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Market Orientation and Performance Measurement System Adoption Impact on Performance in SMEs

Author

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  • Aapo Länsiluoto
  • Sanna Joensuu‐salo
  • Elina Varamäki
  • Anmari Viljamaa
  • Kirsti Sorama

Abstract

Previous research has shown a connection between market orientation (MO) and firm performance, as well as between performance measurement systems (PMS) adoption, but their mutual interactions are as yet little understood in small and medium‐sized enterprises (SMEs). Using empirical data collected by a survey from 123 Finnish SMEs, we analyze the relationship between MO, PMS adoption, and performance. According to the results, MO has positive relationships with PMS adoption and nonfinancial performance. However, the impact of MO on financial performance is mediated by PMS adoption. PMS adoption is thus an important factor in explaining variance in firm performance. Finally, empirical analysis shows that the larger SME firms adopt PMS more extensively.

Suggested Citation

  • Aapo Länsiluoto & Sanna Joensuu‐salo & Elina Varamäki & Anmari Viljamaa & Kirsti Sorama, 2019. "Market Orientation and Performance Measurement System Adoption Impact on Performance in SMEs," Journal of Small Business Management, Taylor & Francis Journals, vol. 57(3), pages 1027-1043, July.
    • Handle: RePEc:taf:ujbmxx:v:57:y:2019:i:3:p:1027-1043
    DOI: 10.1111/jsbm.12393
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    Cited by:

    1. Moad Hamod Saleh & Mohammed A. Al-Hakimi, 2022. "The Effect of Marketing Ethics as a Moderator on the Relationship Between Competitor Orientation and SMEs’ Performance in Saudi Arabia," SAGE Open, , vol. 12(3), pages 21582440221, August.
    2. Linda Narh & Raphael Odoom & Mahmoud Abdulai Mahmoud & Ernest Yaw Tweneboah-Koduah, 2023. "The symbiotic effect of market orientation and brand orientation on performance of service firms in Ghana," Journal of Brand Management, Palgrave Macmillan, vol. 30(4), pages 318-332, July.

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