Understanding the Role of Inter-firm Market Orientation in the Market Orientation-Performance Relationship

  • Anthony Francescucci

Student thesis: Doctor of Business Administration


The Market orientation (MO) phenomena have been meticulously studied in the marketing literature for more than three decades. While in the beginning MO had been investigated from a focal form perspective, it has evolved to account for the role it plays in distribution channels or supply chains. However, the perspective taken has consistently been from a focal firm perspective, either about its own or its partners market orientation. This study seeks to extend the theory on market orientation to account for the role that it plays within business relationships (i.e. inter-firm market orientation). IMO was initially conceptualized as the joint activities between the focal firm and its channel partner in joint intelligence generation, joint intelligence dissemination and joint customer responsiveness. This study develops the theory that a business relationship can be either market oriented or not and attempts to explain the effect of this inter-firm market orientation on relationship performance as well as focal firm performance. Specifically, this study asks the question, does inter-firm market orientation mediate the focal firm market orientation - performance relationship?This study was investigated using a two-stage approach. In the first stage, a measurement scale was developed and empirically tested to measure inter-firm market orientation. It was from the scale development efforts that the conceptualization of IMO was refined to include the joint intelligence cooperation and joint customer responsiveness efforts between the focal firm and its channel partners. It appears that the focal firm and their channel partner do not differentiate or separate the activities of intelligence generation and intelligence dissemination. They view it more as a cooperative effort. Additionally, the focus of the intelligence cooperation efforts appears to be more about intelligence collected through market research about end-user customers rather than by speaking with customers directly. Finally, the customer responsiveness efforts appear to be reactively focused rather than both reactively and proactively.The scale development was followed by the second stage where the revised IMO construct was included in a model in which it mediated the often-studied market orientation - performance relationship. A number of hypotheses were developed using various relationship theories such as transaction cost economics, resource-based view, and interaction approach. The model was tested with a sample of 130 informants using a variance-based structural equation modeling technique called partial least squares. The final analysis indicated that all paths were significant and that the IMO and relationship performance constructs partially mediated the MO - performance relationship. These findings suggest that it is important to understand both intra and inter-firm market orientation activities to truly understand their impact on business performance.
Date of Award1 Aug 2015
Original languageEnglish
Awarding Institution
  • The University of Manchester
SupervisorPeter Naude (Supervisor)


  • Market Orientation
  • Inter-firm Market Orientation
  • Business Performance
  • Mediation

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