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Market orientation and performance in the service industry: A data envelopment analysis

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  • Haugland, Sven A.
  • Myrtveit, Ingunn
  • Nygaard, Arne

Abstract

The relationship between market orientation and performance is a cornerstone in the market orientation literature. However, few empirical studies applying objective performance measures raise concerns about whether or not the most market-oriented firms are the best performers. This article reports a study testing the market orientation model using a multi-method approach to measure performance. The study applies two objective performance measures-relative productivity, calculated by data envelopment analysis (DEA) and return on assets (ROA)-and one subjective performance measure-perceived profitability compared to key competitors. Building on empirical data from the hotel industry, the results indicate that market orientation has only a modest effect on relative productivity and no effect on return on assets. The strongest effect of market orientation on performance occurs when applying the subjective performance measure.

Suggested Citation

  • Haugland, Sven A. & Myrtveit, Ingunn & Nygaard, Arne, 2007. "Market orientation and performance in the service industry: A data envelopment analysis," Journal of Business Research, Elsevier, vol. 60(11), pages 1191-1197, November.
    • Handle: RePEc:eee:jbrese:v:60:y:2007:i:11:p:1191-1197
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    Cited by:

    1. Dev K. Dutta & Vishal K. Gupta & Xiujian Chen, 2016. "A Tale of Three Strategic Orientations: A Moderated-Mediation Framework of the Impact of Entrepreneurial Orientation, Market Orientation, and Learning Orientation on Firm Performance," Journal of Enterprising Culture (JEC), World Scientific Publishing Co. Pte. Ltd., vol. 24(03), pages 313-348, September.
    2. Diego Monferrer & Maria Ripolles & Andreu Blesa, 2012. "Competitiveness through strategic orientation," Tržište/Market, Faculty of Economics and Business, University of Zagreb, vol. 24(2), pages 163-185.
    3. Hanyu Zhu & Kailing Zhang & Gang Li & Lin Chen & Xijie Zhao, 2022. "Relationship Management Capability and Service Innovation Performance: The Joint-Effect of Relationship Learning and Competitive Intensity," Sustainability, MDPI, vol. 14(19), pages 1-22, September.
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    5. Patrik Jangl, 2015. "Relationship Between Market Orientation and Business Performance in Czech and German High-Tech Firms," Tržište/Market, Faculty of Economics and Business, University of Zagreb, vol. 27(2), pages 153-170.
    6. Kozielski Robert, 2016. "Determinants of Business Success – Theoretical Model and Empirical Verification," Folia Oeconomica Stetinensia, Sciendo, vol. 16(1), pages 274-285, December.
    7. Huang, Chin-wei & Ho, Foo Nin & Chiu, Yung-ho, 2014. "Measurement of tourist hotels׳ productive efficiency, occupancy, and catering service effectiveness using a modified two-stage DEA model in Taiwan," Omega, Elsevier, vol. 48(C), pages 49-59.
    8. Rahman, Mahabubur & Lambkin, Mary & Hussain, Dildar, 2016. "Value creation and appropriation following M&A: A data envelopment analysis," Journal of Business Research, Elsevier, vol. 69(12), pages 5628-5635.
    9. Mahmoud Abdulai Mahmoud & Charles Blankson & Robert E. Hinson, 2017. "Market orientation and corporate social responsibility: towards an integrated conceptual framework," International Journal of Corporate Social Responsibility, Springer, vol. 2(1), pages 1-15, December.
    10. Amézquita, Juan C. & Puig, Francisco & Royo-Vela, Marcelo, 2022. "Location, market orientation, and firm performance: An analysis of the Colombian healthcare industry," TEC Empresarial, School of Business, Costa Rica Institute of Technology (ITCR), vol. 16(3), pages 34-54.
    11. Paul Amadieu & Jean-Laurent Viviani, 2010. "Intangible effort and performance: the case of the French wine industry," Agribusiness, John Wiley & Sons, Ltd., vol. 26(2), pages 280-306.
    12. Li-Ting Yeh, 2017. "Incorporating Workplace Injury to Measure the Safety Performance of Industrial Sectors in Taiwan," Sustainability, MDPI, vol. 9(12), pages 1-14, December.
    13. Casanueva, Cristóbal & Gallego, Ángeles & Castro, Ignacio & Sancho, María, 2014. "Airline alliances: Mobilizing network resources," Tourism Management, Elsevier, vol. 44(C), pages 88-98.
    14. Manuel Espitia‐Escuer & Lucia Isabel Garcia‐Cebrian, 2020. "Efficiency of football teams from an organisation management perspective," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 41(3), pages 321-338, April.
    15. Pradeep Kumar Mohanty & N. Senthil Kumar, 2017. "Measuring farmer’s satisfaction and brand loyalty toward Indian fertilizer brands using DEA," Journal of Brand Management, Palgrave Macmillan, vol. 24(5), pages 467-488, October.
    16. Herhausen, Dennis, 2016. "Unfolding the ambidextrous effects of proactive and responsive market orientation," Journal of Business Research, Elsevier, vol. 69(7), pages 2585-2593.
    17. Salunke, Sandeep & Weerawardena, Jay & McColl-Kennedy, Janet R., 2013. "Competing through service innovation: The role of bricolage and entrepreneurship in project-oriented firms," Journal of Business Research, Elsevier, vol. 66(8), pages 1085-1097.
    18. Aliyu Mukhtar Shehu & Rosli Mahmood, 2014. "An Empirical Analysis of Market Orientation and Business Performance Relationship in the Context of Developing Economy," International Journal of Academic Research in Business and Social Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Business and Social Sciences, vol. 4(9), pages 219-232, September.
    19. Antonio Carrizo Moreira & Pedro Miguel Silva, 2013. "Market orientation, innovation and organizational commitment in industrial firms," Tržište/Market, Faculty of Economics and Business, University of Zagreb, vol. 25(2), pages 123-142.
    20. Richard Glavee-Geo & Per Engelseth & Arnt Buvik, 2022. "Power Imbalance and the Dark Side of the Captive Agri-food Supplier–Buyer Relationship," Journal of Business Ethics, Springer, vol. 178(3), pages 609-628, July.
    21. Makridou, Georgia & Doumpos, Michalis & Galariotis, Emilios, 2019. "The financial performance of firms participating in the EU emissions trading scheme," Energy Policy, Elsevier, vol. 129(C), pages 250-259.
    22. Avkiran, Necmi K. & Thoraneenitiyan, Nakhun, 2010. "Purging data before productivity analysis," Journal of Business Research, Elsevier, vol. 63(3), pages 294-302, March.
    23. Eleni Dimitriadou & Asimina Kouriati & Sofia Karampela & Anna Tafidou & Thomas Bournaris, 2023. "The Three Dimensions of Small Accommodation Businesses and Their Efficiency," Tourism and Hospitality, MDPI, vol. 4(3), pages 1-16, August.
    24. Pilar Alberca & Laura Parte, 2020. "Efficiency in the Holiday and Other Short-Stay Accommodation Industry," Sustainability, MDPI, vol. 12(22), pages 1-22, November.
    25. Assaf, A. George & Josiassen, Alexander & Gillen, David, 2014. "Measuring firm performance: Bayesian estimates with good and bad outputs," Journal of Business Research, Elsevier, vol. 67(6), pages 1249-1256.

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