The influence of market orientation on innovation strategies

Newman, Alexander and Prajogo, Daniel and Atherton, Andrew (2016) The influence of market orientation on innovation strategies. Journal of Service Theory and Practice, 26 (1). pp. 72-90.

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Purpose This study examines the effects of market orientation on exploratory and exploitative innovation, and the moderating effects of family ownership on these relationships. Design/methodology/approach This study utilizes multi-group path analysis and confirmatory factor analysis in LISREL on data from 228 firms in the Australian service sector. Findings This study establishes that both customer and competitor innovation are positively related to exploitative and exploratory innovation. However, customer orientation does not lead to significantly stronger effects on exploitative innovation than on exploratory innovation, and competitor orientation does not lead to significantly stronger effects on exploratory innovation than on exploitative innovation. In addition, the study found that the relationship between customer orientation and exploratory innovation was stronger for family firms, whilst the relationships between competitor orientation and both exploratory and exploitative innovation were stronger for non-family firms. Research limitations/implications The cross-sectional design is one weakness of this study. In addition, as firms in the present study came from the service sector the generalizability of our findings to other sectors of the economy need to be determined. Practical implications These findings of this study highlight the need for managers to build a strong market orientation in order to promote innovation, and consider the effects of ownership structure on innovation strategies. Originality/value This study is the first to measure the relative influence of customer and competitor orientation on a firm’s use of exploitative and exploratory innovation strategies.

Item Type:
Journal Article
Journal or Publication Title:
Journal of Service Theory and Practice
Additional Information:
This article is (c)2016 Emerald Group Publishing and permission has been granted for this version to appear here. Emerald does not grant permission for this article to be further copied/distributed or hosted elsewhere without the express permission from Emerald Group Publishing Limited.
Uncontrolled Keywords:
?? family businessmarket orientationinnovation orientationstrategy and management ??
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Deposited On:
01 Mar 2016 11:22
Last Modified:
31 Dec 2023 00:36