The Effect of Market Orientation on Learning, Innovativeness, and Performance in Primary Agriculture

Abstract

Market awareness and innovativeness are important resources in any business environment. As customer needs and competitor responses change, performance may depend on the ability for firms to recognize and react to market shifts. Using survey data from beef farmers in Illinois, we examine the role market orientation, organizational learning, and innovativeness play on satisfaction with performance. We use a structural equation model to find that market-oriented and innovative firms are more satisfied with their performance while controlling for structural and demographic variables. Results also show that while market-oriented firms are more innovative, human capital resources moderate the ability to exploit innovations. We also find that an increase in experience correlates with less organizational learning. La connaissance du marché et l'esprit d'innovation constituent deuxéléments importants de tout environnement commercial. Compte tenu du fait que les besoins des consommateurs et les réactions des concurrentsévoluent, la performance des entreprises peutêtre sensibleà leur capacitéà identifier et a réagir aux facteurs influençant le marché.À l'aide des données d'une enquête réalisée auprès de producteurs de bovins de boucherie de l'Illinois, nous avons examiné le rôle du suivi du marché, de l'apprentissage organisationnel et de l'esprit d'innovation sur la satisfaction quant au rendement.À l'aide de la modélisation paréquations structurelles et en tenant compte des variables démographiques, nous avons déterminé que les entreprises qui font un suivi plus serré du marché et qui sont plus innova-trices sont plus satisfaites de leur rendement. Les résultats de notre analyse montrent que, malgré le fait que les entreprises qui font un suivi plus serré du marché soient aussi plus innovatrices, les dotations en capital humain réduisent la capacitéà exploiter les innovations. Nous avonségalement observé qu'une augmentation de l'expérience se traduit par une diminution de l'apprentissage organisationnel.

Innovation behaviour and the use of research and extension services in small-scale agricultural holdings

“…Our framework represents farmers' innovation behaviour profile as three components: market orientation (MO), learning orientation (LO), and innovation attitude (IAT). MO and LO can be considered antecedents of IAT (Keskin, 2006;Micheels & Gow, 2014) and, according to our framework, all shape farmers' willingness to consult RES.…”

“…Agricultural extension and research policy are 3 Innovation behaviour and the use of research and extension services of agricultural SMEs customer's needs, which can lead to innovative consequences as doing something new or different in response to market conditions. According to Micheels & Gow (2014), innovative managers transform valuable market information into product and process innovation. Innovation processes, therefore, depend on a variety of interactions where potential barriers may appear.…”

“…As SMEs are crucial agents of the rural economies (Avermaete et al, 2004;Baregheh et al, 2012), we consider the farm size as a control variable for our model. We focused on farm size in terms of Innovation behaviour and the use of research and extension services of agricultural SMEs total gross margin results (Rama & Alfranca, 2003), which also refers to the hypothesis that available resources affect managers' decisions (Langemeier & Jones, 2000;Micheels & Gow, 2014). Recent empirical evidence suggests a positive relationship between firm size and the probability to innovate through improved access to human and financial resources and profit persistence (Laforet, 2008;Karantininis et al, 2010).…”

Innovative capabilities of users of agricultural R&D services

“…MO is recognized as a cultural variable which is also identified as a behavioural characteristic in contexts where internal innovation determines the process in which individuals develop and implement firm's strategies based on information given by market trends, competitors and customers (Kohli & Jaworski, ; Narver & Slater, ). Micheels and Gow () describe MO as a heterogeneous intangible firm's cultural resource that integrates articulated new information that includes needs of potential or actual markets and consumers. Empirically, previous literature concludes that the MO significantly enhances business performance in a context also influenced by the learning orientation of individuals in firms (Baker & Sinkula, ; Lin, Peng, & Kao, ; Slater & Narver, ).…”

“…Lee and Tsai () state that an interactive cooperation among firms has an important role when comes to encouraging the internalization of the market and learning orientation. At a farm level, innovation capabilities could facilitate firms to be more aware of opportunities within markets trends and new processes, which allows them to strengthen their position in the value chain (Micheels & Gow, ). A shift from a simple “transfer of technology” approach to an “innovation system” approach is considered desirable in the AKIS (Wielinga, Koutsouris, Knierim, & Guichaoua, ).…”