Dissertation: “Does a market orientation guarantee success in the SME segment of South African...

Salford Business School

Does a market orientation guarantee success in the

SME segment of South African companies?

By Marc Fletcher

Student Number: 00377204

A dissertation submitted in partial fulfilment of the requirements of The University of

Salford for the degree of MSc Marketing

Supervisor: Dr. Vesna Sedoglavich

15th November 2014

Does a market orientation guarantee success in the SME segment of South African companies?

Marc Fletcher, November 2014 i

Declaration

I hereby declare that this dissertation is submitted for the MSc Marketing

degree at The University of Salford and is my own work and has not been previously

submitted to any other institution of higher education. I further declare that all

sources cited or quoted are indicated and acknowledged by means of a

comprehensive list of references.

Word Count: 15,686


Marc Fletcher, November 2014 ii

Abstract

Market orientation is a topic which has been discussed at large for over fifty years and still it remains a business strategy that is largely overlooked in many organisations. Within South Africa, SME’s account for 34 percent of the country’s GDP and 91 percent of the country’s formalised business community. This positions South African SMEs as a critical segment in the country’s economy and a key area of focus for the South African Government as they seek ways to grow South Africa’s economy, create sustainable jobs and to improve standards by increasing responsible Government spending.

This research study seeks to understand the level of market orientation within South African SMEs, the relationship between market orientation and company performance and strives to identify key determinants of market orientation within SMEs in order to provide actionable areas of focus for those wishing to improve their market orientation.

This research was conducted using a survey strategy targeting SME managers within the Western Cape of South Africa. The survey instrument was created through a combination of adopting and adapting existing question constructs from previous research on market orientation and where required, development of new constructs to meet the needs and objectives of the research questions.

The results indicate an overall modest level of market orientation, which however also indicates a strong presence of a sales orientation. The relationship between market orientation and performance is inconclusive, which is concluded to be due to the combination of the inherent modest market orientation and the struggling South African economy. Culture emerges as having an effect on market orientation, however this is identified as being specifically contrary to the existing research on the matter, which is attributed to the specific SME segment which this research addresses.

In conclusion the results of this dissertation provides for an actionable set of focus areas for the South African Small Business Council or even individual SMEs and business incubators to consider. Market orientation in the SME segment has a baseline which exists from inherent customer orientated activities but lacks the education and mentoring to develop strategic plans and execute on the resultant plans to help drive market orientation to its full potential.


Marc Fletcher, November 2014 iii

Acknowledgements

I take this opportunity to thank those that participated in my survey, who were drawn

from a large network of business acquaintances, colleagues and partners from

across the breadth of the thriving SME segment of business in South Africa. Without

their help and response this project would not have been possible.

I would like to acknowledge the support and guidance afforded to me by Professor

Gabriel Jacobs with his invaluable contributions and ideas that helped form my

research topic, and to my supervisor Dr Vesna Sedoglavich for her guidance

throughout the process and the speed at which she responded to my requests.

My appreciation goes to my colleagues at Intervate who through their thoughtful

support provided me the time and space to complete this project and in particular to

Wilhelm van Rensburg, who was most supportive of my efforts.

Lastly, but not least, I am ever grateful to my parents Adrian and Sylvia Fletcher for

their continued encouragement and support, and to my wife Juleiga Moosa-Fletcher,

without whom this task would have been unfathomable, providing me with the

mental, physical and emotional support with which to complete this epic task whilst

working full time.


Marc Fletcher, November 2014 iv

Contents

1. Chapter 1: Introduction ........................................................................................... 1

1.1. Chapter Overview ............................................................................................ 1

1.2. Background...................................................................................................... 1

1.3. Motivation ........................................................................................................ 2

1.4. Aims and Objectives ........................................................................................ 3

1.5. Research Questions Overview ........................................................................ 3

1.5.1. Central Question ....................................................................................... 3

1.5.2. Research Questions .................................................................................. 4

1.6. Research Methodology .................................................................................... 5

1.7. Limitations of the Study ................................................................................... 5

1.8. Ethical Considerations of the Study ................................................................. 6

1.9. Organisation of the Dissertation ....................................................................... 6

1.10. Chapter Summary .......................................................................................... 7

2. Chapter 2: Literature Review .................................................................................. 8

2.1. Chapter Overview ............................................................................................ 8

2.2. The Origins of a Market Orientation ................................................................. 8

2.3. Defining a SME in the Context of South Africa ................................................ 9

2.4. Defining Marketing Orientation ...................................................................... 10

2.5. Market Intelligence’s Exogenous Factors ...................................................... 13

2.6. Market Intelligence Generation, Dissemination and Responsiveness ........... 14

2.7. Market Orientation and Culture ...................................................................... 17

2.8. Market Orientation and Innovation ................................................................. 21


Marc Fletcher, November 2014 v

2.9. Market Orientation and Competition .............................................................. 22

2.10. Relationship between Market Orientation and Organisation Performance .. 24

2.11. Measuring Market Orientation...................................................................... 25

2.12. Conceptual Framework ................................................................................ 26

2.13. A Summary Market Orientation Definition .................................................... 27

2.14. Chapter Summary ........................................................................................ 28

3. Chapter 3: Research Methodology ....................................................................... 29

3.1. Chapter Overview .......................................................................................... 29

3.2. Research Design ........................................................................................... 29

3.3. Population and Sample .................................................................................. 29

3.4. Operationalization .......................................................................................... 30

3.5. Questionnaire Design .................................................................................... 30

3.6. Data Analysis ................................................................................................. 34

3.7. Reliability and Validity .................................................................................... 34

3.8. Ethics ............................................................................................................. 36

3.9. Chapter Summary .......................................................................................... 37

4. Chapter 4: Results and Discussion ...................................................................... 38


4.2. Data Demographics Results and Discussion ................................................. 39

4.3. Research Question 2 – Level of Market Orientation - Results ....................... 46

4.3.1. RQ2- Level of Market Orientation - Reliability ......................................... 46

4.3.2. RQ2 - Level of Market Orientation - Market Orientation Scale ................ 50

4.4. Research Question 2 – Level of Market Orientation – Discussion ................. 54


Marc Fletcher, November 2014 vi

4.5. Research Question 2 – Level of Market Orientation – Summary ................... 59

4.6. Research Question 3 – Determinants of Market Orientation - Results .......... 61

4.6.1. RQ3 - Determinants of Market Orientation - Reliability ........................... 61

4.6.2. RQ3 - Determinants of Market Orientation – Culture .............................. 65

4.6.1. RQ3 – Determinants of Market Orientation – Competitiveness ............... 66

4.6.2. RQ3 - Determinants of Market Orientation – Management Investment ... 67

4.7. Research Question 3 – Determinants of a Market Orientation – Discussion . 68

4.8. Research Question 3 – Determinants of a Market Orientation – Summary ... 73

4.9. Research Question 1 – Company Performance and Market Orientation –

Results .................................................................................................................. 74

4.9.1. RQ1 – Company Performance and Market Orientation – Reliability ....... 74

4.9.2. RQ1 – Company Performance and Market Orientation – Performance .. 75


Discussion ............................................................................................................ 80


Summary .............................................................................................................. 81

4.12. Chapter Summary ........................................................................................ 82

5. Chapter 5: Conclusions and Recommendations .................................................. 84


5.2. Problem Statement and Methodology ............................................................ 84

5.3. Conclusions ................................................................................................... 85

5.4. Limitations ..................................................................................................... 89

5.5. Recommendations and Scope for Future Research ...................................... 90

5.6. Chapter Summary .......................................................................................... 90


Marc Fletcher, November 2014 vii

6. References ........................................................................................................... 91

7. Appendix A – Email Note to Respondents ........................................................... 99

8. Appendix B – First Question of Questionnaire ................................................... 100

9. Appendix C – Complete Questionnaire .............................................................. 101

List of Tables

Table 1 - Research Questions .................................................................................... 4

Table 2 - Company Category in South Africa according to the National Small Business

Amendment Act, 2003 - (The Presidency, Republic of South Africa, 2003) ............. 10

Table 3 - Reliabilities of the Market Orientation Scales - Intelligence Generation and

Dissemination ........................................................................................................... 47

Table 4 - Reliabilities of the Market Orientation Scales - Development of a Market

Orientated Strategy .................................................................................................. 48

Table 5 - Reliabilities of the Market Orientation Scales - Implementation of a Market

Orientation Strategy / Responsiveness .................................................................... 49

Table 6 - Percentages of both favourable and non-favourable responses to the market

orientation scales ..................................................................................................... 51

Table 7 - Second Market Orientation Construct ....................................................... 53

Table 8 - Reliabilities of the Determinants of Market Orientation Scales -

Innovation ................................................................................................................. 62

Table 9 - Reliabilities of the Determinants of Market Orientation Scales -

Competition .............................................................................................................. 62

Table 10 - Reliabilities of the Determinants of Market Orientation Scales - Culture . 63

Table 11 - Reliabilities of the Performance Scale ..................................................... 74


Marc Fletcher, November 2014 viii

List of Figures

Figure 1 - A Model of Organizational Culture Types - (Deshpande, Farley, & Webster,

Jr, 1993, p. 25) ......................................................................................................... 20

Figure 2 - Conceptual Framework of Antecedents to and Consequences of a Market

Orientation ................................................................................................................ 27

Figure 3 - Job Roles of Respondents ....................................................................... 40

Figure 4 - Highest Level of Qualification Obtained ................................................... 41

Figure 5 - Subject of Highest Qualification (if not Matric) ......................................... 41

Figure 6 - Percentage of Respondents by Industry Sector ....................................... 43

Figure 7 - Company Category (SME Size) by Employees ........................................ 44

Figure 8 - Job Role Allocation .................................................................................. 45

Figure 9 - Market Orientation Measures - Percentage Favourable/Non Favourable

Response ................................................................................................................. 55

Figure 10 - Implementation of a market orientated strategy / responsiveness ......... 56

Figure 11 - Development of a Market Orientated Strategy ....................................... 58

Figure 12 - Intelligence Generation and Dissemination ............................................ 59

Figure 13 - Organisational Culture Types ................................................................. 65

Figure 14 - Organisation Culture Types by SME Segment ....................................... 66

Figure 15 - Determinants of Market Orientation – Competitiveness ......................... 67

Figure 16 - Percentage Shareholding of those Respondents who are Shareholders 68

Figure 17 - SME Size and Shareholding Percentage ............................................... 70

Figure 18 - Competition and Market Orientation Scales Combined ......................... 72

Figure 19 - Profit relative to our businesses' largest competitor ............................... 75

Figure 20 - Size relative to our businesses' largest competitor ................................ 76

Figure 21 - Market share relative to our businesses' largest competitor .................. 77

Figure 22 - Growth relative to our businesses' largest competitor ............................ 78

Figure 23 - Correlation between Profitability and Market Orientation - Intelligence

Generation and Dissemination ................................................................................. 79


Marc Fletcher, November 2014 ix

Figure 24 - Correlation between Profitability and Development of a Market Orientated

Strategy .................................................................................................................... 79

Figure 25 - Correlation between Profitability and Implementation of a Market

Orientated Strategy .................................................................................................. 80

Figure 26 - Conceptual Framework of Antecedents to and Consequences of a Market

Orientation - Summary ............................................................................................. 88

List of Acronyms

SME / SMEs Small and Medium sized Enterprises

GDP Gross Domestic Profit

SBU Strategic Business Unit

POPI Protection of Personal Information Act


Marc Fletcher, November 2014 1

1. Chapter 1: Introduction

1.1. Chapter Overview

This chapter provides an overview of the research study completed. The

chapter will provide a background to the study and will also explore the motivation of

the author to conduct the study as well as the aims and objectives. The research

questions and an overview of the methodology are also be presented.

1.2. Background

SME companies in South Africa are believed to make up 91% of formalized

businesses in South Africa, accounting for approximately 60% of the labour force

and accounting for approximately 34% of GDP (The Banking Association of South

Africa, 2013). The South African government has identified a number of challenges

in this most significant sector or business, which includes a lack of management

skills (The Banking Association of South Africa, 2013).

Many organisation’s management teams, not just in South Africa, but globally,

make the mistake of focusing on the selling concept (also known as the selling

philosophy) opposed to the marketing concept (also known as the marketing

philosophy (Levitt, 1960). The selling concept is the focus of ‘selling’ ones products

or services without really understanding the customer’s needs and wants (Kotler,

Keller, Brady, Goodman, & Hansen, 2012). Conversely, the marketing concept takes

a different view. Theodore Levitt (1960) of Harvard Business School defined this

succinctly in his article in the Harvard Business Review:

Selling focuses on the needs of the seller; marketing on the needs of the buyer. Selling is preoccupied with the seller’s need to convert his product into cash; marketing with the idea of satisfying the needs of the customer by



means of the product or service and the whole cluster of things associated with creating, delivering and finally consuming it (Levitt, 1960, p. 50).

The risks associated with a selling concept include customer dissatisfaction

resulting from purchasing a product or service that the customer really did not want

or which did not meet their needs nor desires.

Market orientation is the name used to refer to the implementation of the

marketing concept or philosophy, therefore a market-orientated organisation is one

that is striving to implement aspects of the marketing concept in order to fulfil the

goals of its organisation (Webster Jr, 1988).

1.3. Motivation

As an entrepreneur in South Africa over the last 12 years I have owned one,

and co-owned one SME company and I envisage that I will continue to be involved in

the SME segment in South Africa for some years to come. Many entrepreneurs and

SME company managers and owners in South Africa have little or no formal

business education or training, and tend to make strategic decisions through the

instinct of survival with short term objectives and gains top of mind. My own

experience has led me to postulate that with guidance and mentorship in areas such

as market orientation, the SME segment could grow and strengthen, ultimately

improving the South African economy and helping South Africans help themselves to

become better employers and run more successful and sustainable businesses.



1.4. Aims and Objectives

This aspiration, and my experience directly in being one of these business

owners has led me to the proposed dissertation title which will seek to investigate the

following:

To understand what is the general level of market orientation in South African

SME companies.

To understand if there is a relationship between companies performance

within the SME segment of companies in South Africa and their adoption of

market orientation.

To understand what are the key influencing determinants of market orientation

in companies in the SME segment in South Africa.

The research will aim to provide a useful insight to what guidance the South

African government could and should focus on providing, through the National Small

Business Council, which was created as a result of the National Small Business Act

of 1996, to small businesses within South Africa to help them succeed and grow. I

postulate that the research will also be relevant to small business and to business

incubators as it may provide some guidance on the topic of market orientation and its

relevance in business mentorship.

1.5. Research Questions Overview

1.5.1. Central Question

The central research question of this dissertation is:



”Is there a relationship between market orientation and company performance in the

SME segment of companies in South Africa?”

1.5.2. Research Questions

This central question and other research questions are defined in detail in

Table 1 below:

Table 1 - Research Questions

RQ # Research Question Description Method

RQ1 Is there a relationship between

market orientation and company

performance in the SME

segment of companies in South

Africa?”

The study explored facets of

performance and market

orientation.

Literature Review and

questionnaire.

RQ2 What is the general level of

market orientation in South

African SME companies

compared to Western European

/ North American companies?

This question seeks to

position South Africa’s SME

segment with other research

undertaken in the developed

world.


questionnaire.

RQ3 What are the key influencing

determinants of market

orientation in companies in the

SME Segment in South Africa?

Research shows that there a

number of determinants for

market orientation – the

study sought to explore

which of these were

prevalent in the South

African SME context.


questionnaire.



1.6. Research Methodology

The study reflects a philosophy of positivism, in that data was collected about

observable realities and regularities and causal relationships were sought to create

law-like generalisations (Gill & Johnson, 2010).

The study adopted an abductive approach – data was collected to ultimately

concur with or modify the existing theory that market orientation has a relationship

with company performance, within the specific context of my study. The study used

quantitative methods in its methodology.

A survey strategy was adopted to establish a data set from respondents. The

survey was conducted online and contact was initiated via email and telephone to

invite the respondents to participate. Respondents were encouraged to share the

survey link with any contacts who they felt may be appropriate. The intended

participants were drawn from the author’s pool of acquaintances and contacts in

South Africa who are either founders/owners or managers in SME firms. It was

envisaged that the sample size would be 150 participants. A return rate of between

35% to 40% of respondents was anticipated and was considered to be an

acceptable response rate (Baruch & Holton, 2008). Finally data from the collated

data set was analysed to arrive at conclusions and to identify recommendations for

future research.

1.7. Limitations of the Study

Given the limitation of time, a cross-section study was undertaken.

Furthermore, the study was undertaken in English. While some respondents did not

have English as their ‘mother-tongue’ (there are 11 official languages in South



Africa), business is predominantly undertaken in English and it was not expected to

have an adverse effect on the outcomes.

1.8. Ethical Considerations of the Study

Anonymity and confidentiality of all respondents to this study were ensured.

The data contained within the survey was coded to ensure that this confidentiality

was retained. Further ethical considerations are discussed in detail in the

methodology chapter.

1.9. Organisation of the Dissertation

This research study has been divided into six chapters, as follows:

Chapter 1: Introduction. This chapter provides a background to the study, which has

led to the formulation of the research questions. It also includes the motivation of the

author and provides an ideal on how this research may be used in South Africa.

Chapter 2: Literature Review. This chapter provides a synthesis of the published

work on the topic of ‘Market Orientation’ and has sought to underpin the aims and

objectives of this study as well as to provide a wholesome overview of the seminal

studies that have been completed to date.

Chapter 3: Research Methodology. This chapter defines the data collection methods

and research design chosen for this research study and provides a reasoned

argument for the choice, and reviews the reliability and validity issues of the

methodology.



Chapter 4: Results and Discussion. This chapter will present the results captured

using the methodology adopted and will discuss the analysed results that have been

found.

Chapter 5: Conclusions and Recommendations. This chapter will present the

conclusions and recommendations resulting from the study. This chapter will also

provide a final reflection on the research study, highlighting the successes and

failures and also provide details of opportunities for further research on this topic as

identified through this study.

At the end of the study, a comprehensive list of references is provided.

1.10. Chapter Summary

This chapter presented an overview of the research study conducted,

including the aims, objective and motivation and outlining the methodology. Finally

the chapter concluded with an outline of the dissertation structure.



2. Chapter 2: Literature Review


The purpose of the literature review and therefore this chapter is to

understand the seminal theory and empirical studies that have been undertaken on

the topic of market orientation and its evolution over time. The chapter commences

with a broad view of some of the origins of market orientation, followed by a

discussion on the topic of the definition of a SME, a key and critical concept that

pertains to the target frame of this study. This is followed by a review and discussion

of the concept of market orientation, which is a widely interpreted phenomenon

resulting in a variety of definitions and implications. The chapter reviews the

determinants of market orientation as considered key to the author in this study and

states five hypotheses of market orientation within the SME segment of South Africa

to be tested as a result.

2.2. The Origins of a Market Orientation

The realm of market orientation provides for a considerable and broad body of

literature, and for that reason I am not attempting to provide an exhaustive account

of all literature pertaining to market orientation. However I proffer a small sampling

that provides theoretical grounding and empirical evidence which pertains to the

focus of this dissertation.

Market orientation was born from the marketing concept which essentially is a

business philosophy or policy statement which suggests that the ultimate goal of an

organisation is to fulfil the needs of customers in order to maximise business profits

(Webster Jr, 1988). During these early days it was not just scholars but business



leaders alike who were developing the marketing concept. John McKitterick of

General Electric stated that:

[It] is not so much to be skilful in making the customer do what suits the

interests of the business as to be skilful in conceiving and then making the business

do what suits the interests of the customer (McKitterick, 1957, pp. 71-82).

As explored in the introduction chapter, Levitt (1960) was an early proponent

of the differentiation between selling and marketing, by focusing on the customer’s

needs and not just the organisation’s products. Many of the studies in the 1990’s

and beyond used the seminal research of Narver and Slater (1990) or Kohli and

Jaworski (1990) or both as the basis of their research. The 2000’s and beyond also

saw a steady rise in the number of studies using this seminal research of the 1990’s

as a base, whilst adapting these theories, practices and frameworks to an ever

increasing myriad of permeations and variations to explore the various antecedents

and factors which have emerged around the topic.

2.3. Defining a SME in the Context of South Africa

This study concerns itself with the SME market, and therefore as a departure

point it is worth clarifying the context of a SME, specifically in the South African

context. Small and Medium sized Enterprises or SMEs have a variety of definitions

which vary between and within countries. Within South Africa this definition is

defined in Table 2 below (The Presidency, Republic of South Africa, 2003).



Table 2 - Company Category in South Africa according to the National Small Business Amendment Act, 2003 - (The Presidency, Republic of South Africa, 2003)

Company Category Employees Turnover

Medium Sized <= 200 < ZAR 51m

Small <= 50 < ZAR 13m

Very Small <=20 < ZAR 5m

Micro <= 5 < ZAR 0.2m

Within South Africa, due to large discrepancies of revenue within the size

bands between businesses, the measure of the number of employees is used more

regularly to classify company sizes. Therefore, within South Africa the size band,

based on the number of employees, for a SME is between 1 to 200 employees.

Given that this study is to focus on South African SMEs this will be the target

population for this study.

2.4. Defining Marketing Orientation

Definitions of the marketing concept, marketing orientation, market orientation

or customer orientation, as some scholars refer and use synonymously, differ in

many forms. Kohli and Jaworski (1990) note the term ‘market orientation’ is

preferred in many recent studies, allied with the idea that ‘market’ refers to the

broader context including customers, competitors and other exogenous forces. So

whilst I may refer to marketing orientation and marketing concept within this

dissertation – this will be for completeness and accuracy of citation whilst

recognising that the recommended term is ‘market orientation’.



Narver and Slater (1990, p. 21) define market orientation as “the

organisational culture that most effectively and efficiently creates the necessary

behaviours for the creation of superior value for buyers, thus continuous superior

performance for the business.” A market orientated business therefore continuously

seeks to identify its sustainable competitive advantage, by understanding how it can

maintain and create superior value for customers, whilst considering customer’s

needs to reduce a buyer’s total acquisition and use costs (Narver & Slater, 1990).

Narver and Slater (1990) claim that market orientation comprises of three

behaviours: customer orientation, competitor orientation and inter-functional

coordination, and two decision criteria: long term focus and profitability. Narver and

Slater’s (1990) empirical research is one of a number of seminal studies limited to

large commercial (North American) organisations, which as a result introduces a

bias. This bias, in my opinion may exist in the third behaviour: inter-functional

coordination, which in an SME could prove to be negated due to its operational size

and therefore could be argued to be an invalid measure of market orientation in the

SME context.

Kohli and Jaworski (1990) define market orientation as the collection and

dissemination of market intelligence, which is a broad context of a number of

exogenous sources (not just customers), including both current and future needs of

customers, and importantly, taking actions as a result of that intelligence. Therefore,

Kohli and Jaworski (1990) consider customer orientation and competitor orientation

under the classification of market intelligence. Accordingly, I concur with Kohli and

Jaworski’s broader definition, which includes a breadth of actors and factors, whilst

recognising that Narver and Slater’s (1990) focus is explicitly on ‘behaviours’, which



they postulate are the key instruments in a market orientation. I would argue that

developing these definitions to combine the breadth and the detail of both to ensure

an all-encompassing definition, could lead to a more complete definition which could

allow for a more refined test within the SME context.

Ruekert (1992, p. 228) defines market orientation as the “degree to which the

business unit obtains and uses information from customers, develops a strategy

which will meet customer needs, [and] implements that strategy by being responsive

to customers’ needs and wants”.

Deshpande et al (1993, p. 27) define customer orientation as “the set of

beliefs that puts the customer’s interest first, while not excluding those of all other

stakeholders such as owners, managers, and employees, in order to develop a long-

term profitable enterprise”.

All these definitions serve the purpose of further elaborating on the concept of

market orientation - whilst Narver and Slater’s (1990) definition could be argued to

provide a more theorised context ideal for large enterprise, Kohli and Jaworski’s

(1990) provide for a more practical implementation which has elements which may

provide for more definitive constructs with which to base a specific SME focused

study upon. Finally, Ruerkert’s (1992) theory of the development and implementation

of a market orientation strategy further provides a very practical approach which

could be very relevant for SMEs, where practicality tends to outweigh process, and

also where multiple departments may not exist, countering Narver and Slater’s

(1990) inter-departmental interaction as a key measure of market orientation.



An important and more recent study by Hult et al (2005) attempts to reconcile

the disparate definitions and postulates that market orientation includes all of the

seminal theories from the likes of Narver and Slater (1990), Kohli and Jaworski

(1990) and others previously mentioned. The most important conclusion that they

state is that customer orientation is not the only decisive factor of a market

orientation – a conclusion that I concur with and seek to explore further through this

study.

2.5. Market Intelligence’s Exogenous Factors

As already alluded to, market intelligence, the term proposed by Kohli and

Jaworski (1990), extends beyond the realms of just the ‘customer’ and the

‘competitor’ as posited by Narver and Slater (1990). These exogenous factors could

include government regulation, market forces as a result of new technology, trends,

changes in political climate, and environmental factors (Kohli & Jaworski, 1990). I

further posit that South Africa, as an emerging economy, is conceivably more likely

to be exposed to some of these forces than other markets, due to its relative

volatility, and specifically more so than those markets where most of the seminal

studies have been conducted within, which are largely the North American and

Northern European regions. Furthermore, with consideration of my focus on SMEs

within South Africa and my belief of the nation’s relative volatility, the aforementioned

exogenous factors may well have been experienced less by firms in developed

nations as a result of it being somewhat predictable in its effects or stable in its

factors.



2.6. Market Intelligence Generation, Dissemination and Responsiveness

A key construct of market intelligence is the method by which such

intelligence is gathered. Collection or generation could occur through such diverse

methods including lunch appointments, formal meetings, seminars and conferences,

trade press and other publications, surveys and polls, to name just a few (Kohli &

Jaworski, 1990). I posit that these behaviours, whilst largely social in their construct,

could also be influenced by cultural norms of a country, and in the context of South

Africa, with its ethnically diverse cultures within, even further influenced by these

sub-cultures that exist. South Africa, specifically in the less formal SME segment,

has a large component of social behaviour woven into its business community which

can help drive relationships and intelligence gathering in a different way to both other

national samples and larger organisations.

Intelligence gathering is only one half of the equation however. Once the

intelligence is gathered, and importantly gathered by all departments, not just

marketing, the job of dissemination is key. Kohli and Jaworski (1990) argue that

dissemination should importantly follow a structured process but this should not

preclude informal channels of communication, for example conversations at the

proverbial water cooler or coffee machine. They also posit that organisation wide

lateral communication is also key in order to ensure that the intelligence gathered

permeates divisions at the right levels and avoids the hierarchical effects of a ‘chain

of command’. In the context of South African SMEs, I consider that this may be less

of a challenge due to the size (rather than cultural aspects) of the firms considered

within this study. Despite its informal and formal diversification in terms of

generation and dissemination, I also believe that there may need to be a core



element of information that is captured using some method or tool which can ensure

that the information can be accessed easily by all those that require it. This theory is

supported by Taylor et al (2008) who postulate that key information must be

gathered and that education of the workforce in this capture is critical to the success

of the process. They further conclude that through educating their workforce to

collect this information - they are in essence helping them to evolve their customer

orientation. Inoguchi (2011) noted that SMEs are likely to conduct intelligence

gathering informally, and also likely not to capture this and therefore use the

information ineffectively, which through education, as cited by Taylor et al (2008)

could be remedied.

In summary, which has been evidenced in the literature, I believe that the

process should not be too rigid so as to limit the activity and the creativity of sharing.

It is also clear that education is required on how to collect intelligence and there

needs to be an element of control and accountability for the actions that need to take

place.

Paradoxically, Anderson (1982) posits that marketing’s most important role

may be ‘selling’ within the firm. This is in the context of leveraging the intelligence

collated and facilitating the dissemination, and obtaining acknowledgement of the

importance of the intelligence at the executive level, in order to exhibit how this can

help meet the strategic objectives of the firm. This implies that such intelligence is

key to the firm achieving its strategic objectives and that whilst it’s not the sole

responsibility of marketing to disseminate, the literature would lead me to venture

that it is marketing’s responsibility to ensure that dissemination occurs. Furthermore,

it would follow that the overall responsibility, and accountability, could rest with an



executive who has a responsibility and accountability for marketing within the

organisation, and the coordination of marketing activities organisation wide. I would

further postulate as a result of the literature reviewed, that should there not be a

founder or owner, or executive manager responsible for marketing, this could have a

negative impact on an organisations ability to be effective in its market orientation.

This is further discussed in the section on market orientation and culture.

Responsiveness refers to the action, or non-action of an organisation as a

result of market intelligence collated and disseminated within an organisation (Kohli

& Jaworski, 1990). In a market orientated company all departments, once again not

just the marketing department, actively participate in responding to the market forces

that the marketing intelligence brings to the fore. However the original definition of

‘responsiveness’ defined by Kohli and Jaworski (1990) should include ‘pre-empting’

changes in the market or proactively responding to customer’s latent needs. This

proactivity is described by Narver et al (2004) as a proactive market orientation.

Therefore, responsiveness may refer to actively responding to the market

intelligence gathered or pre-empting changes in the market’s future needs through

activities including: reviewing prices based on market changes, identifying new

market segments, reacting to customer opinion, sentiment or complaints, periodically

or reactively reviewing or adapting product or service offerings to meet changing

needs, and adaption of promotions. This list is by no means exhaustive, yet provides

for a sample of activities that can be construed as being responsive (Kohli &

Jaworski, 1990).

Responsiveness and proactivity therefore seems highly achievable, and I am

confident that most managers questioned using a broad construct would with



conscience respond that they are indeed highly responsive. However,

responsiveness and proactivity should be defined as being concerned with the

development of a plan of action or a strategy (Ruekert, 1992). Such a plan should

consider the objectives and the resources available to achieve the objectives, allied

with an allocation of a responsible person to ensure that the plan is executed upon.

As evidenced by the literature I venture that it is this practical implementation of

responsiveness and a market orientation as a whole which differentiates truly those

that believe they are market orientated and those that actually are.

So far only a few empirical studies have used the Narver et al (2004) dual

model of market orientation (responsive and proactive), including Voola and O’Cass

(2010), and these limited results have indicated that a proactive market orientation

has a strong influence on performance.

2.7. Market Orientation and Culture

A broad array of research exists which concludes that there is a relationship

between organisational culture and market orientation (Deshpande & Webster Jr.,

1989); (Denison, Corporate Cutlure and Organizational Effectiveness, 1990); (Kotter

& Heskett, 1992); (Sorensen, 2002); (Denison, Haaland, & Goelzer, 2004); (Gainer &

Padanyi, 2005); (Laforet, 2008). Narver and Slater (1990, p. 21) refer to market

orientation as being “the organizational culture that most effectively and efficiently

creates the necessary behaviours for the superior creation of value for buyers”. Both

Narver and Slater (1990) and Lichtenthal and Wilson (1992) suggest that culture is a

key element of market orientation. They agree that market orientation is a set of

behaviours that to be successful needs to be embedded within the organisational

culture, which comprises of an organisation’s values and mission, and must be both



embraced and led by the organisations leadership. Leadership, or management as

Rapp et al (2008) refer to it as, is considered a key influence of market orientation.

This aspect is an area which I consider to be a key determinant of market orientation

within SMEs. Laforet (2008) posits however that all SMEs are not equal in this

scenario, and this could be true in the South African context. Laforet (2008) argues

that the divergent size of a SME can have an effect on its culture which is driven by

the leadership. I posit however that many SMEs, unlike larger corporate firms tend to

be entirely owner-managed, or at least have a management who hold a majority

investment in the business. This investment model, which has coined the phrase

“skin in the game”, first used by Warren Buffett, tends to direct a set of behaviours

which is a focused belief that the customer is the most important facet of the

business, ultimately because it’s the customer that is providing the financial

resources and enabling the firm to remain viable on a long term basis. This

behaviour in turn drives a positive culture of customer orientation, which as a result

of being a smaller firm, is somewhat easier to create, maintain and keep alive.

Therefore, it is my opinion that the customer orientated culture of an SME may be

enriched by a limited and shallow hierarchy and is assisted by the fact that many

managers and even executives within an SME are both invested, and tend to be

client focused and client facing on a regular basis.

Management literature reflects a swathe of research related to the reward

systems of employees and the effect on the attitudes and behaviour of the

employees (Anderson, 1982), (Chambers, 1985). Webster (1988, p. 38) even goes

as far as arguing that “the key to developing a market-driven, customer orientated

business lies in how managers are evaluated and rewarded”. However there is no



such research to review the relationship between the invested management of an

SME and a SMEs market orientation. I therefore postulate that:

H1: The greater the investment the management team hold within an SME the

greater the overall market orientation.

This hypothesis builds upon the work of Ndubisi and Agarwal (2014) who

conclude that a relationship between entrepreneurial innovation (a facet of a market

orientation) and organisational performance exists.

Deshpande et al (1993) responded to a call from the Marketing Science

Institute to undertake a study which looked at these previously distinct determinants

of market orientation and its impact on business performance which included:

culture, customer orientation and innovativeness. Deshpande and Webster (1989, p.

4), in their earlier research, defined culture as “the pattern of shared values and

beliefs that help individuals understand organizational functioning and thus provide

them with the norms for behaviour in the organization”. Subsequently, Deshpande et

al (1993, p. 25) adapted a model of ’organizational culture types’ as shown in figure

1 below, from Cameron and Freeman (1991, p. 29). This model seeks to define an

organisations cultural model based upon its values, assumptions and staff member’s

interpretation of these factors (Cameron & Freeman, 1991). It is a further adaptation

of this model which facilitates this study’s measure of culture which can then be used

to test the relationship between this and other key determinants.



Organic Processes (flexibility, spontaneity)

Mechanistic Processes (control, order, stability)

External Positioning (competition, differentiation)

Internal Maintenance (smoothing activities, integration)

Type: Clan

DOMINANT ATTRIBUTES:Cohesiveness, participation, Teamwork, sense of family

LEADER STYLE:Mentor, facilitator, parent figure

BONDING:Loyalty, tradition, interpersonal cohesion

STRATEGIC EMPHASES:Developing human resources, commitment, morale

Type: Adhocracy

DOMINANT ATTRIBUTES:Entrepreneurship, creativity, adaptability

LEADER STYLE:Entrepreneur, innovator, risk taker

BONDING:Entrepreneurship, flexibility, risk

STRATEGIC EMPHASES:Toward innovation, growth, new resources

Type: Hierarchy

DOMINANT ATTRIBUTES:Order, rules and regulations, uniformity

LEADER STYLE:Coordinator, administrator

BONDING:Rules, policies and procedures

STRATEGIC EMPHASES:Toward stability, predictability, smooth operations

Type: Market

DOMINANT ATTRIBUTES:Competitiveness, goal achievement

LEADER STYLE:Decisive, achievement orientated

BONDING:Goal orientation, production, competition

STRATEGIC EMPHASES:Toward competitive advantage and market superiority

Figure 1 - A Model of Organizational Culture Types - (Deshpande, Farley, & Webster, Jr, 1993, p. 25)

The y axis on figure 1 above defines the continuum from organic to

mechanistic in terms of processes of control. This construct is defining the

organisations flexibility and agility versus control and order. The x axis defines the

organisation’s outlook in terms of being inwardly or outwardly focused. Deshpande

et al (1993) are quick to point out however that this model represents a modal set of



cultural types which are therefore not mutually exclusive, which further implies that a

firm may have traits of more than one type. However, one culture will ultimately

emerge as the strongest. It is important to note that within a larger organisation with

multiple divisions and/or Strategic Business Units (SBUs), these individual units

could have a differing culture and sub-culture within them. Within this study, focused

on SMEs, this point is largely moot due to the difference in size of the organisations

and the difference of the methodology adopted.

H2: SMEs with a stronger culture towards ‘market’ will have a stronger market

orientation.

2.8. Market Orientation and Innovation

Innovation and adaptability are two key behaviours that also lead towards an

increased propensity towards a market orientation and therefore business

performance (Deshpande, Farley, & Webster, Jr, 1993); (Deshpande & Farley,

2004); (Menguc & Auh, 2006); (Sandvik & Sandvik, 2003); (Kirca, Jayachandran, &

Bearden, 2005), and I would further postulate this is ever present within an SME.

These two behaviours are factors in what Narver et al (2004) refer to as the

responsiveness and proactivity pillars and are arguably also a part of an

organisations culture. Due to their size, many SMEs tend to have less restrictive and

more innovative process and organisational structure which whilst are not pure

antecedents to innovation and adaptability, most definitely provide for an

environment where innovation and adaptability can be more easily achieved (Ndubisi

& Agarwal, 2014). As Sandvik and Sandvik (2003) conclude, an organisation that

facilitates and promotes innovation, which in turn introduces a level of risk, do so

with the added potential benefit of meeting a customer’s unique and changing needs



– conversely the failure of such an innovation can be supported by the culture of the

organisation to not be considered an institutional failure but a learning experience –

thus promoting innovation. This is a conclusion that Ndubisi and Agarwal (2014)

largely concur with.

Menguc and Auh (2006) even take this point further to suggest that an

entrepreneurial spirit is key to the essence of market orientation, a view which was

first asserted by Drucker (1954, p. 37) almost 50 years prior interpreted from his

statement that “any business enterprise has two – and only these two – basic

functions: marketing and innovation”. This is a view which I also maintain and aim to

substantiate through this study. Sandvik and Sandvik (2003) further conclude that

providing the market with new products that have unique benefits will ultimately

assist the firm to achieve a superior performance, an activity that results from a focus

on innovation. I further postulate, in line with this conclusion, that the size, structure

and culture of an SME, which inevitably is smaller than the larger organisations used

within the aforementioned studies, will provide for an environment which is more

agile and therefore more fertile for innovation, notwithstanding a culture to support

this. This is a view supported by O’Regan et al (2006) in a similar study of this

hypothesis in the United Kingdom.

H3: The more highly innovative and adaptable SMEs are the greater the

organisation’s market orientation.

2.9. Market Orientation and Competition

Competition is cited by Kohli and Jaworski (1990) as being a significant factor

in market orientation. Strong competition will create a buyers’ market, which in turn



will drive sellers to work harder – however I would question Kohli and Jaworski

(1990) in their implied statement that this would necessarily drive market orientation

because this could possibly on the contrary drive a selling orientation as a result. To

this point however, I would venture that those businesses that have commenced a

journey of implementing a market orientation are more likely to continue that journey.

Contrariwise, within a SME, it could be argued that there is never a good time to

consider starting that journey. Covin and Slevin (1989) concluded that a strong

competitive market actually drives SMEs towards a market orientation in that they

seek new products and services for survival. Conversely Kohli and Jaworski (1990)

claim that in markets where demand exceeds supply, firms are less likely to rely on a

market orientation, or even the competitive environment, to sustain their position due

to the markets munificence. I posit therefore that there is likely a strong relationship

between competition and responsiveness and market orientation on the whole. This

postulation pertaining to the competitive environment and market orientation is

considered however with cognisance of the study by Jaiyeoba and Amanze (2014).

In their study of Botswanan SMEs Jaiyeoba and Amanze (2014) concluded that the

market orientation was contingent on the environmental conditions pertaining to

determinant factors and should not be considered equal in all scenarios. These

determinant factors as explored earlier, include culture and innovation. Appiah-Adu

and Singh (1998) concluded within their empirical evidence that an

overcompensated focus on the competitor environment could be detrimental to the

customer environment, and therefore market orientation in general. I believe that this

conclusion substantiates a claim that the elements of market orientation are both



symbiotic and effected by environmental nuances as cited by Jaiyeoba and Amanze

(2014).

H4: The greater the competition, the greater the responsiveness within the

organisation, leading to a stronger market orientation.

2.10. Relationship between Market Orientation and Organisation Performance

In the same way that multiple authors have created multiple definitions and

frameworks for market orientation, these same authors have also arrived at varying

degrees of organisational performance being related to market orientation. In the last

20 years a considerable number of independent studies have identified a positive or

strongly positive relationship to organisation performance (Narver & Slater, 1990);

(Appiah-Adu & Singh, 1998); (Baker & Sinkula, 1999); (Menguc & Auh, 2006);

(Wong & Ellis, 2007); (Zahra, 2008); (Tsai, Chou, & Kou, 2008); (Jaiyeoba &

Amanze, 2014). Similarly, there are a handful that have concluded no significant

relationship between market orientation and performance (Caruna, Pitt, & Berthon,

1999); (Lonial, Tarim, Tatoglu, Zaim, & Zaim, 2008). From the literature reviewed, I

posit that context, environment, leadership, culture and innovation, and adoption are

all significant determinants that form a symbiotic environment that results in a

successful implementation of market orientation and therefore it is not surprising to

learn that there is an array of results across these diverse and unique studies.

H5: An organisations performance, measured in financial terms, is positively

related to its market orientation.



2.11. Measuring Market Orientation

As Kholi and Jaworski (1990) note, market orientation is not a binary status.

They postulate that it is not a case of an organisation being market orientated or not,

but rather, that an organisation’s market orientation is measured on a scale and is

interpreted as a result of analysis of an organisations response to the three pillars:

market intelligence generation, dissemination and responsiveness.

As a result, Kohli et al (1993) developed a measure of market orientation,

called MARKOR, with the intention of aligning research on the topic to deliver

comparable results. Primarily Kohli et al (1993) devised this measure to be used by

SBUs of large organisations. Given the focus of this research it is therefore

necessary to be cognisant of the nuances that a focus on SBUs in a large

organisation will have, and to adapt this to be applicable to the SME market focus.

One such nuance was that Kohli et al (1993) provisioned the survey to a sample of

both market and non-marketing executives within the same SBU. The sample, as

already mentioned, will comprise of SME’s in South Africa, where there may not be a

specific executive responsible for marketing, and therefore would preclude this

approach. Given the objectives of this study, the provision of a survey to one or more

founders, owners or executives (who may be SBU executives) within an organisation

will suffice the research.

The MARKOR scale provides for a perfectly adequate base method through

which to measure a generalised market orientation with some changes required to

acknowledge an SME and South African context. This is modified using Ruekert’s

(1992) study as an indicator of enquiry that is more relevant for SMEs. However

neither the MARKOR scale nor Ruekert’s (1992) models in their current form



facilitate the analysis of market orientation’s relationship with performance or the key

determinants of market orientation that have been discussed. Therefore an

instrument providing for the measurement of innovation and culture is adapted from

Deshpande et al (1993) and Narver et al (2004) which will facilitate these additional

constructs required.

2.12. Conceptual Framework

In summary the following hypotheses are derived following a focused search

and scrutiny of both theoretical and seminal literature on market orientation, which

the study will seek to test:




orientation.







These hypotheses are shown in Figure 2 below, which presents a conceptual

framework of antecedents to and consequences of a market orientation.



Market Orientation

Perfomance

Management Investment

Market Culture

ResponsivenessCompetition

Innovation

H4

H3

H2

H1

H5

Figure 2 - Conceptual Framework of Antecedents to and Consequences of a Market Orientation

2.13. A Summary Market Orientation Definition

As a result of the literature review a concluding definition for the phenomenon

which we call ‘market orientation’ is a combination of those provided by Kohli and

Jaworski (1990), Reukert (1992) and Narver (2004) – Market orientation is the

organisation wide generation of market intelligence pertaining to current and future



customer needs, dissemination of the intelligence within the company to all staff, the

development and execution of a market orientated strategy and the responsiveness

and proactivity to customers which is influenced by an organisations culture.

It is this definition that is used as the focus of this study on both measuring

South African SMEs market orientation and providing a context to the research

question involving the relationship between market orientation and performance and

its determinants.


In this chapter the literature reviewed covered the origins and the seminal

works of market orientation which has a strong focus on the North American and

North European markets and within large enterprises. As a result, the literature

reveals significant gaps in the hypotheses and empirical research relating to SMEs

and emerging market economies such as South Africa and the nuances to the

findings already presented. With a focus on South African SMEs, this study

highlights the cultural and environmental differences and extends the limited

research on SMEs which will build on the existing theory and research.



3. Chapter 3: Research Methodology


This chapter describes the methodology of the research used within this

study. This includes the population and sample size, the instrument designed to

collect the primary data and specifically how the constructs were decided upon. This

chapter also considers the reliability and validity measures and ethics.

3.2. Research Design

A mono method research design was chosen for this study. The strategy was

to use a survey to collect primary quantitative data from the sample frame. A survey

strategy was chosen to facilitate a relatively large sample within a reasonably short

timescale and to enable the statistical analysis of the resultant data. Specifically the

survey was considered a suitable instrument following the research design on the

question constructs, which if answered in entirety would provide the necessary data

with which to derive conclusions to the research questions. The research instrument

chosen for the survey was an internet based questionnaire which was coded to

provide statistical and numerical quantitative data which facilitated the analysis of

trends and relationships between variables of each of the questions contained within.

Due to the time constraints on the research study, a cross-sectional study was

chosen.

3.3. Population and Sample

Due to time limitations and resources the population from which the sampling

frame was selected was all SMEs within Cape Town, South Africa, with which the

researcher had acquaintance with over the last 12 years. Becker (1998) states that a



sample should represent the full set of cases in a way that can be justified and is

meaningful. As stated the enlisted SME managers for the sample frame was

obtained from the researchers own vast network of contacts gathered from living for

over 12 years in the region and networking in SME circles across industries. This

sample was considered representative of the population of SMEs in Cape Town

based on the researchers experience and knowledge of the region. The sample

frame for this study consisted of 123 SME Managers of which 71 responded

representing a response rate of 58%. This was considered satisfactory by standards

which state that response rates from organisation’s representatives of between 35%

and 40% are reasonable (Baruch & Holton, 2008).

3.4. Operationalization

The goals of the study were to provide further understanding of the level of

market orientation in South African SMEs, the relationship between market

orientation and performance and also to consider the determinants of market

orientation. To achieve this, constructs from previous works on the identified

pertinent variables were adopted and adapted from various authors. These are

discussed in the following section.

3.5. Questionnaire Design

The questionnaire used in this study is provided in Appendix C. Babbie (2005)

states that the layout and flow of a questionnaire is just as important as the

questions themselves. Questionnaires which are poorly laid out, enforce questions

to be answered, or are misleading or confusing are likely not to be completed in their

entirety leading to mortality (which is a threat to internal validity) or simply a poorly



responded to survey. As a result, significant effort was taken to research the most

appropriate online survey questionnaire tool. eSurveyCreator was chosen based on

its simple layout, inclusion of mandatory and non-mandatory questions, its ability to

allow respondents to part-complete and return to a questionnaire, and the facility to

provide conditional routing within the tool.

The questionnaire was constructed of ten parts. The first part was an

introduction to provide the respondent context to the study and to request their

assistance through participation. Importantly the opening statement also made it very

clear that the information provided would be anonymous and all information provided

would be kept confidential. In order to provide reciprocation, and in the spirit of the

research undertaken, an offer to receive a summary of the research once complete

was made to all respondents. The first part included a yes/no question construct in

order to gain explicit acceptance of the information provided and the respondent’s

agreement to continue. The first question was mandatory in order to achieve an

explicit acceptance or a non-acceptance which then exited the participant gracefully

from the questionnaire and thanked them for their time thus far.

The second section requested some personal framing information including

job title, academic qualifications, and industry and company size. This was

requested to both qualify the respondents and to provide some simple questions with

which to initially engage the respondents. The last question of the second section

requested the respondent to disclose if they were a shareholder or not which based

upon them answering positively would then lead to a question requesting the

percentage held and the number of shareholders. This was requested specifically to

inform a hypothesis relating to invested managers.



The third section asked the respondents to provide information about their

marketing role responsibility – this was to qualify those that were coming from a

marketing background and those that were not. Up to this point all the question

constructs had been developed specifically for the purposes of this study.

The fourth section comprised of three parts, which asked the respondents to

respond to a set of statements using a 5-part Likert scale. A ‘Don’t Know’ option was

added coded with a zero in order to provide a complete response when a respondent

simply did not know the answer, omitting the ambiguity of a non-response to a

statement or even a random selection. This section was largely concerned with

market orientation and these constructs were adapted from the scales of both

Ruekert (1992) and Kohli et al (1993).

The fifth section included a question which respondents were asked to

associate with through the allocation of a maximum number of 100 points to one of

two statements. This section was intended to be used as a check against the

reliability of the market orientation constructs in the previous section, which

essentially provided a concise, yet different approach to the same question theory.

This construct was adopted from the MARKOR scale presented by Kohli et al (1993).

The sixth and seventh sections provided a focus on innovation and

competitive intensity – concepts believed to be determinants of market orientation.

The innovation constructs were adapted from Hurley and Hult (1998) with a view to

measuring a SMEs innovation. The competitive intensity constructs were adopted

from Pelham and Wilson (1996). The scale measured threats within a business



environment and the ability and behaviour of competitive firms to be distinct in the

market.

The eighth section was an enquiry around company performance. The

constructs were adopted from Deshpande et al (1993) and used a three-point scale

of profitability, size, market share and growth rate relative to the respondent’s largest

competitor. This construct could be considered subjective, however considering that

performance is essentially a lagging indicator, this approach was deemed

appropriate given that it was a cross-sectional study.

The ninth section was related to company culture which was also believed to

be a determinant of market orientation. The operationalization of the culture

construct was adopted from Deshpande et al (1993), who in turn adapted the

construct from Cameron and Freeman (1991). Culture was measured in the context

of four organisation types which Deshpande et al (1993) concluded were relative to

performance through market orientation and hence was used to determine a cultures

propensity to performance and market orientation.

The final section was a ‘thank you’ page which reminded respondents that

their responses were confidential and anonymous and encouraged any respondents

to email the researcher at the provided Salford University address should they wish

to receive the conclusions and recommendations of the study.

Prior to the questionnaire being published, a pilot group of 5 colleagues were

asked to pre-test the questionnaire to determine a number of critical success factors.

These factors included the time taken to complete the questionnaire, the clarity of

the questions and the language used within the questions. The purpose of the pilot



group was to collate qualitative feedback on these critical success factors to indicate

a generally acceptable instrument which would aid the capture of the information

from the sample frame, and to also highlight any weaknesses in both the academic

design and experience design using the online tool. The feedback received

indicated an average completion time of 15 minutes and minimal changes to

question wording.

3.6. Data Analysis

The data collected from the questionnaire was coded, collated and then

recorded in Microsoft Excel to enable manipulation for quantitative analysis.

3.7. Reliability and Validity

The research design was formulated after careful consideration and research

with a view to be logical and to stand up to careful scrutiny through rigor and

transparency (Raimond, 1993).

The research instrument employed for the quantitative research was an

internet based questionnaire which was distributed via email to the target frame

using a tracking URL from bit.ly to track the clicks versus the questionnaire

completion metrics. This enabled a simple method of correlating the completion rate

to the activity on the URL itself which proved to be consistent within a reasonable

margin.

As previously stated in the section on ‘Questionnaire Design’, the research

design of the data collection techniques and specifically the questionnaire’s

constructs were based upon a number of previous studies. A combination of

adopting, adapting and developing new questions was chosen (Bourqe & Clark,



1994), with an emphasis on adopting to enable a comparison to preceding studies of

market orientation. Where adopting was not appropriate, adaptation of existing

constructs was chosen and where neither of these two methods were appropriate or

applicable, new constructs were developed. This was intended to improve reliability

and consistency aligning with the existing body of research and as a result extending

the research on this topic.

Mitchell (1996) provides three approaches to assessing reliability, which were

considered in the research design. These are: test re-test, internal consistency and

alternative form. Test re-test was deemed not an appropriate approach for the

questionnaire in this study. Internal consistency for the multi-dimensional constructs

of market orientation, innovation, competitive intensity and performance were

conducted by using Cronbach’s coefficient alpha (Churchill, 1979), with special

attention to reverse those where inverse scales were used to detect if respondents

were automatically selecting scale responses. A scale of 0.7 (Nunnally, 1978) or

above using Cronbach’s alpha was considered to provide a measure of reliability.

An alternative form question, also known as a check question, was used in the

questionnaire (question 16) to provide a measure of reliability against the market

orientation questions (questions 13-15).

Validity has been referred to in the context of content validity, criterion-related

validity and construct validity (Bloomberg, Cooper, & Schindler, 2008). Content

validity of the questionnaire was self-assessed and peer reviewed through

discussion and the questionnaire resulted in retaining all ‘essential’ questions and

two ‘useful’ questions (questions 1 and 5). Criterion related validity was ensured

through the adoption and adaptation of questions used in other questionnaires



discovered through the literature review and specifically the results and

recommendation sections of other studies. Similarly, construct validity was ensured

through this same method.

3.8. Ethics

Ethics in a research context refer to the standards of behaviour that are

applied to ones conduct when obtaining information from a subject (Saunders,

Lewis, & Thornhill, 2012). A number of ethical principles were adhered to for this

research, which will be discussed as follows.

Confidentiality and anonymity was asserted as a key ethical principle to all

respondents both in the invite email (see appendix A) and in the introductory section

of the questionnaire. This was effected in practice by having an anonymous

questionnaire, in that respondents were not requested for their name, company or

any other personally identifying information.

The questionnaire’s first question (see appendix B) provided an overview of

the study and also provided the respondent with an option to select “yes” in

acknowledgement of the information provided related to their participation and “no”

to acknowledge that they did not want to take part which would exit the questionnaire

with no further information captured.

None of the questions within the questionnaire were mandatory, with the

exception of Question 1 to ensure compliance to the informed consent of the

respondent. This was designed to enable respondents the right to not answer any

question that they felt they were unable to for whatever reason.



In accordance with the South African Protection of Personal Information

(POPI) Act of 2013 which has been recently promulgated, the research data will be

retained only for the period required by this program, after which it will be destroyed.

The information captured is unidentifiable to a natural person by nature of the

questionnaire design and therefore is also noted to be within the bounds of the act in

terms of having to provide personal access.


This chapter provided a discussion around the research methodology. The

key points of this was the use of a survey strategy which used a questionnaire as a

measuring instrument, the questionnaire design and the reliability and validity of the

study data.



4. Chapter 4: Results and Discussion


This study’s primary objective was to understand what the general level of

market orientation was in South African SMEs and to identify any key determinants

of market orientation and to determine if a relationship between market orientation

and performance exists. The intention is that this information can be used by small

business, business incubators, and government institutions charged with improving

employment through building sustainable businesses.

This chapter presents the results of the study and provides an evaluation of

the resultant data through the research questions which are repeated here for clarity:

RQ1: Is there a relationship between market orientation and company

performance in the SME segment of companies in South Africa?

RQ2: What is the general level of market orientation in South African SME

companies compared to Western European / North American companies?

RQ3: What are the key influencing determinants of market orientation in

companies in the SME segment of South Africa?

This chapter also presents the results pertaining to the hypotheses stated in

Chapter 2: Literature Review.




orientation.









The chapter addresses each of the Research Questions and Hypotheses in

turn, but not in the order shown in the introduction, but in an order which will provide

a logical flow of information.

4.2. Data Demographics Results and Discussion

Of the final 71 respondents, 64 respondents answered all questions. However

the American Association for Public Opinion Research (2008) defines four levels of

non-response which this study has taken into account. The four levels include:

Complete refusal – none of the questions are answered.

Break-off – less than 50% of all questions answered.

Partial response – 50% to 80% of all questions answered.

Complete response – over 80% of all questions answered.

The completeness of response to the survey’s questions represents a 90%

completion and therefore the data from all 71 respondents has been used in the data

set for analysis.

All of the respondents were owners and/or senior managers of a company

with less than 200 employed staff – qualifying them as an SME in South Africa. Job



role or job title was captured on the questionnaire in free-form text to provide the

researcher with the opportunity through review to ensure that the respondents were

indeed within the target roles intended. Figure 3 below shows the job roles of the

respondents which completed the questionnaire for this study. All but the ‘Chef’

which represents 1% of the respondents are easily identifiable as being aligned with

the target sample and this is not to say that the Chef was not an SME owner or

manager.

Figure 3 - Job Roles of Respondents

Figure 4 shows the highest level of academic qualification held by the

respondents. This data shows that just over half of the sample (54%) has graduate

degrees or post-graduate degrees.



Figure 4 - Highest Level of Qualification Obtained

Figure 5 represents the subjects that the respondents took through their

highest qualification post matriculation. Where the highest qualification was

matriculation / A-Levels, these are shown as ‘Matric’.

Figure 5 - Subject of Highest Qualification (if not Matric)



An assertion made in the introduction of this dissertation was that many of the

South African SME managers possessed little or no formal business education or

training and this could be construed to be validated through this result. Whilst 54%

of respondents have an under-graduate or post-graduate degree, it could be argued

that with just over 24% of those under-graduate or post-graduate qualifications

focused on general business skills or subjects which include ‘Business

Administration’, ‘Finance and Accounting’ and ‘Entrepreneurship’, the level of formal

business management education and training is low. This however does not take

into account any supplemental education programmes that managers may have

taken that are not represented as a result of not being a qualification that is their

highest ranking, which is what the question construct asked for. Therefore this

consideration could be a point for future research.

Figure 6 shows the industry sectors from which the respondents came from. A

significant 51% are within the Information Technology industry, followed by

Consulting at 20% and Media and Marketing at 11%.



Figure 6 - Percentage of Respondents by Industry Sector

Arguably a bias of information technology focused businesses is represented

in this sample. However, based upon the Annual Review of Small Business (2008)

conducted by the South African Government’s Department of Trade and Industry in

2008, a comparable spread of sectors in the SME landscape can be identified

through a statement that 44% of SMEs in South Africa operate within the Financial

and Insurance, Real Estate and Business Services sector. ‘Business Services’ in the

context of the dataset captured within this study includes: ‘Information Technology’,

‘Consulting’ and ‘Media and Marketing’ and therefore can be considered somewhat

representative of the population, albeit still somewhat bias to these industries.



Figure 7 shows the split of respondents across the company categories as

defined by the South African Government. The pie chart clearly shows a very equal

and balanced sample across the categories from micro to medium.

Figure 7 - Company Category (SME Size) by Employees

Figure 8 shows the job role allocation between the roles of: marketing, sales,

general management, finance, operations, production/delivery and administration.

Respondents were asked to allocate 100 points to denote the amount of time they

spent on each job role within their organisation.



Figure 8 - Job Role Allocation

On average, marketing tied with production / delivery with 18% of the

respondents time spent equally on both roles. However it is worthy to note that only

26% of the respondents spent 25% or more of their available time on marketing, with

91% spending at least some time on marketing and 3% spending all of their time on

marketing. Considering that 50% of the sample has more than 21 staff members, the

amount of time spent on marketing activities, or with individuals with a unique

marketing focus is considered to be low.

This would indicate an inherent low level of market orientation within the

sample frame if market orientation was considered a consequence of mainly

marketing-function orientated activities. However, this could be proven otherwise if

marketing was led by an executive whose main role was not marketing. The results



infer that this could be the case based upon 91% of the respondents spending

‘some’ time on marketing. At the extreme, the remaining 6% that spend no time on

marketing could be accounted for by the fact that this survey did reach the person

responsible for marketing within their organisation or that they simply do not

undertake any marketing.

Overall the results suggest that the sample frame includes a proportional

cross section of roles that exist within a business and are representative of an SME.

4.3. Research Question 2 – Level of Market Orientation - Results



Two question constructs were chosen to collect data and to test this research

question. The first was a question construct adapted from the scales of both Ruekert

(1992) and Kohli et al (1993). The second question construct was adopted from the

MARKOR scale presented by Kohli et al (1993).

4.3.1. RQ2- Level of Market Orientation - Reliability

The first question construct’s reliability was the first test conducted on the

dataset and examined the reliability of the multi-item scales for market orientation.

Table 3 represents the results of the analysis of the intelligence generation and

dissemination scale and yielded a coefficient alpha of 0.74. Table 4 represents the

results of the analysis for the development of a market orientation strategy scale and

yielded a coefficient alpha of 0.66. Table 5 represents the results of the analysis for

the implementation of a market orientated strategy / responsiveness and yielded a

coefficient alpha of 0.64. Across the 27-item scale a coefficient alpha of 0.66 was



yielded. It is acknowledged that the overall coefficient alpha is marginally below the

minimum level of 0.7 suggested by Nunnally (1978), however it has been presented

that Cronbach’s alpha estimation of reliability increases with scale length and is

particularly noticeable with scales with less than 7 items (Voss, Stem Jr., &

Fotopoulos, 2000) (Swailes & McIntyre-Bhatty, 2002). The scales lengths were 10, 8

and 8 respectively. Given this assertion the alphas produced have been deemed

within an acceptable tolerance of Nunally’s (1978) levels.

Table 3 - Reliabilities of the Market Orientation Scales - Intelligence Generation and Dissemination

Scale and Item Alpha if item

deleted

Coefficient

alpha

Arithmetic

Average

Standard

Deviation

Intelligence Generation and Dissemination 0.74

We do a lot of (in-house) market research into

our area of products and services.

0.74 3.88 1.05

We have structured programs to obtain

customer feedback to improve quality of our

products and/or services

0.68 3.43 1.22

We frequently measure customer satisfaction 0.68 3.52 1.08

Data on customer satisfaction is disseminated

at all levels of the organisation

0.71 3.21 1.16

We collect industry information by informal

means (e.g.: lunch with industry friends, social

events with industry friends, talks with trade

partners)

0.72 4.25 0.70

We are slow to detect fundamental shifts in

our industry (e.g.: competition, technology,

regulation) (R)

0.72 2 0.90




deleted

Coefficient

alpha

Arithmetic

Average

Standard

Deviation

We periodically review the likely effect of

changes in our business environment (e.g.:

regulation such as POPI Act) on customers

0.72 3.89 0.91

Marketing personnel in our business spend

time internally discussing customers’ future

needs

0.74 3.62 1.01

When something happens to a major customer

the whole business knows about it within a

short period

0.73 4.22 1.05

We never discuss our competitors’ strategies

(R)

0.71 2.23 1.02

(R) denotes reverse coded item

Table 4 - Reliabilities of the Market Orientation Scales - Development of a Market Orientated Strategy


deleted

Coefficient

alpha

Arithmetic

Average

Standard

Deviation

Development of a Market Orientated

Strategy

0.66

Our market strategy is informed by market

research

0.61 3.34 1.05

We develop specific plans for market

segments

0.60 3.63 0.97

Marketing has resources (people and money)

to improve the company’s market position (i.e.:

to get to be number 1)

0.59 3.29 1.22

Our company values financial performance

more than market position (R)

0.67 3.34 1.02

We determine price by market value 0.63 3.60 0.79




deleted

Coefficient

alpha

Arithmetic

Average

Standard

Deviation

Our focus is on markets where we have

competitive strength

0.64 4.25 0.71

Our planning is organised by markets rather

than products

0.58 3.22 1.09

Our market strategy is presented to all staff for

input

0.67 3.40 1.12


Table 5 - Reliabilities of the Market Orientation Scales - Implementation of a Market Orientation Strategy / Responsiveness


deleted

Coefficient

alpha

Arithmetic

Average

Standard

Deviation

Implementation of a market orientated

strategy / responsiveness

0.64

Our business exists primarily to serve the

needs of our customers

0.61 4.27 0.78

Our company keeps its promises it makes to

our customers

0.58 4.48 0.50

We pay close attention to after-sale service 0.59 4.21 0.67

If a major competitor were to launch an

intensive campaign targeted at our customers,

we would implement a response immediately

0.60 3.52 1.09

Customer complaints fall on deaf ears within

our business (R)

0.57 1.64 0.97

Even if we came up with a great marketing

plan, we would not have the resources or time

to implement it (R)

0.63 2.77 1.21




deleted

Coefficient

alpha

Arithmetic

Average

Standard

Deviation

When we find out that customers are unhappy

with the quality of our service, we take

corrective action immediately

0.59 4.65 0.48

For one reason or another, we tend to ignore

the changes in our customer’s needs (R)

0.58 1.85 0.73

Our managers regularly visit customers 0.63 4.08 0.95


4.3.2. RQ2 - Level of Market Orientation - Market Orientation Scale

For each of the market orientation constructs’ 27 items, the responses were

coded to represent the respondent’s level of agreement or disagreement to the

questions. A five-point Likert scale was used ranging from ‘Strongly Agree’ to

‘Strongly Disagree’ providing two scales for ‘agreement’ and two scales for

‘disagreement’ and a scale for ‘Neither Agree nor Disagree’. The ‘Strongly Agree’

and ‘Agree’ scales were combined to determine the level of positive agreement and

the ‘Strongly Disagree’, ‘Disagree’, and ‘Neither Agree nor Disagree’ were combined

to provide a negative scale. Those questions that were reverse coded have been

reversed to provide a result representative of market orientation being an ‘agree’ or

‘disagree’ construct’ thereby simplifying the analysis. The reverse coded questions in

Table 6 have also been re-written to show the reverse of the original question to

represent a reversed positive construct to enable a review of the positive constructs

to determine a level of market orientation using this scale. Table 6 presents the data

is this format described using percentage values between the two scales.



Table 6 - Percentages of both favourable and non-favourable responses to the market orientation scales

Item Percentage of combined Strongly Agree & Agree

Percentage of combined Disagree & Strongly Disagree & Neither Agree nor Disagree

Intelligence Generation and Dissemination 68 34

We do a lot of (in-house) market research into our area of

products and services.

75 25

We have structured programs to obtain customer feedback

to improve quality of our products and/or services

57 43

We frequently measure customer satisfaction 58 42

Data on customer satisfaction is disseminated at all levels

of the organisation

48 52

We collect industry information by informal means (e.g.:

lunch with industry friends, social events with industry

friends, talks with trade partners)

88 12

We are proactive to detect fundamental shifts in our

industry. / We are slow to detect fundamental shifts in our

industry (e.g.: competition, technology, regulation) (R)

79 21

We periodically review the likely effect of changes in our

business environment (e.g.: regulation such as POPI Act)

on customers

71 29

Marketing personnel in our business spend time internally

discussing customers’ future needs

56 44

When something happens to a major customer the whole

business knows about it within a short period

76 24

We regularly discuss our competitor’s strategies /

We never discuss our competitors’ strategies (R)

71 29

Development of a Market Orientated Strategy 56 44

Our market strategy is informed by market research 54 46





We develop specific plans for market segments 68 32

Marketing has resources (people and money) to improve

the company’s market position (i.e.: to get to be number 1)

49 51

Our company values market position more than financial

performance / Our company values financial performance

more than market position (R)

28 72

We determine price by market value 58 38

Our focus is on markets where we have competitive

strength

87 13

Our planning is organised by markets rather than products 45 55

Our market strategy is presented to all staff for input 54 46

Implementation of a market orientated strategy /

responsiveness

82 18

Our business exists primarily to serve the needs of our

customers

89 11

Our company keeps its promises it makes to our customers 100 0

We pay close attention to after-sale service 89 11

If a major competitor were to launch an intensive campaign

targeted at our customers, we would implement a response

immediately

52 48

Customer complaints are dealt with within our business /

Customer complaints fall on deaf ears within our business

(R)

91 9

We have the resources to implement great marketing plans

/ Even if we came up with a great marketing plan, we would

not have the resources or time to implement it (R)

50 50





When we find out that customers are unhappy with the

quality of our service, we take corrective action

immediately

100 0

We are responsive to the changing needs of our customers

/ For one reason or another, we tend to ignore the changes

in our customer’s needs (R)

85 14

Our managers regularly visit customers 85 15

(R) denotes reverse coded item Where values are less than 100 this excludes the “Don’t Know” response.

The second market orientation question was a single item global measure of

market orientation adopted from the MARKOR instrument devised by Kohli et al

(1993). The question asked the respondents to indicate using 100 points between

the two statements, the level that their company resembled the two statements.

Table 7 represents the results.

Table 7 - Second Market Orientation Construct

Item Construct Percentage

Company A relies heavily on its sales people to use a variety of selling techniques for

getting customers to say “yes”. The primary emphasis in the company is on selling.

Customer satisfaction is considered important but the emphasis is on going out and

pushing the company’s products and/or services.

38

Company B does a lot of research to learn the concerns of its customers, and responds

by developing new products and marketing programs. The emphasis is on understanding

why customers act and feel the way they do, and exploiting this knowledge. Selling is

considered important, but the emphasis is on making products and/or services that will

almost “sell themselves.”

62



4.4. Research Question 2 – Level of Market Orientation – Discussion

Based on the first question construct defined to determine the level of market

orientation using the measures of intelligence generation and dissemination, market

orientation strategy development and the implementation of a market orientated

strategy, the results presented an average 68% favourable response to the market

orientation items. This compares to the second question construct defined to

determine the same and designed as a simple parity check against the more

complex and detailed construct. The second construct provided a 62% result in

favour of the company described as company ‘B’, which exhibits characteristics of a

market orientated organisation. Whilst this indicates a reasonably positive response

to the market orientation scales with an average market orientation indication of

65%, there are a number of items that indicate significant weaknesses.

The implementation of market orientation strategy scale produced noticeably

higher results than the items used to capture intelligence generation and

dissemination, and development of a market orientation strategy as shown in Figure

9. This arguably could reflect a tendency towards reactiveness and therefore a sales

orientation given that this scale was not supported by a similar strength in the market

intelligence and strategy development scales.



Figure 9 - Market Orientation Measures - Percentage Favourable/Non Favourable Response

Working backwards through the scales, the implementation of market

orientation strategy scale (see Figure 10) was also given strength by a number of

items which attracted a favourable response around responsiveness and conversely

weakened by two items that specifically addressed SMEs ability to execute on

marketing plans and to respond to a competitors marketing campaign focused on its

customers. It is perhaps these two weak results and specifically the weakness to

execute on marketing plans that has an effect on performance which is discussed

later in this dissertation.



As explored in the literature review chapter, Narver et al (2004) and Voola and

O’Cass (2010) both present findings that the dual mode of responsive and proactive

market orientation, which is anchored in the ability to execute upon marketing

campaigns resulting from information gathering and dissemination has a strong

influence on performance and by virtue will have a negative influence where the

implementation of a market orientated strategy is low. To this point, I would argue

that the first 7 items on the scale relate more to responsiveness, which has already

been stated could be exhibited by an organisation with a sales orientation; whereas,

the last two items are focused on the implementation and by its nature, the execution

of an implemented strategy providing a clearer view perhaps of the sample frames

market orientation within the implementation of a marketing strategy construct.

Figure 10 - Implementation of a market orientated strategy / responsiveness



Considering this point, and isolating the last two items, which as stated

already represents in the result a more truly market orientated focus, this would then

drop the percentage market orientation scale for the implementation of a market

orientated strategy / responsiveness from a reasonably high 82% to a marginal 51%

and would provide a clear area of focus for businesses to consider improvement

within.

The development of a market orientated strategy produced the least

favourable result to the overall market orientation scales, producing a 56% positive

result. At one end of the scale garnering a strong 87% (see Figure 11) was the item

concentrating on SMEs focus on markets with competitive strength which arguably is

a more obvious decision for SMEs to make and most likely a decision that can be

arrived at even if a company devotes no time to developing a market orientated

strategy, yet would be a worthy input. This scale indicated that on the whole almost

half of the SME’s were particularly weak in strategy development to achieve a

market orientation and noticeably in dissemination of the strategy to staff. By far the

most significantly weak result on this scale, at 28%, was SMEs focus on financial

performance over market position. This is considered a short term focus over a

longer term focus which Narver and Slater (1990) cite as being one of the two

decision criteria critical of a company aiming to achieve a market orientation and

arguably is an area which an SME would most likely suffer.

The low result on this construct would inform the revised and lower result

postulated earlier related to the implementation, by virtue that without a market

orientation strategy developed the implementation would ultimately revert to a sales

orientation through the lack of a strategy to implement and execute upon.



Figure 11 - Development of a Market Orientated Strategy

The intelligence generation and dissemination scale produced a 67%

favourable result to the items on this scale (see Figure 12). The highest favourable

result at 88% indicated a strong focus on collecting industry information, or

exogenous factors as cited by Kohli and Jaworski (1990), through informal means.

However, conversely other noticeable areas in terms of lower results include having

methods of measuring customer satisfaction and then as a result actually measuring

and then disseminating that information within the organisation in a format that is

easily consumed. Ruekert (1992) succinctly defines market orientation as the

capture of information from customers to be used in the development of a strategy.

It could be that this lack of customer feedback pertaining to satisfaction and other



matters that could be influencing the lack of strategy development as explored

earlier. These results therefore indicate a suitable focus on the market as a whole

but a distinct lack of effort focused on customers and once again the dissemination

of this information throughout the organisation and into the strategy development

phase.

Figure 12 - Intelligence Generation and Dissemination

4.5. Research Question 2 – Level of Market Orientation – Summary





The general level of market orientation in South African SMEs based upon the

summary results would be considered to be adequate with room for considerable

improvements. However in digging into the individual constructs it is clear that the

level of market orientation is likely to be lower than at first glance given that there are

items propping up the average which are scoring highly and are somewhat

independent of market orientated practice and even reminiscent of a sales

orientation.

Using the three constructs of intelligence generation and dissemination,

development of a market orientation strategy, and implementation of a market

orientated strategy it is clear that a focus should start on the former and progress in

turn though the stages to ensure a cohesive and robust market orientation can be

achieved.

To reduce this to measurable figures in order to enable future comparison in

future studies, the average of the two constructs measuring market orientation

produced a 65% positive response to the market orientation scales. As already

stated however, cognisance needs to be taken that there are items which are

inflating this overall figure – if the revised percentage for the implementation scale

alone was to be factored into this calculation, the percentage would drop to 51% and

would still potentially be scoring sales orientation based practices incorrectly as

market orientation items. The percentage comparison therefore is provided therefore

for just that – cursory comparison, because the detail contained within is actually

most relevant.



The methodology in part was adopted from Ruekert’s (1992) study and

intended to provide a level of comparison to a study conducted with a sample from a

developed nation. In reality this proved inconclusive due to the size and nature

differences of the target samples which specifically range from SME to Fortune 500

companies in the United States of America.

4.6. Research Question 3 – Determinants of Market Orientation - Results



Innovation, competitiveness and market culture were included as

determinants of market orientation as a part of this study. Constructs were adapted

from Hurley and Hult (1998), Pelham and Wilson (1996), for innovation and

competitiveness respectively, and from Deshpande et al (1993) and Cameron and

Freeman (1991) for market culture.

4.6.1. RQ3 - Determinants of Market Orientation - Reliability

The scale reliability and values using Cronbach’s alpha coefficient for

innovation and competitiveness are reported in Table 8 and Table 9 respectively.

The scale for innovation does not meet the threshold Nunnally (1978) recommends.

This is possibly due to the fact that the items are insufficient or in some way not

appropriate. Due to the low reliability values conclusions for the innovation construct

were not drawn and this will be a matter for consideration in future research.



Table 8 - Reliabilities of the Determinants of Market Orientation Scales - Innovation


deleted

Coefficient

alpha

Arithmetic

Average

Standard

Deviation

Innovation 0.56

We are first-to-market with new products

and/or services amongst our competition.

0.47 2.27 0.62

Resources (people and money) are made

available for innovation programs.

0.41 2.26 0.59

We actively seek innovative ideas. 0.50 2.80 0.40

Employees are penalised for new ideas that

do not work (R).

0.64 1.09 0.34

Innovation in our company is perceived too

risky and is resisted (R).

0.40 1.20 0.40


The competitiveness scales were manipulated my deleting one of the items (Our

Competitors are relatively weak) to provide a coefficient alpha of 0.76, which is

considered acceptable by Nunnally (1978).

Table 9 - Reliabilities of the Determinants of Market Orientation Scales - Competition


deleted

Coefficient

alpha

Arithmetic

Average

Standard

Deviation

Competitiveness 0.76

Competition in our industry is cut-throat. 0.71 3.61 0.96

Anything that one competitor can offer others

can match.

0.63 3.26 1.11

Price competition is a hallmark of our industry. 0.78 3.05 1.19



The scale reliability and values using Cronbach’s alpha coefficient for culture

are reported in Table 10. This scale does meet the threshold Nunnally (1978)

recommends.

Table 10 - Reliabilities of the Determinants of Market Orientation Scales - Culture


deleted

Coefficient

alpha

Arithmetic

Average

Standard

Deviation

Clan 0.85

My company is a very PERSONAL place. It is

like an extended family. People seem to share

a lot of themselves

0.76 37.7 20.8

The leadership of my company is generally

considered to provide: MENTOR, SAGE, or a

FATHER or MOTHER figure(s) to the staff

0.81 29.2 18.0

The glue that holds my company together is

LOYALTY and TRADITION. Commitment to

this firm runs high.

0.74 32.6 20.0

My company emphasises HUMAN

RESOURCES. High cohesion and morale in

the firm are important.

0.78 27.6 16.6

Adhocracy 0.82

My company is a very DYNAMIC and

entrepreneurial place. People are willing to

stick their necks out and take risks.

0.72 36.3 21.1


considered to be: ENTREPRENEUR(S),

INNOVATOR(S), or RISK TAKER(S)

0.75 39.8 19.6

The glue that holds my company together is a

COMMITMENT to INNOVATION and

DEVELOPMENT. There is an emphasis on

being first.

0.79 36.1 18.3




deleted

Coefficient

alpha

Arithmetic

Average

Standard

Deviation

My company emphasises GROWTH and

ACQUIRING NEW RESOURCES. Readiness

to meet new challenges is important.

0.77 25.4 14.8

Hierarchy 0.95

My company is a very FORMALISED and

STRUCTURAL place. Established procedures

generally govern what people do.

0.81 16.8 11.3


considered to be: COORDINATOR(S),

ORGANISER(S), or ADMINISTRATOR(S)

0.79 24.4 15.8


FORMAL RULES and POLICIES. Maintaining

a smooth running operation is important here.

0.77 16.3 12.2

My company emphasises PERFORMANCE

and STABILITY. Efficient, smooth operations

are important.

0.87 29.3 15.6

Market 0.86

My company is very PRODUCTION /

DELIVERY ORIENTATED. A major concern is

with getting the job done, without much

personal involvement.

0.79 21.8 16.9


considered to be: PRODUCER(S),

TECHNICIAN(S), or HARD-DRIVER(S)

0.73 20.9 14.1


the emphasis on TASKS and GOAL

ACCOMPLISHMENT. A production/delivery

orientation is commonly shared.

0.70 28.5 19.2




deleted

Coefficient

alpha

Arithmetic

Average

Standard

Deviation

My company emphasises COMPETITIVE

ACTIONS and ACHIEVEMENT. Measurable

goals are important.

0.76 28 17.9

4.6.2. RQ3 - Determinants of Market Orientation – Culture

Figure 13 presents a summary of the culture scale and items which is a

representation of the culture types: ‘adhocracy’, ‘clan’, ‘market’ and ‘hierarchy’ as

defined by Cameron and Freeman (1991).

Figure 13 - Organisational Culture Types

The overall split between the cultures was largely equitable. Overall 30% of

the SMEs were adhocracies, 29% were clans, 22% were market and 19% were

hierarchies. Within the scales there was however more diversity – adhocracy led the

results on two of the scales: ‘What holds the company together’ and ‘Leadership’ and

came in very high and almost equal on the scales ‘kind of company’ and ‘what is

important’. Combining the externally focused cultures of market and adhocracies



provides a result of 52%, leaving 48% split between the internally focused clans and

hierarchies.

The results analysed by SME segment provide for some further interesting

insight and are show in Figure 14. Clans are clearly a dominant and strong culture

type in the first three segments from micro to small and then adhocracy becomes the

lead organisational culture type within medium sized SMEs.

Figure 14 - Organisation Culture Types by SME Segment

4.6.1. RQ3 – Determinants of Market Orientation – Competitiveness

The competitiveness scale results are shown in Figure 15. The ‘agree’

responses were combined to create the positive and the ‘disagree’ responses were



combined to create the negative responses. The neutral response represents the

‘neither agree or disagree’. It is clear from the results that the overwhelming majority

consider that the competition within their respective industries are significantly high.

Similarly, differentiation is low in that in the second item on Figure 15 it is shown that

competitors can often match offers made into the market. Finally the last item

indicates that price is a highly competitive factor.

Figure 15 - Determinants of Market Orientation – Competitiveness

4.6.2. RQ3 - Determinants of Market Orientation – Management Investment

The split between SME manager respondents that stated they were invested

in the company that they worked for was 74% versus 26% that were not

shareholders in the company. Figure 16 shows the percentage shareholding of



those respondents that are shareholders within their organisation within their

percentage band share holdings.

Figure 16 - Percentage Shareholding of those Respondents who are Shareholders

4.7. Research Question 3 – Determinants of a Market Orientation – Discussion

The strongest culture type that emerged was that of adhocracy, representing

an overall 30%. This was not largely surprising considering that this represents

attributes of entrepreneurship, adaptability, flexibility and innovation. These are

attributes which are expected from an SME and in particular SMEs where the

management are largely invested as is the case with this sample. The second

largest result at 29% however was surprising and this was represented by clans.



With reference to Figure 1, clans represent organisations still with flexible organic

processes but with a stronger focus on internal factors such as the ‘sense of family’,

nurturing loyalty and human capital development (Cameron & Freeman, 1991).

Upon reflection on this result the strong representation of clans could indicate the

‘owner-operated’ nature of some SMEs, the minimal silos which are represented by

SBU’s in larger organisations and the staff centric approach that many smaller

companies tend to have. What is most interesting to note however is that the clan is

strong throughout the SME segments, and dominant within two (Micro and Small) yet

the adhocracy culture type excels to a much stronger and dominant position within

the Medium sized SME (see Figure 14). It is my postulation that at this size the

business considers itself less of a ‘family run’ business and most likely less

exclusively owner operated, conceivably introducing more external investors which

results in a more externally focused organisation whilst retaining the entrepreneurial

spirit. This view is somewhat supported by the data shown in Figure 17.



Figure 17 - SME Size and Shareholding Percentage

Deshpande’s et al (1993) hypothesis of performance and market orientation

also based on Cameron and Freeman’s (1991) model, which was supported by their

results, posits that the order of the cultural types from the most market orientated to

the least was: market, adhocracy, clan and hierarchical. The key difference between

the Deshpande et al (1993) sample and this study is that theirs was based on large

corporate organisations and this study is based on SMEs. The very nature of the

organisation is defined by the culture - and in turn the culture fit for that organisation

can be utilised to create a market orientation. The culture of an SME is therefore

most likely projected towards an adhocracy and clan and further enhanced by having

executive managers who are invested in the business.



Therefore, I would posit however, that in the SME sector, the order of cultures

which will drive the most market orientation would be adhocracy, clan, market and

hierarchical. The two cultures which are adhocracy and clan both fulfil the needs of

the SME to be flexible and adaptable to meet the needs of their customer. Whilst

adhocracy represents the externally facing entrepreneurial traits required in an SME,

the balance of the clan culture, provides for precisely the trait that an SME needs to

maintain to attract and retain staff, a culture committed to its staff breeding loyalty

and nurturing with a shallow hierarchy of management.

Considering the combined results of both the adhocracies and the clans, a

total of almost 60% is shown through the culture construct, leaving the remaining

40% split between market and hierarchy. This result is comparable to the 65% of

positive results shown against the market orientation scales of research question 2.

Admittedly, these implications are speculative due to the exploratory nature of this

analysis and relies upon the measurement of the market orientation which has been

shown to be incongruent when exploring the detail. Therefore the results indicate

that H2 (SMEs with a stronger culture towards ‘market’ will have a stronger market

orientation) is rejected in that this hypothesis is not valid for the SME segment.

H3 (The more highly innovative and adaptable SMEs are the greater the

responsiveness within an organisation, leading to a stronger market orientation) was

not decisive due to the reliability of the data collected in this regard.

Colvin and Slevin (1989) concluded that strong competitiveness in the market

drives SMEs towards a market orientation naturally as they seek to become

customer orientated, innovative and efficient in their dealings. Figure 18 provides an



exploratory view of the two scales for competitiveness and market orientation where

the ‘agree’ and ‘neutral’ scales have been combined and the ‘disagree’ scales

combined to arrive at a two scale representation. An individual item regression

correlation did not prove to be positive in the hypotheses however using an

exploratory and subjective view of the chart in Figure 18 it is concluded that both

competitiveness and market orientation results are similar in their sentiment.

Figure 18 - Competition and Market Orientation Scales Combined

Therefore H4 (The greater the competition, the greater the responsiveness

within the organisation, leading to a stronger market orientation) is rejected because

it cannot be concluded that competitive intensity is intrinsically linked to market

orientation despite the suggestion through the comparable results. Further research

is recommended to qualify this.



Management investment was a rudimentary measure which did suggest

support of the hypotheses (H1) that invested management have an overall effect on

market orientation, given that there is an indication between the invested

management results (74%) and the overall level of market orientation observed

within the sample. As alluded to in the literature review, through a reasonably

exhaustive search, no research was found to base this hypothesis upon and

therefore was purely exploratory and subjective. This hypothesis would require

further research and is a consideration for such and is most likely better achieved

through a longitudinal study.

4.8. Research Question 3 – Determinants of a Market Orientation – Summary



Culture in general is a significant influencing determinant of market

orientation, albeit the hypothesis (H2) is not supported in its current form. I would

postulate however, that a specific culture type of an organisation is not a determinant

of market orientation in that any of the four culture types could help to create a

market orientation assuming that the staff within the business are a good fit to that

culture type. Ultimately culture is manifested through people, especially leadership,

processes and attitudes. Therefore a congruent fit of culture within the organisation

is likely to have more of an impact on market orientation than individual cultures

observed side by side in such a study.

Innovation (H3) and competitiveness (H4) were not proven due to reliability of

the data. Management investment (H1) is deemed to be a determinant of market



orientation in the context of an SME, especially in cultures that are adhocracies and

clans, however this requires further research to be conclusive.

4.9. Research Question 1 – Company Performance and Market Orientation – Results


performance in the SME segment of companies in South Africa?”

The performance construct was comprised of four items which respondents

were asked to indicate the evaluated statement that best represented their company

relative to their businesses’ largest competitor. The four items focused on: profit,

size, market share and growth. A three-point Likert scale was coded to represent the

evaluated statements which differed between each item. Two of the items were

reverse coded in an attempt to minimise response set bias.

4.9.1. RQ1 – Company Performance and Market Orientation – Reliability

The scale reliability and values using Cronbach’s alpha coefficient for

performance are reported in Table 11. This scale does meet the threshold Nunnally

(1978) recommends.

Table 11 - Reliabilities of the Performance Scale


deleted

Coefficient

alpha

Arithmetic

Average

Standard

Deviation

Performance 0.78

Profit relative to our largest competitor 0.70 1.80 0.77

Size relative to our largest competitor 0.77 2.74 0.56

Market share relative to our largest competitor 0.71 2.47 0.77




deleted

Coefficient

alpha

Arithmetic

Average

Standard

Deviation

Growth relative to our largest competitor 0.75 2.24 0.84

4.9.2. RQ1 – Company Performance and Market Orientation – Performance

Figure 19 shows the results for the item ‘profit relative to our businesses’

largest competitor’. Remarkably, 41% of respondents believed that their business

was less profitable than their largest competitor. With 38% believing that they were

equally profitable. Only 21% of the respondents believed they were more profitable.

Figure 19 - Profit relative to our businesses' largest competitor



Figure 20 shows the results for the item ‘size relative to our largest

competitor’. From a relative size perspective, 82% of respondents believed their

business were smaller than their largest competitor, with 14% responding that they

were the same size and 5% stating they were larger.

Figure 20 - Size relative to our businesses' largest competitor

Figure 21 shows the results for the item ‘market share relative to our largest

competitor’. From a market share perspective, 62% of respondents believed that

their business had a smaller market share than their largest competitor, with 20%

stating that they had the same market share and 18% having a larger market share

than their largest competitor.



Figure 21 - Market share relative to our businesses' largest competitor

Figure 22 shows the results for the item ‘growth relative to our largest

competitor’. Growth provided the only strongly positive result within this construct,

with 50% stating they were growing faster than their largest competitor, with 25%

stating they were growing about the same and 25% stating they were growing slower

than their largest competitor.



Figure 22 - Growth relative to our businesses' largest competitor

Hypotheses H5 (An organisations performance, measured in financial terms,

is positively related to its market orientation) examined the impact of market

orientation on financial performance. This was tested primarily by regressing the

profitability performance measure on the three scales of market orientation. Figure

23, Figure 24 and Figure 25 shows the results of the regression analysis.



Figure 23 - Correlation between Profitability and Market Orientation - Intelligence Generation and Dissemination

Figure 24 - Correlation between Profitability and Development of a Market Orientated Strategy



Figure 25 - Correlation between Profitability and Implementation of a Market Orientated Strategy

In each case no correlation was determined, with correlation coefficient

represented by R2 values on each of the graphs ranging from 0.01, 0.07 and 0.01

respectively.


Discussion

No statistical correlation was determined to exist between company

performance and market orientation across any of the company performance scales

that were adapted from the Deshpande et al (1993) study. Furthermore and

surprisingly, 79% of respondents stated that they were currently less profitable or

about equally profitable than their largest competitor, leaving only 21% to state that

they were more profitable. The scale is by nature subjective in its questioning, and a

snapshot in time at a time when SME’s in South Africa are enduring some difficult

economic times with many failing to remain viable in an ever increasingly



consolidating and retracting market. Considering however that 50% of respondents

stated that they were growing faster than their largest competitor, with a further 25%

stating that they were growing about the same, could also indicate that this 75% of

the sample are actively reinvesting their profits through a growth strategy in order to

adapt to the changing market needs.

It is postulated however, that the result relating to company performance is

allied with Kohli and Jaworski’s (1990) view that profitability is not a component of

market orientation and is in fact an consequence, albeit in this study a positive

consequence was conspicuously absent by a number of factors including the

relatively modest level of market orientation and the factors related to financial

performance as already noted.


Summary



Contrary to some prior research, this study found no evidence to support a

relationship between market orientation and company performance. This may be

related to the reasons proffered in the previous section. Furthermore, hypotheses H5

- An organisations performance, measured in financial terms, is positively related to

its market orientation, is rejected by this study.

It is worth reiterating the postulation cited in the literature review chapter that

recalled the work of a number of authors that had both accepted and rejected a

similar hypotheses related to the relationship between market orientation and



performance across a number of independent studies. Jaiyeoba and Amanze (2014)

conducted one of these such studies and was also a study which used SMEs as

their target frame in Southern Africa (Botswana). Jaiyeoba and Amanze (2014)

rejected the null hypotheses but also concluded that environmental factors played a

key part in arriving at this point. Importantly, Jaiyeoba and Amanze (2014) make this

important observation which many of the authors that have explored this relationship

have done so with varying measures and methods. Jaiyeoba and Amanze (2014)

themselves used ‘sales growth’ as their performance indicator, whereas within this

research study ‘profitability’ was used as the measure. The later could be

considered a more abstract form of measurement and could have led to a varying

interpretation. A consideration for further research therefore will be to identify a

measure which is unambiguous and which will ensure consistent and reliable results

data.


This chapter presented the results of the study and provided a discussion

based upon the results observed. The chapter also answered the research questions

and hypotheses which are summarised below.



Not supported within this study and in turn the hypotheses (H5) that an

organisations performance, measured in financial terms, is positively related to its

market orientation, and is not supported.





The general level of market orientation in South African SMEs is considered

adequate, but not without significant room for improvement in key areas identified

within the discussion of this chapter. Arguably there are traits of a sales orientation

appearing in the results which are counter to the market orientation objectives.



Culture in general is a significant influencing determinant of market

orientation. However, contrary to the study by Deshpande et al (1993), my

conclusion with particular reference to SMEs is that the culture type adhocracy,

followed by clan, is the most beneficial and influential to an organisation seeking a

market orientation. This therefore does not support the hypothesis (H2) that SME’s

with a stronger culture towards ‘market’ will have a stronger market orientation.

The hypothesis for Innovation (H3) was not proven due to reliability of the

data. Competitiveness (H4) was rejected as being a determinant of market

orientation based on the regression testing, however a subjective association could

be observed. Management investment (H1) was deemed to be a determinant of

market orientation, however this requires further research to be conclusive and is

therefore also rejected in this dissertation.



5. Chapter 5: Conclusions and Recommendations


This chapter is the final chapter of this dissertation and provides a brief

summary of the dissertation’s objective, methodology, results and the implications of

these results relevant to the objectives of the study. This chapter also provides a

summary of the limitations first described in the introduction allied with the post-

research limitations identified. Finally the chapter concludes with recommendations

for the organisations that this research may benefit, namely the South African

Government and specifically the Small Business Council, SME business owners and

managers, regional Chambers of Commerce and business incubators.

5.2. Problem Statement and Methodology

Within South Africa and throughout the world, companies face a choice when

it comes to strategy pertaining to marketing and selling. That choice is whether to

adopt a selling orientation, or to adopt a market orientation. Most companies, and

particularly SMEs adopt a selling orientation by default, and therefore, one could

argue not by choice, but due to a lack of knowledge surrounding the strategy and

tactics to employ for a market orientation. The objectives of this dissertation included

understanding the level of market orientation in South African SMEs, to understand if

there is a relationship between performance and South African SMEs level of market

orientation and finally to understand which determinants had an impact on the level

of market orientation.

A survey strategy was adopted utilising an online survey tool which facilitated

an easily deployable survey instrument which provided immediate and accessible



data. Quantitative data was collected from a frame of 123 SME managers of which

71 responded providing an acceptable 58% response. The questionnaire was

comprised of ten parts and criterion-related validity was ensured by using a

combination of adopted and adapted item constructs from existing research, notably

including that of Kohli et al (1993), Ruekert (1992), and Deshpande et al (1993), and

the development of new item constructs where none existed. Many of the questions

relied upon Likert scales and therefore reliability was tested using Cronbach’s

coefficient alpha utilising Nunnally’s (1978) scale measurement of 0.7 or above as an

indication of acceptable reliability.

5.3. Conclusions

To the research question which is the basis for the subsequent questions,

“What is the general level of market orientation in South African SME companies

compared to Western European / North American companies?” The results indicated

a rather modest level of market orientation which actually surfaced evidence of a

selling orientation within the constructs. To this end, I conclude that there are

significant areas of focus for South African SMEs to improve their market orientation,

which if undertaken could raise the overall level of market orientation considerably.

The constructs identified as low were largely related to strategy development and

execution whereas the strongest traits of market orientation existed in intelligence

generation and dissemination and direct customer engagement activities. I conclude

therefore that these strengths are areas that are more inherent within business, and

that the weaknesses are areas that require education and mentoring in order to fully

comprehend to be able to execute upon. It is this lack of a rounded market orientated

focus, which considers both market intelligence, strategy development and strategy



implementation which Reukert (1992) states is the key to achieving a strong market

orientation. The comparison to Western European/North American organisations

proved to be challenging due to the relative non-comparative measures used

between research studies both of the constructs and the company sizes.

To the research question: “Is there a relationship between market orientation

and company performance in the SME segment of companies in South Africa?”

There was not a proven relationship between performance and market orientation

which is explained through a number of factors. Firstly, the South African economy is

experiencing a financial slow down and has had a very small growth in the last four

years comprising of an average growth of just 2 percent per year (Statistics South

Africa, 2014), which is effecting many businesses but specifically the SME segment.

Many SMEs are filing for voluntary and involuntary liquidation as a result of the

financial pressures endured. Secondly, as discussed, the level of market orientation

was not consistently strong, and where it is, it is concluded that this is artificially so

due to elements of a sales orientation being evident. Therefore to conclude a

relationship based on these environmental factors would be inconclusive and

conceivably flawed. Arguably this substantiates the postulation that a symbiosis of a

number of factors, including environment, play a part in this and this study will join

those of Caruna et al (1999) and Lonial et al (2008) in concluding no relationship

between performance and market orientation.

To the research question: “What are the key influencing determinants of

market orientation in companies in the SME segment of South Africa?” Culture in

general was determined to have an influence on the level of market orientation,

however contrary to the research by Deshpande et al (1993) the culture type that



was concluded to be the most prevalent in SMEs was that of an adhocracy followed

by clan, followed by market and hierarchy using the model of organisational culture

types originally constructed by Cameron and Freeman (1991). This departure from

the conclusions of Deshpande et al (1993) is explained by the difference in size of

the organisations used within the target frame. Interestingly, the clan organisation

type was predominantly seen in the micro, very small and small segments and

adhocracy was dominant in the medium segment, representing I would conclude a

maturity in a business which is focussed more on the external customer. Lastly, I

conclude that any of the organisational types can achieve a level of market

orientation, assuming that the leadership is driving a culture that is best suited to

their organisation size and on the assumption that the leadership and the staff are of

a good cultural fit for that cultural model.

The conceptual framework proposed summarising the hypotheses is shown in

Figure 26. Figure 26 shows the status of the hypotheses. In summary H1 was

accepted in principle but requires further research to be conclusive. H2 was rejected

due to the specificity of the hypothesis, with recognition of the research question

pertaining to this and discussed earlier. H3 was not proven due to the reliability of the

data. H4 was rejected and H5 was not supported due to the financial and market

orientation findings discussed earlier.



Market Orientation

Perfomance

Management Investment

Market Culture

ResponsivenessCompetition

Innovation

H4

H3

H2

H1

H5

Accepted – Needs further research

Rejected

Rejected

Rejected

Rejected

Figure 26 - Conceptual Framework of Antecedents to and Consequences of a Market Orientation - Summary

To the title of this dissertation: “Does a market orientation guarantee success

in the SME segment of South African companies”, this study finds that the evidence

is inconclusive to qualify such an emphatic statement, however this could be in part

reliant on the modest level of market orientation identified in organisations through

this study. I conclude however that whilst this research does not permit such an



emphatic statement to be upheld, it does indicate that organisations are striving for

market orientation, even if they are largely unaware of it – which is evidenced

through their higher scores on the inherent items and lower on those that, in my

opinion, would benefit from further education and mentoring, and would overall

increase the level of market orientation.

5.4. Limitations

A limitation was identified in advance related to language. This I conclude

had minimal impact because all of the respondents were competent English

speakers. Further post-research limitations pertain to the geographic coverage

which was limited to the Western Cape province of South Africa which has a different

demographic from the other eight provinces. Furthermore there was a bias towards

technology related SMEs which could be construed as a limitation, further research

could look to expand the research into other industries within the South African SME

sector.

Because the study was not longitudinal, the performance measure and the

management investment hypothesis are both somewhat subjective of a snapshot in

time and this should be considered when reviewing the results and conclusions

pertaining to these.

The educational enquiry construct was limited by asking for a respondent’s

highest qualification, whereas a business focused qualification may have been

present but not their highest.

The objectives of this study have been achieved however, therefore these

limitations are considered mitigated and items for further research.



5.5. Recommendations and Scope for Future Research

The objective of this dissertation was to provide an insight to what guidance

the South African Government through its National Small Business Council could

provide to SMEs in South Africa in order to help them become more profitable, to

grow, to create more employment and to help the South African economy prosper as

a result. I conclude that this dissertation provides some actionable areas of focus

with which the National Small Business Council could provide education and

mentoring on.

In order to provide a true 360 degree view, further research is recommended

to include customers of company’s within such research, so that the customer’s

perception and experience of the company’s response to the market orientation

measures can be considered in the conclusions, which would lead to a less

subjective results set. Furthermore I would recommend that future research carefully

considers the performance construct to determine the best fit for the organisations

surveyed and the environmental factors at large.


This chapter provided a summary of the dissertation’s objective, methodology

and results and the implications of these results relevant to the objectives of this

study, allied with recommendations for the use of this dissertation in education of

SMEs and areas for further research.



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company performance. Journal of Strategy and Management, 1(2), 125-142.



7. Appendix A – Email Note to Respondents

Hi <name>,

Hope is all with you. I have a favour to ask:

I am in the process of undertaking an MSc in Marketing at the University Of Salford

Business School. I am in the final stages and have started my dissertation, which is

a research study titled: "Does a market orientation guarantee success in the SME

segment of South African Companies".

I am hoping to get data from about 200 managers who work in SMEs in South Africa

and considering that you are one, I am hoping that you will have 15 mins to spare to

complete my survey.

Please follow this link to complete the survey before close of business on Monday

13th October.

http://bit.ly/MarketOrientation

The data will be anonymous and confidential – I don’t collect names, email

addresses etc so I won’t know who answers what, I will only have the data –

therefore please be as honest and frank with your answers as you can.

Please feel free to send this link to any people you know who are managers in a

SME or to any managers within you own business. (Which is a company with

between 1 and 200 employees).

Thanks in advance, I really appreciate your time and input.

Regards

Marc Fletcher



8. Appendix B – First Question of Questionnaire

My name is Marc Fletcher and I am a postgraduate student undertaking an MSc in

Marketing at the University of Salford Business School.

As a part of my course I am completing a research study titled: "Does a market

orientation guarantee success in the SME segment of South African Companies".

The purpose of my study is to understand how "market orientated" our SMEs are in

South Africa, compared to other parts of the world, and if being "market orientated"

actually helps companies become more successful.

As an entrepreneur myself, I am passionate about small business and helping

people succeed, and through this survey and ultimately my dissertation conclusions I

hope to be able to give something back, through my time and efforts to help this

great nation that we are - improving the South African economy and helping South

Africans help themselves to become better managers and run more successful and

sustainable businesses.

Therefore, I need your help in doing this - your valuable and learned insights,

collectively decades of experience, will help me to have enough data to derive some

tangible and actionable conclusions that I can hopefully share with others through

the Chamber of Commerce and other business incubator organisations.

Importantly, the information you share with me is anonymous and confidential. I do

NOT ask for any names, email addresses or anything that can identify you or your

company - I just want your views, opinions and insights. Please feel to contact me at

the email address: [email protected], if you would like to receive a

summary of my research, once I am finished in February 2015.

Thank you in advance for your participation - it will take about 15 mins of your time.

My dissertation supervisor is Dr Vesna Sedoglavich.

Please select "yes" to continue, and to acknowledge what I have written - and select

"no" to exit, if you do not wish to participate. *



9. Appendix C – Complete Questionnaire

The complete questionnaire is included in the following pages.

Dissertation: “Does a market orientation guarantee success in the SME segment of South African...

Business

Transcript of Dissertation: “Does a market orientation guarantee success in the SME segment of South African...