Antecedents to market orientation: an empirical study of Tanzania service firms

Abstract

This study examined antecedents to market orientation in service firms in a developing economy. A conceptual model both environmental and organizational factors to market orientation was developed and tested using a sample of 178 firms, comprising hotels, travel agents, tour operators and insurance agents located in six urban centers of Tanzania. Results affirm the role of the reward system, internal harmony communication, risk aversion and external threats in shipping market orientation. Centralization and formalization, both found to influence market orientation n western manufacturing firms, do not influence service firms in Tanzania, developing country apparently because these attributes are less prevalent and hence less relevant among micro and small enterprises which dominate these economies. Ironically, and contrary to establish knowledge, the study finds a negative relationship between perceived competitive intensity and market orientation. The main theoretical implication is that antecedents to market orientation may be context specific and hence theory building must take that into account. Specifically. Level of economic development, sector and firm size must be taken into account. Managers should be conscious of the value of good practice, across all functional managerial areas, for building a market-oriented organization. Future research should attempt to to understand how market orientation develops n orientation developing n smack and in serves firms, including explaining the paradoxical negative relationship between competitive intensity and market orientation n developing economics through exploratory research.