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Thursday, February 21, 2019

A Review of the Literature Essay

Introduction Beca consumption the focus on grocery store druthers has steadily increased over the last decade, academicians and marting managers overhear begun to debate the authorization of food commercialiseplace preference as a meshwork enhancing outline. Researchers and merchandiseing managers be proveing to measure the benefits and costs associated with the death penalty of commercialise preference. For look fores and managers, the lynchpin heads that surround mart preference be whether or non it increases proceeding, and if so, in which circumstances should securities industry predilection be implemented.In order for food market penchant to call on a cornerst iodin of personal credit line practices in years to come, these questions essential be responseed. This review will focus on three holds which address these primaeval questions mart penchant and Comp either Performance Empirical Evidence from UK Companies by Greenley, G (1995), marketpla ce Orientation Antecedents and Consequences, by Jaworski and Kohli (1993) and The Effect of a Market Orientation on Business hitableness by Narver and woodlouse (1990). succinct of The Effect of a Market Orientation on Business Profitability by Narver & slater (1990) In The Effect of a Market Orientation on Business Profitability (1990), Narver and slater address the lack of experiential evidence surrounding the effectiveness of market druthers. They begin the article by stating market predilection is the actually heart of modern selling direction and strategy ? yet to date, no star has developed a legal measure of it or assessed its influence on melodic phrase performance?as a result, business practitioners confirm had no specific counseling as to what precisely a market predilection is and what its actual effect on business performance may be. Their analyse strives to develop a binding measure of market orientation and its effect on the profitability of the loya l. Narver and slaters playing argona is material bodyed to test the hypothesis that thither is a strong correlation betwixt market orientation and profit levels for twain commodity and non-commodity businesses.Narver and slaterhypothesize that market orientation is a one dimensional construct consisting of three behavioral components customer orientation, competitor orientation and inter-functional coordination. Additionally, they hypothesize that on that point argon two decision criteria a foresightful term focus and a profit objective. Based on these criteria, Narver and woodlouse developed a questionnaire which was given to a sample group of one hundred forty strategic business units in the same division of a major(ip)(ip) Western corporation.They then employ statistical depth psychology to try to tick the correlation between the adoption of market orientation and the increase in profit and general performance. In order to obtain accurate results, the researchers es s eparate to limit the influence of the otherwise forces that touch a businesss profit margin by doing this, they were able to isolate two call variables and find the kin between them.Based on their selective information and analysis, Narver and woodlouse concluded that there is a monotonic relationship between profit and market orientation for the non-commodity business, whereas the relationship with commodity business was only observable above the state median in market orientation. Narver and Slater likewise concluded that market orientation is economical in all environments, and the question was decision the optimal level of market orientation. survey of The Effect of a Market Orientation on Business Profitability by Narver & Slater (1990).Narver and Slaters admit is one of the first major semi a posteriori studies on the subject of market orientation and its impact on the trustworthys profit. This ground-breaking conceive offers semiempirical validation to theories t hat were unproven prior to the probe. However, found on the results of Narver and Slaters study, there are still m whatsoever questions that remain un rooted. I found that the most signifi elicitt problem with the study is that their sample was taken from a single corporation, meaning that the data they use was limited to only one industry and one region.As Narver and Slater noted in their conclusion, a sample this limited means that their results can be influenced and skewed by many variables, including corporate culture and regional practices. It is also possible that their purposes are industry-specific and do not pertain to other companies external of foresting. However, in the articles conclusion, Narver and Slater acknowledge these shortcomings and are eager for others in various regionsto conduct further research in this field. Although the limited nature of the study makes it difficult to draw any round scale conclusions about the effectiveness of market orientation, Narver and Slater have created a effective model for an empirical study of market orientation which can now be applied to other industries and regions. The most interesting fall apart of the study is not necessarily the results, but the fact that they were able to design the first successful empirical study.Another problem with the study is that Narver and Slater concluded that an equilibrium existed the point at which the level of market orientation reaches a point at which its cost is equal to its benefit. At this point, any increase of market orientation would only be detrimental to the firms profit margin. Although the study states that the equilibrium is present, the authors offer no guidance on how marketing managers can identify this critical point. Further studies should be dedicated to answering this question in order to make market orientation a more effective strategy for businesses.Additionally, in the articles conclusion, Narver and Slater neglected to discuss a real ly key finding which surfaced in their data. Their study revealed that market orientation can have a detrimental effect on a companys overall performance when certain(p) market forces and internal conditions apply. In my opinion, this finding was largely ignored in the conclusion in order to authorize their original hypothesis that market orientation has a decreed impact on the performance of an organization.Although this finding was acknowledged in the article, I snarl the conclusion was somewhat misleading with regard to the outcome of the study in this respect. Summary of Market orientation Antecedents and consequences, by Jaworski and Kohli (1993) In Market orientation Antecedents and consequences (1993) Jaworski and Kohli set out to through empirical observation earn upon Narver & Slaters study. Jaworski and Kohli attempt to study the relationship between market orientation and its effect on numerous formulations of the firm.The authors lay out a series of 13 hypotheses wh ich they attempt to prove within their study. The four hypotheses that dealt directly with the key questions noted in the introduction of this review are A. The greater the market orientation of an organization, the blue its business performance. B. The greater the market orientation, the greater the (1) esprit de corps and (2) organizational shipment of employees. C. The greater the market turbulence, the stronger the relationship between market orientation and business performance. D. The greater the competitive intensity, the stronger the relationship between market orientation and business performance. The other nine hypotheses are related to the antecedents of market orientation, including managements role on market orientation and the impact the organizations structure and communication has on market orientation. Although these questions are classic, I am primarily interested in Jaworski and Kohlis conclusions on whether or not market orientation affects overall perform ance and profit/ cede on equity.Jaworski and Kohli set up two samples from which they derived their data. The first sample was made up of executives from 102 companies the second sample was made up of 230 executives taken from the membership peal of the American Marketing Association. The authors gathered data via a questionnaire that was sent to participants by mail. Based on the data reviewed, Jaworski and Kohli concluded that market orientation is an important determinant of overall performance regardless of factors such(prenominal) as market turbulence, competitive intensity or technological turbulence.However in two samples, the authors found little correlation between market orientation and crop on equity and market share. Jaworski and Kohli also found that the commitment of return management towards implementing market orientation is an important factor on the strategys overall performance, as are the levels of interdepartmental coordination and interdepartmental conflict . evaluate of Market orientation Antecedents and consequences, by Jaworski and Kohli (1993) Jaworski and Kohlis study measures the value that market orientation creates for a business.In their introduction, the authors state their intentions quite clearly The break up of this research is to address the voids in knowledge in the Narver and Slater study. (Jaworski &Kohli 1993) In this study, Jaworski and Kohli build upon and answer many of the questions left unanswered in Narver and Slater (1990). In my opinion, one of the most important aspects of Jaworski and Kohlis article is that they attempted to relieve their study in an accessible manner by including a ingredient that dealt with the implications of their findings for market managers.Unlike Narver and Slater, I felt that Jaworski and Kohli went to great lengths to try to answer the key questions that managers might have and attempted to lay exhaust guidelines that managers could use in the implementation of market orientat ion. Jaworski and Kohli also realized the importance of one of the findings Narver and Slater neglected in their conclusion that market orientation could be detrimental to a business in certain circumstances. Jaworski and Kohli explained the relationships between market orientation and certain environmental contexts including market turbulence and competitiveness.The aspect of the study that I found most interesting was Jaworski and Kohlis discovery that there is neither an association between market orientation and return on equity nor a relationship between market orientation and market share. Although the two authors still concluded that market orientation was beneficial for overall performance, the finding that it does not help return on equity is very significant. Return on equity, for many firms, is the guiding factor in the decision-making process, curiously for private equity groups and investment banking firms.Having worked for a private equity firm, where return on equity is the principal goal, I can confidently say these findings are a huge b humble to the advocacy of market orientation. However, I would not feel comfortable ruling out market orientation based on one study further research must be done on this pass awayic. Additionally, I found one aspect of Jaworski and Kohlis conclusion problematic the authors concluded that market orientation had a direct relationship with overall performance, organizational commitment and esprit de corps, yet they stated that it did not influence return on equity and market share.This finding seems to be contradictory to common business beliefs, which would suggest that if market orientation had a positive impact on commitment, overall performance and esprit de corps, it would indeed have an impact on profit or return on equity. This finding is either misleading or it indicates that common beliefs regarding performance and employee pauperization are incorrect.Summary of Market orientation and company perform ance empirical evidence from UK companies by Greenley, G (1995) In the article Market orientation and company performance empirical evidence from UK companies Greenley identifies a clear expect for anempirical study in the get together Kingdom. As of 1995, no major empirical research had taken place anywhere but the unite States.Greenley created his study based upon this research gap. His basic hypothesis, that market orientation is positively associated with performance, is taken from the aforementioned studies by Narver and Slater (1990) and Jaworski and Kohli (1993). Greenley also tested superfluous hypotheses from Narver and Slaters 1990 study. The hypotheses Greenley tested dealt with the relationship between market orientation and cost, size of the company, market entry, customer power and competitive hostility in the market.Additionally, he tested hypotheses pertaining to market growth, turbulence and technological change. To obtain his data, Greenley used a slightly alte red version of Narver and Slaters 1990 questionnaire, alter for UK business culture. The questionnaires were sent to 280 top level managers, mainly CEOs. Of those 280 questionnaires, he receive 240 usable responses, which made up the data for his study. Based on the analysis he conducted, Greenley concluded that market orientation does not have a direct affect on performance. (Greenley 1995) He also concluded that with high levels of market turbulence, market orientation is negatively associated with return on equity, whereas with low levels of market turbulence, market orientation is positively associated with return on equity. Critique of Market orientation and company performance empirical evidence from UK companies by Greenley, G (1995) Greenleys study is the first major empirical study of market orientation in the UK, and quite surprisingly, his results were very different than the front findings of studies conducted in the United States.Any reader of Greenleys study Market orientation and company performance must immediately question whether or not business culture and practices in the UK are so different from their United States counterparts that one strategy empirically proven to work in the United States will be rendered ineffective in the UK. If Greenleys results are accurate, multinational corporations using a centralized control method would have to rethink using market orientation. This, however, does not seem to be the case. observe and Gamble (P&G) appear to successfully implement global strategies, including marketorientation, profitably. Therefore, I propose that Greenleys inability to find a positive relationship between market orientation and performance is a result of a problem in his data collection process. As Greenley stated in his conclusion, his data was gathered during a recession, and therefore a managers thoughts on a long-term profit schemes such as market orientation might have been skewed. Also, Greenley obtained nearly 60 pe rcent of his data from top level CEOs and Chairmen, a different sampling base than foregoing studies in the United States.For instance, Narver and Slater used CPUs and Jaworski and Kohli primarily used market managers for their samples. The difference in sample bases significantly impacts the results of Greenleys study typically, CEOs and top management, like those that Greenley questioned, are not as involved in the everyday implementation of market orientation and tend to be short-term profit orient. Managers lower on the organizations hierarchy, such as marketing managers, might have a more direct involvement with the implementation of market orientation.For future research, I think it would be more wise to take a broader sample of managers at all levels, thereby eliminating any bias that can occur when only sampling a certain section of the managerial hierarchy. Another problem that I found in Greenleys conclusion was the fact that he did not make the single(a) participants aware of the studys purpose. Although he intended for this to be a tool for gathering accurate and unbiased data from participants, I weigh this strategy actually had the opposite effect, given the timing of his article.During a recession, CEOs and Chairmen are attempting to regain short term profitability and/or attempting to scale down costs in order to survive until the recession ends. At such a time, market orientation would not be a workable option and it is unlikely that the top management Greenley questioned would consider it a useful strategy. Therefore, the data collected by Greenley during this period would have little or no relevance for the measurement of the effectiveness of market orientation outside of a recession.ConclusionAll three of the articles discussed deal with the task of empirically studying the relationship between market orientation and its effects on businesses. Narver and Slater produced the first major study in this field and their research became a s ignificant starting point for future studies. Narver and Slaters article stated that they found a direct relationship between marketing orientation and performance however, the study also brought to light many holes in their research and aspects of this relationship which needed further study.Jaworski and Kohlis 1993 study attempted to answer some of the key questions that arose from Narver and Slaters article. The questions Jaworski and Kohli turn to included why some organizations are more market oriented then others and whether or not the linkage between market orientation and business performance depend on the environmental context. The Greenley study in 1995 was the first major study done outside the United States. Greenley followed Narver and Slaters model in his attempt to empirically study market orientation in the United Kingdom.While his methods were the same, Greenleys research produced very different results than that of Narver and Slater, and only agreed with some of J aworski and Kohlis conclusions. In my opinion, Greenleys research only added to the confusion that surrounds the study of market orientation the differences in his results can be attributed to many factors, including gaps in previous research, differences between the United States and the UK, or differences in the economy at the time of the studies.The ambiguous results of this study confirm the need for more research in order to answer the key question of market orientations relationship with performance and profit. Therefore, after reading and critically reviewing the above articles, my conclusion is that further empirical research must be done in order for there to be any confidence in the use of market orientation as a performance-enhancing strategy.A multi-national study or the study of two-fold multinational companies would provide valuable insight into whether market orientation is exclusively suited to companies operating in the United States or if its implementation in di fferent countries can also be profitable. Further research must also be done in order to affirm or refute Jaworski and Kohlis claim that market orientation has no positive relationship with market share and return on equity.I take that if Jaworski and Kohlis claim is true, managers, especially those operating publically traded companies, will needs need to rethink the use of market orientation within their corporations. be given of References Greenley, G. (1995). Market orientation and company performance empirical evidence from UK companies. British Journal of Management, 61-13. Jaworski, B. and Kohli, A. (1993). Market orientation antecedents and consequences. Journal of Marketing, 57(July) 53-70. Narver, J. and Slater, S. (1990). The effect of a market orientation on business profitability. Journal of Marketing 54(October) 20-35.

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