Women’s driving decree, market orientation, and company performance in Saudi Arabia

Abstract

This paper investigated whether the royal decree of September 2017 allowing women to drive affects the relationship between market orientation and firm performance of official car dealerships in Saudi Arabia. In the empirical investigation, a quantitative method was used, focusing on car dealership managers and executives. The hypotheses were tested using structural equation modelling with data collected from 94 questioned. Market orientation dimensions that were investigated included customer orientation, competitor orientation, and inter-functional coordination. The results indicate a positive effect of market orientation on company performance in Saudi Arabia over two periods, before and after the application of the decree. Before the royal decree, only two of the three dimensions of market orientation affected company performance, customer orientation, and inter-functional coordination. After the decree, all three dimensions of market orientation affected company performance. This proves that political decision has intensified competition in this market. Our results underlined the non-necessity of equality and the strength of the three components belonging to the market orientation on performance. Yet, our investigation is unprecedented having sought to resolve this classic relationship in a specific context.

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