Market Orientation and the Learning Organization

Abstract

Effective organizations are configurations of management practices that facilitate the development of the knowledge that becomes the basis for competitive advantage. A market orientation, complemented by an entrepreneurial drive, provides the cultural foundation for organizational learning. However, as important as market orientation and entrepreneurship are, they must be complemented by an appropriate climate to produce a “learning organization.” The authors describe the processes through which organizations develop and use new knowledge to improve performance. They propose a set of organizational elements that comprise the learning organization and conclude with recommendations for research to contribute to the understanding of learning organizations.

Differential Mediating Effects of Radical and Incremental Innovation on Market Orientation-Performance Relationship: A Meta-Analysis

“…Some argue that market orientation leads to a reactive response by the firm wherein the firm is only responding to expressed customer needs (e.g., Atuahene-Gima 1995;Hamel and Prahalad 1991;Hayes and Wheelwright 1984). Because marketoriented firms seek to understand customers' expressed needs through adaptive learning, they may tend to introduce incremental innovation derived from articulated customer feedback (Atuahene-Gima 1995; Slater and Narver 1995). In particular, when market orientation is coupled with traditional market research that attempts to identify the expressed needs of customers, some researchers contend that market-oriented firms can only produce incremental line extensions, modifications, and adaptations of current products, and may miss the emergence of new segments (Hayes and Wheelwright 1984).…”

“…The alternative perspective is that market-oriented companies also seek to understand and satisfy customers' latent needs, not just their expressed needs (e.g., Kohli and Jaworski 1990;Slater and Narver 1995). Market-oriented firms are not simply customer-led (Slater and Narver 1998).…”

“…Market orientation also provides the cultural foundations for generative learning that questions long-held assumptions and focuses on developing new ways of looking at the world. Consequently, some researchers expect market orientation to increase radical innovation (Santos-Vijande et al 2005;Slater and Narver 1995). Moreover, customers' ability to provide useful suggestions for radical innovation should not be underestimated.…”

Knowledge exploitation, knowledge exploration, and competency trap

“…So, even when new strategies or capabilities might be appropriate, or even though they may realize, in the abstract, that exploring new knowledge is central to their survival, organizations are more likely to engage in activities that support and advance their current competencies, to continue emphasizing historical and traditional marketing assets, capabilities, and strategies (Sinkula, 1994;Slater and Narver, 1995). The result is that, on one hand, the dominated exploitative learning of organizations ensure reliable throughout and output (March and Simon, 1958).…”

“…The external environment has been shown to influence the nature and extent of learning in an organization (Menon and Varadarajan, 1992;Sinkula, 1994;Slater and Narver, 1995). Organizations competing in hypercompetitive environments exhibit behavior that differs significantly from behavior in more static environments (Thomas, 1996).…”