Academic journal article Journal of Business Economics and Management

Responsive and Proactive Market Orientation and Innovation Success under Market and Technological Turbulence

Academic journal article Journal of Business Economics and Management

Responsive and Proactive Market Orientation and Innovation Success under Market and Technological Turbulence

Article excerpt

1. Introduction

Recent market orientation literature has stressed the importance of distinguishing between two complementary forms of market orientation: responsive and proactive. Grinstein (2008) calls for more studies that would distinguish between these constructs, their antecedents, and consequences. For Atuahene-Gima et al. (2005) and Tsai et al. (2008), responsive and proactive market orientations are important determinants of new product performance. Through developing a market orientation, organizations can build up an edge over competitors in innovation and enhance innovation consequences in the competitive environments in which they operate (Grinstein 2008). This said, the question then becomes "Do both responsive and proactive market orientations enhance innovation consequences?"

The key research issues of this study are the relationships between market orientation, innovation success, and market success, with a distinction made between the responsive or proactive form of market orientation. In examining these issues, this study aims to scan how adopting a proactive or responsive market orientation influences innovation success when both the market and technology are turbulent/changing. Extensive literature has already examined how market orientation influences the market success of the organization. However, the impact of market orientation on innovation has received much less research attention (see Han et al. 1998; Kirca et al. 2005). Knowledge about the relationship between market orientation and innovation remains fragmented and uncompleted (Lukas, Ferrell 2000). To date, few empirical studies (Narver et al. 2004; Atuahene-Gima et al. 2005; Tsai et al. 2008) have examined the impact of responsive and proactive market orientation on new product success. None of these studies has examined the entire chain of relationships between market orientation, innovation and market success and the moderating effect of market changes in the market orientation-innovation success relationship. While Tsai et al. (2008) examined the contingent effects of the technological change on the relationship between responsive and proactive market orientations and new product success; they only obtained results from a high-tech sector. The reality is that the majority of organizations are not necessarily in the high-tech sector. To fill this research gap, our study addresses the relationship between market orientation, innovation success, and market success under the moderating effect of market and technological turbulence in a cross-sector sample. Included are organizations from diverse, high-tech and non-high-tech sectors and industries. The study is based on subjective data, i.e. managers' perceptions of constructs under review.

2. Theoretical background

2.1. Market orientation and innovation success

According to Narver et al. (2004), a responsive market orientation refers to discovering, understanding, and satisfying expressed customer needs. In contrast, a proactive market orientation refers to discovering, understanding, and satisfying latent customer needs. Although the two most frequently mentioned definitions of market orientation from the early 1990s refer to the importance of understanding present and future target customers (Narver, Slater 1990) and gathering information about present and future customer needs (Kohli, Jaworski 1990), past measures of market orientation were focused predominantly on the responsive market orientation (Narver et al. 2004). Similarly, Jaworski et al. (2000) claimed that market orientation is often interpreted too narrowly as adopting the offer to the current customer preferences and/or market structure (i.e., market-driven) compared to proactively shaping customers and/or the market to enhance a company's competitive position (i.e., market driving). While responsive market orientation is generally regarded as being market-driven, proactive market orientation is more compatible with the concept of market driving (Mohr, Sarin 2009). …

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