The Diffusion of Market Orientation Throughout the Organization: A Social Learning Theory Perspective

Abstract

This study examines the diffusion of market orientation as a social learning process to acquire and transfer individual-level market orientation. Central to the diffusion are important work-group members, or envoys. Through their market-oriented action, top managers serve as market-oriented role models to two important types of observers in work groups — formal middle managers and work-group expert peers. These observers in turn become top managers’ envoys to role-model market oriented behavior to frontline employees. Empirical results from a three-level data set from a Fortune 500 company support this perspective. While envoys that are neither market oriented nor identified with the firm are the worst, envoys that are not market oriented but are strongly identified with the firm are also detrimental. Network size hinders the informal route of learning through expert peers but not the formal route through middle managers. By identifying whom the important work-group envoys are and under what conditions certain envoys are likely to be most effective, this study helps managers select the most effective envoys to implement market orientation.