Market orientation as determinant of entrepreneurship: An empirical investigation on SMEs

  • Salvatore SciasciaEmail author
  • Lucia Naldi
  • Erik Hunter


Entrepreneurial Orientation (EO) and Market Orientation (MO) are considered key factors in ensuring firm longevity in the new competitive landscape. Despite extensive research during the past decade, most of the studies use samples that exclude small and medium enterprises (SMEs), which represent the majority of economic activity worldwide. Some studies do investigate this relationship in small companies but place little importance on the subtle differences between SMEs and large companies when measuring MO. This study empirically investigates the relationship between MO and EO on a sample of 2500 Swedish SMEs. A new measure of MO that takes into consideration SMEs specific conditions has been developed and used. Findings suggest that MO is the main determinant of EO in SMEs.


Market orientation Entrepreneurial orientation SMEs 


Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.


  1. AMA board approves new marketing definition. (1985). Marketing News, 1(1), 1.Google Scholar
  2. Andersen, O., & Kheam, L. S. (1998). Resource-based theory and international growth strategies: An exploratory study. International Business Review, 7, 163–184.CrossRefGoogle Scholar
  3. Atuahene-Gima, K., & Ko, A. (2001). An empirical investigation of the effect of market orientation and entrepreneurship orientation on product innovation. Organization Science, 12, 54–74.CrossRefGoogle Scholar
  4. Baker, W. E., & Sinkula, J. M. (1999). The synergistic effect of market orientation and learning orientation on organizational performance. Journal of the Academy of Marketing Science, 27, 411–427.Google Scholar
  5. Barney, J. B. (1986). Strategic factors markets: Expectations, luck and business strategy. Management Science, 32, 1231–1241.Google Scholar
  6. Barret, H., Balloun, J. L., & Weinstein, A. (2000). Marketing mix factors as moderators of the corporate entrepreneurship—business performance relationship: A multistage, multivariate analysis. Journal of Marketing Theory and Practice, 8, 50–61.Google Scholar
  7. Barret, H., & Weinstein, A. (1998). The effect of market orientation and organizational flexibility on corporate entrepreneurship. Entrepreneurship Theory and Practice, 23(1), 57–71.Google Scholar
  8. Barringer, B., & Bluedorn, A. (1999). The relationship between corporate entrepreneurship and strategic management. Strategic Management Journal, 20, 421–444.CrossRefGoogle Scholar
  9. Becherer, R. C., & Maurer, J. G. (1997). The moderating effect of environmental variables on the entrepreneurial and marketing orientation of entrepreneur-led firms. Entrepreneurship Theory and Practice, 22(1), 47–58.Google Scholar
  10. Birley, S., & Weasthead, P. (1994). A comparison of new business established by novice and habitual founders in Great Britain. International Small Business Journal, 12(1), 38–60.Google Scholar
  11. Brockmann, E. N., & Simmonds, P. G. (1997). Strategic decision making: The influence of CEO experience and use of Tacit knowledge. Journal of Managerial Issues, 9, 454–468.Google Scholar
  12. Brown, T. (1996). Resource orientation, entrepreneurial orientation and growth : How the perception of resource availibility affects small firm growth. Newark, N.J.: The State University of New Jersey.Google Scholar
  13. Brown, T., Davidsson, P., & Wiklund, J (2001). An operationalization of Stevenson's conceptualization of entrepreneurship as opportunity based behavior. Strategic Management Journal, 22, 953–968.CrossRefGoogle Scholar
  14. Burgelman, R. A. (1983). Corporate entrepreneurship and strategic management: Insights from a process study. Management Science, 29, 1349–1364.Google Scholar
  15. Carrier, C. (1994). Intrapreneurship in large firms and SMEs: A comparative study. International Small Business Journal, 12(3), 54–61.Google Scholar
  16. Carson, D., Stanley, C., McGowan, P., & Hill, J. (1995). Marketing and entrepreneurship in SMEs: An innovative approach. London: Prentice Hall.Google Scholar
  17. Christensen, C. M. (1997). The innovator's dilemma. Boston: Harvard Business School Press.Google Scholar
  18. Christensen, C. M., & Bower, J. L. (1996). Customer power, strategic investment and the failure of leading firms. Strategic Management Journal, 17, 197–218.CrossRefGoogle Scholar
  19. Coviello, N. E., Brodie, R. J., & Munro, H. J. (2000). An investigation of marketing practice by firm size. Journal of Business Venturing, 15, 523–545.CrossRefGoogle Scholar
  20. Covin, J. G., & Slevin, D. P. (1989). The influence of organizational structure on the utility of an entrepreneurial top management style. Journal of Management Studies, 25, 217–234.Google Scholar
  21. Covin, J. G., & Slevin, D. P. (1989). Strategic management of small firms in hostile and benign environment. Strategic Management Journal, 1, 75–87.Google Scholar
  22. Covin, J. G., & Slevin, D. P. (1991). A conceptual model of entrepreneurship as firm behaviour. Entrepreneurship Theory and Practice, 16(1), 7–25.Google Scholar
  23. Cragg, P. B., & King, M. (1988, Winter). Organizational characteristics and small firms performance revisited. Entrepreneurship Theory and Practice, 49–64.Google Scholar
  24. Davis, D., Morris, M., & Allen, J. (1991). Perceived environmental turbulence and its effect on selected entrepreneurship, marketing and organizational characteristic in industrial firms. Journal of the Academy of Marketing Science, 19, 43–51.Google Scholar
  25. Day, G. S. (1994). The capabilities of market-driven organizations. Journal of Marketing, 58(4), 37–52.Google Scholar
  26. Day, G. S., & Montgomery D. B. (1999). Charting new directions for marketing. Journal of Marketing, 63(2), 3–13.Google Scholar
  27. Dess, G. G., Lumpkin, G. T., & Covin, J. G. (1997). Entrepreneurial strategy making and firm performance: Tests of contingency and configurational models. Strategic Management Journal, 18, 677–695.CrossRefGoogle Scholar
  28. Drucker, P. F. (1985). The discipline of innovation. Harvard Business Review, 63(3), 67–72.Google Scholar
  29. Dutton, J. E., & Duncan, R. B. (1987). The influence of the strategic planning process on strategic change. Strategic Management Journal, 8, 279–295.Google Scholar
  30. Eisenhardt, K. M., & Martin, J. A. (2000). Dynamic capabilities: What are they? Strategic Management Journal, 21, 1105–1121.CrossRefGoogle Scholar
  31. Foxall, G. R. (1984). Corporate innovation: Marketing and strategy. Beckenham: Croom Helm.Google Scholar
  32. Galunic, D. C., & Rodan, S. (1998). Resource recombination in the firm: Knowledge structures and the potential for Schumpeterian innovation. Strategic Management Journal, 19, 1193–1201.CrossRefGoogle Scholar
  33. George, G., & Zahra, S. A. (2002). Being entrepreneurial and being market—driven: Exploring the interaction effect of entrepreneurial and market orientation on firm performance. In N. Bygrave, N. et al. (Eds.), Frontiers in Entrepreneurship Research, Babson College.Google Scholar
  34. Grant, R. (1996). Toward a knowledge-based theory of firm. Strategic Management Journal, 17, 109–122.Google Scholar
  35. Gronroos, C. (1990). Relationship approach to the marketing function in service contexts: The marketing and organization behavior interface. Journal of Business Research, 20(1), 3–11.CrossRefGoogle Scholar
  36. Gustafsson, V. (2004). Entrepreneurial decision-making: Individuals, tasks and cognitions. Jönköping: Jönköping International Business School.Google Scholar
  37. Hills, G. E. (1987). Marketing and entrepreneurship research issues: Scholarly justification? Paper presented at the UIC Symposium on Marketing and Entrepreneurship, Chicago.Google Scholar
  38. Fahy, J. (2002). A resource-based analysis of sustainable competitive advantage in a global environment. International Business Review, 11(1), 57–78.CrossRefGoogle Scholar
  39. Foss, N. J. (1997). Resources, firms, and strategies: A reader in the resource-based perspective. New York: Oxford University Press.Google Scholar
  40. Galbreath, J. (2005). Which resources matter the most to firm success? An Exploratory study of resource-based theory. Technovation, 25, 979–987.Google Scholar
  41. Hills, G. E., & LaForge, R. W. (1992). Research at the marketing interface to advance entrepreneurship theory. Entrepreneurship Theory and Practice, 16(3), 33–60.Google Scholar
  42. Hitt, M. A., & Reed, T. S. (2000). Entrepreneurship in the new competitive landscape. In G. D. Meyer and K. A. Heppard (Eds.), Entrepreneurship as strategy: Competing on the entrepreneurial edge. Thousand Oaks, CA: Sage.Google Scholar
  43. Hult, G. T. M., & Ketchen, D. J. (2001). Does market orientation matter? A test of the relationship between positional advantage and performance. Strategic Management Journal, 22, 899–906.CrossRefGoogle Scholar
  44. Hunt, S. D. (2000). A general theory of competition. Thousand Oaks, CA: Sage.Google Scholar
  45. Hunt, S. D. (2002). Foundations of marketing theory. New York: M.E. Sharpe.Google Scholar
  46. Hunt, S. D., & Morgan R. M. (1996). The resource-advantage theory of competition: Dynamics, path dependencies and evolutionary dimensions. Journal of Marketing, 60(4), 107–114.Google Scholar
  47. Jaworski, B. J., & Kohli A. K. (1993). Market orientation: Antecedents and consequences. Journal of Marketing, 57(3), 53–70.Google Scholar
  48. Jennings, D., & Lumpkin, G. T. (1989). Insights between environmental scanning activities and porter's generic strategies: An empirical analysis. Journal of Management, 18, 791–804.Google Scholar
  49. Karmel, S. M., & Bryon, J. (2002). A comparison of small and medium enterprises in Europe and in the USA, London: Routledge.Google Scholar
  50. Kinnear, T. (1999). A perspective on how firms relate to their markets. Journal of Marketing, 63(2), 112–114.Google Scholar
  51. Kohli, A. K., & Jaworski, B. J. (1990). Market orientation: The construct, research proposition and managerial implications. Journal of Marketing, 54(4), 1–18.Google Scholar
  52. Kohli, A. K., Jaworski, B. J., & Kumar, A. (1993). MARKOR: A measure of market orientation. Journal of Marketing Research, 30, 467–477.Google Scholar
  53. Kreiser, P. M., Marino, L. D., & Weaver, M. K. (2002). Assessing the psychometric properties of the entrepreneurial orientation scale: A multi-country analysis. Entrepreneurship Theory and Practice, 26(4), 71–93.Google Scholar
  54. Kuratko, D. F. (2003). Entrepreneurship education: Emerging trends and challenges for the 21st century, Coleman Foundation White Paper Series for the USASBE.Google Scholar
  55. Lee, S. M., & Peterson, S. J. (2000). “Culture, entrepreneurial orientation, and global competitiveness. Journal of World Business, 35, 401–416.CrossRefGoogle Scholar
  56. Lichtenstein, B. M. B., & Brush, C. G. (2001). How do resource bundles develop and change in new ventures? A dynamic model and longitudinal exploration. Entrepreneurship: Theory and Practice, 25(3), 37–59.Google Scholar
  57. Low, M. (2001). The adolescence of entrepreneurship research. Entrepreneurship Theory and Practice, 25(4), 17–26.Google Scholar
  58. Lumpkin, G. T., & Dess, G. G. (1996). Clarifying the entrepreneurial orientation construct and linking it to performance. Academy of Management Review, 21, 135–172.Google Scholar
  59. Lyon, D. W., Lumpkin, G. T., & Dess, G. G. (2000). Enhancing entrepreneurial orientation research: Operationalizing and measuring a key strategic decision making process. Journal of Management, 26, 1055.CrossRefGoogle Scholar
  60. Macrae, D. J. R. (1992). Characteristics of high and low growth small and medium sized businesses. Management Research News, 15(2), 11–17.Google Scholar
  61. Marino, L. D., Strandholm, K., Steensma, K. H., & Weaver, M. K. (2002). The moderating effect of national culture on the relationship between entrepreneurial orientation and strategic alliance portfolio extensiveness. Entrepreneurship Theory and Practice, 26(4), 145–160.Google Scholar
  62. Matsuno, K., Mentzer, J. T., & Oszomer, A. (2002). The effects of entrepreneurial proclivity and market orientation on business performance. Journal of Marketing, 66(3), 18–32.CrossRefGoogle Scholar
  63. Menon, A., & Varadarajan, P. R. (1992). A model of marketing knowledge use within firms. Journal of Marketing, 56, 53–71.Google Scholar
  64. Mezious, F. (1991). Areas of strength & weakness in the adoption of the marketing concept by small manufacturing firms. Journal of Small Business Management, 29(4), 72–78.Google Scholar
  65. Miles, M. P., & Arnold, D. R. (1991). The relationship between marketing orientation and entrepreneurial orientation. Entrepreneurship Theory and Practice, 15(4), 49–65.Google Scholar
  66. Miller, D. (1983). The correlates of entrepreneurship in three types of firms. Management Science, 29, 770–791.Google Scholar
  67. Miller, D., & Friesen P. H. (1982). Innovation in conservative and entrepreneurial firms: Two models of strategic momentum. Strategic Management Journal, 3,1–25.Google Scholar
  68. Morris, M. H., & Kuratko, D. F. (2002), Corporate entrepreneurship. Fort Worth, Tex: Harcourt College Publishers.Google Scholar
  69. Morris, M. H., & Paul, G. W. (1987). The relationship between entrepreneurship and marketing in established firms. Journal of Business Venturing, 2, 247–259.CrossRefGoogle Scholar
  70. Morris, M. H., Schindehutte, M., & LaForge R. W. (2002). Entrepreneurial marketing: A construct for integrating emerging entrepreneurship and marketing perspectives. Journal of Marketing Theory and Practice, 10(4), 1–20.Google Scholar
  71. Narver, J. C., & Slater S. F. (1990). The effect of a market orientation on business profitability. Journal of Marketing, 54(4), 20–35.Google Scholar
  72. Nelson, R. R., & Winter, S. G. (1982). An evolutionary theory of economic change. Cambridge, MA: Harvard University Press.Google Scholar
  73. Ruokolainen J. (2005). Gear-up your software start-up company by the first eferencecustomer–nomothetic research study in the Thai software industry. Technovation, 25, 135–44CrossRefGoogle Scholar
  74. Salvato, C. (2002). Antecedents of entrepreneurship in three types of family firms. Jönköping: Jönköping International Business School.Google Scholar
  75. Saly, W. (2001). Antecedents and consequences of entrepreneurship in large established firms. Rotterdam: Rotterdam Research Institute.Google Scholar
  76. Schollhammer, H., & Kuriloff, A. (1979). Entrepreneurship and small business management. Chicester: John Wiley.Google Scholar
  77. Schumpeter, J. A. (1934). The theory of economic development. Boston, Mass: Harvard University Press.Google Scholar
  78. Shane, S. (2000). Prior knowledge and the discovery of entrepreneurial opportunities.Organization Science, 11, 448–469.CrossRefGoogle Scholar
  79. Shane, S. (2003). A general theory of entrepreneurship. Cheltenham: Edward Elgar.Google Scholar
  80. Shane, S., & Venkataraman, S. (2000). The promise of entrepreneurship as a field of research. Academy of Management Review, 25, 217–226.Google Scholar
  81. Siu, W., & Kirby, D. A. (1998). Approaches to small firm marketing: A critique. European Journal of Marketing, 32(1–2), 40.Google Scholar
  82. Slater, S. F., & Narver, J. C. (2000). The positive effect of a market orientation on business profitability: A balanced replication. Journal of Business Research, 48, 69–73.CrossRefGoogle Scholar
  83. Stevenson, H. H., & Gumpert, D. E. (1985). The heart of entrepreneurship. Harvard Business Review, 63, 85–94.Google Scholar
  84. Stevenson, H. H., & Jarillo, J. C. (1990). A paradigm of entrepreneurship: Entrepreneurial management. Strategic Management Journal, 11, 17–27.Google Scholar
  85. Storey, D. J. (1994). Understanding the small business sector. London: Routledge.Google Scholar
  86. Teece, D. J., Pisano, G., & Shuen, A. (1997). Dynamic capabilities and strategic management. Strategic Management Journal 18, 509–533.CrossRefGoogle Scholar
  87. Verhees, F., & Meulenberg M. (2004). Market orientation, innovativeness, product innovation and performance in small firms. Journal of Small Business Management, 42, 134–154.CrossRefGoogle Scholar
  88. Vitale, R., Giglierano, J., & Miles, M. (2003). Entrepreneurial orientation, market orientation and performance in established and startup firms. Paper presented at the UIC Symposium on Marketing and Entrepreneurship, Chicago.Google Scholar
  89. Weinrauch, J. D., Mann, O. K., Robinson, P., & Pharr, J. (1991). Dealing with limited financial resources: A marketing challenge for small business. Journal of Small Business Management, 29(4), 44–55.Google Scholar
  90. Wernerfelt, B. (1984). A resource-based view of the firm. Strategic Management Journal, 5, 171–180.Google Scholar
  91. Wiklund, J. (1998). Small firm growth and performance – Entrepreneurship and beyond. Jönköping: Jönköping International Business School.Google Scholar
  92. Wiklund, J., & Shepherd, D. (2003). Knowledge-based resources, entrepreneurial orientation, and the performance of small and medium-sized businesses.Strategic Management Journal, 24, 1307–1314.CrossRefGoogle Scholar
  93. Zahra, S. A. (1991). Predictors and financial outcomes of corporate entrepreneurship: An exploratory study. Journal of Business Venturing, 8, 319–340.Google Scholar
  94. Zahra, S. A. (1993). A conceptual model of entrepreneurship as firm behavior: A critique and extension. Entrepreneurship Theory and Practice, 17(4), 5–21.Google Scholar
  95. Zahra, S. A., & Covin J. (1995). Contextual influence on the corporate entrepreneurship-performance relationship: A longitudinal analysis. Journal of Business Venturing, 10, 43–58.Google Scholar
  96. Zahra, S. A., Jennings, D., & Kuratko, D. (1999). The antecedents and consequences of firm-level entrepreneurship: The state of the field. Entrepreneurship Theory and Practice, 24(2), 45–65.Google Scholar

Copyright information

© Springer Science + Business Media, Inc. 2006

Authors and Affiliations

  1. 1.ERDC—Entrepreneurship and Regional Development CenterUniversità Carlo Cattaneo Castellanza—LIUCCastellanzaItaly
  2. 2.Jönköping International Business SchoolJönköping UniversityJönköpingSweden

Personalised recommendations