The journey from market orientation to firm performance

Abstract

PurposeThis paper aims to investigate the link between market orientation and performance of US and Taiwanese small‐ and medium‐sized enterprises (SMEs). This study is primarily centred on empirically investigating two issues: test the effectiveness of MARKOR (a widely used market orientation measure developed by Kohli et al.) in US and Taiwanese SME contexts, and investigate the factors influencing US and Taiwanese SMEs’ performance.Design/methodology/approachThis study's participants were owners or managers from 138 SMEs located in three states in the USA (i.e. Maryland, New York, and Pennsylvania) and 151 SMEs located in Taiwan. A survey was created to collect data: market orientation scale items used in this survey were mainly adopted from MARKOR; performance scale items were adopted directly from previous studies. Structural equation modelling was employed to analyse the data collected.FindingsThis study finds that neither US and Taiwanese SMEs’ intelligence generation, nor intelligence dissemination had a significant relationship with their firm performance. However, the findings do indicate that there was a significantly positive link between US and Taiwanese SMEs’ responsiveness and their firm performance.Originality/valueIn almost all previous studies in this field, the primary emphasis has focused on the market orientation of large businesses. Research on market orientation in SMEs has been scarce. Hence, this paper contributes to the extant literature by changing the research direction and studying market orientation in SME context. In addition, this paper provides SME managers with a more understandable guide to specific market‐oriented activities.