TY - JOUR
T1 - Market orientation, innovation capability and business performance
T2 - Insights from the global financial crisis
AU - Huhtala, Juho Petteri
AU - Sihvonen, Antti
AU - Frösén, Johanna
AU - Jaakkola, Matti
AU - Tikkanen, Henrikki
PY - 2014
Y1 - 2014
N2 - Purpose: The paper aims to examine the role of market orientation (MO) and innovation capability in determining business performance during an economic upturn and downturn. Design/methodology/approach: The data comprise two national-level surveys conducted in Finland in 2008, representing an economic boom, and in 2010 when the global economic crisis had hit the Finnish market. Partial least square path analysis is used to test the potential mediating effect of innovation capability on the relationship between MO and business performance during economic boom and bust. Findings: The results show that innovation capability fully mediates the performance effects of a MO during an economic upturn, whereas the mediation is only partial during a downturn. Innovation capability also mediates the relationship between a customer orientation and business performance during an upturn, whereas the mediating effect culminates in a competitor orientation during a downturn. Thus, the role of innovation capability as a mediator between the individual market-orientation components varies along the business cycle. Originality/value: This paper is one of the first studies that empirically examine the impact of the economic cycle on the relationship between strategic marketing concepts, such as MO or innovation capability, and the firm's business performance.
AB - Purpose: The paper aims to examine the role of market orientation (MO) and innovation capability in determining business performance during an economic upturn and downturn. Design/methodology/approach: The data comprise two national-level surveys conducted in Finland in 2008, representing an economic boom, and in 2010 when the global economic crisis had hit the Finnish market. Partial least square path analysis is used to test the potential mediating effect of innovation capability on the relationship between MO and business performance during economic boom and bust. Findings: The results show that innovation capability fully mediates the performance effects of a MO during an economic upturn, whereas the mediation is only partial during a downturn. Innovation capability also mediates the relationship between a customer orientation and business performance during an upturn, whereas the mediating effect culminates in a competitor orientation during a downturn. Thus, the role of innovation capability as a mediator between the individual market-orientation components varies along the business cycle. Originality/value: This paper is one of the first studies that empirically examine the impact of the economic cycle on the relationship between strategic marketing concepts, such as MO or innovation capability, and the firm's business performance.
KW - 512 Business and Management
KW - Business performance
KW - Economic fluctuation
KW - Financial crisis
KW - Innovation capability
KW - Market orientation
KW - PLS
KW - Business, Markets and Societal Dynamics
UR - http://www.scopus.com/inward/record.url?scp=84897063982&partnerID=8YFLogxK
U2 - 10.1108/BJM-03-2013-0044
DO - 10.1108/BJM-03-2013-0044
M3 - Article
AN - SCOPUS:84897063982
SN - 1746-5265
VL - 9
SP - 134
EP - 152
JO - Baltic Journal of Management
JF - Baltic Journal of Management
IS - 2
ER -