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The relationship between market orientation and performance in the hospital industry: A structural equations modeling approach


  • P.S. Raju
  • Subhash Lonial
  • Yash Gupta
  • Craig Ziegler


There is general consensus in the research literature that market orientation is related to organizational performance. This study examines this relationship in the hospital industry. One unique feature of this study is that both market orientation and performance are conceptualized as being multi-dimensional constructs. Hence the technique of Structural Equations Modeling (SEM) is used to examine the relationship. Analyses were based on market orientation and performance data obtained from 175 hospitals in a five-state region of the United States. The SEM results confirm the multi-dimensional nature of both market orientation and performance, and the strong relationship between the constructs. Interestingly, this relationship is found to be much stronger for smaller hospitals than for larger hospitals. Implications for the hospital industry are discussed. Copyright Kluwer Academic Publishers 2000

Suggested Citation

  • P.S. Raju & Subhash Lonial & Yash Gupta & Craig Ziegler, 2000. "The relationship between market orientation and performance in the hospital industry: A structural equations modeling approach," Health Care Management Science, Springer, vol. 3(3), pages 237-247, June.
  • Handle: RePEc:kap:hcarem:v:3:y:2000:i:3:p:237-247
    DOI: 10.1023/A:1019061912075

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    Cited by:

    1. Raju, P.S. & Lonial, Subhash C. & Crum, Michael D., 2011. "Market orientation in the context of SMEs: A conceptual framework," Journal of Business Research, Elsevier, vol. 64(12), pages 1320-1326.
    2. Jin-An Huang & Chi-Shiun Lai & Jer-San Hu & Rhay-Hung Weng, 2014. "The impact of market orientation on patient loyalty: the mediation of relationship quality," Service Business, Springer;Pan-Pacific Business Association, vol. 8(4), pages 499-515, December.


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