The Relationships Among Market Orientation, Operational Synergistic Capabilities And Performance From Logistics Outsourcing Perspective

As market competition intensifies, the logistics industry developed rapidly andlogistics outsourcing market matures, more and more firms reduce costs and focus oncore business through logistics outsourcing (Mitra, 2006). Market orientation is one ofthe major concerns for marketing strategy in the past twenty years, and therelationship between market orientation and firm performance is the main objective.But most of these studies focus on much more on some industry or environment andfirm characteristics influences than logistics outsourcing impacts.This study concentrates on the relationships among market orientation,operational synergistic capabilities and performance from logistics outsourcingperspective. In research background of Chinese government thinks highly of logisticsindustry development and more and more firms outsourcing their logistics, how firmsare market-orientated, how they evaluate the logistics outsourcing process morescientifically in order to improve performance are worth further studying. This studyinvestigates the relationships among market orientation, operational synergisticcapabilities and performance based on marketing theory, division theory, resourcesbased view and relationships theory. Through introducing the important mediatorvariable of operational synergistic capability, this study investigates the whole processof market orientation affects performance. We first ran the in-depth interviews with 12managers and 2 experts from firms and industry association in the Pearl River Delta,panel discussion with Master of Engineering class of grade 2005, and then analyze the201 samples of logistics outsourcing users through structure equation modeling tovalidate the theoretical model and hypothesis. We finally supported 5 hypotheses onthe relationships among market orientation, operational synergistic capabilities andperformance. The major contribution are as follows?Firstly, it is the first time to choose logistics outsourcing users in China asresearch objectives, and to investigate deeply the relationships among their marketorientation, operational synergistic capabilities and performance. By introducing theimportant mediator of operational synergistic capability, this study quantifies theinfluence of 3PL on firms, which enriches and expands the theories and empiricalresearch in the field of market orientation and logistics outsourcing.Secondly, this study verifies that customer orientation and competitor orientationare two dimensions of market orientation through logistics outsourcing user sample in China. These two dimensions are relative independent; each represents differentmarket orientation gesture. Two dimensions also have internal convergence whichconverges and share a common variable-MO. This study verifies the model from theoverall construct of MO perspective, which is able to reflect the true fact of firm MOpractice than either single customer orientation or customer orientation andcompetitor orientation respectively.Thirdly, this study provides operational synergistic capability construct based onlogistics outsourcing, and develop its dimension. 3PL's expertise and scale advantageare helpful for firms to reduce the logistics costs and enhance efficiency of logisticsservices to meet customer demand, and improve the performance eventually. In orderto take full advantage of 3PL, firms are needed to coordinate with it and to cooperateclosely. This requires the closely cooperation between the logistics department and3PL, and the closely coordination among the different departments, in order toprovide flexible logistics operation. Through the interviews, this study develops thesecond orders and three dimensions model of operational synergistic capability, andverifies it through data analysis. Firms'operational synergistic capability includesthree elements: external coordination between firms and 3PLs, internal coordinationwithin the firm departments, and operational flexibility. The three elements ofoperational synergistic capability are integrated coexistence, mutual alternative andcomplementary.Fourthly, this study introduces logistics service performance as an importantconcept into the model, and develops its measuring scale. The intensifying of marketcompetition and increasing service demands of customers all call for firms toemphasize and improve their logistics service to improve end customers'satisfaction.This study extends performance measurement by introducing logistics serviceperformance, and explores the relationship between the different performances whichenrich logistics outsourcing research perspective, deepens the logistics outsourcingtheory. For the efficiency and quality of logistics service affect directly accuratemeasurement of firm logistics outsourcing. The existing scale was developed based ondeveloped foreign countries which maybe not suitable for early stage cooperationbetween firms and 3PLs in developing countries. Based on the research of Sinkovicsand Roath (2004), combining in-depth interviews with managers of firms cooperatedwith 3PLs, 3PLs, experts of logistics association, and chain operation association, thisstudy develops measurement scale of logistics service performance, which is validated to have internal consistency and reliability. It provides theoretical support for accuratemeasurements of logistics service performance in China.Fifthly, this study explores the internal mechanism of firm's market orientationaffects performance based on logistics outsourcing. The empirical results of therelationship between market orientation and performance are not consistent; some ofthe conclusions are even conflict. Academic and business circles realize that the pointshould be how to benefit from market orientation instead of whether or not to benefitfrom it. This study investigates internal process of how market orientation affectsperformance, develops and verifies the model of market orientation, operationalsynergistic capability, logistics outsourcing service performance and marketperformance. The results show the relationship between market orientation andperformance are indirect, operational synergistic capability is the key variable thatmarket orientation is converted to performance, which indicates the whole process ofoperational synergistic capability affects performance.