Abstract
Recent literature has argued that the positive relationship between market orientation and business performance is contextual and there is a clear need to establish this relationship in various contexts. We attempt to bridge this gap and contribute to enhance our understanding of market orientation and business performance relationship by empirically testing it among logistics service providers. Top level management in 108 logistics service providing organisations was surveyed and we found the support for the positive relationship between market orientation and overall performance of firms. The link between market orientation and business performance has been studied by many scholars suggesting a positive, negative or no relationship (Kohli and Jaworski, 1990; Narver and Slater, 1990). Recent studies suggest that market orientation and business performance linkage works well in business to business market (Beverland & Lindgreen, 2006; Gonzalez-Benito, 2005). However, the question whether the positive market orientation-performance relationship is monotonic across different contexts has not been fully investigated. In fact, scholars such as, Martin and Grbac (2003), Mason, Doyle & Wong (2006), Min & Mentzer (2000) call for the assessment of the impact of market orientation on firms involved in supply chain management. We attempt to bridge this gap and contribute to enhance our understanding of market orientation and business performance relationship by empirically testing it among logistics service providers. The study utilizes MARKOR as suggested by Kohli, Jaworski and Kumar (1993). Their original instrument (MARKOR) was amended to reflect the situation in logistics service provider firms. The changes involved substituting service firms for business unit; service to replace product; operations for manufacturing department; logistics for industry; and business to business firms for customers. Top level management in 108 logistics service providing organisations was surveyed in Mumbai, major port city of India. The results show that positive, statistically significant relationship resulted between market orientation and overall business performance with r² of 0.24 statistically significant at .001 levels. The finding suggest that logistics service provider firms’ efforts to build superior performance depends not just on reinforcing market orientation practice but also proper intelligence gathering, dissemination of information and use of the strategic information in day to day activities. We found support for intelligence generation and intelligence dissemination within organization. Study suggests that implementation of market intelligence leads to superior performance.