Implementing Strategic Orientations in SMEs: The role of CEO’s Market Orientation

Authors

  • Maguette Teuw Diao Cheikh Anta Diop University, Senegal
  • Balla Doucoure Cheikh Anta Diop University, Senegal

DOI:

https://doi.org/10.55482/jcim.2022.33299

Keywords:

Strategic orientations, Individual market orientation, SMEs, Upper echelon theory, Chief Executive Officer (CEO)

Abstract

The purpose of this study is to explore the influence of a CEO’s market orientation on the strategic orientations of Small and Medium Enterprises (SMEs). A survey was conducted and data were collected from a sample of 175 Senegalese SMEs. The data were analyzed using structural equation modeling in STATA. The results show that some dimensions of a CEO’s market orientation positively influence SMEs’ strategic orientations. The findings imply that CEOs must individually exhibit market-oriented behaviors to encourage the development of strategic orientations in their SME. This study contributes to the development of the literature on individual market orientation by revealing that the CEO’s market orientation constitutes a key factor for the strategic orientation in SMEs

Author Biographies

Maguette Teuw Diao, Cheikh Anta Diop University, Senegal

Maguette Teuw Diao, (PhD, Cheikh Anta Diop University of Dakar, Senegal) is a Lecturer at the Faculty of Economics and Management of Cheikh Anta Diop University. He is also the Management Department chair. His research focuses on the strategic orientations of SMEs, notably market orientation. His current research focuses on the implementation of strategic orientations in SMEs. Specifically, he studies the role played by SME managers in the creation and development of a market orientation. He published in leading journals such as Recherche et Applications en Marketing and Recherche en Sciences de Gestion-Management Sciences-Ciencias de Gestión. Maguette Teuw was a recipient of the French Government's Post-Doctoral Research Fellowship Program (2020). He has been Visiting Scholar at Grenoble Ecole de Management (France, 2016, 2018, 2020, and 2022). He is a member of the African Marketing Association and the French Marketing Association. He is also a member of the Senegalese Management Sciences Association.

Balla Doucoure, Cheikh Anta Diop University, Senegal

Balla Doucouré, (PhD, Cheikh Anta Diop University of Dakar, Senegal) is Assistant Professor in Management at Cheikh Anta DIOP University (Dakar, Senegal) and a collaborating Research Associate at CEDIMES Institute USA (Centre for Research in Global Business, Entrepreneurship and Economics).  Balla is member of several African and international scientific associations such as Africa Business and Entrepreneurship Research Society, French Marketing Association, Association for Marketing Research on African Countries, Senegalese Management Sciences Association, and African Marketing Association. He is also an invited scholar at Montpellier SupAgro (Montpellier, France) and at Lille University (Roubaix, France). He serves as the current head of the Centre of Employability and Entrepreneurship at Cheikh Anta Diop University. Balla’s research interests lie in the small business strategic orientations and performance. His articles have been published in academic journals of international business and management including Journal of African Business, Transnational Corporations Review, Food Systems.

 

References

Adams, P., Freitas, I. M. B., & Fontana, R. (2019). Strategic orientation, innovation performance and the moderating influence of marketing management. Journal of Business Research, 97, 129-140.

Al-Hakimi, M.A., Saleh, M.H., Borade, D.B., Hasan, M.B., & Sharma, D. (2022). Competitor orientation and SME performance in competitive environments: the moderating effect of marketing ethics. Journal of Entrepreneurship in Emerging Economies, 1-22. https://doi.org/10.1108/JEEE-12-2021-0486

Anderson, J. (1987). An approach for confirmatory measurement and structural equation modeling of organizational properties. Management Science,33(4), 525–541.

Andotra, N., & Gupta, R. (2016). Impact of environmental turbulence on market orientation–business performance relationship in SSIs. Global Business Review, 17(4), 806-820.

Anwar, M., Clauss, T., & Issah, W. B. (2022). Entrepreneurial orientation and new venture performance in emerging markets: the mediating role of opportunity recognition. Review of Managerial Science, 16(3), 769-796.

Avci, U., Madanoglu, M., & Okumus, F. (2011). Strategic orientation and performance of tourism firms: Evidence from a developing country. Tourism Management, 32(1), 147-157.

Baber, R., Kaurav, R. P. S., & Paul, J. (2020). Impact of individual market orientation on selling and customer orientation. Journal of Strategic Marketing, 28(4), 288-303.

Bagozzi, R. P., & Phillips, L. W. (1982). Representing and testing organizational theories: A holistic construal. Administrative science quarterly, 27(3), 459-489.

Becherer, R.C., Halstead, D. &Haynes, P. (2001). Marketing Orientation in SMEs: Effects of the Internal Environment. Journal of Research in Marketing and Entrepreneurship, 3(1), 1-17.

Beck, L., Janssens, W., Debruyne, M., & Lommelen, T. (2011). A Study of the Relationships Between Generation, Market Orientation, and Innovation in Family Firms. Family Business Review, 24(3), 252–272.

Billore, S., & Billore, G. (2020). Internationalization of SMEs and market orientation. European Business Review, 32(1), 69–85.

Blankson, C., & Cheng, J. M.-S. (2005). Have small businesses adopted the market orientation concept? The case of small businesses in Michigan. Journal of Business & Industrial Marketing, 20(6), 317–330.

Blankson, C., Motwani, J. G., & Levenburg, N. M. (2006). Understanding the patterns of market orientation among small businesses. Marketing Intelligence & Planning, 24(6), 572-590.

Brower, J., & Nath, P. (2018). Antecedents of market orientation: marketing CEOs, CMOs, and top management team marketing experience. Marketing Letters, 29(4), 405-419.

Cano, C. R., Carrillat, F. A., & Jaramillo, F. (2004). A meta-analysis of the relationship between market orientation and business performance: evidence from five continents. International Journal of research in Marketing, 21(2), 179-200.

Carpenter, M. A., Geletkanycz, M. A., & Sanders, W. G. (2004). Upper echelons research revisited: Antecedents, elements, and consequences of top management team composition. Journal of management, 30(6), 749-778.

Carson, D. (1990). Some exploratory models for assessing small firms' marketing performance (a qualitative approach). European journal of marketing, 24(11), 8-51.

Chen, Y. C., Rivas, A. A., & Wu, W. Y. (2017). Exploring the determinants and consequences of salesperson market orientation behavior: An empirical study in the financial service industry. Journal of Service Theory and Practice, 28(2), 170-195.

Chen, Y., Tang, G., Jin, J., Xie, Q., & Li, J. (2014). CEOs’ transformational leadership and product innovation performance: The roles of corporate entrepreneurship and technology orientation. Journal of Product Innovation Management, 31(1), 2-17.

Churchill Jr, G. A. (1979). A paradigm for developing better measures of marketing constructs. Journal of marketing research, 16(1), 64-73.

Dangereux, K., Chapellier, P., & Villeseque-Dubus, F. (2017). To adapt the tools of control to the context and to the actors in SMEs: the exploratory case of a dashboard purchase of a leader. Revue internationale de la PME, 30(1), 27-56.

Davis, P. S., Babakus, E., Englis, P. D., & Pett, T. (2010). The influence of CEO gender on market orientation and performance in service small and medium‐sized service businesses. Journal of Small Business Management, 48(4), 475-496.

Day, G. S. (1994). The capabilities of market-driven organizations. Journal of marketing, 58(4), 37-52.

Diao, M. T., Gotteland, D., & Boulé, J. M. (2017). How does the sociodemographic profile of the CEO affect a company’s market orientation? The case of Senegalese SMEs. Recherche et Applications en Marketing (English Edition), 32(1), 21-39.

Didonet, S. R., Simmons, G., Díaz‐Villavicencio, G., & Palmer, M. (2016). Market orientation's boundary‐spanning role to support innovation in SMEs. Journal of Small Business Management, 54(S1), 216-233.

Donavan, D. T., Brown, T. J., & Mowen, J. C. (2004). Internal benefits of service-worker customer orientation: Job satisfaction, commitment, and organizational citizenship behaviors. Journal of marketing, 68(1), 128-146.

Doucouré, B., & Diagne, A. (2022). Market Orientation, Innovativeness and Competitive Advantage: Empirical Insight from Women Entrepreneurs in the Senegalese agri-food Sector. Journal of African Business, 1-25.

Ellis, P. D. (2006). Market orientation and performance: A meta‐analysis and cross‐national comparisons. Journal of Management studies, 43(5), 1089-1107.

Eriksson, T., Robertson, J., & Näppä, A. (2020). Functional top management teams and marketing organization: exploring strategic decision-making. Journal of Strategic Marketing, 1-18.

Feng, T., Wang, D., Lawton, A., & Luo, B. N. (2019). Customer orientation and firm performance: The joint moderating effects of ethical leadership and competitive intensity. Journal of Business Research, 100, 111-121.

Fornell, C., & Larcker, D. F. (1981). Evaluating structural equation models with unobservable variables and measurement error. Journal of marketing research, 18(1), 39-50.

Franczak, J., Weinzimmer, L. & Michel, E. (2009), An empirical examination of strategic orientation and SME performance, Small Business Institute National Proceedings, 33(1), 68-77.

Gatignon, H., & Xuereb, J. M. (1997). Strategic orientation of the firm and new product performance. Journal of marketing research, 34(1), 77-90.

Gauzente, C. (1999). Comparing Market Orientation Scales: A Content Analysis. Marketing Bulletin, 10, 76–82.

Gebhardt, G. F., Carpenter, G. S., & Sherry Jr, J. F. (2006). Creating a market orientation: A longitudinal, multifirm, grounded analysis of cultural transformation. Journal of marketing, 70(4), 37-55.

Gotteland, D. (2019). What type of leadership is needed to implement and develop a market-oriented culture? Decisions Marketing, 94(2), 53-70.

Gotteland, D., Shock, J., & Sarin, S. (2020). Strategic orientations, marketing proactivity and firm market performance. Industrial Marketing Management, 91, 610-620.

Gupta, M. C., Sahi, G. K., & Chahal, H. (2013). Improving market orientation: the theory of constraints-based framework. Journal of Strategic Marketing, 21(4), 305-322.

Hakala, H., & Kohtamäki, M. (2011). Configurations of entrepreneurial‐customer‐and technology orientation: differences in learning and performance of software companies. International Journal of Entrepreneurial Behavior & Research, 17(1), 64-81.

Hambrick, D. C. (2007). Upper echelons theory: An update. Academy of management review, 32(2), 334-343.

Hambrick, D. C., & Mason, P. A. (1984). Upper echelons: The organization as a reflection of its top managers. Academy of management review, 9(2), 193-206.

Hamzah, M. I., Othman, A. K., Hassan, F., Musa, R., & Abdullah, M. Z. (2018). Individual market orientation and its implications on job performance: does sense of togetherness matters? Malaysian journal of consumer and family economics, 71-85.

Hamzah, M. I., Othman, A. K., & Hassan, F. (2020). Mediating effects of individual market orientation on the link between learning orientation and job performance. Journal of Business & Industrial Marketing, 35(4), 655-668.

Harris, L. C., & Ogbonna, E. (2001). Leadership style and market orientation: an empirical study. European journal of marketing, 35(5/6), 744-764.

Hernández-Linares, R., Kellermanns, F. W., & López-Fernández, M. C. (2021). Dynamic capabilities and SME performance: The moderating effect of market orientation. Journal of Small Business Management, 59(1), 162-195.

Ho, V. B., Niden, P., & Johneny, S. (2011). Market orientation of individuals: A study on the remisiers in Malaysia. Proceedings of the Annual Summit on Business and Entrepreneurial Studies, Malaysia, 387-395.

Horng, S. C., & Chen, A. C. H. (1998). Market orientation of small and medium-sized firms in Taiwan. Journal of Small Business Management, 36(3), 79-85.

Hurley, R. F., & Hult, G. T. M. (1998). Innovation, market orientation, and organizational learning: an integration and empirical examination. Journal of marketing, 62(3), 42-54.

Jaworski, B. J., & Kohli, A. K. (1993). Market orientation: antecedents and consequences. Journal of marketing, 57(3), 53-70.

Jeong, I., Pae, J. H., & Zhou, D. (2006). Antecedents and consequences of the strategic orientations in new product development: The case of Chinese manufacturers. Industrial Marketing Management, 35(3), 348-358.

Judson, K., Heiser, A., & Neeley, L. (2014). The importance of a CEO’s market orientation. Journal of Contemporary Business Issues, 20(1), 1-15.

Kai, C., & Fan, W. X. (2010). The effects of market orientation on performance in property service industry. International Conference on Management and Service Science, 1-4. doi: 10.1109/ICMSS.2010.5577191

Kara, A., Spillan, J. E., & DeShields, O. W. (2005). The effect of a market orientation on business performance: a study of small‐sized service retailers using MARKOR scale. Journal of small business management, 43(2), 105-118.

Kennedy, K. N., Goolsby, J. R., & Arnould, E. J. (2003). Implementing a customer orientation: Extension of theory and application. Journal of marketing, 67(4), 67-81.

Kirca, A. H., Bearden, W. O., & Roth, K. (2011). Implementation of market orientation in the subsidiaries of global companies: The role of institutional factors. Journal of the Academy of Marketing Science, 39(5), 683-699.

Kirca, A. H., Jayachandran, S., & Bearden, W. O. (2005). Market orientation: A meta-analytic review and assessment of its antecedents and impact on performance. Journal of marketing 69(2), 24-41.

Kohli, A. K., & Jaworski, B. J. (1990). Market orientation: the construct, research propositions, and managerial implications. Journal of marketing, 54(2), 1-18.

Kohli, A. K., Jaworski, B. J., & Kumar, A. (1993). MARKOR: a measure of market orientation. Journal of Marketing Research, 30(4), 467–477.

Kumar, K., Subramanian, R., & Yauger, C. (1998). Examining the market orientation-performance relationship: a context-specific study. Journal of management, 24(2), 201-233

Lai, C. J. (2016). The effect of individual market orientation on sales performance: An integrated framework for assessing the role of formal and informal communications. Journal of Marketing Theory and Practice, 24(3), 328-343.

Lam, S. K., Kraus, F., & Ahearne, M. (2010). The diffusion of market orientation throughout the organization: A social learning theory perspective. Journal of Marketing, 74(5), 61-79.

Ledwith, A., & O'Dwyer, M. (2009). Market orientation, NPD performance, and organizational performance in small firms. Journal of Product Innovation Management, 26(6), 652-661.

Li, E. Y., & Ko, S. F. (2021). Employee’s Market Orientation Behavior and Firm’s Internal Marketing Mechanism: A Multilevel Perspective of Job Performance Theory. Sustainability, 13(12), 6972.

Liao, H., & Subramony, M. (2008). Employee customer orientation in manufacturing organizations: Joint influences of customer proximity and the senior leadership team. Journal of Applied Psychology, 93(2), 317–328.

Liu, H. (1995). Market orientation and firm size: an empirical examination in UK firms. European journal of marketing, 29(1), 57-71.

Malhotra, N. K., Kim, S. S., & Patil, A. (2006). Common method variance in IS research: A comparison of alternative approaches and a reanalysis of past research. Management science, 52(12), 1865-1883.

Marjanova, T. J., Sofijanova, E., Davcev, L., & Temjanovski, R. (2015). Entrepreneurial competition orientation and profitability: The case of a developing economy. Procedia-Social and Behavioral Sciences, 207, 652-661.

Martin, J. H., Martin, B. A., & Minnillo, P. R. (2009). Implementing a market orientation in small manufacturing firms: from cognitive model to action. Journal of Small Business Management, 47(1), 92-115.

Masa’deh, R., Al-Henzab, J., Tarhini, A., & Obeidat, B. Y. (2018). The associations among market orientation, technology orientation, entrepreneurial orientation and organizational performance. Benchmarking, 25(8), 3117–3142.

Matsuno, K., Mentzer, J. T., & Özsomer, A. (2002). The effects of entrepreneurial proclivity and market orientation on business performance. Journal of marketing, 66(3), 18-32.

Menguc, B., & Auh, S. (2006). Creating a firm-level dynamic capability through capitalizing on market orientation and innovativeness. Journal of the academy of marketing science, 34(1), 63-73.

Moorman, C., & Day, G. S. (2016). Organizing for marketing excellence. Journal of Marketing, 80(6), 6-35.

Narver, J. C., & Slater, S. F. (1990). The effect of a market orientation on business profitability. Journal of marketing, 54(4), 20-35.

Narver, J. C., Slater, S. F., & Tietje, B. (1998). Creating a market orientation. Journal of market-focused management, 2(3), 241-255.

Neely Jr, B. H., Lovelace, J. B., Cowen, A. P., & Hiller, N. J. (2020). Metacritiques of upper echelons theory: Verdicts and recommendations for future research. Journal of Management, 46(6), 1029-1062.

Neter, J., Wasserman, W., & Kutner, M. H. (1985). Applied Linear Statistical Models: Regression, Analysis of Variance, and Experimental Design. Homewood IL: Richard D. Irwin.

Nunnally, J. C. (1967). Psychometric theory. New-York: McGraw-Hill.

Nwankwo, S. (1995). Developing a customer orientation. Journal of consumer marketing, 12(5), 5-15.

O’Dwyer, M., & Gilmore, A. (2019). Competitor orientation in successful SMEs: An exploration of the impact on innovation. Journal of Strategic Marketing, 27(1), 21-37.

O'Dwyer, M., & Ledwith, A. (2010). Size matters: market orientation and NPD in small and large firms. International Journal of Product Development, 12(2), 107-125.

Pelham, A. M. (2000). Market orientation and other potential influences on performance in small and medium-sized manufacturing firms. Journal of small business management, 38(1), 48-67.

Perry, M. (2014). Market orientation in small businesses: Creative or lacking? Marketing Management Journal, 24(1), 96-107.

Podsakoff, P. M., MacKenzie, S. B., Lee, J. Y., & Podsakoff, N. P. (2003). Common method biases in behavioral research: a critical review of the literature and recommended remedies. Journal of applied psychology, 88(5), 879–903.

Raju, P. S., Lonial, S. C., & Crum, M. D. (2011). Market orientation in the context of SMEs: A conceptual framework. Journal of Business Research, 64(12), 1320-1326.

Rao, A. N. (2021). The Impact of Market Orientation on the Performance and Innovation of Global Teams. International Management Review, 17(2), 67-147.

Reijonen, H., & Komppula, R. (2010). The adoption of market orientation in SMEs: required capabilities and relation to success. Journal of strategic marketing, 18(1), 19-37.

Rezazadeh, B., Karami, H., & Karami, A. (2016). Technology orientation, dynamic capabilities and SMEs performance. Strategic Management Quarterly, 4(1), 41-60.

Schlosser, F. K., & McNaughton, R. B. (2009). Using the I‐MARKOR scale to identify market‐oriented individuals in the financial services sector. Journal of Services Marketing, 23(4), 236-248.

Schlosser, F. K., & McNaughton, R. B. (2007). Individual-level antecedents to market-oriented actions. Journal of business Research, 60(5), 438-446.

Sendaro, A. A., & Baharun, R. (2020). Mediating role of individual market orientation in emotional Intelligence and job performance relationship for banking industry. Global Business Review, 21(1), 18-30.

Shah, S. M. A., El-Gohary, H., & Hussain, J. G. (2015). An investigation of market orientation (Mo) and tourism Small and Medium-Sized Enterprises’(SMEs) performance in developing countries: a review of the literature. Journal of travel & tourism marketing, 32(8), 990-1022.

Siguaw, J. A., Simpson, P. M., & Baker, T. L. (1998). Effects of supplier market orientation on distributor market orientation and the channel relationship: the distributor perspective. Journal of marketing, 62(3), 99-111.

Sivaramakrishnan, S., Zhang, D., Delbaere, M., & Bruning, E. (2008). The relationship between organizational commitment and market orientation. Journal of Strategic Marketing, 16(1), 55-73.

Slater, S. F., & Narver, J. C. (1994). Does competitive environment moderate the market orientation-performance relationship? Journal of marketing, 58(1), 46-55.

Tahmasebinia, Z., Jokar, A., Mohebi, A., Fardmehregan, S., Beigi, M., & Tahmasebinia, F. (2022). A Study on the Impact of Market and Strategic Orientations on Business Performance by Emphasizing the Role of Innovation as a Mediator. Business Management and Strategy, 13(2), 67.

Tsou, H. T., Chen, J. S., & Liao, W. H. (2014). Market and technology orientations for service delivery innovation: the link of innovative competence. Journal of Business & Industrial Marketing, 29(6), 499-513.

Verhees, F. J., & Meulenberg M. T. (2004). Market Orientation, Innovativeness, Product Innovation, and Performance in Small Firms. Journal of Small Business Management, 42(2), 134–154.

Voss, G. B., & Voss, Z. G. (2000). Strategic orientation and firm performance in an artistic environment. Journal of marketing, 64(1), 67-83.

Wang, D., Su, Z., & Guo, H. (2019). Top management team conflict and exploratory innovation: The mediating impact of market orientation. Industrial Marketing Management, 82, 87-95.

Wang, G., Holmes Jr, R. M., Oh, I. S., & Zhu, W. (2016). Do CEOs matter to firm strategic actions and firm performance? A meta‐analytic investigation based on upper echelons theory. Personnel Psychology, 69(4), 775-862.

Webster Jr, F. E. (1988). The rediscovery of the marketing concept. Business horizons, 31(3), 29-39.

Winston, E., & Dadzie, K. Q. (2002). Market orientation of Nigerian and Kenyan firms: The role of top managers. Journal of Business & Industrial Marketing, 17(6), 471-480.

Zahra, S. A., Hayton, J. C., & Salvato, C. (2004). Entrepreneurship in Family vs. Non-Family Firms: A Resource- Based Analysis of the Effect of Organizational Culture. Entrepreneurship theory and practice, 28(4), 363–381.

Downloads

Published

2022-12-28

How to Cite

Diao, M. T., & Doucoure, B. (2022). Implementing Strategic Orientations in SMEs: The role of CEO’s Market Orientation . Journal of Comparative International Management, 25(2), 246–274. https://doi.org/10.55482/jcim.2022.33299

Issue

Section

Research Articles