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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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    References listed on IDEAS

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    Citations

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    Cited by:

    1. 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.
    2. repec:gam:jsusta:v:9:y:2017:i:12:p:2241-:d:121575 is not listed on IDEAS
    3. 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.
    4. 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.
    5. repec:eee:touman:v:44:y:2014:i:c:p:88-98 is not listed on IDEAS
    6. Herhausen, Dennis, 2016. "Unfolding the ambidextrous effects of proactive and responsive market orientation," Journal of Business Research, Elsevier, vol. 69(7), pages 2585-2593.
    7. Seyed Mohammad FATEMINEJAD & Fatemeh BAGHERI & Hannan Amuzadeh MEHDIRAJI & Reza GHAFFARITABAR, 2012. "Subsystem Strategy Setting for Iran Local Market:Benchmarking Approach," Economics and Applied Informatics, "Dunarea de Jos" University of Galati, Faculty of Economics and Business Administration, issue 3, pages 85-92.
    8. 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.
    9. 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.
    10. 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.
    11. 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.
    12. 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.
    13. 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.
    14. Avkiran, Necmi K. & Thoraneenitiyan, Nakhun, 2010. "Purging data before productivity analysis," Journal of Business Research, Elsevier, vol. 63(3), pages 294-302, March.
    15. 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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