Culture, conduct and innovation: a deconstruction of market orientation

Abstract

Purpose – This purpose of this study is to deconstruct market orientation to explore how culture interrelates with conduct and value-creating innovation and its effect on performance. The authors suggest that market orientation is an organizational identity that can be built and managed for sustained competitive advantage. Design/methodology/approach – The authors use a split sample of 553 Canadian small- and medium-sized enterprises (SMEs) in both the manufacturing and technical service sectors. Hierarchical moderated regression analysis is used to test the main hypothesis that culture moderates the relationship between conduct and innovation. Support for the respective hypotheses is determined by the statistical significance of each focal variable. Findings – The study finds that culture does in fact moderate the relationship between conduct and innovation but only in service firms, not in manufacturing firms. Research limitations/implications – Theoretical implications include establishing support for the main premise of the paper, namely, that market-oriented culture interacts with the behavioral component of market orientation influencing the firm’s ability to create value through innovation. Practical implications – Managerial implications include the refinement of the many conceptualizations of the innovation construct by establishing innovation as value-creating. It also provides insight on how firm culture relates to the systems and processes used to operationalize both a market and innovation conduct within the firm. Originality/value – This paper provides a unique insight into the marketing/innovation interface, specifically in the context of SMEs.