Invested capital < 20 million baht
Medium Employees < 200 Invested capital < 100 million baht
USA Small & Medium Employees < 500 Annual Sales < US$ 5 million

6. Definition SMEs (Cont.)
However
Some other criteria
The term ‘SME’ cover a
wide variety of definitions
No universally accepted
definition
Number of Employees
Turnover
Invested
Capital
Total
Assets
However
Some other criteria
The term ‘SME’ cover a
wide variety of definitions
No universally accepted
definition
Number of Employees
Turnover
Invested
Capital
Total
Assets

7. Aim and Objectives
To build a
structured
literature
review to the
field of MO
To develop a clear
understanding
about the
different research
points regarding
MO studies
Explore and
analyse the
different research
methodologies
used in previous
MO studies
Antecedents of
MO
MO-Performance
relationship
Moderators of
MO-Performance
MO scale used
Performance
measures used
Time period of the survey: 1990 to 2013
Context
of
the
study:
Large
firms
and
SMEs
Context
of
the
study:
Developed
and
developing
economies
Aim of the study
Objective 2
Objective 1

8. Key Elements of the Study
Antecedents of MO
MO and Performance Relationship
Moderators of MO-Performance Relationship
MO Measures Used
Performance Measures Used

9. Research Methodology
The authors reviewed the literature by implementing three stages search
Determination of the initial database that could be considered as the potential
publications outlets in the field of MO
ABI/Inform Database
Emerald (MCB) Full text
Science Direct (Elsevier) Database
Proquest Electronic Database
Birmingham City University Catalogue
Sample and Procedures
Stage 1

10. Research Methodology(Cont.)
Stage 2
Search Descriptors Time period
 Market Orientation
 Marketing Orientation
 Market Driven
 Market led
1990 to 2013
Yielded more than 900 articles based on descriptors mentioned above

11. Research Methodology (Cont.)
Identification of the relevant research studies
Inclusion Criteria:
Articles that have been published in Marketing, Business and
Management, and Economics Journals were included.
Only journals articles were included
According to Nord and Nord (1995), journals articles represent the highest level of
research and scholars and practitioners alike most often use journal articles to get
information and disseminate new findings.
the articles that examine:
The relationship between MO and performance
Investigate the antecedents of MO
Investigate the impact of moderators on MO-Performance relationship
Stage 3

12. Research Methodology (Cont.)
Stage 3 yield a total of 252 articles from 92 journals
The articles were classified according to:
Year of Publication.
Developed or developing country.
Firms’ Size (Large or SMEs).
MO-Performance relationship.
Antecedents of MO.
Moderators of MO-Performance relationship.
MO scale used.
Performance measures used.
Research Methodology used.
Research Methods used.
Name of journal.
Classification Method

13. Key Findings
A total of 252 articles from 92 journals (200 from large firms and 52 from
SMEs)
Top ten journals in terms of frequency of articles accounted for 42.2% of
the total.
Publication Outlets
4%
6%
22%
5%
12%
9%
15%
8%
12%
7%
Asia Pacific Journal of Marketing and Logistics
European Journal of Innovation Management
European journal of marketing
International Journal of Research in Marketing
Industrial Marketing Management
International Marketing Review
Journal of Business Research
Journal of Strategic Marketing
The Journal of Marketing
Journal of Small Business Management

14. Key Findings (Cont.)
Distribution of MO articles by year of publication:
2
0
1
5
2
3
7 7
15
11
17
8
10
14
6
18
8
17 17
21
19 19
21
8
0
5
10
15
20
25
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Total
10.7% (1990 to 1997) 37.6% (1998 to 2005) 51.5% (2006 to 2013)

15. Key Findings (Cont.)
Out of 27 studies which investigated different antecedents, 20 have investigated
the antecedent model proposed by Jaworski and Kohli (1990 and 1993) which
include
Top management factors.
Interdepartmental factors.
Organisational structure related factors.
Antecedents of MO
Context of the studies In Large Firms In SMEs %
Developed Countries 14 5 70% (11% of the total in
developed countries)
Developing Countries 6 2 30% (10% of the total in
developing countries)
% 74% (10% of the
total in large firms)
26% (13% of the
total in SMEs)
100%

16. Key Findings (Cont.)
The researchers in current study have pursued an understanding of the
relationship between MO and performance by investigating:
A positive relation (for example: Ruekert, 1992; Zebal and Goodwin, 2009).
Not significant relationship (for example: Jimenez-Jimenez et al., 2008; Silva et al., 2009).
A negative relationship (for example: Grewal and Tansuhaj, 2001; Arshad et al., 2012).
No relationship (for example: Bhuian, 1997; Ho and Huang, 2007).
Out of 252 studies surveyed, 224 studies have investigated the MO-Performance
relationship
Out of 224 studies,
172 studies (76.7% of total) reported a positive relationship,
32 studies (14.2% of total) reported a non-significant relationship,
3 studies (1.3% of total) reported a negative relationship, While
6 studies (2.7 of total) reported no relationship.
MO-Performance Relationship

17. Key Findings (Cont.)
With respect to developed and developing countries:
MO-Performance Relationship (Cont.)
Relationship Studies conducted in
developed countries
% Studies conducted in
developing countries
%
Positive 120 82.8 52 76.5
Not significant 20 13.8 12 17.6
Negative 1 0.7 2 2.9
No relationship 4 2.8 2 2.9
Total 145 100 68 100

18. Key Findings (Cont.)
With respect to large firms and SMEs:-
However, it is significant to note that these irregularities in MO-Performance
relationship is due to different factors.
MO-Performance Relationship (Cont.)
85%
12%
0% 3%
In Large Organisations
Positive Not Significant Negative No-relation
67%
26%
5% 2%
In SMEs
Positive Not Significant Negative No-relation

19. Key Findings (Cont.)
Literature regarding MO reveals several scales to measure MO, for example:
MKTOR (developed by Narver and Slater, 1990).
MARKOR (developed by Kohli et al., 1993).
DFW (developed by Deshpande et al., 1993).
However, by examining the literature from 1990 to 2013 it was absorb that:
Measures of MO
29%
34%
11%
6%
6%
14%
In Developed Countries
MARKOR MKTOR BOTH Literature DFW Others
26%
29%
12%
1%
5%
27%
In Developing Countries
MARKOR MKTOR BOTH Literature DFW Others

20. Key Findings (Cont.)
With respect to large organisations and SMEs
However, with respect to MO-Performance relationship and MO scales used
Studies that use MKTOR scale have reported 32% of the total number of positive effect.
Studies that use MARKOR scale have reported 27% of the total number of positive effect.
Measures of MO (Cont.)
Scale Studies conducted in large firms % Studies conducted in SMEs %
MARKOR 57 28.5 12 23.1
MKTOR 66 33.0 15 28.8
Both 20 10.0 6 11.5
Literature 11 5.5 2 3.8
DFW 9 4.5 5 9.6
Others 37 18.5 12 23.1
Total 200 100 52 100

21. Key Findings (Cont.)
Studies regarding MO-Performance relationship have used either
Subjective measures of performance, (189 studies, 84.3% of the total).
Objective measures of performance, or (16 studies, 7.1% of the total).
Both (19 studies, 8.4% of the total).
With respect to developed and developing countries
Measures of Performance
83%
8% 9%
In Developed Countries
Subjective Objective Both
87%
6%
7%
In Developing Countries
Subjective Objective Both

22. Key Findings (Cont.)
With respect to large firms and SMEs the result is almost the same
Regarding MO-Performance relationship and measures of performance
used, the results show that
Studies that use subjective measures of performance have reported 87.7% of the total
number of positive effect
Studies that use objective measures of performance have reported 5.7% of the total
number of positive effect
Studies that use both measures of performance have reported 7.2% of the total number
of positive effect
Measures of Performance
(Cont.)
Performance
Measures
Studies conducted
in large firms
% Studies conducted
in SMEs
%
Subjective 150 82.9 39 90.7
Objective 14 7.7 2 4.7
Both 17 9.4 2 4.7
Total 181 100 43 100

23. Key Findings (Cont.)
Out of 63 studies which have investigate the moderating effect of different
variable on the relationship between MO and performance, 34 studies (13.4% of
the total) have investigated the moderating effect of market-level factors
market turbulence,
technological turbulence, and/or
competitive intensity
Moderators of MO-Performance
Relationship
Context of the study In Large Firms In SMEs %
Developed 28 14 66.1 (26% of the total in
developed countries)
Developing 16 6 33.8 (28% of the total in
developing countries)
% 69.8 (22% of the total in
large firms)
31.7 (38% of the total in
SMEs)
100

24. Key Findings (Cont.)
Research Methodologies Used
91%
2% 7%
In Large Organisations
Quantitative Qualitative Mixed Methods
88%
4%
8%
In SMEs
Quantitative Qualitative Mixed Methods
Methodologies Studies conducted in
developed countries
% Studies conducted in
developing countries
% Total
Quantitative
149 92.0 67 85.9
228(90.4% of the
total)
Qualitative
5 3.1 2 2.6 7(2.7% of the total)
Mixed Methods
8 4.9 9 11.5 17(6.7% of the total)
Total 162 100.0 78 100.0 252

25. Key Findings (Cont.)
Research Methods Used
90%
8% 2%
In Developed Countries
Questionnaire Interviews Focus Groups
82%
14%
4%
In Developing Countries
Questionnaire Interviews Focus Groups
Research
Method
Studies conducted in
large firms
% Studies conducted in
SMEs
% Total
Questionnaire 176 88.0 45 86.5 221 (87.6% of the total)
Interviews 19 9.5 5 9.6 24 (9.5% of the total)
Focus Group 5 2.5 2 3.8 7 (2.7 of the total)
Total 200 100 52 100 252

26. Conclusion
Regarding antecedents of MO, our result is consistent with Kirca et al. (2005) who
argued that most of the studies conducted to investigate the antecedents of MO
derived their factors from Jaworski and Kohli’s (1990 and 1993) model. However,
the work is very limited to SMEs (7 studies, 2.8% of the total).
Current review concludes that the evidence on the positive relationship between
MO and performance in the context of SMEs is, at least, equivocal.
Measures used (i.e. both MO scales and performance measures) have a significant
effect on the relationship between MO and performance.
The current study also conclude that majority of studies (34 out of 63) have
examined the moderating effect of turbulence in a firm’s immediate environment.
Although, the literature review shows that 72.2% of all studies included in this
review used a quantitative methodology. However, a triangulation approach based
on qualitative strategy (which will provide in-depth information about the
construct of MO and its antecedents) and quantitative strategy (which will answer
the “What” question) will be very fruitful.

27. Limitations and Implications
The articles include are published on five online database.
Classifications in this study are based on the keyword index which might obstruct
in presenting full picture of MO.
The survey only include English publications.
Depending on this review, researchers and scholars in the field will have a clearer
view to set their attitude towards suitable future research studies and
methodologies which in turn will contribute to the related accumulated
knowledge in the field of MO.
Limitations
Implications

28. References
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Responsibility.Journal of Applied Business Research (JABR), 28(5), 851-860.
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Marketing, 11(5), 317-328.
 Deshpandé, R., Farley, J. U., & Webster Jr, F. E. (1993). Corporate culture, customer orientation, and innovativeness in Japanese firms: a
quadrat analysis. The journal of Marketing, 23-37.
 Grewal, R., & Tansuhaj, P. (2001). Building organizational capabilities for managing economic crisis: the role of market orientation and
strategic flexibility. The Journal of Marketing, 67-80.
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industry. Journal of American Academy of Business, 11(1), 297-303.
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organizational learning. European Journal of Innovation Management, 11(3), 389-412.
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 NARVER, J. C. & SLATER, S. F. (1990), ‘The effect of a market orientation on business profitability’. Journal of Marketing, 54 ( 3), 20-35.
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