The innovativeness effect of market orientation and learning orientation on business performance

Abstract

Purpose

The purpose of this paper is to provide a quantitative analysis, in which learning orientation, market orientation, entrepreneurial orientation, and innovativeness function as key success factors in technology‐intensive firms. The authors formulate a structural equation model to examine the relationship among these constructs.

Design/methodology/approach

A structural equation model was designed to examine the relationship. To test the model, the authors conducted covariance structural analyses of data collected from 333 venture companies, including innovation companies, in Taiwan.

Findings

The central finding is that learning orientation plays a full mediating role in the relationship between market orientation and innovativeness. The results indicate that organizational structure (formalization and decentralization) does not play a moderating role in the relationship between innovativeness and business performance; however, the extent of formalization of an organizational structure negatively correlates with business performance.

Practical implications

Market orientation can strengthen innovativeness via organizational learning. In the high‐tech industry, the market information obtained from customers and competitors helps firms to keep an eye on the market. For better competitive advantages and business performance, firms must have learning capabilities and employees' identity with corporate mission.

Originality/value

The research empirically examines the mediating role of learning orientation and the moderating role of organizational structure in the model. The findings indicate that firms should strengthen their learning orientation and innovativeness, and avoid interfering in the organizational structure to improve business performance.

Citation

Lin, C., Peng, C. and Kao, D.T. (2008), "The innovativeness effect of market orientation and learning orientation on business performance", International Journal of Manpower, Vol. 29 No. 8, pp. 752-772. https://doi.org/10.1108/01437720810919332