Performance implications of Competitor Orientation

The study decomposes the notion of market orientation, focusing on its competitor orientation component. The objective is to empirically examine the frontline employees’ and market performance of a competitor-orientated... [ view full abstract ]

The study decomposes the notion of market orientation, focusing on its competitor orientation component. The objective is to empirically examine the frontline employees’ and market performance of a competitor-orientated strategy in the banking sector. The findings indicate that frontline employees’ performance is affected positively by implementing a competitor-orientated strategy at the supervisors’ or at the frontline employees’ level. The former turns out to be more dominant than the latter, revealing ‘top-down’ effect of the mechanism. When such a strategy is implemented at the frontline employees’ level, the financial performance of the branch is improved, while market performance is not affected. Additionally supervisors’ competitor orientation has no significant effect on the aforementioned performance indicator either. As such practical implications directly stem from the research at the management level. It is asserted that supervisors’ vision of the competitive environment is translated into the employees’ incentives, and results in a higher business performance.