The Degree of Marketing and Entrepreneurial Orientations in Spinoff and Non-Spinoff Organizations

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ABSTRACT

The present study utilizes psychometrically sound organizational orientation scales to test if "spinoff" organizations exhibit a higher degree of either marketing orientation or entrepreneurial orientation than non-spinoff organizations. The results of this empirical study indicated that there was not a significant difference in the level of marketing orientation between spinoff firms and non-spinoff organizations. In addition, the results indicated that there was no significant difference in the level of entrepreneurial orientation between spinoff firms and non-spinoff organizations. These findings fail to support the literature that suggests that spinoffs may utilize either a marketing and/or entrepreneurial orientation as a strategic response to a more hostile environment.

INTRODUCTION

The business orientations of interest in the present study are the marketing orientation and the entrepreneurial orientation. Marketing orientation is conceptually defined by McCarthy and Perreault (1984) as the adoption of the marketing concept by an organization. Entrepreneurial orientation refers to "the propensity of a company's top management to take calculated risks, to be innovative, and to demonstrate proactiveness" (Morris & Paul, 1987).

PURPOSE OF THE STUDY

The relationship between a firm's propensity toward a marketing orientation and its propensity toward an entrepreneurial orientation has been studied in traditional organizations (Murray, 1981; Webster, 1981; Zeithaml & Zeithaml, 1984; Hills, 1987; Morris & Paul, 1987). The purpose of this study was to investigate the differences between "spinoff" and "non-spinoff" organizations with respect to their relative degrees of marketing orientation and entrepreneurial orientation. Timmons, Smollen, and Dingee (1985) suggest that new ventures, such as might be typified by a spinoff venture from an existing organization, often face a more uncertain environment than existing organizations.

This is important in studying spinoff ventures because numerous researchers have proposed a link between environmental turbulence and firms' tendency to adopt either a marketing or entrepreneurial orientation (Foxall, 1984; Ginsberg, 1985; Morris & Paul, 1987; Covin & Slevin, 1989). Zeithaml and Zeithaml (1984) suggest that an entrepreneurial orientation may assist a firm in dealing with both its macroenvironment and its task environment. Morris and Paul (1987) argue that both the marketing and the entrepreneurial orientations can be strategic responses by management to increasing levels of environmental uncertainty. Smith, Arnold, and Bizzell (1988) suggest that organizations now face "increasingly turbulent, complex, threatening environments."

Because environmental change is accelerated for spinoff organizations, it is suggested that this creates a need for such organizations to adopt strategies designed to cope with uncertain macroenvironments. This implies that spinoff ventures may have a higher level of either entrepreneurial orientation or marketing orientation than similar non-spinoff organizations as correlates of a potentially more uncertain macroenvironment. The specific objective of the present study was to empirically determine whether spinoff organizations exhibit a greater degree of either marketing orientation or entrepreneurial orientation than non-spinoff firms.

SPINOFF VS. NON-SPINOFF ORGANIZATIONS

There is no consensus as to the exact definition of a spinoff. However there is general agreement that "spinoffs" are new and independent ventures that are in some significant way related to a previous or existing organization (Danilov, 1969; Bruno & Tyebjee, 1982). Danilov (1969) implies that spinoffs are typically technology- or product-based firms.

Spinoff organizations for the purpose of the present study are looked on as new ventures started by former employees of another organization that utilized the same or a related technology, products, or customer base, regardless of whether it has or has not spawned other firms. …