Market and entrepreneurial orientation's effect on organisational performance through marketing capabilities

While many studies have discussed the notions of market and entrepreneurial orientation, there is no consensus among scholars regarding their effect on organisational performance. Moreover, there is little empirical work... [ view full abstract ]

While many studies have discussed the notions of market and entrepreneurial orientation, there is no consensus among scholars regarding their effect on organisational performance. Moreover, there is little empirical work incorporating both notions into broader models. The present study brings together market orientation and entrepreneurial orientation and develops a holistic view of the effect that they have on the performance of small and medium manufacturing companies through the development of certain marketing-specific capabilities. Adding to the extant literature, data of the current research confirm that these two orientations are interrelated and the findings also show that they both affect a specific set of marketing capabilities, which in turn can be the base of a competitive advantage. Specifically, market oriented firms enjoy high customer linking capabilities while the adoption of entrepreneurial orientation leads companies to have increased market sensing capabilities. In addition to this, results confirm the important role of marketing capabilities in organisational performance, with findings indicating that both customer linking and market sensing capabilities affect positively the performance of SMEs.