Exploration of stakeholder marketing orientation and its impact on business performance in Indian pharmaceutical marketing companies

Abstract

Purpose The purpose of this study is to understand the concept of stakeholder marketing orientation (SMO), its dimensionality and the development of an SMO scale. Further, the study also aims to analyze the impact of SMO on business performance (BP) in Indian pharmaceutical marketing companies. The moderating role of organizational culture between the study variables (i.e. SMO and BP) is also evaluated. Design/methodology/approach The data regarding SMO are gathered from 93 owners/managers of pharmaceutical marketing companies operating in North India. The underlying dimensions of the scale are identified through exploratory factor analysis. Further, the reliability and validity of the scales are also checked. Further, the partial least square (PLS) technique is used to analyze the study variables. Findings SMO is established as a multi-dimensional scale comprising system thinking (personal consideration of stakeholder, the relationship of stakeholder, systematic problem-solving and interdependence), paradoxical thinking (decision control and autonomy, uniformity and individualization and distance and closeness) and democratic thinking (ease for the stakeholders to share their voice, involvement in decision-making, the existence of participatory culture in the organization). The SMO showed a positive and significant impact on BP (market growth, return on investment, return on asset and market share). Further, the results also indicated the moderating role of organizational culture between SMO and BP relationship. Research limitations/implications This study primarily focuses on the measurement of SMO, exploring its dimensions (system thinking, paradoxical thinking and democratic thinking) and validating using exploratory factor analysis (EFA) and PLS techniques. Further, the sample size of the study is small (n = 93), and hence confirmatory factor analysis (CFA) and covariance based-SEM could not be applied. It is suggested that future research needs to be undertaken with a bigger sample in the pharmaceutical sector and later in other sectors to validate the results of the study. The impact of moderating variables such as organizational culture, industry size, type and owner experience can also be explored between the study variables in the future. The study is limited to the measurement of SMO from owners/managers’ perspectives, other internal (employees) and external stakeholders such as suppliers, distributors, chemists and hospitals were not contacted because of time constraints. Future research needs to consider the perspectives of these stakeholders in grounding the conceptual framework of SMO. Originality/value This research contributes to the development of the SMO scale. It is identified as a practice, based on system thinking, paradoxical thinking and democratic thinking, which provides an organization with better performance. The study results help in strengthening SMO and BP in pharmaceutical marketing industries.