Market orientation, learning orientation and organisational performance in international joint ventures

Abstract

PurposeDespite failure rates of around 30 per cent, international joint ventures (IJVs) continue to grow. It is argued that IJVs provide a platform for organisational learning, which facilitates organisational performance. Intuitively, IJVs that are learning oriented should have a positive impact upon organisational performance. However, it is unclear as to whether a firm in an IJV should focus more on being learning oriented, or market oriented. The paper aims to address this question.Design/methodology/approachA survey of 168 senior managers involved in IJVs in Malaysia. Data were analysed using two‐stage least squares estimators for latent variable models.FindingsResults suggest that for IJVs, a market orientation has a more positive impact on organisational performance than a learning orientation. The non‐linear relationship between market orientation and performance suggest that larger gains in performance are achieved by firms who have low initial levels of market orientation. Thus, in the absence of one or the other, it is preferable for a firm in an IJV to have a strong market orientation.Practical implicationsFor managers of IJVs, the study would suggest that firms should concentrate on improving their organisations' overall level of market orientation if they are to improve the level of business performance.Originality/valueThis paper is the first to examine the relative effects of a market orientation and a learning orientation in the context of IJVs.