A Study On The Implementation Path And Performance Results Of Market Orientation Strategy Of Chinese Manufacturing Firms

The market orientation (MO) concept, a cornerstone of modern marketing thought, stipulates corporates to achieve competitive advantages and supply unique value for customers. With the advance of the political and economic system reform in our country, MO has become many firms', especially successful firms, practice guidelines. However, in the MO literature, the contemporary academic interest focus on MO's definition, measurement and model issues, however, implementation issue of MO has not been payed enough attention always. In fact, the organization performance result is deeply influenced by the specific paths and methods of implementation process of MO, particularly in the early stage of marketing function, the degree and pattern of MO compared with western enterprises has big gap. So, this paper presents the implementation path of MO strategy of manufacturing firms in the transitional economic context, that is "antedents of MO—organization reform—performance result" framework.Firstly, based on a cross case study on the manufacturing firms, this paper presents a conceptual framework incorporating change dynamics of the market orientation implementation from the theoretical perspective of organizational change. The findings indicate the dynamics of MO organization reform come from external organization and internal environment during the process of market orientation change, on one hand, institutional pressures composed by coercive, normative and mimetic institutional pressures are context dynamics; on the other hand, the perception and behavior of top managers are critical precipitating dynamics, which provide the willing of MO organizational reform; the internal supporting systems including HRM, organizational structure and use of IT are effective enabling dynamics, which provide the capabilities of MO organizational reform. Secondly, based on questionnaire survey of235manufacturing firms, the paper empirically tests the antecedents of MO. This paper adapts the traditional model of antecedents of MO through introducing three institutional pressures into the model. The findings indicates both organizational factors and environmental factors all significantly affect the MO, in particular, the factors of include (in terms of importance weight) strategic alliance, standard certification, benchmarking; market turbulence and competitive pressure, while the roles of government policies, employee turnover and management consulting are not significant; the factors of precipitating dynamics and enabling dynamics include (in terms of importance weight):exemplification behavior of top leaders, inter-functional connectedness, crisis and change awareness, market-based reward system, market-based training, formalization and use of IT, while the impacts of risk aversion tendency of top managers and decentralization are not significant. Meanwhile, the dynamic mechanism model of MO organizational reform is also examined, the result shows:(1) the context dynamics only have indirect effect on MO through precipitating dynamics and enabling dynamics without direct effect on MO.(2) both precipitating dynamics and enabling dynamics not only have direct effect on MO, but is the critical mediating variables of the context dynamics. So, only the firms integrate the direct dymamics and indirect dynamics effectively, can the level of MO be advanced in the context of transitional economy.Finally, through resource-based view and organizational strategy theory, this paper presents a model of influencing mechanism of MO upon firm performance. Based on a survey of476enterprises in mainland China, our research results show that:(1) MO, as critical organizational resource, has direct and positive effect upon organization performance;(2) MO also impact organization performance indirectly via learning orientation and innovativeness;(3) Firm size has significant moderating effect upon all links in the framework. Compared with big firms, market orientation in medium-small firms has stronger total effect on organization performance, except the direct effect, but also including indirect effect via learning orientation and innovativeness, but MO in big firms has vast majority of direct effect on organization performance, without significant indirect effect. In addition, some valuable managerial implications as how to improve business performance through developing MO are provided to managers.