Purpose -The purpose of this paper is to investigate the joint effects of market orientation (MO) and corporate social responsibility (CSR) on firm performance. Design/methodology/approach -Data were collected via a questionnaire survey of star-rated hotels in China and a total of 143 valid responses were received. The hypotheses were tested by employing structural equation modelling with a maximum likelihood estimation option. Findings -It was found that although both MO and CSR could enhance performance, once the effects of CSR are accounted for, the direct effects of MO on performance diminish considerably to almost non-existent. Although this result may be due to the fact that the research is conducted in China, a country where CSR might be crucially important to performance given the country's socialist legacy, it nonetheless provides strong evidence that MO's impact on organizational performance is mediated by CSR.Research limitations/implications -The main limitations include the use of cross-sectional data, the subjective measurement of performance and the uniqueness of the research setting (China). The findings provide an additional important insight into the processes by which a market oriented culture is transformed into superior organizational performance. Originality/value -This paper is one of the first to examine the joint effects of MO and CSR on business performance. The empirical evidence from China adds to the existing literature on the respective importance of MO and CSR.
Recent literature suggests that the relationship between market orientation and business performance may be moderated by the nature of the external environment. While the conceptual arguments for such a relationship are well established, empirical evidence on the precise nature of this link has been both limited and ambiguous. The current paper provides further evidence on the nature of the links between market orientation, the environment and performance through a comparative analysis of two business sectors in China with distinctively different competitive environments. The results indicate that market orientation's impact on business performance is positive regardless of environmental conditions. However, the environment is found to moderate the relationship between market orientation and customer satisfaction. Finally, the study provides evidence that market orientation also has positive impacts on power in distribution channels and corporate social responsibility.
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