Market orientation of Korean MNC subsidiaries and their performance in the Chinese and Indian markets

Abstract

PurposeThe study of the market orientation of MNC subsidiaries in foreign markets has been generally limited. This paper, therefore, aims to assess the effects of market orientation on performance and the factors affecting the utilization of market orientation by foreign subsidiaries.Design/methodology/approachMarket orientation is operationalized within the context of the foreign market. Research hypotheses are tested using a sample of 168 Korean MNC subsidiaries operating in China and India, the two most giant emerging countries in the world.FindingsThe results show that market orientation performs an important function in foreign subsidiary performance. In addition, foreign subsidiaries, which possess superior technology advantages and maintain active network relationships with local key entities such as suppliers, distributors, customers, and governmental authorities, are shown to actively devote themselves to market orientation.Originality/valueAs this study is to address the influence of MNC subsidiaries' market orientation on their business performance in the emerging markets, the results are expected to make a contribution to the literature in the field of market orientation.