The impact of market orientation on NSD and financial performance of hospital industry

Industrial Management and Data Systems - 2008
Subhash C.Lonial1, MehvesTarim2, EkremTatoglu3, SelimZaim4, HalilZaim4
1Department of Marketing, University of Louisville, Louisville, Kentucky, USA
2School of Healthcare Management, Marmara University, Istanbul, Turkey
3Department of Management, Bahcesehir University, Istanbul, Turkey
4Department of Management, Fatih University, Istanbul, Turkey

Tóm tắt

PurposeThe principal aim of this study is to determine the critical factors of market orientation (MO) and to measure its effect on new service development (NSD) and financial performance of hospital industry in Turkey.Design/methodology/approachDrawing on a self‐administered questionnaire, the data were collected from a sample of privately‐held general hospitals within the city of Istanbul in Turkey. Based on theoretical considerations, a model was proposed to examine the interrelationships among MO, NSD‐performance and financial performance.FindingsData analysis reveals that while MO has a strong and positive effect on NSD‐performance, it has no significant effect on financial performance. Also a strong and positive relationship was noted between NSD‐performance and financial performance. Finally, the findings also provided evidence for the mediating role of NSD‐performance in the relationship between MO and financial performance in the hospital industry.Research limitations/implicationsFirst, due to relatively small sample size, a caution should be exercised when interpreting the results. Second, the data were collected from hospitals in Turkey, which may restrict to some extent generalizability of findings. Third, we relied on the subjective evaluations of senior executives. It would therefore be useful to replicate the results with objective measures of performance indicators.Practical implicationsAlthough there is compelling evidence that MO has a positive effect on business performance, it alone may not be able to produce superior performance. Many hospitals are committed to MO and new services development. The framework clearly indicates that a strong commitment to both the NSD‐performance and marketing areas is essential for improving the financial performance of hospitals. Also, to remain competitive in today's healthcare industry, hospital managers should all keep pace with the daily changes in the market place and stay attuned to NSD activities and quality management practices.Originality/valueThe main thrust of this study is to investigate whether the relationship between MO and financial performance is mediated by NSD‐performance in hospital industry. This constitutes the novelty of this research as most prior empirical research investigating a mediating mechanism through which MO affects firm performance largely focused on other factors with no or little emphasis being placed on NSD activities or NSD‐performance in healthcare context.

Từ khóa


Tài liệu tham khảo

Appiah‐Adu, K. and Ranchhod, A. (1998), “Market orientation and performance in the biotechnology industry: an exploratory empirical analysis”, Technology Analysis & Strategic Management, Vol. 10 No. 2, pp. 197‐210.

Armstrong, J.S. and Overton, T.S. (1977), “Estimating non‐response bias in mail surveys”, Journal of Marketing Research, Vol. 14, pp. 396‐402.

Atuahene‐Gima, K. (1995), “An exploratory analysis of the impact of market orientation on new product performance: a contingency approach”, Journal of Product Innovation Management, Vol. 12 No. 4, pp. 275‐93.

Atuahene‐Gima, K. (1996), “Market orientation and innovation”, Journal of Business Research, Vol. 35 No. 2, pp. 93‐103.

Avlonitis, G.J. and Gounaris, S.P. (1997), “Market orientation and company performance: industrial vs consumer goods companies”, Industrial Marketing Management, Vol. 26, pp. 385‐402.

Avlonitis, G.J., Papastathopoulou, P.G. and Gounaris, S.P. (2001), “An empirically‐based typology of product innovativeness for new financial services: success and failure scenarios”, Journal of Product Innovation Management, Vol. 18, pp. 324‐42.

Baker, W.E. and Sinkula, J. (1999a), “The synergistic effect of market orientation and learning orientation on organizational performance”, Journal of the Academy of Marketing Science, Vol. 27 No. 4, pp. 411‐27.

Baker, W.E. and Sinkula, J. (1999b), “Learning orientation, market orientation, and innovation: integrating and extending models of organizational performance”, Journal of Market Focused Management, Vol. 3 No. 4, pp. 295‐308.

Bates, K., Bates, H. and Johnston, R. (2003), “Linking service to profit: the business case for service excellence”, International Journal of Service Industry Management, Vol. 14, pp. 173‐83.

Camison, C. (1996), “Total quality management in hospitality: an application of the EFQM model”, Tourism Management, Vol. 17, pp. 191‐201.

Chang, T.Z. and Chen, S.J. (1998), “Market orientation, service quality and business profitability: a conceptual model and empirical evidence”, Journal of Services Marketing, Vol. 12 No. 4, pp. 246‐64.

Craig, A. and Hart, S. (1992), “Where to now in new product development research”, European Journal of Marketing, Vol. 26 No. 11, pp. 1‐49.

Damanpour, F., Szabat, K.A. and Evan, W.M. (1989), “The relationship between types of innovation and organizational performance”, Journal of Management Studies, Vol. 26, pp. 587‐601.

Day, G.S. (1994), “The capabilities of market‐driven organizations”, Journal of Marketing, Vol. 58 No. 4, pp. 37‐52.

De Brentani, U. (1989), “Success and failure in new industrial services”, Journal of Product Innovation Management, Vol. 6, pp. 239‐58.

Deshpande, R. and Farley, J.U. (1998), “Measuring market orientation: generalization and synthesis”, Journal of Market Focused Management, Vol. 2 No. 2, pp. 213‐32.

Desphande, R., Farley, J.U. and Webster, F. Jr (1993), “Corporate culture, customer orientation and innovativeness in Japanese firms: a quadrate analysis”, Journal of Marketing, Vol. 57, pp. 23‐37.

Deshpande, R., Farley, J.U. and Webster, F.E. (2000), “Triad lessons: generalizing results on high performance firms in five business‐to‐business markets”, International Journal of Research in Marketing, Vol. 17 No. 4, pp. 353‐62.

Diamantopoulos, A. and Hart, S. (1993), “Linking market orientation and company performance: preliminary evidence on Kohli and Jaworski's framework”, Journal of Strategic Marketing, Vol. 1, pp. 93‐121.

Francois, J.F. and Reinert, K.A. (1996), “The role of services in the structure of production and trade: stylized facts from a cross‐country analysis”, Asia‐Pacific Economic Review, Vol. 2 No. 1, pp. 1‐9.

Gatignon, H. and Xuereb, J. (1997), “Strategic orientation of the firm and new product performance”, Journal of Marketing Research, Vol. 34, pp. 77‐90.

Greenley, G.E. (1995), “Market orientation and company performance: empirical evidence from UK companies”, British Journal of Management, Vol. 6, pp. 1‐13.

Green, K.W. Jr, Chakrabarty, S. and Whitten, D. (2007), “Organizational culture of customer care: market orientation and service quality”, International Journal of Services and Standards, Vol. 3 No. 2, pp. 137‐53.

Green, K.W. Jr, Rudolph, L. and Stark, C. (2008), “Antecedents to service quality in a service centre environment”, International Journal of Services and Standards, Vol. 4 No. 2, pp. 167‐81.

Hair, J.F., Anderson, R.E., Tatham, R.L. and Black, W.C. (1998), Multivariate Data Analysis, Prentice‐Hall, Upper Saddle River, NJ.

Han, J.K., Kim, N. and Srivastava, R.K. (1998), “Market orientation and organizational performance: is innovation a missing link?”, Journal of Marketing, Vol. 62 No. 4, pp. 30‐45.

Harris, L.C. (2001), “Market orientation and performance: objective and subjective empirical evidence from UK companies”, Journal of Management Studies, Vol. 38, pp. 17‐43.

Horng, S‐C. and Chen, A.C‐H. (1998), “Market orientation of small and medium sized firms in Taiwan”, Journal of Small Business Management, Vol. 36 No. 3, pp. 79‐86.

Jaworski, B.J. and Kohli, A.K. (1993), “Market orientation: antecedents and consequences”, Journal of Marketing, Vol. 57 No. 3, pp. 53‐70.

Jaworski, B.J., Kohli, A.K. and Sahay, A. (2000), “Market‐driven versus driving markets”, Journal of Academy of Marketing Science, Vol. 28 No. 1, pp. 45‐54.

Kohli, A.K. and Jaworski, B.J. (1990), “Market orientation: the construct, research propositions and managerial implications”, Journal of Marketing, Vol. 54 No. 2, pp. 1‐18.

Kohli, A.K., Jaworski, B.J. and Kumar, A. (1993), “MARKOR: a measure of market orientation”, Journal of Marketing Research, Vol. 30, pp. 467‐77.

Kumar, K., Subramanian, R. and Yauger, C. (1998), “Examining the market‐performance relationship: a context specific study”, Journal of Management, Vol. 24 No. 2, pp. 201‐34.

Langerak, F. (2002), “What is the predictive power of market orientation?”, SSRN, available at: https://ep.eur.nl.

Langerak, F., Hultink, E.J. and Robben, H.S.J. (2000), “The mediating effect of NPD‐activities and NPD‐performance on the relationship between market orientation and organizational performance”, SSRN, available at: https://eepi.ubib.eur.nl.

Menor, L.J., Tatikonda, M.V. and Sampson, S.E. (2002), “New service development: areas for exploitation and exploration”, Journal of Operations Management, Vol. 20, pp. 135‐57.

Narver, J.C. and Slater, S.F. (1990), “The effect of a market orientation on business profitability”, Journal of Marketing, Vol. 54 No. 4, pp. 20‐35.

Nunnally, J.C. (1978), Psychometric Theory, 2nd ed., McGraw‐Hill, New York, NY.

Parasuraman, A., Berry, L.L. and Zeithaml, V. (1985), “A conceptual model of service quality and its implications for future research”, Journal of Marketing, Vol. 49, pp. 41‐50.

Raju, P.S. and Lonial, S.C. (2002), “The impact of service quality and marketing on financial performance in the hospital industry: an empirical examination”, Journal of Retailing and Consumer Services, Vol. 9, pp. 335‐48.

Reed, R., Lemak, D.J. and Montgomery, J.C. (1996), “Beyond process: TQM content and firm performance”, Academy of Management Review, Vol. 21 No. 1, pp. 173‐202.

Rust, R.T., Zahorik, A.J. and Keiningham, T.L. (1994), Return on Quality: Measuring the Financial Impact of Your Company's Request for Quality, Probus Publishing Company, Chicago, IL.

Schumacker, R.E. and Lomax, R.G. (1996), A Beginner's Guide to Structural Equation Modeling, Lawrence Erlbaum Associates, Mahwah, NJ.

Shapiro, B.P. (1988), “What the hell is market oriented?”, Harvard Business Review, Vol. 66 No. 6, pp. 119‐25.

Slater, S.F. and Narver, J.C. (1994), “Does competitive environment moderate the market orientation‐performance relationship?”, Journal of Marketing, Vol. 58, pp. 46‐55.

Slater, S.F. and Narver, J.C. (1995), “Market orientation and the learning organization”, Journal of Marketing, Vol. 59, pp. 63‐74.

Slater, S.F. and Narver, J.C. (1999), “Market orientation is more than being customer led”, Strategic Management Journal, Vol. 20, pp. 1165‐8.

Subramanian, A. and Nilakanta, S. (1996), “Organizational innovativeness: exploring the relationship between organizational determinants of organizational performance”, Omega, International Journal of Management Science, Vol. 24 No. 6, pp. 631‐47.

Wickramasinghe, N. (2008), “Fostering knowledge assets in healthcare with the KMI”, International Journal of Management and Enterprise Development, Vol. 4 No. 1, pp. 52‐65.

Wickramasinghe, N., Goldberg, S. and Bali, R.K. (2008), “Enabling superior m‐health project success: a tricountry validation”, International Journal of Services and Standards, Vol. 4 No. 1, pp. 97‐117.

Yavas, U., Bilgin, B. and Shemwell, D.J. (1997), “Service quality in the banking sector in an emerging economy: a consumer survey”, International Journal of Bank Marketing, Vol. 15, pp. 217‐23.

York, K.M. and Miree, C.E. (2004), “Causation or covariation: an empirical re‐examination of the link between TQM and financial performance”, Journal of Operations Management, Vol. 22, pp. 291‐311.

Zeithaml, V.A., Berry, L.L. and Parasuraman, A. (1996), “The behavioural consequences of service quality”, Journal of Marketing, Vol. 60, pp. 31‐46.

Zeithaml, V.A., Parasuraman, A. and Berry, L.L. (1990), Delivering Service Quality: Balancing Customer Perceptions and Expectations, The Free Press, New York, NY.

Thông tin
Thông tin xuất bản

Industrial Management and Data Systems

Thông tin tác giả