The relationship between learning orientation, market orientation and innovation and their effect on organizational performance

The fundamental premise of successful firms possessing resources that are superior to those of their competitors has been prevalent in the related literature. This has fostered a wealth of research to determine the source, as well as the necessary maintenance of these resources. Resources should possess certain characteristics that would benefit the firm, given that effective strategic deployment of resources at any time is moderated by time, the actions of competitors, and the dynamics of the external environment.; It is through this ongoing process of competing and ultimately succeeding through ideocyncratic resources that provides the catalyst for superior financial performance. These capabilities, which are developed over time, provide a source of advantage that must be continually protected and improved. As the external environment changes, dynamism in the environment requires a departure from established organizational strategies; the entrepreneurial firm pursues competitive advantage through innovation, considered essential to competitive advantage. The competitive marketplace becomes the impetus for innovation, and innovation in turn becomes a key form of organizational learning.; Contemporary research focuses on the integration and identification of those variables necessary for a firm to achieve competitive advantage as indicated by performance levels. These variables are identified as learning orientation, market orientation and innovation.; This study incorporates the constructs of learning orientation, market orientation and innovation as they relate to organizational performance. Although organizational performance is the ultimate measure of the existence, effectiveness and interaction of these variables, this study compares all three constructs, in addition to a new measure of short term performance, dynamism, on a cross sectional analysis of industries.; Research findings indicate a positive linear relationship between performance and marketing orientation, and market orientation and learning orientation. The construct of innovation did not correlate to performance, learning orientation or market orientation. Market dynamism did exhibit a positive linear relationship to performance. The results complement the research of Sinkula, Baker, and Noordewier (1997) and Baker and Sinkula (1999).