Limitaciones constitucionales

The concept of MO has received a considerable amount of research attention since the topic was reignited by (Kohli and Jaworski 1990 and Narver and Slater 1990). Much of the empirical research that followed has been concerned with establishing a contributory relationship between MO and firm performance (Morgan and Strong, 1998; Sanjaya, Vasudevan and Gaur 2011). Although it has been suggested that this relationship holds across different industry sectors and national cultures Jaworski and Kohli (1996) and Slater and Narver (2000); Rodrigues and Pinho (2010), there is less support for direct contributory relationship between MO and performance in service firms (Sargeant and Mohamad,1999; Caruana et al.,1998).

This equivocality and lack of understanding of how market orientation contributes to service firm performance have prompted calls for research to investigate the mechanisms by which MO does contribute to performance (Day, 1998; Jaiyeoba 2013). This paper thus examines the mechanisms by which MO is posited to contribute to firm performance. This conceptualization of how MO contributes to firm performance complements research that considers that MO is an aspect of a firm’s culture (Slater and Narver, 1995; Appiah-Adu and Singh, 1999; Sanjaya, Vasudevan and Gaur 2011).

A potential for resolving these differences is the distinction which Slater and Narver, (1995) draw between organizational culture and climate, where culture is the deeply rooted set of values and beliefs that provide norms for behavior within the organization and climate. This is consistent with Avlonitis and Gounaris (1999) who suggest that a true MO represents the synthesis of attitudes and practices and that these attitudes and practices are related and inseparable. While there is a propensity for a low effect of MO on performance among small firms, marketing scholars and managers have continued to argue over the last three decades that a business which improves its MO will enhance its performance, (Kotler and Andreason, 1987; Narver and Slater, 1990). For small firms in particular, it has been suggested that MO is likely to be vital factor for success since such firms usually lack the financial means to pursue other sources of business profitability, such as research and development, competitive advantage, low cost leadership or skilled staff to develop effective planning strategies (Pelham and Wilson, 1996). Evidence of this sentiment can be inferred from the findings of Narver and Slater, (1990), which suggest that large strategic business units with a low level of MO but low cost advantages perform better than smaller strategic business units with a medium degree of MO in the same organization. Blankson and Cheng, (2005), and Jaiyeoba, (2013), based on their investigation of small firms in Michigan and Botswana, argue that the size of businesses does not change the importance of MO on performance. Thus we hypothesize that:

Hypothesis 1: The level of market orientation of small firms in the service industry in Botswana is significantly and positively related to business performance.

The marketing concept identifies a unique organizational philosophy that places the customer at the core of the firm’s approach to its strategy development and operations (Deshpande, 1993; Asikhia 2010). Kohli and Jaworski (1990) and Zebal and Goodwin (2011) state that while the marketing concept is normally described as a belief or a way of thinking that directs the allocation of resources and the creation of organizational strategies, MO is regarded as the activities associated with the execution of the marketing concept.

The starting point of MO is market intelligence, which includes customer’s verbalised needs and preferences, as well as an analysis of exogenous factors that influence those needs and preferences (Deshpande, 1999; Jaiyeoba, Marandu and Kealesitse 2015). MO is a corporate culture that differentiates one business from another in its tendency to always give superior value to its customers (Slater and Narver, 1994). Thus a business firm with superb market information collection and processing capabilities can predict more precisely and make rapid changes in the market place. Intelligence generation also helps define what superior value means to customers (Pelham, 1997; Dauda, 2010). Thus, understanding the current and future customer needs is critical to sustained organizational performance.

Kohli and Jaworski,(1990) define market orientation as an organization wide generation of market intelligence pertaining to current and future customer needs, dissemination of the intelligence across departments, and an organization wide responsiveness to this intelligence. Intelligence

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generation relates to observing and studying customers’ needs and preferences. Conversely, failure to ascertain such customer needs and preferences through market information collection and processing capabilities would result in the production of goods and services that do not satisfy customers. Traditionally, it has been the responsibility of the marketing function to generate customer intelligence for the purpose of feeding a firm’s strategic and operational decisions. However, an essential feature of a market oriented firm is the organization wide generation of intelligence pertaining to customers. Consequently, it is not exclusively the marketing function responsibility to generate intelligence. Managers from different departments of the firm should pay visits to present and prospective customers and constitute, a valuable source of intelligence within the organization.

Thus, although market intelligence pertains to customer needs and preferences, it includes an analysis of how these may be affected by exogenous factors such as government regulation, technology, competitors, and other environmental forces. As such, environmental scanning activities are subsumed under market intelligence generation (Kohli and Jaworski, 1990). Laukkanen and Reijnon (2010) postulate that information is a message that is meant to change the way the receiver of it perceives something –it influences his judgement and behavior.

Laukkanen and Reijnon (2010) conclude that knowledge is a mix of experience, values, contextual information and expert insight. In the context of the SMEs, the owner-manager usually plays an important role as a searcher and assimilator of information (Lybaert, 1998; Asikhia 2010). Thus, the SMEs are often opportunistic in their information seeking behaviors and information is gathered from sources such as trade journals, customers and members of the supply chain that can be assessed with little additional effort outside the scope of normal business activities (Fuelhart and Glasmeier, 2003; Matanda and Ndubisi 2009). It is hypothesize that:

Hypothesis 2: For small firms in the service industry in Botswana, the level of intelligence generation is significantly and positively related to business performance.

Intelligence dissemination relates to the exchange of ideas generated from intelligence among various departments and individuals within an organization through both formal and informal channels responsiveness is the organization’s implementation of strategies and actions using the intelligence that is generated and disseminated. In order for MO to operate correctly, information developed in the intelligence generation stage must be shared with other functional units of the business (Kara et al., 2005; Asikhia 2010). This is attained through information exchange. Thus, for organizations to adapt to market needs, market intelligence needs to be communicated, disseminated, and perhaps even sold to the relevant departments and individuals in an organization. This successful sharing of information gives the marketers the opportunity to modify interpretations, and to provide new insights (Quinn, 1992 cited in Kara, Spillan and DeShields, 2005; Zebal and Goodwin 2011). Effective dissemination of market intelligence is important because it provides a shared basis for concerted actions by different departments of an organization (Deshpande, 1999). It is therefore, expected that the information dissemination process will play a seminal role in the business’s MO efforts.

Thus, sound dissemination of customer and competitive intelligence requires at the very least: organization wide awareness of the content of relevant intelligence; formal and informal means of routine dissemination of the intelligence; and incentives to share the intelligence. Certain organizational antecedents, for example senior management characteristics, interdepartmental dynamics and organizational systems, can enhance or impede the dissemination of intelligence and the general implementation of MO, (Kohli and Jaworski, 1990; Dubhilela 2013). Organizational antecedents that enhance MO are, for example, an active top management that communicates a consistent commitment to creating a MO supported with credible resource allocations (Kohli and Jaworski, 1990; Vieira 2010). Organizational systems that impede MO and the effective use of market intelligence are high formalisation and centralisation (Jaworski and Kohli, 1993; Zebal and Goodwin 2011). In some firms, sales people may have their raison d’être because of information asymmetries that exist between them and their colleagues (Sorensen, 2009). Asikhia (2010), contend that information dissemination pertains to the communication and transfer of information to all departments and individual within a business enterprise through formal and informal channels. We therefore hypothesize that:

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Hypothesis 3: The level of intelligence dissemination of small firms is significantly and positively related to business performance.

Superior performance can only be achieved by responding continuously to the customer’s ever changing needs and preferences (Kara et al, 2005; Dauda 2010). It thus explains the criticality of market intelligence. Responsiveness refers to the actions taken after the intelligence is generated and disseminated. In a meta-analysis by Deshpande (1999), about a survey conducted by Kohli and Jaworski (1990), Deshpande (1999) posits that the responsiveness to market intelligence takes the form of selecting target markets, designing and offering products and services, catering for their current and anticipated needs, and producing, distributing and promoting the products in a manner that elicits favourable end-customer response. Superior performance can only be achieved by responding continuously to the customers’ ever changing needs Kohli and Jaworski (1990), critical in this disruptive business era of hyper competition especially amongst small firms in Botswana.

Therefore, MO is typically measured by assessing a firm’s commitment to base strategic decisions on customer-oriented market intelligence (Narver and Slater, 1995 cited in Baker and Sinkula, 2009). Firms with strong MO prioritise learning about customers (for instance, their likes and dislikes, satisfaction, perceptions and so on), factors that influence customers (competition, the economy, socio-cultural trends), and the factors that affect the ability of the firm to influence and satisfy customers (technology, regulations).

Firms give prominence to responsiveness because they believe in the prominence of customer satisfaction as an organizational objective (Baker and Sinkula, 2009). As such, it is expected that market-oriented business firms will influence their responsiveness to customer needs so as to continuously meet and or exceed their needs better than their competitors. Thus, early MO literature reports that the action taken is intended to elicit favourable customer response (Kohli and Jaworski, 1990). Asikhia (2010), therefore, contend that responsiveness may take the form of selecting target markets, designing and offering products or services that cater for their ardent and anticipated needs, hence producing, distributing and promoting the products in a way that elicits favourable customer response.

In summation, environmental scanning about the customer needs and competitive actions are subsumed under market intelligence generation. This is a critical element of MO since it is only when a firm clearly knows its customer needs and the factors that influence those needs that it can tailor its internal processes to satisfy them. This is followed by intelligence dissemination that pertains to the communication and transfer of intelligence information to all departments and individuals within an organization through both formal and informal channels.

The marketing concept suggests that in order to operate profitably, the enterprise has to be oriented towards satisfying customer needs, wants and aspirations (Blankson, Motwani and Levenburg, 2006). Laukkanen and Reijnon (2010) conclude that this requires gathering, analysing and acting on customer information. Finally, responsiveness is the action that is taken in response to the intelligence that is generated and disseminated. Thus, business firms that have implemented these three facets of MO have a better understanding of and responding to their customers’ needs that, in turn, delivers superior business performance. We therefore hypothesize that:

Hypothesis 4: The level of intelligence responsiveness of small firms is significantly and positively related to business performance.

METHODS

The study employed a snowball sample of managers and business owners in the small service firm domain within Gaborone and its environs. The reason for opting for non-probability rather than probability sampling was that the sampling frame of the key informants was not available. In addition, the study was confirmatory in nature in order to improve the understanding of organizational market orientation behavior in Botswana context. The final pool of small service firms to whom questionnaires were sent totaled 400. Eventually, only 249 (constituting over 60% response rate) usable questionnaires were returned by the respondents.

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The questionnaire was pretested prior to collecting data and respondents were asked to identify items they found unclear, ambiguous or confusing. As a result of the pretest, minor adjustments were made to the questionnaire. The majority of the respondent personnel were managers, accounting for about 50% of the total. This suggests that most respondents were sufficiently experienced to be able to provide meaningful response to broader policy issues relating to market orientation. After comparing the responses of the early and late respondents, on a number of characteristics, no significant difference was found suggesting that the sample is free from response bias. The sample size and the response rate are consistent with related studies.

The questionnaire and scale measures (MARKOR Scale) were adopted from Kohli and Jaworski, (1993) constructs. The items in the questionnaire were measured with the aid of a five point Likert type Scale. The management behaviors were measured by items adopted from (Jaworski and Kohli, 1993). Environmental dynamics were adopted from Jaworski and Kohli, (1993) and Gray et al, (1998) respectively. Reliability analysis was conducted on all the multi items scales to check the internal consistency of the scales. This study adopted a cut off of 0.5 for Cronbach’s Coefficient following Nunnally (1988). Using 0.5 as the cut off is not without precedent. It has been adopted in related studies (Blankson and Stokes, 2002; Blankson and Cheng, 2005). The coefficient alpha values for intelligence generation, intelligence dissemination or interfunctional coordination, and intelligence responsiveness or taking action are 0.63, 0.60, and 0.55 respectively, indicating that the MARKOR scale developed by Kohli and Jaworski (1993) is also a reliable instrument for measuring market orientation in Botswana. The coefficient alpha values of 0.73 for top management emphasis and 0.88 for centralization also confirmed the reliability of Kohli and Jaworski’s (1993) scale items for data collection in Botswana.

Similarly, other scales including market based reward system, interpersonal conflict, interpersonal connectedness, market turbulence, technological turbulence adapted from Kohli and Jaworski (1993) produced coefficient alpha values of 078,0.62,0.81,0.53 and 0.63 respectively, thus indicating that these scales were also reliable for data collection in Botswana. The factor loading values range from 0.50-0.85, the KMO and Bartlett’s test are satisfactory and Eigen values are greater than 1 thus explicating competence of the factor structure.

Factor analysis was employed in testing for categories of construct validity. Principal component extraction method was adopted with varimax rotation method. The varimax rotation method was adopted since it minimizes the number of variables that have high loadings on each factor and simplifies the interpretation of the factors. Before applying the factor analysis to examine the construct validity of the market orientation scale, the Kaiser-Meyer-Olkin (KMO) measure of sampling adequacy and Bartlett test of sphericity were performed to assess the appropriateness of using factor analysis.

The test provided results that were enough for factor analysis to be used with KMO of 0.765 and significant level (p<0.001) for the Bartlett test. Using an Eigen greater than 1 which is the threshold, the coefficients for the factors of the market orientation construct ranged from (0.50-0.90) which are well above the desirable value recommended by (Hair et al 2006). The values explicated have demonstrated the robustness of the factor structure. The rotated sum of the squared loadings of the first ten items of the market orientation construct has shown the percentage cumulative of variance explained to be 67.5%.

The appropriateness of applying factor analysis was confirmed for business performance by both the KMO index (0.906) and Bartlett’s test (p< 0.001). Result shows that all items converged on one common construct. The factor loadings of the items ranged from (0.50-0.906) suggesting high convergent validity. The average variance explained elicited 64.52% showing the robustness of the factor structure among small service firms in Botswana.

RESULTS

Prior to major analyses, data were examined using SPSS 18.0 for data entry accuracy, missing values and violation of regression assumptions of normality, linearity, multicollinearity. Residuals were screened for normality with the aid of skewness and kurtosis. The skewness values and kurtosis

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values for the market orientation and business performance constructs, were all closer to zero as posited by Hair et al (2006), thus confirming the normality of the data.

The data analysis results as shown in Tables 1 and 2 show that the overall market orientation behavior of small service firms account for 25.7% (standardized coefficient value) variation in the small service firms’ financial performance in Botswana. Result in tables 1 and 2 show that hypothesis H1 is supported among sampled small service firms in Botswana.

Table 3 shows that intelligence dissemination is significantly and positively related to small service firms performance. Intelligence generation and intelligence responsiveness are not, however significantly and positively related to business performance, but lend support to the hypothesized relationship. Thus hypotheses H1 and H3 are supported, while hypotheses H2 and H4 are rejected. The beta coefficient as shown in Table 4 is in the same direction as hypothesized (β=0.304,p<0.05), that is to say the intelligence generation, dissemination and responsiveness behavior of small service firms in Botswana explained 30.4% variation in the economic business performance of small service firms in Botswana. The Durbin Watson value of 1.783 is satisfactory for the hypothesized relationship. The implication is that an increase in intelligence generation, dissemination, and responsiveness behavior of small service firms in Botswana would result in an increase in small business financial performance.

Assumption of multicollinearity was tested using correlation matrix and collinearity diagnostics as shown in Tables 5 and 6. For the study, correlation values for all independent constructs were below 0.9 indicating that the axiom of multicollinearity was not violated. Collinearity diagnostics as shown in Table 6 were determined by noting tolerance values and variance inflation factor (VIF). Low tolerance (those approaching zero) indicate that multiple correlation with other variables is high, suggesting the possibility of multicollinearity. This study however indicate that the tolerance values for the independent variables are quite respectable and the VIF values range from (1.03-1.24) which are well below the threshold of 10,and Tolerance values range from (0.803-0.966).

Table 7 also validates the hypothesized relationship which shows that overall market orientation is significantly and positively related to business performance as shown in the path analysis (AMOS 18). Hypothesis H1 is thus supported. The intelligence generation principles of small service firms in Botswana is also significantly and positively related to business performance as shown in the path analysis and structural equation modeling using AMOS 18. Thus, hypothesis H3 is supported. However, the intelligence generation and responsiveness of small service firms are not significantly and positively related to the business performance of small service firms in Botswana. Therefore, hypotheses H2 and H4 are rejected.

DISCUSSION