Beliefs of senior managers and their influence on market orientation: an Australian owner-managed, vertically-integrated horticultural enterprise perspective

Abstract

Agriculture makes an important contribution to the Australian economy through food and fibre production, exports and employment. Horticulture is the third largest component of the Australian agricultural industry after meat and grain. It provided employment for almost 60,000 people in 2011/12. However, the number of people employed in horticultural product processing in Australia is declining, partly as a consequence of multinational food manufacturers relocating their commodity fruit and vegetable processing such as freezing and canning to countries with lower costs of production than Australia. Concurrent with the relocation of large-scale fruit and vegetable processing, segments of consumers are increasingly seeking new and unique food experiences with attributes such as low food miles, provenance and assurances of safe and ethical production practices. These can be manufactured by smaller-scale Australian-based processors because consumers seeking these benefits are often prepared to pay price premiums. This means that opportunities exist for Australian niche product manufacturers to develop and market products to satisfy this emerging demand. However, traditional horticultural industry marketing and distribution practices have relied on farmers focusing on efficiencies of production with little need for marketing which means that skills and understanding of marketing of products within the horticultural sector is limited. Market orientation contributes to organisational performance. It involves gathering market intelligence, sharing it widely within the organisation so that all departments can contribute to planning and implementing timely and coordinated responses to the identified opportunities and threats. It is part of organisational culture which in its simplest form is described as “the way we do things around here”. Many aspects of market orientation have been published but past research on barriers to adoption of market oriented behaviour have focused on broad cultural issues rather than specific beliefs. Understanding specific beliefs of founders, owners and senior managers is important because beliefs influence behaviour. Research on the subject of market orientation in agriculture is limited and there are few studies on market orientation in horticulture, particularly in Australia. This research was conducted to determine the salient beliefs of top management teams of vertically-integrated horticultural enterprises that influenced the degree of market orientation adopted by their organisations. The research employed a qualitative approach involving 52 semi-structured interviews of founders, owners and senior managers reporting to them from four Australian vertically-integrated horticultural enterprises located in south east Queensland and northern New South Wales. These organisations were purposefully selected as typical. Two firms with annual incomes of $30m - $40m and managed by employed managers, and two with annual incomes of less than $2m managed by family members were selected as the case study firms. Senior managers from each organisation were interviewed three times. At the commencement of the final interview, interviewees received a short presentation about market orientation, the benefits of organisations being market oriented and the evidence to support the relationship between market orientation and superior organisational performance. A total of 28 beliefs of senior management team members were identified. These beliefs, which appeared to have become part of organisational culture, influenced the way market intelligence was gathered, shared and how the organisations planned, coordinated and timed their responses to market opportunities and threats. The results suggest that changing management beliefs about marketing and market orientation may be important component of enhancing the degree to which firms are market oriented. The contribution to literature made by this research is the identification of salient beliefs that influenced the degree to which the case study firms were market oriented. This extends the literature in the area of barriers to market orientation. Additionally, this research developed and demonstrated the use of a qualitative method for identifying the salient beliefs of senior management team members which influenced the degree to which their organisations adopted market orientation. The results of this research have implications for education, training and interventions designed to influence marketing effectiveness. It suggests that before higher levels of market orientation can be achieved, the salient beliefs of founders, owners and senior management team members must first be understood and modified. Prior literature indicates that country and industry culture may influence the degree to which organisations are market orientation. Consequently, this research has implications for government policy that influences industry culture, and recommends that horticultural industry culture related to market orientation be assessed and compared with Australia’s international competitors as the first step in evaluating the extent to which enhancing the degree to which the industry adopts market orientation will improve its competitive position.