Market orientation and learning orientation in improving innovativeness and organizational performance of medium sized industrial businesses

Abstract

The purpose of this research was 1) to study innovativeness levels and organizational performance levels of medium sized industrial businesses, 2) to study the relationship of market orientation and learning orientation and their effectiveness on innovativeness and the organizational performance of medium sized industrial businesses, 3) to develop and examine the goodness of fit of a causal model of market orientation and learning orientation effecting innovativeness and organizational performance of medium-sized industrial businesses to the empirical data. The research methodology was divided into two types. Firstly, the study utilized quantitative methodology, which was a collection of data through the use of questionnaires. The research samples consisted of 265 organizations from five medium sized industries which consist of the automotive manufacturing industry, the plastics manufacturing industry, the chemist manufacturing industry, the rubber manufacturing industry and the fruits and vegetable processing industry. The data obtained were analyzed by using descriptive statistics, Pearson‟s product moment correlation by SPSS, and the analysis of structural equation model and model invariance by the LISREL program, version 8.52.Secondly, the study used qualitative methodology, which included in-depth interviews with top management in order to study phenomenon and applied the obtained data to describe and confirm the data with the quantitative results. The quantitative research findings were as follow: 1) The levels of innovativeness of medium-sized industrial businesses were quite high ( Χ =5.02, S.D.=0.28).The part of behavioral innovativeness had the highest average( Χ =5.35, S.D.=0.28). And the levels of organizational performance of medium-sized industrial businesses were quite high ( Χ =4.79, S.D.=0.35). The overall performance had the highest average ( Χ =4.80, S.D.=0.45). The rubber manufacturing industry had the highest average of innovativeness levels and organizational performance levels. 2) The relationship between observed variables of market orientation, learning orientation, innovativeness and the organizational performance both had a number of 78 and the relationship was significant at the 0.01 level. The correlation coefficient values were positive with a number of 0.226 to 0.665.Both correlation coefficients between competitor orientation and customer orientation were the highest correlation (r=0.665). 3) The causal model was a fit with the empirical data, as indicated by the Chisquare= 53.221, p=0.079, df=40, GFI=0.970, AGFI=0.932 and RMR=0.009. The variable that directly affected organizational performance the most was learning orientation. Next were innovativeness and market orientation, respectively. And the variables that directly affected innovativeness were market orientation and learning orientation, respectively. The variables in the model accounted for 94%, 72% and 47% of organizational performance, innovativeness and learning orientation, respectively.