tajeddini trueman larsen examining the effect of market orientation on innovativess

Journal of Marketing Management, 2006, 22,529-551

Kayhan Tajeddini^Myfanwy Trueman^and Gretchen Larsen^

School of Management,University of Bradford

Examining the Effect of MarketOrientation On Innovativeness

For the past decade innovativeness, asopposed to innovation, has receivedconsiderable attention in the academicliterature as well as the corporate arenabecause it is considered to promote acompetitive advantage. This study examinesthe link between innovativeness andperformance of SMEs in the Swiss watchindustry, in terms of customer orientation,competition orientation and inter-functionalcoordination. It uses performance measuressuch as market share, percentage of newproduct sales to total sales and return oninvestment (ROI), and has developed a newresearch scale of innovativeness. The resultsshow that customer orientation has a positiveeffect on performance as well as the level ofinnovativeness in each company. There arealso strategic implications for CEOs andmanagers as far as the methodologicallimitations and future research directions areconcerned.

Keywords: innovativeness, customer, competitor and market orientation,interfunctional coordination, company performance

Introduction

There is a growing recognition in strategic management and marketingliterature that one of the avenues to gain a competitive advantage isinnovativeness (Nieto and Quevedo 2005; Olson, Slater and Hult 2005; Hult,

1 Correspondence: Kayhan Tajeddini (PhD Student), University of Bradford, School ofManagement, Emm Lane, Bradford, BD9 4JL, UK, Telephone: ++44 (0) 1274 23 5632,e-mail: [email protected] Dr Myfanwy Trueman, Lecturer in Marketing, University of Bradford, School ofManagement, UK3 Dr Gretchen Larsen, Lecturer in Marketing, University of Bradford, School ofManagement, UK

ISSN0267-257X/2006/5-6/00529 + 22 ©Westburn Publishers Ltd.

530 Kayhan Tajeddini, Myfanwy Trueman and Gretchen Larsen

Snow and Kandemir 2003: Martins and Terblanche 2003; Sandvik andSandvik 2003; Salaman and Storey 2002; Edwards, Kumar and Ranjan 2002;Deshpande, Farley and Webster 1993; Hurley and Hult 1998; demons andRow 1991). In this regard, Hult, Hurley and Knight (2004) state that one ofthe key components for the success of industrial flrms is the extent of theirinnovativeness. Researchers in marketing suggest that innovativeness is"possession of newness," (Roehrich 2004), or the degree of newness of aproduct (Freel 2005; Daneels and IGeinschmidt 2001; Michalisin 2001; Cooperand Kleinschmidt 1990, 1993; Gatignon and Xuereb 1997; Capon, Farley,Hulbert and Lehmann 2992). Moreover, innovativeness can be also viewedfrom a cultural perspective (Hult et al. 2003, 2004; Calantone, Garcia andDroge 2003; Hurley and Hult 1998; Hurley 1995; Deshpande et al. 1993). But,in this study, the word "innovativeness" is used solely with reference toorganisational innovativeness that contributes to organisational theory andstrategic management.

A large number of studies have examined innovativeness as anindependent variable since it can make a critical contribution to businessperformance and company survival (Deshpande et al. 1993; Deshpande andFarley 1999, 2002, 2004; Appiah-Adu and Singh 1998). But despite numerousstudies about factors that give rise to innovativeness in the firm, there is stillno consensus about how this can be harnessed to maximise performance(Abratt and Lombard 1993; Henard and Szymanski 2001). In addition, whilethe concept of innovation is widely dealt with in research, the definition of"innovativeness" is rarely discussed and there are many interpretations andapproaches, leading to ambiguity and confusion in practice. Emsley (2005)believes that when examining the concept of innovativeness, it becomesproblematic because it is concerned with the full range of innovationsdeveloped, each of which can be at a different point on the continuum frominitial idea to full implementation.

Furthermore, marketing has been interested in innovation for some time.In one of his most-cited passages, Drucker (1954:37) links innovativeness andmarket orientation, stating that "there is only one valid definition of businesspurpose: to create a customer.. .It is the customer who determines what the businessis... Because it is its purpose to create a customer ... any business enterprise hastwo-and only two- basic functions: marketing and innovation". Innovation isgenerally regarded as an important research topic because innovations arebelieved to enable organisations to successfully adapt to, and survive,volatile business environments (Rogers 1995). Subramanian and Nilakanta(1996:632) note "the adoption of innovations galvanizes an organization andleads to better organizational performance". However, there are somereasons why it is important to study innovativeness (as opposed to a singleinnovation). First, innovativeness gives a more complete reflection of the

Effect of Market Orientation on Innovativeness 531

number of innovations adopted in a given time period (Damanpour 1991).Second, a single innovative project ignores the fact that organisations adoptmany innovations in a given time period (Damanpour 1991). Third, when thenumber of innovations studied increases, the influence of explanatoryvariables relevant to any single innovation decreases, enablinggeneralisations to be more easily made (Emsley 2005; Damanpour 1991).Fourth, innovativeness embraces a range of innovations that then enablesthem to be categorised (Emsley 2005).

On the other hand, researchers studying innovation have mainly focusedon sfructural properties (e.g., size, cenfralisation, specialisation etc.). Thosethat have gone beyond structural properties have tended to examine therelationship between innovation and climate (e.g., Hossini, Azar and Anvari2003; Abbey and Dickson 1983), or innovation and leadership (e.g., Scott andBruce 1994). Research on culture and innovation has been conducted in termsof counfry (e.g., Mansfleld 1988), corporate strategic behaviour (e.g., Zhou,Gao, Yang and Zhou 2005) and at group cultural level (e.g.. Hurley 1995;Hurley et al. 2003; Capon et al. 1992). However, Hult et al. (2004) believe thatlitfle is known about the drivers of innovativeness and how those driversoperate collectively to influence performance. Hurley and Hult (1998)recommend that the relationship between organisational innovation andmarket orientation should be examined in more depth. Hult et al. (2004)suggest that future research should delve more deeply into these constructsand their interrelationships in a variety of settings among industrial firms.More recently, Woodside (2005) observes a muddling of deflnitions ofinnovativeness. He adds that research methods that go beyond structuralequation modelling, and permit formal consideration of both antecedentsand consequences of innovativeness as well as business performance, areworthy of more attention than is generally found in the industrial marketingliterature (Woodside 2005). In addition, until now, there have been fewempirical studies of the relationships between market orientation,innovativeness and business performance. Consequently, this research takesa fresh approach using the Swiss watch industry as a test bed to examine thedivergent theories of market orientation and its components that serve asantecedents to, and dynamics of innovativeness. Specifically, in this study,we address two research questions:

1. What is the effect of market orientation (i.e., customer orientation,competition orientation and interfunctional coordination) oninnovativeness?

2. What effect does innovativeness have on business performance?


Theoretical Foundations

Innovativeness DefinedBut what is the extent of innovativeness in industrial companies if this is a

key component in successful performance? The relationship betweenirmovativeness and positive performance, survival and growth has drawninterdisciplinary attention (Deshpande and Farley 1999, 2004; Capon et al.1992). For instance, many economists have noted that organisationinnovativeness is important for aggregate economic growth and performanceover time (e.g., Mansfield, Rapaport, Schnee, Wagner, and Hamburger 1971;Schumpeter 1934). Similarly, innovativeness is seen as a lever to raise livingstandards and improve international competitiveness (Ozgelik and Taymaz2004).

Deshpande and Farley (1999, 2000) state a firm must be innovative to gaina competitive advantage in order to survive and grow. They found that, for arepresentative sample of Shanghai firms competing in business-to-businessmarkets, success was related to innovativeness, a high level of marketorientation, and outward-oriented organisational cultures and climates(Deshpande and Farley 2002). According to Auh and Menguc (2005),organisational culture captures the spirit of innovativeness. However, thereis no real consensus on the meaning of innovativeness, because it is a multi-dimensional, composite variable made up of perceptual measures such as'radicalness', and 'relative advantage', or operational measures like 'numberof innovations adopted' (Roehrich 2004, Nystrom, Ramamurthya and Wilson2002).

The concept of irmovativeness depends on the standpoint the researchtakes. Some authors define it as the uniqueness or novelty of the product(Ali, Krapfel and LaBahn 1995); or whether individuals are early adopters ofinnovation (Rogers 1995). It may be the adoption of an idea or behaviour thatis new to the organisation (Daft 1978), or an orgarusational culture thatencourages the introduction of new processes, products, and ideas (Hurleyand Hult 1998; Hult et al. 2003, 2004). Olson, Slater and Hult deflne aninnovation orientation where:

"the business is not only open to, but seeks out new ideas in both its technical andadministrative domains. It encourages risk taking and enhances the likelihood ofdeveloping radically new products. However, businesses must be aware of thepossibility that an innovation orientation may not allow for the follow-throughthat is necessary to fully reap the benefits of earlier innovations"

(Olson et al. 2005:51).

In other words although innovativeness presents opportunities it is also


associated with risk. But for the purposes of this research, "innovativeness"is seen as the organisation's cultural orientation (values and beliefs) towardsinnovation. It incorporates the approach of Calantone et al. (2003) whoobserve that innovativeness is the receptivity of new ideas, and an integralpart of a firm's culture, as well as a measure of an organisation's ability tomake changes as it goes along. McDonald (2002) defines innovativeness asthe willingness and ability to adopt new technologies, processes and ideasand offer new, unique products and services before most competitors.Building on the work of McDonald, the following complementary definitionof innovativeness is proposed by this research:

"The willingness and ability to adopt, imitate or implement new technologies,processes, and ideas and commercialize them in order to offer new, uniqueproducts and services before most competitors. This willingness is based on afirm's culture in terms of values and beliefs in the organization."

This definition is consistent with Damanpour (1991) and Gopalakrishnan andDamanpour (2000) who see innovativeness as synonymous with the numberof innovations, of any type, adopted by an organisation within a givenperiod. It is also similar to Hurley and Hult (1998), and Hult et al. (20032004), who view innovativeness as being a cultural precursor, providing thesocial capital to facilitate innovative behaviour for the 'learning organisation',which is cenfral to understanding creativity and adaptability. In fact, key tosuccessful innovativeness is the willingness or 'orientation' of corporateculture that this research examines in more detail from a marketing,customer, competitor and inter-functional perspective.

Market Orientation

Organisations who embrace the concept of a market orientation believe itwill encourage appropriate behaviour for the creation of superior customervalue and thus superior business performance (Narver and Slater 1990).Market orientation is considered as the central element of managementphilosophy based on marketing concept (Deshpande and Farley 1999) andfor this research incorporates a customer and competitor focus. In fact,previous literature provides a multitude of definitions and descriptions ofthe marketing concept, which has been a cornerstone of the marketingdiscipline since Drucker argued that "there is only one valid definition ofbusiness purpose: to create a customer", and described marketing as "the wholebusiness seen from the point of view of its final result, that is, from the customer'spoint of view" (Drucker 1954:39). This concept and the need for a marketorientation have been important components of marketing academe and


practice for several decades (Noble, Sinha and Kumar 2002; Lafferty and Hult2001; Han, Kim and Sirvastava 1998; Day 1992, 1994a; Slater and Narver1994; Deshpande et al. 1993; Jaworski and Kohli 1993; Kohli, Jaworski andKumar 1993; Narver and Slater 1990; Shapiro 1988). A company is 'marketoriented' if information on all important customers and buying influencespermeates every corporate function, so that strategic and tactical decisionsare made interfunctionally and interdivisionally, and these well-coordinateddecisions are executed with a sense of commitment (Shapiro 1988).

Narver and Slater (1990:21) provide a cultural perspective and definemarket orientation as "the organisation culture that most effectively and efficientlycreates the necessary behaviors for the creation of superior value for buyers and, thus,continuous superior performance for the business". They identify threebehavioural components: (1) Customer orientation, which involvesunderstanding target buyers now and over time in order to create superiorvalue for them (customers); (2) Competitor orientation, which includesacquiring information on existing and potential competitors, such as theirshort-term strengths and weaknesses and long term capabilities; and (3)Inter-functional coordination, which is the coordinated utilisation of company'sresources to create superior value for target customers. Continuousinnovation is implicit in each of these components (Narver and Slater 1999).

In an attempt to improve existing measures of market orientation, Dengand Dart (1994) add profit orientation to this list. In addition. Porter (19801985) argues that there are two basic sources of competitive advantage, firstlyin differentiation that derives from customer, competitor, or innovation-oriented behaviors, and secondly a cost advantage based on the internalorientation or culture of organisations. From a strategic perspective, Olson etal (2005) see four behaviors in 'customer, competitor, innovation, andinternal/cost-orientations' that can lead to a position of competitiveadvantage, if they are engaged simultcineously.

Finally, Kohli and Jaworski (1990) take a behavioural perspective onmarket orientation, using market intelligence rather than customer focus asthe central element because it is a much wider concept: "It includesconsideration of exogenous market factors that affect customer needs and preferencesand current as well as future needs of customers" (Kohli and Jaworski 1990: 3).They suggest the three core themes of customer focus, coordinatedmarketing, and profitability. Their configuration is consistent with Narverand Slater's (1990) conceptualisation of a unidimensional construct withthree behavioural components. In fact, most authors either adopt thedefinition of Kohli and Jaworski (1990) or that of Narver and Slater (1990).This research adopts the latter because it is more relevant to the focus of thisstudy.


Customer Orientation

Customer orientation is a set of beliefs that puts the customer's interest first,while not excluding other stakeholders such as owners, managers, andemployees, in order to develop a long-term profitable enterprise (Deshpandeet al. 1993: 27). Numerous authors have investigated the customer orientationpillar of marketing (Baker and Sinkula 1999; Slater and Narver 1994; Siguaw,Brown and Widing 1994; Jaworski and Kohli 1993; Deshpande et al. 1993;Saxe and Weitz 1982). According to Narver and Slater (1990), customerorientation requires a sufficient understanding to create products or servicesof superior value. Deshpande et al (1993) foimd that customer orientationimproves performance and Gronroos (1982) considered that serviceindustries need to market this orientation to employees if they are toreinforce the quality of the flrm and its services. Slater and Narver (1995)define customer orientation as a culture, which (1) accentuates the creation ofcustomer value as the overriding organisational goal, and (2) provides normsfor organisational development and consensus.

Others claim that to be successful, orgarusations that are market-orientedshould match customer needs with company competencies. "Understandingwhat customers want and do not want, can result in greater efficiency, reduce wastein management in manufacturing, and enhance competitive advantages" (Change,Polsa and Chen 2003: 133). Day and Nedungadi (1994) suggest that marketorientation represents superior skills in understanding and satisfyingcustomers, as well as understanding competitors, and observes that marketdriven firms that balance these two orientations achieve better performance.In a qualitative study, Olson et al. (2005) note that Dell has a philosophy ofcustomer-orientation. Their CEO stated that: "We have a relentless focus on ourcustomers. There are no superfluous activities here. Once we learn directly from ourcustomers what they need, we work closely with partners and vendors to build andship relevant technologies at a low cost".

Competition Orientation

Narver and Slater (1990) believe that competition orientation meansunderstanding the strengths, weaknesses, capabilities and strategies ofcompetitors, whereas Lafferty and Hult (2001) consider that competitororientation is similar to customer orientation in terms of informationgathering. Both require a thorough analysis of technological capabilities andcompetences to satisfy the same market. Zahra (1993: 324) states, "Whenrivalry is fierce, companies must innovate in both products and processes, explorenew markets, find novel ways to compete, and examine how they will differentiatethemselves from competitors". With respect to successful performance variables.Baker and Sinkula (1999) argue that new product development can respond


to markets (by reacting to customer needs and competitor offerings), ordevelop a learning orientation environment (through innovative disruptionsof the status quo, that is, "thinking outside the box"). Consequently, they donot expect strong synergy between orientations for this variable and as suchnone is proposed here. From another perspective, Olsen et all (2005: 51) findthat to "beat the competition", companies should target, prioritise and makein-depth assessments of their competitors, focusing on their goals, strategies,products, resources, capabilities, and information management policies. Tocompete, they should be able to match, if not exceed, competitorperformance. However, this orientation does have an element of risk if it isnot linked with innovativeness:

"A competitor orientation carries with it a certain amount of risk, includinghampering creativity because of the energy required for monitoring competitors,distracting managers' attention from customer need satisfaction, or failure toseize opportunities."

(Olsen et al. 2005: 51)

Inter-Functional Coordination

Inter-functional coordination is the third behavioural component of marketorientation cited by Narver and Slater (1990). They define this as 'thecoordinated utilisation of company resources in creating superior value for itscustomers'. Whereas Wooldridge and Minsky (2002:29) see "thesynchronization of personnel and other resources throughout the company to createvalue for buyers and may be of primary importance to a firm developing asustainable competitive advantage." Similarly, Lafferty and Hult (2001) concludethat anyone in the organisation can potentially create value for the buyer,and this coordinated integration of business resources is closely linked tocustomer and competitor orientation. All draw on the coordinated use ofcompany resources and the dissemination of information throughout theorganisation (Lafferty and Hult 2001). This is achieved when a firmeffectively uses all company resources to create superior value for targetcustomers (Wooldridge and Minsky 2002). In fact all departments shouldcooperate and be sensitive to each others needs if they are to encourage aninnovative culture.

Swiss Watch Industry

In an attempt to accommodate the many environmental variables that mightinfluence innovativeness and market orientation in SMEs, this researchinvestigates the Swiss watch industry for the following reasons. Firstly, thewatch industry is one of the "strategic pillars" identified by Swiss scholars


that improves manufacturing performance in the country, and like mostindustries, it faces substantial environmental turbulence from an increasedinternational competition. Secondly, Swiss watch companies, for a long time,saw innovative changes as a core activity for growth, rather than focusing oneconomics alone (Kim and Mauborgne 1997). Thirdly, some companies werelosing, not because of low-cost Asian imports or high-cost labour inSwitzerland, but were failing because, while the Asians had beenconcenfrating on the future, the Swiss had been defending the present (Kimand Mauborgne 1997). Their focus was on the traditional art of watchmaking based on skill-intensive mechanical movements. However, whensome companies such as Swatch reoriented the indusfry towards the futureand introduced the highly innovative, low-priced, high-quality quartz watch(the Swatch), the Swiss once again achieved world leadership. Fourthly, thisSwiss indusfry reflects Europe's historical sfrength in innovation (Kim andMauborgne 1997).

This research incorporates the "ups and downs" of Swiss watch indusfryexport performance (Barrett 2000), bearing in mind that exports in 2004 set anew record (for the first time topping $9.2 billion). This is a 9.2 per cent gainover 2003 figures (Shuster 2005). Some scholars claim the recent success ofthe Swiss watch industry is rooted in its innovativeness (Royston 2004;Barrett 2000; Shuster 2005), while some others emphasise on the history anddecline of Swiss watch manufacturing. The latter group argue that thisindustry failed to anticipate major changes and the need to innovate (e.g.,KandampuUy and Duddy 1999; UUmann 1991). The total population of Swisswatch manufacturers is 768 which consider with an estimation of sharing toGNP ca. 0.8% in 2003 (Schefer 2004) and the majority of them are SMEs.Consequently, in order to examine the interrelationships between thesedifferent orientations in terms of their innovativeness we have developed anumber of hypotheses that can be tested on SMEs in the Swiss watchindustry, which has a long tradition in producing innovative, high qualityproducts:

HI: Higher levels of customer orientation are associated with higher levels ofinnovativeness.

H2: Higher levels of competition orientation are associated with higher levelsof innovativeness.

H3: Higher levels of interfunctional coordination are associated with higherlevels of innovativeness.

H4; Higher levels of innovativeness associated with higher levels of business


performance measured by: (a) market share; (b) percentage of new productsales to total sales; (c) ROI.

H5: Higher levels of market orientation are associated with higher levels ofinnovativeness.

Research Design

Data GenerationA self-administered questionnaire was mailed to marketing executives of

manufacturing and service firms in Switzerland. The questionnaire asked fortheir perceptions on a range of organisational variables including the natureof innovativeness, and their orientation towards customers and competitorsas well as their inter-functional approach and business performance. Thisinformation was collected using a five-point scale (1 = strongly disagree to 5= strongly agree) in response to statements about these variables. Therespondents were marketing executives or managers responsible for 650firms with between 5 and 200 employees. These were randomly selectedfrom a list based on information from the Swiss Federal Statistical Office ofSwiss companies.

The questionnaire was pre-tested using seven academics in order to insurethat the survey content and measurement scales were clear, valid andappropriate. Following some modifications, a second pre-test was carried outwith fifteen marketing executives, to make sure that all the questions wererelevant for those in the industry. Based on their response, some items weremodified and others eliminated. This practice follows that proposed by Hultand Ferrell (1997), to ensure the scales for all the constructs were clearlymarked and each item was critically evaluated and verified. Finally, a fewopen-ended questions were added to give "colour" to our data and lead therespondents to think analytically and critically. English was used for all thequestionnaires with the agreement of the majority of respondents.

To maximise response, incentives such as a personalised cover letter aswell as promise of feedback and confidentiality were used. The sample wasrepresentative of the industry as a whole, with industrial/consumer goodsbusinesses on the one hand and manufacturing/service firms on the other.Care was taken to consider employee size and armual sales turnover. In thefirst mail-out, of 250 responses, 238 were usable, resulting in a good responserate of 36.6 per cent.

MeasuresAll measures were drawn from previous research and aligned with the

conceptual aspects of each construct. Innovativeness was quantified using thefive-item scale frequently used by Hurley and Hult (1998), because of its


cultural perspective and incorporates management opinion about thereceptivity to new ideas and innovation. To measure market orientation, weuse the MKTOR scale of Narver and Slater (1990) because of its emphasis onbehavioural components of competitor orientation, customer orientation, andinter-functional coordination. This scale was found to be consistent withother market orientation scales developed by Deshpande and Farley (1998)and Han et al (1998). Business performance uses three perceptual measuresderived from Matsuno, Mentzer and Ozsomer (2002), namely (1) marketshare, (2) percentage of new product sales to total sales, and (3) ROI.Matsuno et al. (2002) argue that these measures relate to competitors becausemarket orientation results in a competitive (thus, relative) advantage. In factthey note that these subjective performance measures are used becauseobjective measures are virtually impossible to obtain at the business unitlevel, and subjective measures, used by previous authors, have been shownto correlate with objective measures (Jaworski and Kohli 1993; Narver andSlater 1990; Slater and Narver 1994).

ResultsOne of the main findings was that customer orientation represents the

most irifluential and proactive means of developing innovativeness.Furthermore, the hypotheses relating to customer and competitororientation, innovativeness and inter-functional coordination were positive.They were tested by using a statistical analysis of the parameters, and thesignificance of each construct was set against independent and dependentvariables (Table 1).

Reliability AnalysisThe reliability analysis uses Cronbach's coefficient alpha (Churchill 1979)

to represent the multi-dimensional constructs of innovativeness and marketorientation (in terms of customer and competitor as well as inter-functionalcoordination) and business performance. In Table 1, the overall coefficientalpha score for each construct suggests a high level of reliability since in eachcase the value is greater than the suggested cut-off level of 0.7 (Nunnally1978). The table also shows the alpha figures on removal of each item. Owingto the small differences between individual item scores and the scale alphafor each construct, the suggestion is that alpha will not be increased bydeleting any of the items. This sfrengthens the case for scale reliability.

InterpretationHere customer orientation is influenced by after sales service and using

customer satisfaction to drive business objectives, while competitionorientation depends on top management taking a strong interest in competitor


Table 1. Reliability Analysis for Multi-item Scales

Item-to- Alpha if

Item Reliability coefficients item item is(Cronbach's coefficient alpha) correlation deleted

Customer orientation (N of items=8) (a=0.9404)We give close attention to after-sales service. .8508 .9269Our business objectives are driven primarily by customer satisfaction. .8467 .9272We measure customer satisfaction systematically. .8252 .9297We constantly monitor our level of commitment to serving .8189 .9318customer's needs.Our competitive advantage is based on our understanding of .7973 .9333customer needs.Our strategies are driven by our beliefs about how we can create .7503 .9358greater value for customers.We frequently measure customer satisfaction. .7850 .9328

Competition orientation (N of items=5) (a=0.9225)Top management regularly discusses competitors' weakness. .9169 .8803We rapidly respond to competitive actions that threaten us. .8465 .8953We target customers where we have an opportunity for .7768 .9092competitive advantage.Top management regularly discusses competitors' strengths. .7727 .9100Our sales people regularly share information concerning .6846 .9361competitor's strategies.

Interfunctional Coordination (N of items=7) (a=0.9003)Our top managers from every function regularly visit our .7464 .8813current customers.Our top managers from every function regularly visit our .7258 .8834prospective customers.Our managers understand how employees can contribute to .7183 .8842value of customers.All of our business functions are responsive to each other's needs. .7174 .8846Information about our customers is freely communicated .7024 .8862throughout our organisation.All of our business functions are integrated in serving the needs .6848 .8881of our target marketsAll of our business developments are responsive to each other's .6598 .8916requests.

Innovativeness (N of items=5) (a=0.9207)Management actively seeks innovative ideas. .8067 .9021Innovation, based on research results, is readily accepted in .7920 .9038our organisation.Innovation is readily accepted by management. .7555 .9090People are penalised for new ideas that don't work. .7505 .9097Innovation in our organisation is encouraged. .7416 .9106

Cont'd...


Item-to- Alpha ifItem Reliability coefficients item item is

(Cronbach's coefficient alpha) correlation deletedPerformance (N of items=3) (a=0.8764)

Percentage of sales generated by new products last year relative .8104 .7814to major competitorsOur business unit's market share growth in our primary market .7600 .8268last year.Our business unit's return on investment (ROI) relative to .7168 .8663major competitors last year.

weaknesses as well as responding quickly if their actions pose a threat.Similarly, if these senior managers have a close relationship with current andprospective customers, this indicates a robust inter-functional coordination andif they actively seek and encourage innovative ideas based on researchresults, they will have an emphasis on innovativeness.

ValidityAssessment of the content validity of the scales was based on a qualitative

exercise. The two main characteristics were: the extent to which scale itemsdepicted the consfruct's domain; and, the thoroughness with which theconstruct to be scaled and its domain were articulated (Parasuraman,Zeithaml and Berry 1988). The procedures observed by the authors whoseconstructs were utilised in this study are congruous with therecommendations of Churchill (1979) for developing psychometric marketingscales. Moreover, for this research, face and content validity checks wereperformed on the market orientation measures to confirm that thedimensions would be understood by the sample and reflect the theme thatthe items were designed to capture. These checks were performed with SMEmanagers and academics with expertise in small business management.

Effects of Innovativeness on Performance Measures

The antecedents of innovativeness were examined in a multiple regressionanalysis. The regression results, for the purpose of model testing, use theparameters based upon independent variables shown in Table 2. Asexpected, 'customer orientation' (P = 0.32, t = 2.40, p < 0.05), 'competitionorientation' (P = 0.16, t = 4.86, p < 0.05) and 'inter-functional coordination' (P= 0.13, t = 2.06, p < 0.05) were significantly and positively related toirmovativeness (all at p < 0.05), supporting hypotheses HI, H2 and H3respectively (Table 2). Hypotheses 4a, 4b and 4c examined the impact ofinnovativeness on various performance indicators. These were tested byregressing each performance measure on innovativeness. In addition to theinnovativeness scale, the other three variables, (customer orientation.


competition orientation, and interfunctional coordination), were included asindependent variables in the regression analysis. The consequences ofinnovativeness were examined in a series of regression models (Jaworski andKohli 1993). Table 2 presents a summary of the results, details of which arediscussed in subsequent sections. Innovativeness has a significant (p < 0.05)and positive (0. 43) impact upon market share (P = 0.43, t = 3.20, p < 0.05),thus, hypothesis 4a is accepted. Hence, it appears that generally, businesseswhich have openness to new ideas, processes and products are able toincrease their market share. Hypothesis 4b is supported since innovativenesshas a significant (p < 0.05) and positive (0.31) effect upon percentage of newproduct sales to total sales (P = 0.31, t = 4.32, p < 0.05).This finding isconsistent with conventional wisdom which suggests that, generally,innovativeness is likely to lead to sales growth.

Innovativeness has a significant (p < 0.01) and positive (0.12) effect on theprofitability levels (ROI) (p = 0.12, t = 2.76, p < 0.01). Hence, hypothesis 4c isaccepted. This implies that, in spite of other possible influences on businessprofitability, firms with a higher degree of innovativeness are likely to bemore profitable. The capacity of a business to cultivate an appropriate culturerequired to develop better value and quality products relative to itscompetitors is vital for achieving and maintaining superior performance.Further, if innovativeness leads to retention/sales growth and repeatpurchases result in lower customer acquisition costs, the outcome should beimproved profitability (Appiah-Adu and Singh 1998).

Market orientation Market orientation has a significant (p < 0.05) andpositive (0.34) effect on innovativeness (P = 0.34, t = -4.32, p < 0.05). Also,regarding to the effect of innovativeness on performance, table 2 exhibits thatmarket orientation has positive effect on market share growth (P = 0.15, t=8.3, p < 0.05), sales growth (p = 0.29, t = -4.3, p < 0.01), and ROI (P = 0.15, t =5.1, p < 0.01).

Customer Orientation, Competition Orientation, InterfunctionalCoordination and Performance

The influence of customer orientation on market share (P = 0.11, t = 3.20, p< 0.01), percentage of new product sales to total sales (P = 0.34, t = 4.3, p <0.05), and ROI (P = 0.27, t = 5.2, p < 0.05) are significant and positive.Similarly the impact of competition orientation on market share (P = 0.19, t =4.3, p < 0.05), percentage of new product sales to total sales (P = 0.35, t = 3.9,p < 0.01), ROI (P = 0.21, t = 6.1, p < 0.01) are signiflcant and positive, but theinfluence of inter-functional coordination (IC) on market share andpercentage of new product sales to total sales were not significant, possiblybecause it was not possible to establish a clear link. However IC and ROI arepositively coordinated (P = 0.14, t = 5.9, p < 0.01). Overall, the regression


Table 2. Multiple Regressions of Innovativeness ;

IndependentVariables

InnovativenessCustomer OrientationCompetitionorientationInterfunctionalcoordinationMarket OrientationFR2Adjusted R̂

md Performance

Dependent variablesInnovativeness market

0.32*0.16*

0.13*

0.34*8.200.470.42

share

0.43*0.11**0.19*

n/s

0.15*6.780.410.36

percentage ofnew productsales to totalsales0.31*0.34*0.35**

n/s

0.29**7.600.390.34

ROI

0.12**0.27*0.21**

0.14*

0.18**6.100.310.27

Notes: *P<0.05; **P < 0.01; n/s not significant

analysis in Table 2 suggests that the effects of customer orientation andcompetition orientation are important for business performance.

Limitations and Further Research

As with any research project, there are limitations which should bediscussed. First, the study is limited to Swiss firms. Generalising the resultsto other industries and countries may not be appropriate. Second, all data arecollected in a cross-sectional manner, and therefore, all we can conclude isthat the role variables and their posited consequences are related at one pointin time. Three major priorities are proposed for future research. It would beuseful to replicate this study and repeat this model testing approach using acompletely new sample. Interesting comparisons could then be undertakenby using an identical model for a developing country, different industry andthen comparing the estimated structural parameters. Second, moreantecedent variables could be incorporated into the model and finally using alongitudinal study may help to identify the direction of causality betweenvariables.

Conclusions and Implications

The purpose of this research has been to investigate the extent to which


market orientation has a positive impact on innovativeness and businessperformance. The findings are consistent with prior research (e.g., Sandvikand Sandvik 2003), but provide a new insight by exploring marketorientation in terms of customer and competition orientation, as well as inter-functional coordination; and how these factors impact upon the culture ofinnovativeness in SMEs. This linkage is generally supported by the empiricaldata where a higher level of market orientation, particularly in terms ofcustomer orientation, is associated with and improved business performancesuch as market share, percentage of new product sales to total sales, and ROI.This reinforces the work of Narver and Slater (1990) who found thatcontinuous innovation is implicit in each of three components of marketorientation.

The results also indicate that customer orientation, competitionorientation and inter-functional coordination are each antecedents toinnovativeness. Although several previous studies have examined therelationship of market orientation and business performance in firmsoperating in different economies, the present study illustrates the importanceof innovativeness for SMEs in the Swiss watch industry. These companies arein a position to compete in an environment where success depends to a largeextent on ensuring that innovativeness is an integral part of corporatestrategy (Liu, Luo and Shi 2003). This suggests that, to improve performance,customer and competition orientation as well as inter-functionalcoordination should encouraged by top level managers particularly if theyperceive innovativeness in terms of openness to new ideas. Overall, thefindings of this study reveal that SMEs in this industry seem to have evolvedtowards a market economy, so that they are in a more competitive positionand are likely to enhance their business performance. This is illustrative ofHult et al. (2004:436), who note that "Innovativeness is likely to be useful forallowing the firm to preempt competitors with new or improved products, diversifyproduct lines, and generally expand the firm's scope of activities. All of theseoutcomes can help contribute to achieving sustainable competitive advantage."Evidence from this study also points to the importance of a managerialemphasis on the creation of an internal business environment conducive toinnovative activities. Specifically, a market orientation was found to have asignificant and positive effect on innovativeness in the long term.

Acknowledgements

We are grateful to two anonymous reviewers of the Academy of MarketingConference 2006 for their thoughtful suggestions and insightful comments onan earlier version of this paper.

Effect of Market Orientation on Irmovativeness 545

References

Abbey, A. and Dickson, J. W. (1983), "R&D Work Climate and Innovation inSemiconductors", Academy of Management Journal, Vol. 26, pp. 362-368.

Abratt, R. and Lombard, A. (1993), "Determinants of Product Iruiovation inSpecialty Chemical Companies", Industrial Marketing Management, Vol. 22,pp. 169-175.

Ali, A., Krapfel, R., and LaBahn, D. (1995), "Product Innovativeness andEnfry Sfrategy: Impact on Cycle Time and Break-even Time", Journal ofProduct Innovation Management, Vol. 12, pp. 54-69.

Appiah-Adu, K. and Singh, S. (1998), "Customer Orientation andPerformance: a Study of SMEs", Management Decision, Vol. 26, No. 6, pp.385-394.

Auh, S. and Menguc, B. (2004), "Top Management Team Diversity andIrmovativeness: The Moderating Role of Interfunctional Coordination".Industrial Marketing Management, Vol. 34, pp. 249-261

Baker, W. and Sinkula, J. (1999), "The Synergistic Effect of MarketOrientation and Learning Orientation on Organisational Performance".Academy of Marketing Science Journal, Vol. 27, No. Fall, pp. 411-427.

Barrett, M. E. (2000), "Time Marches" On: The Worldwide Watch Indusfry.Thunderbird International Business Review, Vol. 42, No. 3, pp. 349-372

Calantone, R. J., Garcia, R. and Droge, C. (2003), "The Effects ofEnviroiunental Turbulence on New Product Development StrategyPlanning," The Journal of Product Innovation Management, Vol. 20, No. 2, pp.90-103.

Capon, N. Farley, J. U. Hulbert, J. M. and Lehmann, D. R. (1992), "Proflles ofProduct Innovators among Large U.S. Manufacturers," ManagementScience, Yol. 38, No.2, pp. 157- 169.

Change,T-Z., Polsa, P., and Chen, S-J. (2003), "Manufacturer ChannelManagement Behaviour and Retailors' Performance: An EmpiricalInvestigation of Automotive Channel" Supply Chain Management, Vol. 8,No. 2, pp. 132-140

Churchill, G. A. Jr. (1979), "Paradigm for Developing Better Measures ofMarketing Consfructs", Journal of Marketing Research, Vol. 16, No.February, pp. 64-73.

demons, K. and Row, M. C. (1991), "Sustaining IT Advantage". The Role ofStructural Differences, Vol. 15: pp. 275-292.

Conant, J. S. Mokwa, M. and Varadarajan, P. R. (1990), "Strategic Types,Distinctive Marketing Competencies and Organisational Performance: AMultiple Measures-Based Study". Strategic Management Journal, Vol. 11,No. 5, pp. 365-383.

Cooper, R. G., and Kleinschmidt, E. J. (1993), "Major New Products: What


Distinguishes the Winners in the Chemical Industry?", Journal of ProductInnovation Management, Vol. 10, pp. 90-111.

Cooper, R. G., and Kleinschmidt, E. J. (1990), New Products: The Key Factor inSuccess, American Marketing Association, Chicago, IL.

Daft, R. L. (1978), "A Dual-Core Model of Organisational Innovation",Academy of Management Journal, Vol. 20, pp. 193-211.

Damanpour, F. (1991), "Organisational Innovation: A Meta-Analysis ofEffects of Determinants and Moderators". Academy of Management Journal,Vol. 34, pp. 555-590.

Daneels. E. and Kleinschmidt, E. J. (2001),"Product Innovativeness from theFirm's Perspective: Its Dimensions and Their Impact on Project Selectionand Performance" Journal of Product Innovation Management Vol. 18, No. 6,pp. 357-373

Day, G. S. and Nedungadi, P. (1994), "Managerial Representations ofCompetitive Advantage." Journal of Marketing, Vol. 58, No. April, pp. 31-44.

Day, G. S. (2002), "Managing the Market Learning Process". Journal ofBusiness and Industrial Marketing, Vol. 17, No. 4, pp. 240-252.

Day, G. S. (1994a), "The Capabilities of Market-Driven Organisations".Journal of Marketing, Vol. 58, No.lO, pp. 37-52.

Deng, S. and Dart, J. (1994), "Measuring Market Orientation: a Multi-Factor,Multi-item Approach", Journal of Marketing Management, Vol. 10, No. 8,pp.725-742.

Deshpande, R. Farley, J. U. and Webster, F. (1993), "Corporate Culture,Customer Orientation, and Innovativeness in Japanese Firms: A QuadradAnalysis". Journal of Marketing, Vol. 57, No. 1, pp. 23-37.

Deshpande, R. and Farley, J. U. (1998) "Measuring Market Orientation:Generalisation and Synthesis". Journal of Market-Focused Management, Vol.2, No. 3, pp. 213-232.

Deshpande, R. and Farley, J. U. (2002), "High Performance Firms in aComplex New China: A Tale of Six Cities". Journal of Global Marketing,Vol. 16, No. 1/2, pp. 207-229.

Deshpande, R. and Farley, J. U. (2004), "Organisational Culture, MarketOrientation, Innovativeness, and Firm Performance: An InternationalResearch Odyssey", International Journal of Research in Marketing, Vol. 21,No.l, pp. 3-22.

Deshpande, R. and Farley, J. U. (2000), "Market-Focused OrganisationalTransformation in China. Global Markeing in Greater China." Journal ofGlobal Marketing, Vol. 14, No. December, pp. 7-35.

Deshpande, R. and Farley, J. U. (1999), "Executive Insights: CorporateCulture and Market Orientation: Comparing Indian and Japanese Firms".Journal of International Marketing, Vol. 7, No. 4, pp. 111-127.


Deshpande, R. and Webster, F. (1989), "Organisational Culture andMarketing: Defining the Research Agenda". Journal of Marketing, Vol. 53,No. 1, pp. 3-15.

Drucker, P. (1954) The Practice of Management. New York: Harper and RowPublication, Inc.

Edwards, R. W., Kumar, P. and Ranjan, R. (2002), Organisation Culture andInnovation. Faper presented at the Paper presented at the 28th EIBA(European International Business Academy) Conference, Athens, Greece.

Emsley, D. (2005), "Resfructuring the Management Accounting Function: ANote on the Effect of Role Involvement on Innovativeness". ManagementAccounting Research, Vol. 16, pp. 157-177.

Freel, M. S. (2005), "Patterns of Innovation and Skills in Small Firms",Technovation, Vol. 25, No.2, pp. 123-134

Gatignon, H. and Xuereb, J-M. (1997), "Sfrategic Orientation of the Firm andNew Product Performance", Journal of Marketing Research, Vol. 34, No.February, pp. 77-90.

Gopalakrishnan, S. and Damanpour, F. (2000), "The Impact of OrganisationalContext on Innovation: Adoption in Commercial Banks" In: IEEETransaction on Engineering Management, Vol. 47, pp.14-25.

Gronroos, C. (1982), Strategic Management and Marketing in Service Sector,Marketing Science Institute, Cambridge, MA

Han J. K. Kim, N. and Sirvastava R. K. (1998), "Market Orientation andOrganisational Performance: Is Innovation a Missing?" Journal ofMarkeHng, Vol. 62, No.4, pp. 30-45.

Henard, D. H. and Szymanski, D. M. (2001), "Why Some New Products AreMore Successful Than Others". Journal of Marketing Research, Vol. 38, No. 3,pp.362-375.

Heru-i, J.-F. (2005), "Management Confrol Systems and Strategy: A Resource-Based Perspective". Article forthcoming in Accounting, Organisations andSociety.

Hossini, K. Azar, A. and Anvari, A. (2003), "The Intervening Role ofInnovative Climate: A Study of Middle Managers in ManufacturingOrganisations in fran" Journal of Public Organisation Review, Vol. 3, No. 2,pp. 151-170.

Hult, G. T. M., Hurley, R. and Knight, G. A. (2004), "Innovativeness: ItsAntecedents and Impact on Business Performance". Industrial MarketingManagement, Vol. 33, pp. 429- 438.

Hult, G. T. M. and Ferrell, O. C. (1997), "A Global Learning OrganisationStructure and Market Information Processing". Journal of Business Research,Vol. 40, pp. 155-166.

Hult, G. T. M., Snow, C. C. and Kandemir, D. (2003), "The Role ofEntrepreneurship in Building Cultural Competitiveness in Different

548 Kayhan Tajeddiru, Myfanwy Trueman and Gretchen Larsen

Organisational Types". Journal of Management, Vol. 29, No. 3, pp. 401- 426.Himt, S. D. and Morgan, R. M. (1996), "The Resource-Advantage Theory of

Competition: Dynamics, Path Dependencies, and EvolutionaryDimensions," Journal of Marketing, Vol. 60, No. October, pp. 107-114.

Hurley, R. F. and Hult, G. T. M. (1998), "Innovation, Market Orientation, andOrganisational Learning: An Integration and Empirical Examination".Journal of Marketing, Vol. 62, No. 7, pp. 42-54.

Hurley, R. F. (1995), "Group Culture and its Effect on InnovativeProductivity," Journal of Engineering and Technology Management, Vol. 12,pp. 57-75.

Jaworski, B. J. and Kohli, A. K. (1993), "Market Orientation: Antecedents andConsequences". Journal of Marketing, Vol. 57, No.7, pp. 53-70.

KandampuUy, J. and Duddy, R. (1999), "Competitive Advantage throughAnticipation, Innovation and Relationship". Management Decision, Vol. 37,No.l, pp. 51-56.

Kim, W. C. and Mauborgne, R. (1997), "Opportunity Beckons" In: TheFinancial Times, pp. 8.

Kohli, A. K. and Jaworski, B. J. (1990), "Market Orientation: The Construct,Research Propositions, and Managerial Implications". Journal ofMarketing, Vol. 54, No. 4, pp. 1-18.

Kohli, A. K., Jaworski, B. J. and Kumar, A. (1993) "MARKOR: A Measure ofMarket Orientation." Journal of Marketing Research, Vol. 30, No, November,pp. 467-477.

Lafferty, B. A. and Hult, G. T. M. (2001), "A Synthesis of ContemporaryMarket Orientation Perspectives," European Journal of Marketing Vol. 35,pp. 92-109.

Liu, S. Luo, X. and Shi, Y. (2003), "Market-Oriented Organisations in anEmerging Economy: A Study of Missing Links". Journal of BusinessResearch, Vol. 56, pp. 481- 491.

Mansfleld, E. (1988), "The Speed and Cost of Industrial Innovation in Japanand the United States: External vs. Internal Technology". ManagementScience, Vol. 34, No. October, pp. 1157-1168.

Mansfield, E. Rapaport, J. Schnee, J. Wagner, S. and Hamburger, M. (1971)The Production and Application of New Industrial Technology. New York:W.W. Norton and Co

Martins, E. C. and Terblanche, F. (2003), "Building Organisational Culturethat Stimulates Creativity and Innovation". European Journal of InnovationManagement, Vol. 6, pp. 64-74.

Matsuno, K. Mentzer, J. T. and Ozsomer, A. (2002), "The Effects ofEntrepreneurial Proclivity and Market Orientation on BusinessPerformance". Journal of Marketing, Vol. 66, No. 7, pp. 18-32.

McDonald, R. E. (2002). Knowledge Entrepreneurship: Linking Organisational


Learning and Innovation. PhD Thesis, School of Management, TheUniversity of Connecticut.

Michalisin, M. D. (2001), "Validity of Annual Report Assertions aboutIrmovativeness: An Empirical Investigation". Journal of Business Research,Vol. 53, pp. 151-161.

Narver, J. C. and Slater, S. F. (1990), "The Effect of a Market Orientation onBusiness Profitability". Journal of Marketing, Vol. 54, pp. 20-35.

Nieto, M. and Quevedo, P. (2005), "Absorptive Capacity, TechnologicalOpportunity, Knowledge Spillovers, and Innovative Effort". Technovation,Vol. 25, pp. 1141-1157.

Noble, C. H. Sinha, R. K. Kumar, A. (2002) Market Orientation andAlternative Sfrategic Orientations: A Longitudinal Assessment ofPerformance Implications. Journal of Marketing, Vol. 66, No. October, pp.25-39.

Nunnally, J. C. (1978) Psychometric Theory. McGraw-Hill Book Company.Nysfrom, P. C. Ramamurthy, K., and Wilson, A.L. (2002), "Orgarusational

Context, Climate and Innovativeness: Adoption of Imaging Technology".Journal of Engineering and Technological Management, Vol. 19, pp. 221-247.

Olson, E., M. Slater, S. F and Hult, G. T. (2005), "The PerformanceImplications of Fit among Business Strategy, Marketing OrganisationStructure, and Strategic Behaviour," Journal of Marketing Vol. 69, No. 7, pp.49-65

Ozgelik, E. and Taymaz, E. (2004), "Does Innovativeness Matter forInternational Competitiveness in Developing Counfries? The Case StudyTurkish Manufacturing Industries", Research Policy, Vol.33, pp. 443-453

Parasuraman, A. Zeithaml, V.A. and Berry, L.L. (1988), "SERVQUAL: aMulti-item Scale for Measuring Consumer Perceptions of ServiceQuality", Journal of Retailing, Vol. 64, pp. 2-40.

Porter, M.E. (1980), Competitive Strategy, Free Press, New York.Porter, M.E. (1985), Competitive Advantage: Creating and Sustaining Superior

Performance, Free Press. New York.Roehrich, G. (2004), "Consumer Innovativeness: Concepts and

Measurements". Journal of Business Research, Vol. 52, pp. 621-677.Rogers, E. M. (1995) Diffusion of innovations. New York: The New Press.

Schumpeter, J. A. (1934) The Theory of Economic Development. Cambridge,MA: Harvard University Press.

Royston, J. (2004) How to Unleash Private Sector R&D Funding? In: Friend ofEurope (Ed, Stampfli, R.) La BibliothSque Solvay, Brussels: Swiss ScienceAgency.

Salaman, G. and Storey, J. (2002), "Managers' Theories about the Process ofIrmovation". Journal of Management Studies, Vol. 39, No. 2, pp. 147-166.

Sandvik, I. L. and Sandvik, K. (2003), "The Impact of Market Orientation on


Product Innovativeness and Business Performance". International Journal ofResearch in Marketing, Vol. 20, pp. 355-376

Saxe, R., and Weitz, B. A. (1982), "The SOCO Scale: a Measure of theCustomer Orientation of Salespeople". Journal of Marketing Research, Vol.19, No. August, pp. 343-351.

Schefer, K. (2004) Swiss Economic Research, UBS Wealth ManagementResearch (Ed, Tajeddini, K.), Zurich.

Scott, G., S. and Bruce, R. A. (1994), "Determinants of Innovative Behaviour:a Path Model of individual Innovation in the Workplace", Academy ofManagement Journal, Vol. 37, No. 3, pp. 580-607.

Shapiro, B.P. (1988), "What the Hell is 'Market Oriented'?", Harvard BusinessReview, Vol. 66, pp. 119-125.

Shuster, W. G. (2005), "Swiss Watch Exports Set Record in 2004".ABI/INFORM Trade & Industry, Vol. 176, No. 4, pp. 58.

Siguaw, J. A. Brown, G. and Widing, R. E. (1994), "The Influence of theMarket Orientation of the Firm on Sales Force Behaviour and Attitudes".Journal of Marketing Research, Vol. 31, No. February, pp. 106-122.

Slater, S. F. and Narver, J. C. (1995), "Market Orientation and the LearningOrganisation". Journal of Marketing, Vol. 59, No. 3, pp. 63-74.

Slater, S. F. and Narver, J. C. (1994), "Does Competitive EnvironmentModerate the Market Orientation- Performance Relationship?" Journal ofMarketing, Vol. 58, pp. 46-54.

Subramanian, A. and Nilakanta, A. (1996), "Orgarusational Innovativeness:Exploring the Relationship between Organisational Determinants ofInnovation, Types of Innovations, and Measures of OrganisationalPerformance". Omega International Journal Management Science, Vol. 24, No.6, pp. 631-647.

UUmann, A. (1991), "The Watch" In: North American Case Research Association,State University of New York Binghamaton, New York, pp. 619-634.

Webster, F. E. Jr. (1988), "Rediscovering the Marketing Concept." BusinessHorizons, Vol. 31, No. May-June, pp. 29-39.

Woodside, A. G. (2005), "Firm Orientations, Innovativeness and BusinessPerformance: Advancing a Systems Dynamics View Following aComment on Hult, Hurley, and Knight's 2004 Study". Industrial MarketingManagement, Vol. 34, No. 3, pp. 275-279.

Wooldridge, B. R. and Minsky, B. D. (2002), "The Role of Climate andSocialisation in Developing Interfunctional Coordination", The LearningOrganisation, Vol. 9, No. 1, pp. 29-38

Zahra, S. A. (1993), "Environment, Corporate Entrepreneurship and FinancialPerformance: a Taxonomic Approach", Journal of Business Venturing, Vol.8, pp. 319-340.

Zaltman, G. Duncan, R. and Holbek, J. (1973) Innovations and Organisations.


New York: John Wiley & Sons.Zhou, K. Z. Gao, G. Y. Yang, Z. and Zhou, N. (2005), "Developing Sfrategic

Orientation in China: Antecedents and Consequences of Market andInnovation Orientations", Journal of Business Research, Vol. 58, pp. 1049-1058

About the Authors

Kayhan Tajeddini has an MBA from Iran and is a PhD student at BradfordUniversity, School of Management. His current research focuses on industrialmarketing in the areas of organisational innovativeness, strategy, learningand entrepreneurship. His research has been published in some conferences.He was granted a full bursary by the Academy of Marketing (AM2005) forthe Dublin Conference. Previously Kayhan spent 7 years in commercialdepartments in different industrial organisations in Iran and Switzerland.

Myfanwy Trueman is Lecturer in Innovation and Marketing at BradfordUniversity School of Management. Her research focus is on how design andvisual evidence of change can enhance city brands. This work is groundedupon a series of ongoing projects with the local business community andBradford City landscape planning department. Previous work examined howdesign can add brand value and reduce risk in new product development.She has published in journals such as Long Range Planning, Product InnovationManagement, Corporate Communications, Design Studies and World Class Designto Manufacture.

Gretchen Larsen is a Lecturer in Marketing at Bradford Uruversity School ofManagement. Her research interests are focused on symbolic consumption,arts consumption and consumer affairs. Gretchen was awarded her PhDfrom the University of Otago, New Zealand. She has published in journalssuch as Marketing Intelligence and Planning, Journal of Consumer Policy andEuropean Advances in Consumer Research.

tajeddini trueman larsen examining the effect of market orientation on innovativess

Documents