The impact of market orientation dimensions on client cooperation in the development of new service innovations

Abstract

PurposeCulture makes firms unique and, depending on the implemented pattern of social and managerial culture, technology, and innovation, it can have an important influence on the personality and behaviour of the firm. Although a cultural model of market orientation encourages product innovation and fosters cooperative relationships with clients, few studies analyse this important relationship from a service perspective. This research seeks to investigate the relevance of market orientation for the firm's client cooperation relationships in developing radical innovations in the service sector.Design/methodology/approachA descriptive investigation uses 433 Spanish service firms that introduced radical innovations in their product fields in the past two years. The paper conducted four discriminant analyses: one for the total sample of firms and three for the sub‐samples defined by the extent to which firms use information and communication technologies (ICTs) in their activities.FindingsThe four models reveal that customer orientation, competitor orientation, and inter‐functional coordination provide means to differentiate between firms that cooperate with their clients to innovate and firms that do not. In each model, the significance and weight of the three variables change, depending on the degree to which the firms use ICT. Therefore, the distinction between firms that cooperate and those that do not is possible mainly for the total sample of firms. For the sub‐samples, not all MO dimensions can discriminate this way.Practical implicationsThis study offers important contributions for both researchers and managers in the field of service innovation. It identifies explicitly the relationship between market orientation and cooperation, which makes it possible to extend the study and enhance comprehension of this concept to the relationship that the firm has with other agents in the value chain. Market orientation, as an inter‐firm phenomenon, may favour the design of market orientation strategies that offer superior value to the market. On the other hand, the empirical analysis shows which factors (philosophical principles, strategic implications of proactive market orientation) have the highest discriminatory power for innovative firms, according to their sector of activity. This work also identifies market orientation as an element that fosters a cooperation strategy.Originality/valueDespite the importance of market orientation for developing cooperative relationships with clients, few studies analyse the relevance of these relationships in the firm's service innovation process. The findings thus offer a valuable contribution by showing the relevance of this relationship in developing new service innovations. Furthermore, the application of Spanish ICT contributes to existing research in Spain.