Size matters: market orientation and NPD in small and large firms

Abstract

This study investigates the impact of market orientation, product advantage and new product performance on organisational performance in small and large firms. A review of literature identified constructs which formed the basis for a research model. This model was tested using data collected from 150 firms in Ireland. Findings from small and large firms were compared, and correlation and regression analyses were used to establish the relationships defined in the model for both sets of firms. The results confirm a relationship between new product and organisational performance in both small and large firms. In small firms, competitor orientation is the only dimension of market orientation that is linked to new product performance, while in large firms both competitor orientation and interfunctional coordination impact new product performance. The findings suggest that an understanding of competitors is critical for new product and organisational success. Finally, this paper questions the appropriateness of the research measures developed for use in large firms when applied to small firms and suggests that measures developed specifically for small firms could yield more meaningful results.