Market Orientation in Australian SME’s: A Size Based Comparison

Abstract

Market orientation theory highlights the role of information acquisition, dissemination and utilisation in meeting customer needs. Prior studies have examined the relationship between market orientation and performance as well as other consequences and requirements. Market orientation activities of a sample of Australian firms are examined to observe whether there are size-related differences. The consistency of market orientation between firms in different size groups and the relationship to performance differences is examined. The survey instrument is based on a conceptualisation of market orientation that includes intelligence gathering, dissemination and responsiveness. Businesses located in the Newcastle and Lower Hunter Region of Australia were surveyed, resulting in responses from 249 firms that were allocated to two size groups based on a size-based definition of small business. A positive relationship between market orientation, firm performance and esprit de corps in both the small and larger firms was found. There was no significant difference in the levels of the three individual components of market orientation between the two groups. Small and larger firms gathered intelligence, disseminated it and responded similarly. Sensitivity tests confirmed the results. Hypotheses proposing positive consequences for market oriented businesses were supported, regardless of firm size. Further analysis of the survey data will examine whether other firm demographics, such as line of business, influence market orientation and performance.