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An Empirical Investigation of the Effect of Market Orientation and Entrepreneurship Orientation Alignment on Product Innovation Author(s): Kwaku Atuahene-Gima
and Anthony Ko Source: Organization Science, Vol. 12, No. 1 (Jan. - Feb., 2001), pp. 54-74 Published by: INFORMS Stable URL: http://www.jstor.org/stable/2640396 Accessed: 08/12/2009 10:55
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An
Empirical
Investigation of and
on
the
Effect
of
Market
Orientation
Orientation
Alignment
Entrepreneurship
Product Innovation
Kwaku Atuahene-Gima * Anthony Ko

Department of Management, City University of Hong Kong, 83 Tat Chee Avenue, Hong Kong [email protected] * [email protected]
Previous research therelationship organizational on of strategy, structure innovation generally and has
assumedthatentrepreneurial market and orientations different"logics" of organization. represented This study shows that entrepreneurial marketing and activitiescan be integrated an orientation to by in in that entrepreneurial marketing drivesinnovation the firm.This studyis particularly interesting that it utilizesboth objectiveand subjective criteria innovation. of Kwaku Atuahene-Gima
Abstract
This article develops a concept of an alignment between market and entrepreneurship orientations and reports the results of a study designed to investigate its effect on a firm's product innovation. A sample of 181 firms was classified into four categories labeled as market/entrepreneurship orientation (ME), entrepreneurship orientation (EO), market-oriented (MO), and conservative (CO) firms. One-way ANOVA and planned contrast tests (PCT) were used to identify whether or not specific product innovation decisions, activities, and performance vary across the groups. The results indicate that these groups of firms significantly differ with respect to both subjective and objective measures of new product performance, and with product innovation strategies and activities pertaining to timing of market entry, product quality, marketing synergy, proficiency of market launch, and management support for innovation. Further, the findings suggest that these groups of firms are not significantly different with respect to perceived environmental hostility and intensity of market competition. This finding suggests that the groups of firms are robust across environments and that the findings presented in this study are not an artifact of environmental variation. Managerial and research implications of the results are discussed.
and to satisfya presentandfuturemarket need. Ourcredo:Do next whatotherstell us we can neverdo. If we can stretchthe will boundaries theimagination enough,ourproducts help of far definethe future.(Kyocera Corporation, Japan)
(Market Orientation; Entrepreneurship Orientation; Product Innovation; New Product Development)
Introduction
At Kyocerawe believe thatevery new productshouldbe full of promise. mustbe designedwithvigilantattention quality It to
Is Kyocera Corporation market oriented, entrepreneurship oriented, or both? The confluence of rapid technological changes and changing demands of customers has created environments characterizedby high levels of market and technological uncertainty for many firms. The literature suggests that firms require a new set of imperatives, such as an alignment of market and entrepreneurship orientations, if they are to be successful in product innovation in these turbulenttimes (Hamel and Prahalad 1994, Slater and Narver 1995). However, currentresearch on market and entrepreneurshiporientation runs in two different streams. The management literature focuses on entrepreneurship orientation (e.g., Burgleman 1983, Covin and Slevin 1989, Zahra 1993), while the marketing literature focuses on market orientation (e.g., AtuaheneGima 1996a, Jaworski and Kohli 1993, Narver and Slater 1990, Ruekert 1992, Slater and Narver 1994). This divergence in the literatureis counterproductivebecause it has been argued that a linkage between the two orientations is beneficial and that firms with combined high market and entrepreneurship orientations will outperform other firms (Hamel and Prahalad 1994, Slater and Narver 1995). Scholars argue that market-orientedfirms focus on responding to articulated customer needs and hence are likely to miss opportunities for developing new products
ORGANIZATION SCIENCE, C) 2001 INFORMS Vol. 12, No. 1, January-February2001, pp. 54-74
1047-7039/01/120
l/0054/$05.00 1526-5455 electronic ISSN
KWAKU ATUAHENE-GIMA AND ANTHONY KO
Effects of Market and Entrepreneurship Orientation Alignment on Product Innovation
that customers cannot describe (Christensen and Bower 1996, Hamel and Prahalad 1994). It is therefore argued that these firms need to build an entrepreneurshiporientation to ensure a proactive and aggressive focus on innovations that meet emerging and unarticulatedcustomer needs (Covin 1991, Martin 1995, Slater and Narver 1995, Zahra 1993). Such an orientation is needed to counter the tyranny of the market and to lead, rather than to be led by, customers (Hamel and Prahalad 1994, Hunt and Morgan 1995, Slater and Narver 1995). However, the risk of this customer-leading orientation is that new products may be technology driven with high risk of marketfailure (Olleros 1986). Hence, it is asserted that firms need to strike a self-reinforcing balance between market and entrepreneurshiporientations to engender effective product innovation and performance (Hamel and Prahalad 1994, Slater and Narver 1995). Although this argument is persuasive, there is as yet no empirical evidence to support it. We know little about the interactive effect of market and entrepreneurshiporientations on product innovation, an important competence variable in turbulent environments. For example, Morris and Paul (1987, p. 258) lament that the natureof the interrelationshipbetween market orientation and entrepreneurshiphas yet to be related to organizational performance. Similarly, Miles and Arnold (1991) recommend future research to examine the interaction between both orientations and its implications for organizational performance. The objective of this study is to link the two fields of research by aligning market and entrepreneurshiporientations and by investigating its implications for product innovation. Three questions are addressed. (1) Does new product performance vary with different combinations of market and entrepreneurship orientations and, if so, which combination is associated with the highest level of performance? (2) Are there significant differences in the effectiveness of product innovation decisions and activities associated with the adoption of different market and entrepreneurship orientation combinations and, if so, which combination is associated with the highest level of effectiveness? (3) To what extent is the market and entrepreneurship orientation combination of firms contingent upon the hostility of the environment and intensity of market competition? The study contributes to the literaturein three respects. First, unlike prior research, which examines bivariate relationships between each of market and entrepreneurship orientation and product innovation (e.g., Atuahene-Gima 1996a, Covin 1991, Zahra 1993), it integrates the two orientations and elevates current work to a more holistic and multivariate level by examining the nature of their
interactive effects. Such an approach allows a better understandingof strategic choices of organizations and their innovation and performance relationships (Zahra and Covin 1993). Second, this study examines the interactive effect of these orientations on product innovation reputed to be a significant means of organizational adaptation (Zahra and Covin 1993) and as an importantcompetency dimension that differentiates strategic archetypes (Conant et al. 1990, Miles and Snow 1978). Third, this study responds to a recent call by Drazin and Schoonhoven (1996) for cross-level research on organizational innovation as it examines market and entrepreneurshiporientations at the firm level and product innovation at the project level. These scholars argue that the strategic orientation of the firm has a vital role to play in the product innovation process and that examining innovation from a multilevel perspective leads to enhanced understanding of the factors leading to higher innovation performance.
Theoretical Background: Alignment Between Market and Entrepreneurship Orientations

Market orientation describes a firm's orientation toward the promotion and support for the collection, dissemination, and responsiveness to market intelligence to serve customer needs (Kohli and Jaworski 1990). In contrast, Miller (1983) describes an entrepreneurshiporientation as one that emphasizes aggressive product-marketinnovation, risky projects, and a proclivity to pioneer innovations that preempt the competition. Unlike market orientation, entrepreneurshiporientation is distinguished by three characteristics: a high degree of innovativeness, risk-taking, and proactiveness (Covin and Slevin 1989, Miller 1983). Organizationalorientations are social learning and selection mechanisms that aim to maintain a coherence between management's strategic intent and operational activities. They shape the way organizational members process information and react to the environment through the nature of control systems and rewards they engender. They create internal environments in which desired behaviors are encouraged and supported. It follows that both market and entrepreneurshiporientations lead to congruent behaviors at the new product development team level because they determine the type and nature of strategic initiatives pursued by employees at operational levels. Market orientation is an important antecedent of product innovation behaviors, activities, and performance (Atuahene-Gima 1996a, Slater and Narver 1994). For example, Kohli and Jaworski (1990, p. 13) suggest that market orientation ". . . provides a unifying focus for the
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Effects of Market and Entrepreneurship OrienitationAlignment on Product Innovation
efforts and projects of individuals and departmentswithin the organization, thereby leading to superior performance." Narver and Slater (1990, p. 21) echo the same theme. They assert that market orientation is an "organizational culture that most effectively creates the necessary behaviors for creating superior value for buyers, and thus, continuous performance." Market orientation engenders product innovation behaviors that focus on understanding the articulated needs of customers. It therefore leads to the exploitation of innovation opportunities that are associated with the current domain of the firm and that take advantage of its currently available learning and experience (see Slater and Narver 1995). In other words, market orientation encourages and supports the refinement and adaptationsof currentinnovations to meet current needs rather than the development of new products targeted at emerging new needs (Bennett and Cooper 1981, Christensen and Bower 1996, March 1991). In support of this argument, Christensen and Bower (1996) show that in firms that listen too carefully to their customers, resource allocations favor incremental innovations demanded by existing markets to the neglect of more innovative products. Currentcustomers place stringent limits on the strategies these firms could pursue, which lead to learning myopia that stifle creative response to emerging technologies and customer needs (Levinthal and March 1993). Similarly, the popular business press advocates that firms should not be market oriented in product innovation because it will often lead them astray (Martin 1995). Consistent with this thinking, Slater and Narver (1995) contend that market orientation mirrors adaptive learning whereby the firm identifies environmental changes and responds to them through previously held assumptions about customers and the competition. Similarly, Foxall (1984) sees market orientation as engendering a reactive response to customer needs and current competitor actions. In keeping with these arguments, several of the measures of market orientation (e.g., Jaworski and Kohli 1993) reflect a reactive approach to collecting, disseminating, and responding to market information (see Appendix A). In contrast with market orientation, entrepreneurship orientation can be described as a learning and selection mechanism that engenders exploratory, risk-seeking behaviors in the product innovation process (Lumpkin and Dess 1996, Miller 1983). Product innovation initiatives fostered by entrepreneurshiporientation involve the creation of new resource combinations that may require competencies not currently available in the organization, and thus involve greater risk taking and experimentation (Burgelman 1991, Levinthal and March 1993, March 1991). Entrepreneurship orientation therefore mirrors
generative or exploratory learning by which the organization questions previously held assumptions about customers, competition, and the environment leading to frame-breaking activities (Lumpkin and Dess 1996, March 1991, Slater and Narver 1995). In some respects, it is akin to technological orientation because it increases the firm's ability and will to acquire new technical knowledge to build new technical solutions to meet new and latent needs of users (Gatignon and Xuereb 1997, Workman 1993). For example, Foxall (1984) argues that in contrast with market orientation, entrepreneurshiporientation is a proactive strategic orientation that leads to aggressive initiation of product innovation with high levels of financial uncertainty and risk. The risk is that an unbridled entrepreneurshiporientation may blind the firm into the erroneous belief that technological superiority is a sufficient condition for new product success (Covin 1991, Olleros 1986). Consistent with the preceding arguments, scholars suggest that an appropriatebalance between market and entrepreneurship orientation is a primary factor in an organization's performance, survival, and prosperity (Hamel and Prahalad 1994, Slater and Narver 1995). For example, Foxall (1984) argues that alertness to market factors, detailed market intelligence, and entrepreneurship insight to detect the emerging unfulfilled needs of customers are the major ingredients in product innovation success. Similarly, Murray (1981) and Morris and Paul (1987) suggest that both orientations are interrelatedstrategic responses to environmental contingencies. This view is consistent with the organizational learning literature that suggests the need for firms to combine exploitation and exploratory learning to achieve effectiveness (Burgleman 1991, Lumpkin and Dess 1996, March 1991). Consequently, our thesis is that market and entrepreneurship orientation are synergistic; they combine positively to affect product innovation activities and performance. Support for this thinking comes from Kyocera Corporation. A careful reading of the statement at the opening of this article suggests that this firm places a strong emphasis on, and blends, both market and entrepreneurship orientations. As further support for the validity of this thinking, consider Sharp Corporation,a leading manufacturer of consumer electronics. Its recent successes in creating consumer electronic devices are ascribed to its strong market/entrepreneurshipapproach to innovation (Hulme 1995). With the aid of market and customer information monitoring points in Japan, Europe, and the United States, Sharp is able to examine the lives and activities of customers and produce new electronic products
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that customers may never have thought of as solutions to their needs (Hulme 1995). Against this backdrop, we argue that an alignment of market and entrepreneurship orientation processes and practices enables the firm to adapt to and manage its market environment to meet current and emerging customer needs. This argument is rooted in Child's (1972) notion of strategic choice. Based on this notion, Chakravarthy (1982) developed a framework of organizationaladaptive states that has specific implications for structureand strategy. Previous research using the adaptability framework suggests that firms have different adaptive orientations based on their pattern of choices with respect to strategy and structure and, as a consequence, adopt different operational procedures and activities (Conant et al. 1990, McKee et al. 1989, Miles and Snow 1978). The principal argument,therefore, is that market orientation is an adaptive capability by which firms react or respond to conditions in the market environment (Hunt and Morgan 1995, Kohli and Jaworski 1990, Narver and Slater 1995, McKee et al. 1989). Entrepreneurship orientation, in contrast, is an environmental management capability by which firms embark on proactive and aggressive initiatives to alter the competitive landscape to their advantage. Hence, a firm with an effective alignment of both orientations may have a better knowledge of its current and future customers, competitors, and other environmental conditions, and thus greater overall adaptive and environmental management capability in meeting customer needs. Thus, the level of adaptability and environmental management capability to meet customer needs inherent in the firm's strategic choice on both orientations underlies the alignment of the two orientations. To operationalize the alignment between market and entrepreneurshiporientations and to examine its influence on product innovation, the matching perspective of coalignment is adopted. This view of coalignment suggests that a high-high combination of any two orientations may yield performance outcomes superior to other combinations (Covin and Slevin 1988, Hart 1992, Venkataraman 1989). Hence, market and entrepreneurship orientation are arrayed on a continuum from low to high, and firms are classified into a 2-x-2 matrix resulting in four distinct groups of firms. A graphic representationof the theoretical typology of firms is presented in Figure 1. This type of firm categorization is frequently used by researchers as a source of input into the strategic planning process (McCabe and Narayanan 1991) and is reputed to provide a useful tool for insights into strategic actions of firms (Covin and Slevin 1988, 1989; McKee et al. 1989).
In Figure 1, firms with high market and high entrepreneurship orientations are labeled market/entrepreneurship orientedfirms (ME). Given their high degree of emphasis on both orientations, we theorize that they emphasize leadership in the development of both marketdriven and market-drivingnew products. For this reason, the new products are likely to have both pioneering technological and market advantages because these firms are equipped to solve the marketing and technical uncertainties associated with the development and marketing of such innovations (Hamel and Prahalad 1994, Olleros 1986). Because they constantly monitor the emerging trends in the environment along with customer needs, and develop responses based on this understanding,ME firms are able to create change in the industry. ME firms are therefore posited to have the highest adaptive and environmental management capability in catering to customer needs. The second group of firms is entrepreneurshipfirms (EO). They are assumed to have high degrees of entrepreneurship orientation combined with low degrees of market orientation. As a result of the lower market orientation, their product innovation processes are essentially technology driven ratherthan market driven. They place a high degree of emphasis on technological leadership and problem finding and are more likely to produce technologically advanced products (see Foxall 1984). However, these generative learning activities are supported with a low level of commitment to market orientation. Hence, these firms are likely to compete on the basis of their technological and engineering skills in the belief that successful innovation emanates from R&D rather than from the market (Bennett and Cooper 1981). Because EO firms make radical changes to adapt to market needs, they have higher adaptability than marketoriented (MO) firms that make only incremental changes
Figure 1
Market/Entrepreneurship Orientation Combination of Firms
Firmiis Market/entrepreneurslhip (ME) High Highest adaptability and environmental managemenit capability Market orientation Firms Enitrepreneurship (EO) Low High adaptability and environmental managemcnit capability
Market-orientedFirms (MO) Low adaptability and environimentalmanagement capability
Conservative Firms (CO) Lowest adaptability and environmiieintal management capability
High Orientation Eintreprencurship
l ow
57
to adapt to market needs. Further, because they try to cater to emerging needs, they have higher environmental management capability than MO firms in meeting customer needs. Hence, we argue that these firms have high adaptive and environmental management capability. Market-orientedfirms (MO) are those with high market and low entrepreneurshiporientations. The higher degree of market orientation suggests that their product innovations are driven by customer needs rather than by the dictates of technology per se. With their focus on meeting expressed needs of customers rather than latent and unarticulated needs, they are likely to prefer to operate in stable and predictable environments to ensure "safe" adaptability(Foxall 1984). Hence, MO firms are likely to develop incremental new products ratherthan novel products that create significant market changes (Christensen and Bower 1996, Bennett and Cooper 1981, Slater and Narver 1995). Foxall (1984) argues that MO firms rely on stable technology bases, hence their product innovation reflects changes in currentcustomer needs. MO firms are posited to have low adaptive and environmental management capability in meeting customer needs. Finally, firms that emphasize low degrees of market and entrepreneurshiporientations are labeled conservative firms (CO). Given the high degree of conservatism in both orientations, we argue that these firms are internally oriented and are less aware of industry and market trends or consumer needs than any one of the other three types of firms. We expect these firms to be the least effective in product innovation among the four groups of firms because they have the lowest adaptive and environmental management capability to meet customer needs.
Research Hypotheses
New product performance describes the degree to which a new product is perceived to have achieved its market share, sales growth, customer use, and profit objectives. Strategic management research suggests that firms that are able to balance seemingly contradictoryor paradoxical strategic orientations or organizational capabilities are likely to have better performancethan those that have similar or singular strategic orientations. For example, Hart (1992) theorizes that firms that combine discrepant strategy-making modes should perform better than single-mode firms should. The logic is that such firms have more "high processing" capacity than singlemode firms (p. 345). Consistent with this theme, Prahalad and Bettis (1986) suggest that a single-mode orientation by itself may suffer from limitations and biases; hence, combining the varied logics associated with different strategic orientations holds better potential for improving performance. This perspective is consistent with
the matching perspective of strategic coalignment (Venkataraman 1989). It argues that one can identify a single combination of any two organizationalorientations that is inherently more favorable than others because it has more of the underlying characteristicsthan the others do. The preceding observations suggest that firms that combine high levels of market and entrepreneurshiporientations should perform better in product innovation than other combinations of both orientations. Resource-based theory supports these observations (Barney 1991). An alignment between market and entrepreneurship orientations is argued to be a valuable, difficult to imitate, and rare resource that provides the firm with the competency to develop and market products to customers with benefits superior to those the competition provides. The rationale for this assertion follows from the literature that suggests that both orientations are embedded in the cultural ethos of the firm and thus lead to congruent behaviors at the project level (c.f. Deshpande et al. 1993, Drazin and Schoonhoven 1996, Slater and Narver 1995). Based on this literature, we argue that an alignment of market and entrepreneurship orientations creates complex, tacit, and intangible skills that unleash the creative human potential of the firm and generate new ideas for the creation of new products and services. Hence, firms that are able to align both orientations at a higher level have higher adaptive and environmental management capability and should performbetter than each of the others in their product innovation projects. Prior research provides support for this hypothesis. Powell (1992) sees an alignment of organizational orientations as a source of competitive advantage. McKee et al. (1989) find that adaptability as operationalized by the Miles' and Snow's (1978) typology has significant impact on performance. Consistent with this theme, Foxall (1984) suggests that although most firms have an inherent tendency toward either market or entrepreneurship orientation, successful product innovation is a function of both orientations. The preceding discussion suggests that compared to ME firms, MO and EO firms are less process capable because of their single dominant orientations (Hart 1992, Prahalad and Bettis 1986). However, we expect differences in new product performance between MO and EO firms. As mentioned previously, entrepreneurshiporiennew tation fosters highly risky, exploratorytrial-and-error product development processes (Burgleman 1991, Covin and Slevin 1988, Lumpkin and Dess 1996, March 1991). Given the exploratory nature of this process, it is likely to lead to prematureintroduction of new products to the market or new products that are far in advance of customer experiences, and therefore less likely to generate
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sales and profits. In support, Calantone et al. (1994) find a significant negative relationship between entrepreneurship orientation and new product success. Covin (1991) finds that EO firms tend to receive a high number of customer complaints given their tendency to develop and market products unfamiliar to customers. This literature suggests that EO firms may be highly adaptable in the innovation process, but they may also be passive with respect to customer needs along the way. Acknowledging the potential difficulties of EO firms in generating sales from new products, Foxall (1984) contends that a firm merits the label of entrepreneurship"only when the market favorably judges the new product . . . by purchasing it in sufficient volume to allow the firm to achieve its business objectives" (p. 72). In contrast to EO firms, MO firms are likely to have greater customer input into the innovation process, and hence are relatively more likely to introduce products that meet customer needs. This discussion suggests that:
HYPOTHESIS 1. There are significant differences in new product performance among thefour groups offirms; and that: a. MEfirms have higher new product performance than EO, MO and CO firms. b. MO firms have higher new product performance than EO and CO firms. c. EO firms have higher new product performance than CO firms.
This constructrepresentsan aspect of innovativeness with earlier entry indicating a greaterdegree of innovativeness. The firm's timing of new product introductions not only matches its market and competitive environments, but also its internal capabilities to deal with market and technological uncertainties associated with its entry strategy (Miles and Arnold 1991, Olleros 1986, Zahra 1993). Hence, we expect the four groups of firms to differ significantly in market-entrytiming strategies. By definition, EO firms are posited to be first to market because of their focus on an exploratory, risk-seeking approachto product innovation. In comparison, ME firms would be slower because they simultaneously balance speed to market with the need to address customer needs. However, we expect ME firms to have a faster market-entry strategy than MO firms. The logic is straightforward.They have a higher attendantentrepreneurshiporientation. Hence,
HYPOTHESIS 2. There are significant differences in the timing of inarket entry among the four groups of firms and that: a. EO firms have a faster market entry than ME, MO, and CO firms. b. ME firms have a faster market entry than MO and CO firms. c. MO firms have a faster market entry than COfirms.
Product InnovationProcess
Extant research suggests that firms with different strategic orientations have inherently dissimilar adaptability and adopt different operational procedures, activities, and marketing efforts (Conant et al. 1990, Miles and Snow 1978, Zahra and Covin 1993). For example, McKee et al. (1989) conceptualized the Miles and Snow (1978) typology of firms as having increasing adaptability from reactors to prospectors, and found significant differences among them in all but one of the marketing activities examined. Consistent with this literature, we expect that the combination of market and entrepreneurshiporientations has product innovation process implications. We examine the differences among the four groups of firms on six critical antecedents of new product performance:timing of market entry, product quality, marketing synergy, proficiency of market launch, top management support for innovation, and external environment (AtuaheneGima 1996b, Zahra 1993). Timing of market entry refers to the firm's strategic choice as to whether to be "first to market," "early follower," "late follower," or "late entrant" with respect to new product introductions (Ansoff and Stewart 1967).
Product quality refers to the perceived superiority of the new product over the competition. It captures the competitive advantage of the new productin terms of cost saving, quality and performance. Hunt and Morgan (1995) suggest that market orientation is an intangible resource that enables the firm to collect and use market information to produce products tailored to marketneeds. Kohli and Jaworski (1990) found that market orientation provides a vision that guides the activities of employees. These assertions are consistent with the behavioral psychology perspective of organizational orientations, which holds that such orientations enhance superiorinnovations because they nurture appropriate firm-specific role behaviors, such as creativity and team orientation, that are unique and difficult for competitors to imitate easily (Barney 1991). However, to gain maximum advantage from these intangible capabilities, the firm must act not only with speed, but also with innovative, risky, pacesetting activities that reduce costs and provide unique value for the customer. Hence, we argue that an alignment between market and entrepreneurship orientations provides a setting that engenders response behaviors that are likely to lead to new products perceived to be of superior quality by current and emerging markets. Compared to EO firms, MO firms are more likely to solicit and use customer input in the product innovation process. Hence,
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we expect that these firms will produce new products perceived to be of superior quality than the new products of EO firms. Although EO firms produce high-quality products, by definition these products are likely to have novel features that represent departuresfrom existing products. Such products tend to offer pioneering advantages and greaterdifferentiation, but are also likely to pose adoption difficulties for potential customers (Covin 1991). Hence,
HYPOTHESIS 3. There are significant differences in product quality among the four groups of firms and that: a. MEfirms have higher product quality than EO, MO and CO firms. b. MO firms have higher product quality than EO and CO firms. c. EOfirms have higher product quality than COfirms.
into new learning arenas (Burgelman 1991, Christensen and Bower 1996, Foxall 1984). Hence, EO firms are posited to have new products with lower marketing synergy than both ME and CO firms have.
HYPOTHESIS 4. There are significant differences in the mean level of marketing synergy among the four groups of firms and that: a. MO firms have higher marketing synergy than ME, EO, and CO firms. b. ME firms have higher marketing synergy than EO and CO firms. c. CO firms have higher marketing synergy than EO firms.
Marketing synergy refers to the extent to which the resources and skills required for a new product development project fit the currentmarketingresources and skills of the firm. A firm formulates and implements a strategy to maximize the value of its resources. Hence, the confinement of new product projects within the currentcompetencies of the firm enhances successful implementation. Atuahene-Gima (1996a) argues that new product project selection requires attention to both internal and external factors, and that market orientation should lead to greater understandingof the internal capabilities of the firm, which in turn should facilitate the selection of compatible new product projects. Hunt and Morgan (1995) make a similar point, arguing that by enhancing knowledge about the external environment, market orientation also enhances the firm's knowledge of itself. Covin (1991) also suggests that entrepreneurshiporientation engenders an awareness of industrial trends and the use of effective competitive strategies. Because both orientations engender understanding of the external environment, they should lead to a clearer understanding of the firm's capabilities that are available to meet environmental challenges. It follows that the firm's ability to develop new products that match its current skills and customer base depends on the extent to which these orientations focus operational personnel on the need for such compatibility. In general, we posit that MO firms select new product projects with the highest synergy with their currentmarketing resources and skills than do each of the other kinds of firms. The logic is that they have the advantage of observing and learning from their own productinnovation problems and those of other firms since they "play it safe" in the product innovation process (see Foxall 1984). EO firms are more likely to pursue new product projects that take them beyond their currentcompetencies
Proficiency of market launch captures the effectiveness of the firm in commercializing its new products. It represents the firm's effort at getting customers to adopt its new product. Effective market launch of a new product requires the creation of an organizational climate and incentive system that ensure the commitment of employees to market the new product. A climate for new product launch refers to employees' shared summary perceptions of the extent to which support for a new product is encouraged, rewarded, and expected within the organization. We expect that ME firms would be more effective in market launch of a new product than each of the other three groups of firms. Given that ME firms are likely to develop new products with strong customer input, and strong proactiveness and risk-taking, we posit that they foster employee skills for new product launch, provide incentives, and remove obstacles to effective launch effort. In comparison, MO firms are likely to have new products that match the skills of their salespeople and other employees, and thus are less likely to be proactive with their launch effort. However, given their focus on stable environments and current technological base and their incremental approach to product innovation (Foxall 1984), MO firms are likely to be more proficient than EO firms in market launch. The logic is that EO firms have significant problems in market launch because their new products are likely to be new to the market, incompatible with the current skills of their employees, and aimed at emerging marketswhere employees have little experience (Covin 1991).
HYPOTHESIS 5. There are significant differences in the mean level of proficiency of market launch among the four groups of firms and that: a. MEfirms are more proficient in market launch than EO, MO, and CO firms. b. MO firms are more proficient in market launch than EO and CO firms.
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c. EO firms are more proficient in market launch than CO firms. Management support for innovation refers to the degree of support that top managers give to product innovation activities in the firm. This construct is indicated by two dimensions-the first through direct acts of management involvement and encouragement of the new product project, and the second through the importance that management gives to product innovation activities and experience in the firm's human resource strategy (Atuahene-Gima 1996b). The strategic orientation of the firm determines the nature and effectiveness of its human resource practices (Schuler 1986, Schuler and Jackson 1987). For example, Schuler (1986) suggests that EO firms have explicit human resource practices that foster support for innovative and risky behavior and that enable employees to keep up with changing technologies. Similarly, MO firms have been shown to develop human resource practices congruent with this orientation (Narver and Slater 1990, Ruekert 1992). This literature suggests that firms with an alignment of market and entrepreneurship orientations would not only have greater direct management support for innovation, but also human resource practices that place a premium on innovative behavior. Based on the theory of overall superiority of the combination of strategic orientations (Covin and Slevin 1988, 1989; Hart 1992; Venkataraman 1989), we expect ME firms to have the highest management support for innovation. In comparison with MO firms, we expect EO firms to have higher management supportfor innovation, given their overriding focus on risk-seeking and experimentation in product innovation. The logic follows from research that suggests that EO firms have more explicit human resource strategies to enhance innovation than other types of firms (Schuler 1986). Hence, 6. There are significant differences in the mean level of management support for product innovation among the four groups of firms, and that: a. ME firms give greater management support to innovation than MO, EO, and CO firms. b. EO firms give greater management support to innovation than MO and CO firms. c. MO firms give greater management support to innovation than CO firms.
HYPOTHESIS
and intensity of competition dimensions have received attention in studies examining market and entrepreneurship orientations (Covin and Slevin 1989, Jaworski and Kohli 1993, Zahra 1993). The hostility dimension, with its explicit consideration of the degree to which the firm is able to control its environment, is consistent with the environmental management perspective inherent in arguments about the alignment between market and entrepreneurship orientations. Several studies have examined the degree to which the environmental context affects the relationship between market, entrepreneurship orientation, and organizational performance (Covin and Slevin 1988, 1989; Jaworski and Kohli 1993). Khandwalla (1977) finds that the linkage between an entrepreneurship orientation and organizational performance is affected by the degree of hostility of environment. He reports that conservative top management style was more effective in benign environments, whereas entrepreneurshiptop management style was more effective in hostile environments. These studies suggest that to establish the usefulness of our theoretical groups of firms, they must not only be shown to be congruent, but it must also be shown that their impact on product innovation and performance is robust across environments (cf. Fry and Smith 1987). Consistent with this argument,McKee et al. (1989) found that strategic archetypes are maintained irrespective of the volatility of the marketenvironments. Hence, we posit that:
HYPOTHESIS 7. There are no significant differences among the four groups of firms in their perception of environmental hostility and intensity of market competition.
Method
Sample and Data Collection. A sample of 500 firms was drawn (every fourth firm) from a list of 2,000 Australianfirms. The sample frame was created by combining the corporate membership list of the Australian Marketing Institute and a list of firms supplied by McKinsey and Company. The overall selection criterion for creating the sample frame was the likelihood of new product introduction by the firm. For example, the list of firms provided by McKinsey and Company were firms that were at the forefront of product innovation and in exporting of their new products. In this way, the sample is a judgment sample, a type of purposive sampling used in prior exploratory research of this nature (see Dess et al. 1997). In this sense, its nonrandom nature limits the generalizability of the study findings. However, our foremost interest here is to test our theory in a most suitable context.
Environmental hostility reflects the intensity of market competition, lack of marketable opportunities, and unfavorable, harsh business climates with the firm having little or no power to influence the environment (Khandwalla 1976/1977, 1977; Covin and Slevin 1988). We examine two aspects of hostility. General environmental hostility
61
KWAKUATUAHENE-GIMA AND ANTHONYKO Effects of Market and Entrepreneurship Orientation Alignnmenzt Product Inniovation on
Seventy percent of the sample consisted of manufacturing firms and 30% consisted of service firms. Sixty-six percent of the respondents described their firms as business units of larger firms and 34% were single and independent firms. Each of the two preceding groups of firms was examined for differences on each of the study variables. T-test analysis indicated no significant differences. The sample comprised firms in several industries: industrialmachinery (8%), chemical and pharmaceuticals (10%), electrical and electronics products (9%), food and beverage (8%), metal products (11 %), finance (banks, insurance, trusts) (11%), computers and software (10%), telecommunications (9%), and others (such as scientific equipment, transportequipment) (24%). Forty-six percent of the sample employed fewer than 100 people, 16% employed between 101 and 200 people, and 19% employed between 201 and 500 people. The remaining 19% employed over 500 people. Following several previous studies on market and entrepreneurship orientations (e.g., Gatignon and Xuereb 1997, Moorman 1995, Zahra 1993), the single-informant method was used for data collection. Several precautions were taken to minimize the problems associated with this method of data collection. First, care was taken to select measurement items that have proved to be valid and reliable in several previous studies. Second, in-depth interviews undertakenduring the pretesting process indicated that respondents were knowledgeable about their firms' strategic orientations and product innovations and were able to provide informed responses. The first pretest was conducted with six marketing managers who examined the questionnaire for clarity, ambiguities, and face validity of the measures. Feedback from this phase led to revisions that improved the readability, wording, and layout of the questionnaire.A second phase of pretests involving a group of four marketing managers, three R&D managers, and four new product managers was conducted. They examined the instrumentand completed it with specific reference to their firms or business units. Feedback from this phase led to a third pretest with six CEOs because most take direct control of product innovation activities. This last pretest yielded few concerns. A questionnaire with a cover letter was send to the CEOs of firms in the sample. The letter instructed them to pass the questionnaire on to the senior manager most knowledgeable about the firm and its recent new product project to complete. This mailing and a postcard reminder yielded 181 usable questionnaires, a response rate of 37.3%. To test for nonresponse bias, the first wave of questionnaires received was compared with the second wave on the variables in the study. T-test analysis showed no significant differences at the 0.05 level, indicating no
problems with nonresponse bias (Armstrong and Overton 1977). We believe that we were successful in reaching informants high enough in the firm's hierarchy who were able to comment on the firm's market and entrepreneurship orientations and its product innovation activity. Specifically, of the 181 completed surveys, 27% were completed by CEOs, 48% by marketing managers, 8% by product managers, and 17% by R&D managers. Using ANOVA, we examined the differences in the study variables among these groups of respondents. No significant differences, save entrepreneurship orientation, were found among these groups of managers. CEOs appear to rate the firm's entrepreneurship orientation higher than do marketing managers. Because no significant differences were found, the sample was pooled for analysis. The sample contained a variety of new products, improvements (35%), line extensions (26%), new product lines to the firm (25%), and new-to-the-world products (14%). Measurement. One way of measuring organizational orientations and product innovation is by gauging the resource allocations that support these activities (Burgelman 1983). However, in this study, perceptual measures were used for several reasons. First, after much effort, no secondary source that provides detailed data reflecting the theoretical constructs was located. Second, Zahraand Covin (1993) noted that few secondary sources provide details that allow one to measure accurately constructs pertaining to innovation or strategic orientation of the firm. Third, prior research provides well-developed, valid, and reliable scales for the constructs in the study (Covin and Slevin 1989, Jaworski and Kohli 1993). Fourth, several studies indicate that perceptual measures have high correlation with objective measures of product innovation and have the added advantage of facilitating comparisons among firms in different industries (Ancona and Cadwell 1992, Zahra 1993, Zahra and Covin 1993). As further support for our approach, Denison and Mishra (1995) compared the effectiveness of objective and subjective performance measures in discriminating among four groups of firms based on their organizational cultures. Their results led to the conclusion that "subjective measures of effectiveness are better suited for the comparison of a disparate set of firms than are the objective measures of effectiveness" (p. 219). Indeed, there is evidence that management attitudes and perceptions largely determine investments in new product innovation (Ginsberg and Venkataraman1992) and that a firm's strategic orientation and product innovation activities could not only be inferred from behavior, but could also be expressed by managers (see Thomas et al. 1991). In brief,
62
market orientation, entrepreneurship orientation, and product innovation activities are identified by managers rather than inferred from resource allocations necessary for their implementation. Consistent with the cross-level nature of the study, all measures pertaining to marketand entrepreneurshiporientations focused on the business unit or firm level, whereas those pertaining to product innovation focused on a specific project (see Moorman 1995). Market orientation was measured by a 20-item scale developed by Kohli et al. (1993), tapping the three dimensions of the construct:marketintelligence generation, dissemination, and responsiveness. There are several measurement scales for market orientation (e.g., Narver and Slater 1990, Ruekert 1992). We used the Kohli et al. (1993) scale for two reasons. First, this scale captures specific behavioral activities reflecting the three dimensions of the construct. It also clearly reflects the reactive or responsive nature of market orientation. Further,it has an informational and customer focus consistent with the other available scales for market orientation. Entrepreneurship orientation was measured by six semantic differential items adapted from Covin and Slevin (1989). The scale reflects the organization's degree of risk-taking propensity, proactiveness, and aggressiveness with respect to innovation. This scale has a long tradition in the strategic management literatureand has been used by several researchers (e.g., Covin 1991; Covin and Slevin 1988, 1989; Miller 1983). New product performance was measured by a fouritem scale. This scale reflects the extent to which the new product is perceived to have achieved its market share, sales and customer use, sales growth, and profitobjectives since its launch. Given concerns with perceptual measures of performance, we conducted a second survey of the sample and collected data for objective measures of new productperformance.These related to the percentage of profits and sales derived from new products less than three years old, and average profits over the last three years because of new products. To measure timing of market entry, we asked respondents to indicate whether the firm was first to market, an early follower, a late follower, or a late entrant with the new product. Product quality was measured by three items that tap its perceived benefits to customers and superiority over competing products. Marketing synergy was captured by three items measuring the fit of the new product project with the firm's market research skills, sales force skills, and customer service resources and systems. Proficiency of market launch was measured by three items pertaining to the effectiveness of market testing, evaluation of the launch procedures, and training of personnel for the launch. Management involvement in
product innovation was captured by four items reflecting the degree to which top management provides resources and encourages employee participation and teamwork during the project. Importance given to innovation in human resource strategy was measured by five items reflecting the extent to which innovation skills and experience are considered important by management in the recruitment,performance appraisal, and reward practices (Atuahene-Gima 1996b). Environmental hostility was measured by three items adapted from Covin and Slevin (1989) that tapped the perceived lack of control over the environment, risks facing the firm, and lack of marketable opportunities.Intensity of market competition was measured by four items that tapped the perceived similarity of competitor offerings, price competition, and aggressiveness of the competitor's behavior. We also examined whether the four groups of firms are significantly different in size, R&D intensity, and number of R&D personnel. Firm size was measured by two items on six-point scale, the number of employees and annual sales. These two items give a good indication of the resources available in the firm for product innovation. R&D intensity was measured by asking respondents to indicate on a six-point scale the percent of annual sales spent on R&D. To measure number of R&D personnel, respondents were asked to provide the number of employees whose job it was to conduct research and develop new products. Measurement Validation. All multiple items were factor analyzed, with varimax rotation, to examine the convergent and discriminantvalidity of the measures. We deleted two items from the market orientation scale and one item from the entrepreneurshiporientation scale. Using the Kaiser criterion (i.e., eigenvalue > 1) and the scree test, 12 distinct factors emerged from the analysis accounting for 65% of the total variance. The items loaded highly on their hypothesized, theoretically meaningful factors. Consistent with the conceptualization of market orientation, three factors emerged from the analysis. Following Jaworski and Kohli (1993), the three dimensions of the construct were combined into a single scale. Our rationale is that a firm that is effective in generating market intelligence gains no advantage from such behavior if the intelligence is not disseminated effectively, or if it is disseminated but not responded to by the functions within the firm. The factor analysis results indicate that the potential threat of common method variance is minimal. If common method variance was a serious problem, a single factor would have emerged from the factor analysis or one general factor would account
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KWAKUATUAHENE-GIMA AND ANTHONYKO Effects of Market and Entrepreneurship Orientation Alignment on Product Innovation
for most of the covariance in the independent and dependent variables (Podsakoff and Organ 1986). The rotated principal factors solution is shown in Appendix A. Table 1 presents the construct correlation matrix, reliability, and other descriptives. Recall that market and entrepreneurshiporientations are related but distinct constructs (Miles and Arnold 1991, Slater and Narver 1995). Notice from Table 1 that, as expected, the correlation between both constructs was significant (r = 0.39; p < 0.01), which is consistent with the findings of Miles and Arnold (1991).
Analysis and Results

Following the procedure recommended for testing coalignment from the matching perspective (Venkataraman 1989), firms were arrayed in ascending order of market and entrepreneurship orientations. A median split method was used to identify the four combinations of firms. Specifically, the sample was split at the median on both orientations into high and low groups to form the four groups of firms depicted in Figure 1. A potential problem with this method of identifying types of firms is that firms at the median are likely to be indistinguishable from those above and below the median (see Thomas et al. 1991). Hence, to enhance discrimination, we deleted firms with median scores from the analysis. This process resulted in 145 firms being available for analysis. Several researchers (e.g., Covin 1991, Karagozoglu and Brown 1988) have used this heuristic of creating distinct groups of firms. Thomas et al. (1991) argue that a more robust test of the coalignment concept is gained by examining the extreme combinations of firms. We opted for a more conservative test involving all four groups of firms, to be consistent with the theoretical typology in Figure 1 and the hypotheses. MANOVA was used to test the null hypothesis that the four groups of firms did not differ across the mean scores of the dependent variables. This hypothesis was rejected (F = 51.00, p < 0.001), suggesting that the four groups of firms are significantly associated with variations in productinnovation activity and performance.To establish further the reliability of the four groups of firms, their R&D expenditures as a percentage of sales were examined. Of all the variables characterizing firm behavior, this has been the most widely used in developing strategic types of firms (e.g., Manu 1992, Miles and Snow 1978). After obtaining a significant MANOVA, one-way ANOVA was used to investigate the differences among the four groups of firms. Notice that the hypotheses predict a specific order of differences among the four groups of firms. Rosenthal
and Rosnow (1985) argue that where the researcher has such focused hypotheses among groups, a planned contrast test should be employed in which weights are assigned to the groups in keeping with the predicted order of differences. Hence, to supplement the ANOVA, we conducted a planned contrast test (PCT) using the proportion of variance multiplied by maximum possible contrast F (MPC-F) approach recommended by Rosenthal and Rosnow (1985). The results are presented in Table 2. The planned contrast test provides support for most of our hypotheses. However, given the exploratory natureof the study, we also controlled for Type 1 error with the more conservative Scheffe comparison procedure and discuss our results accordingly. The hypotheses and empirical conclusions are summarized in Table 3. In support of Hla, ME firms have significantly higher mean scores on perceived new product performance than EO, MO, and CO firms. HIb and HIc are not supported, although the mean differences are in the predicted direction. As mentioned previously, in spite of the appropriateness of our perceptual approach of measuring new product performance, we conducted a second survey of the original sample to collect objective measures of new product performance to validate the results. We received data from 86 firms. Using the same approach of creating the four groups of firms resulted in 71 firms for analysis. We compared these firms on three objective measures of new product performance: (1) percentage of profits derived from new products less than three years old, (2) percentage of sales derived from new products less than three years old, and (3) a three-year average of profits due to new products. The correlation between market orientation and the three objective new product performance measures were (r = 0.18, p < 0.05), (r = 0.07 n.s), and (r = 0.13, p < 0.09) respectively. Similarly, the correlation between entrepreneurship orientation and these performance measures were (r = 0.30, p < 0.001), (r = 0.32, p < 0.001), and (r = 0.32, p < 0.001), respectively.1 As indicated in Table 2, the analysis based on the more objective measures of new product performance yield stronger results than our analysis based on the perceptual measures. HIa is supported with the three objective measures. In each case, ME firms have significantly higher mean scores than EO, MO, and CO firms. HIb is partially supported, with MO firms having higher means than EO and CO firms on one measure and higher than CO firms on all three measures of new product performance. Hlc is supported by the data with respect to two new product performance measures, as EO firms have higher means than CO firms. In brief, the results of both the perceptual
64
15.
14. 13. 12. R&D
11. 10.
9. in
8. 7. 6. 5. 4. 3. 2. 1.
Table 1 New Variables new Timing Market market human Annual Product Number Number Intensity of Innovation Marketing of percentage of of Proficiency sales Management product of of Environmental product quality Significance: R&D resource market orientation expenditure Entrepreneurship synergy ap competition sales as Descriptive market entry < orientation employees hostility project of strategy involvement performance 0.01; personnel
Notes.
launch
orientation
bp <
Statistics,
4.31 4.59 4.35 5.45 5.17 5.30 6.13 2.18 2.58 4.55 3.83 3.46 5.40 3.17 4.06
Mean
0.001; 1.39 1.94 1.11 1.02 1.15 4.27 1.72 1.24 1.21 1.16 0.98 1.12 0.84 S.D. .140 1.16 N Reliability
=
-
0.80 0.65 0.83 0.84 0.66 0.71 0.85 0.88 0.80 0.79 0
and
120.
1 Correlation -19 -220.03 -0.02 0.21 0.14 0.03 0.04 -0.09 0.46b 0.42b 0.50b 0.43b 2 Matrix 3 0.17 0.12 -0.02 -0.15 0.05 0.22 0.19 0.39b 39b 0.29a 0.54b 0.54b 0.26a 0.24a
0.01 0.11 -0.00 -0.15 0.21 0.10 0.18 0.14 0.10 0.18 0.29a 0.24a 0.07 0.19 0.09 0.30b -0.04 -0.02 -28a 0.37b 0.38b 0.27a -0.11 0.01 0.21 0.26a 0.17 0.11 0.10 -0.02 0.03 -0.18 -0.02
6 0.10 -0.09 0.11 0.13 -0.15 0.20 -0.03 0.15 0.17 0.01 -0.13 0.12 0.16 0.45b
0.24
7
0.15 0.24a
-0.13 0.12 0.34b -0.04 -0.05 -0.17 0.60b
-0.21 -0.11 0.08 0.29a -0.14 -0.09 -
-0.13 -0.02 0.12 0.09 -25a
10
-0.01 -0.13 0.03 0.02

-
11
12
0.33b -0.32b 0.83b
13 _0.24a 0.43b 0.15

-
14 15
65
Effects of Market and EnitrepreneurshipOrientation Alignment on Product Itinnovation
Table 2
Results of Analysis of Variance and Planned Contrast Test: Market/Entrepreneurship Orientation Group of Firms and Product Innovation Total Sample 145 Mean
Number of firms Defining variables (rank) 1. New product performance Product innovation activity 2. Timing of market entry 3. Product quality 4. Marketing synergy 5. Proficiency of market launch 6. Management involvement in new product project 7. Importance of innovation in human resource strategy External environment 8. Environmental hostility 9. Intensity of market competition Firm characteristics 1. Annual sales 2. Number of employees 3. R&Dexpenditure as percentage of sales 4. Number of R&D personnel
ME 47 Mean
EO 20 Mean
MO 29 Mean
CO* 49 Mean
F value
F PCT**
Scheffe Test
5.48 (1)
4.62 (4)
5.20 (2)
5.13 (3)
5.21
3.33b
3.44c
ME > EO, MO, CO
3.66 5.93 5.61 5.03
(1) (1) (2) (1)
3.50 5.23 5.04 4.30
(2) (4) (4) (3)
3.04 5.26 6.11 4.91
(3) (2) (1) (2)
2.56 5.24 5.55 3.99
(4) (3) (3) (4)
3.12 5.46 5.50 4.54 4.59 4.29
10.99d
26.49d ME> MO, CO; EO > CO 5.88c 10.98d ME > EO, MO, CO 659d 18.40d MO > EO, CO 8.47d 24.02d ME, EO > CO ME > EO, MO, CO; EO, MO>CO ME > EO, CO; EO, MO > CO
5.46 (1) 4.95 (1)
4.55 (3) 4.81 (2)
4.62 (2) 4.66 (3)
3.78 (4) 3.53 (4)
22.20d 58.14d
16.61d 38.32d
3.84 (1) 4.76 (1)
3.63 (4) 4.69 (2)
3.76 (3) 4.39 (4)
3.81 (2) 4.40 (3)
3.80 4.56
0.21 0.63
0.56 1.66
3.11 (2) 2.34 (3) 2.98 (1) 6.61 (2)
2.75 (4) 1.95 (4) 2.61 (2) 6.47 (3)
4.30 (1) 3.48 (1) 1.56 (4) 11.22 (1)
3.44 (3) 2.34 (3) 1.81 (3) 3.61 (4)
3.39 2.51 2.25 6.35
4.31c 3.46b 8.91d
9 15d
MO > ME, EO
8.34d
MO > ME, EO, CO 25.69d ME > MO, CO; EO > MO

5.43d
2.04
of new product performance Objective measures Validating sample (No. of firms) 23 5 1. Percentage of profits from new products less than 3 years old 39.35 (1) 27.37 (2) 2. Percentage of sales from new products less than 3 years old 39.09 (1) 14.25 (3) 3. Average profit from new products in the last three years 39.35 (1) 27.38 (2)
27 20.17 (3) 19.89 (2) 20.17 (3)
16 13.31 (4) 13.31 (4) 15.18 (4)
71 25.70 25.23 25.70

5.76c
11.69d ME > EO, MO, CO; EO, MO > CO

9.96d
4.16c
495d
ME > EO, MO, CO; MO > EO, CO ME> EO, MO, CO; EO, MO > CO
959d
Notes. ME = Market/entrepreneurship firms, EO = Entrepreneurship firms, MO = Market oriented firms, CO = Conservative firms Planned Contrast Test Significance bp < 0.05; cp < 0.01; dp < 0.001.
and objective measures of new product performance support the validity of the arguments for the alignment between market and entrepreneurshiporientations. Notice that EO firms have higher mean performance scores than MO firms with respect to two measures, the percentage of profits from new products less than three years old and the three-year average profits derived from new products. However, with respect to percentage of sales derived from new product less than three years old,
MO firms have higher mean scores than EO firms. Restated, it appears that MO firms have better sales from new products than do EO firms. However, EO firms appear to make more profits from new products than MO firms do. Although not consistent with our predictions, these differences offer useful insight. The rationale for the differences between MO and EO firms may be a result of the higher costs associated with productinnovation and marketing activities of EO firms. As Covin (1991) finds,
66
Table 3
Summary of Hypotheses and Empirical Findings Empirical Support'
Construct Hi. New product performance Objective new product performance Percentage of profits from new products less than 3 years old Percentage of sales from new products less than 3 years old Average profit from new products in the last 3 years H2. Timing of market entry H3. Product quality H4. Marketing synergy H5. Proficiency of market activity H6. Management involvement in new product project Importance of innovation in human resource strategy H7. Environmental hostility Intensity of market competition
Hypothesized Relationships (a) ME > EO, MO, CO; (b) MO > EO, CO; (c) EO > CO*
a Yes
b No
c No
(a) ME > EO, MO, CO; (b) MO > EO, CO; (c) EO > CO (a) ME > EO, MO, CO; (b) MO > EO, CO; (c) EO > CO (a) (a) (a) (a) (a) ME > EO > ME > MO > ME > EO, MO, CO; (b) ME, MO, CO; (b) EO, MO, CO; (b) ME, EO, CO; (b) EO, MO, CO; (b) MO > ME > MO > ME > MO > EO, CO; (c) EO > MO, CO; (c) MO > EO, CO; (c) EO > EO, CO; (c) CO > EO, CO; (c) EO > CO CO CO EO CO
Yes Yes Yes Partial Yes Partial Partial Yes Partial
Partial Yes Partial Yes No No Partial Partial Partial Yes Yes
Yes No Yes No No No No Yes Yes
(a) ME > EO, MO, CO; (b) EO > MO, CO; (c) MO > CO (a) ME > EO, MO, CO; (b) EO > MO, CO; (c) MO > CO ME = EO = MO = CO ME = EO = MO = CO
Notes. * ME = Market/entrepreneurship firms; EO = Entrepreneurship firms; MO = Market oriented firms; CO + Based on Scheffe comparison test
Conservative firms
EO firms have greater problems in marketing new products because they have to deal with more customer complaints about unfamiliar products. It appears that these problems retard the sales growth of new products. However, given the likely newness and competitive advantage of their new products, they appearto make greaterprofits from their sales than do MO firms. It may be that EO firms may use skimming pricing strategies, whereas MO firms may use penetrating pricing strategies. We now present the results regarding the product innovation process. H2a, which looks at timing of market entry, is partially supportedby the data. EO firms have higher mean scores than MO and CO firms but not than ME firms. H2b is supported by the data, as ME firms have higher mean scores on timing of market entry than do MO and CO firms. Further, MO firms have higher means than CO firms, in support of H2c. We argued in H2a that EO firms would have fastest market entry among the four groups of firms because of their focus on an exploratory, riskseeking approach to product innovation. The results suggest that perhaps this argument is inconsistent with the theory of strategic alignment as a source of superiorcompetitive advantage (see Convin and Slevin 1988, Powell
1992). Although not statistically significant, ME firms have faster market entry than EO firms because they have more of the underlying characteristics of market and entrepreneurship orientation than the others do (Venkataraman 1989). This reasoning is consistent with strategic management research that argues for the superiority of strategic orientation combinations (Hart 1992, Prahalad and Bettis 1986). H3a is supported. ME firms have higher mean scores than each of the other three groups of firms on product quality. However, H3b and H3c are not supported, although the means are in the predicted direction. It appears that MO, EO, and CO firms differ on product quality only marginally. Our prediction in H4a is partially supported by the data because MO firms have significantly higher mean scores on marketing synergy than either EO or CO firms, but not higher than ME firms. Although the mean score of EO firms is higher than that of ME firms as predicted, it is not statistically significant. H4b is not supported although the mean scores are in the predicted direction, suggesting that ME firms appear to select new product projects with greater compatibility to current marketing resources and skills than EO and CO firms do.
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These findings appear to provide some support for the assertion that, unlike entrepreneurship orientation, market orientation fosters reactive or exploitative behaviors that constrain innovation within current capabilities and familiar customer segments. As predicted in H4c, EO firms have lower marketing synergy compared with CO firms, but the difference is not statistically significant. H5a and H5b are partially supported. ME and MO firms have significantly higher proficiency of market launch than CO firms. H5c is not supported, although the means are in the direction predicted by the hypothesis. The data in Table 2 provide strong but in some ways surprising support for H6, which considers management support for innovation. Recall that management support for innovation was operationalized along two dimensions: management involvement in new product projects, and innovation orientation in human resource strategy. With respect to the first dimension, ME firms have significantly higher mean scores than each of the other three groups of firms in support of H6a. In partial support of H6b, EO firms have higher mean scores than CO firms do. Finally, MO firms have higher mean scores than CO firms, thus supporting H6c. With respect to the second dimension of management support for innovation, (i.e., importance of innovation in human resource strategy), ME firms have significantly higher mean scores than both MO and CO firms but not higher than EO firms, in partial support of H6a. Results pertaining to H6b and H6c are similar to that obtained for the first dimension of management support innovation reported above. Though not statistically significant, it is interesting that EO firms have lower mean scores than MO firms with respect to management involvement in new product projects, but higher mean scores on innovation orientation in human resource strategy. In EO firms, management may to be more concerned with setting human resource policies and practices that encourage innovation. In contrast, in MO firms, management may be more likely to support specific projects. Notice from Table 2 that MO firms are significantly larger than EO firms. Hence, it is possible that they have formalized procedures for management involvement in new product projects, unlike EO firms which may lack such formal systems. In brief, the management of MO and EO firms may have different ways of supporting innovation. The data in Table 2 supportH7, indicating that the four groups of firms do not significantly differ on perceived environmental hostility and intensity of market competition. Thus, the results reported above are not driven by perceptions of the environment, suggesting that the derived groups of firms based on their degree of market and
entrepreneurshiporientation are indeed enduring firm behaviors. In summary, the findings of this study show a discernible pattern of product innovation activities and performance among the four groups of firms in support of our central hypothesis about the need for firms to match market and entrepreneurshiporientations. Figure 2 recaps the key correlates of the four groups of firms based on the ranking of the variable mean scores.
Discussion
The objective of this study was to examine the impact of the alignment between market and entrepreneurshiporientations on productinnovation activity and performance. The evidence presented in the preceding sections shows that the interaction between market and entrepreneurship orientations plays an important role in fostering product innovation and its outcomes. Our findings suggest that ME firms have higher new product performance, as measured by both subjective and objective measures, and are more effective in the product innovation process in several respects than EO, MO, and CO firms. Further, the evidence shows that the four groups of firms do not significantly differ on perceived environmental hostility and intensity of market competition. This suggests that the differences among the four groups of firms found previously are not artifacts of the environment. Our findings suggest three important contributions to the market and entrepreneurship orientation literature. First, they argue for a more integrated and compositional approach to the study of the effect of these orientations on firm activities and performance. The findings of this study suggest that this approachmay be more viable than previous approaches of examining bivariate relationships between each of market orientation and entrepreneurship orientation and product innovation activities and outcomes separately. Consistent with the strategic management (Covin and Slevin 1989, Hart 1992, Venkataraman 1989) and the marketing literatures (Slater and Narver 1995), the findings confirm the inherent overall superiority of the high-market and high-entrepreneurshiporientation combination (i.e., ME firms). Second, the evidence we report highlights the importance of the role of management in creating an environment conducive to product innovation. It suggests that the interactionof both orientations has implications for product innovation activities. For example, we found, surprisingly, that MO firms appear to provide greater managerial support for specific innovation projects than EO firms do. In contrast, EO firms appear to put greater emphasis on innovation in their human resources practices. Although not statistically significant, this finding appears to suggest a pattern
68
2001 12, No. 1, January-February
Figure 2
Effects of Market/Entrepreneurship Orientation Combinations of Firms on Product Innovation (Based on Mean Rankings)
Market/EntrepreneurshipFirms (ME) Highestnew productperformance Highestprofitsfromnew products Highestsales fromnew products Highest3-yearaverageprofitsfromnew products with First-to-market new products Highestperceivednew productquality High marketing synergy High Highestproficiencyin marketlaunch Highestmanagerial for involvement/support new productprojects Highestimportance given to innovationin humanresourcestrategy Market-OrientedFirms (MO) High new product performance Low profitsfromnew products High sales fromnew products Low 3-yearaverageprofitsfromnew products Late-to-market new products with Highperceivednew product quality Highestmarketing synergy High proficiencyin marketlaunch High managerial involvement/support new product for projects Low importance given to innovation humanresourcestrategy in
Market Orientation EntrepreneurshipFirms (EO) Lowestnew product performance High profitsfromnew products Low sales fromnew products High 3-yearaverageprofitsfromnew products with Early-to-market new products Lowestperceivednew productquality Low Lowestmarketing synergy Low proficiencyin marketlaunich Low maniagerial involvement/support new product for projects High importance given to innovationin humanresourcestrategy High EntrepreneurshipOrientation Conservative Firms (CO) Low new product performance Lowestprofitsfromnew products Lowestsales fromnew products Lowest 3-yearaverageprofitsfromnew products Very late to inarket with new products Low perceivednew product quality Low marketing synergy Lowestproficiencyin market launch Lowestmanagerial involvement/support new product for projects Lowest imiiportance to innovation humanresourcestrategy given in Low
of differential emphasis on the dimensions of management support for innovation, and warrants future empirical analysis. The third contribution relates to the results pertaining to the environmental context. We found that the four groups of firms appear to be robust across environments. Although we examined a limited set of dimensions of the environment (hostility and competitive intensity), this finding is importantbecause it is consistent with research on strategic types. Our data, however, could not allow us to explore the extent to which the environment affects the new product performance of each type of firm. An importantresearch question is the extent to which the nature of the environment moderates the relationship between new product performance and its antecedents in each type of firm. One could speculate that MO firms may be more successful in stable environments (Foxall 1984), EO firms may be more successful in rapidly changing environments, and ME firms may perform better in moderate environments. Research along these lines is necessary because it would provide insights into the classical strategy-
environment-performancerelationship with respect to the groups of firms proposed here. Finally, interesting results regarding the firm characteristics deserve comment. Table 2 shows that MO firms have higher mean scores on number of R&D personnel and size of the firm than EO firms, yet they have the lowest mean scores on R&D expenditure as percentage of sales. A plausible rationale for this result may be that MO firms spend less on R&D because of their focus on incremental innovations and adaptations of currentproducts. These firms may tend to spend more on brandbuilding and other marketing activities that are unlikely to be seen as constituting R&D expenditure. However, it is possible that given the radical nature of their new products, EO firms are likely to consider brand-building expenditures as part of R&D expenditure. The high scores on R&D personnel reported by MO firms may reflect a loose definition of R&D in these firms. Possibly, unlike EO firms, MO firms consider sales and marketing personnel who have occasional involvement in product innovation to be R&D personnel. Future research is needed
ORGANIZATION SCIENCE/VOl. 12, No. 1, January-February 2001
69
to explore the demographic characteristics of the four types of firms proposed here.
Managerial Implications
The results of this study have useful managerial implications. It was found that an alignment between market and entrepreneurship orientation is important for new product performance, timing of market-entry strategy, product quality, proficiency of market launch, and management support for innovation. This finding suggests that managers should plan and implement product innovation efforts within an appropriatecombination of these two firm orientations. Product innovation is recognized as an important strategic activity. Given the increasing interest of managers in market and entrepreneurshiporientations, they need to examine the extent to which these organizationalorientations affect such a strategic activity. This study is an initial step in providing guidance for managers in this respect. The central message from the evidence presented is that the adoption of either market or entrepreneurshiporientation to the exclusion of the other may be a less effective strategy in achieving effectiveness and success in product innovation. If ME orientation is important for organizational performance, the task for managers is how to design and implement organizational processes that are consistent with and support such an orientation.In this respect, managers need to note that decisions on market and entrepreneurship orientations are strategic and require senior management responsibility. Product innovation, however, has its locus at the new product team level (Ancona and Caldwell 1992, Drazin and Schoonhoven 1996). This suggests that managementneeds to institute measures that ensure that employee behaviors congruent with market and entrepreneurship orientations are exhibited at the new product project levels in the firm. Market-based reward systems and provision of resources and support are possible measures management could take to engender such congruency (Kohli and Jaworski 1990). However, management should be cautioned that although high market orientation coupled with high entrepreneurshiporientation may be attractive for product innovation, and may be patently superior over other combinations, it may also be more costly to create because it involves greater emphasis on both orientations.
Study Limitations and Future Research Directions

The limitations of the study need to be taken into account in interpreting the findings. The first question that must be addressed relates to the development of the conceptual scheme used to identify firms with different market and entrepreneurshiporientation combinations. As with any method of firm classification, questions could be raised
regarding the point at which firms need to be classified on the dimensions of market orientation and entrepreneurship. Thus, the results are constrained by the degree to which the classification of firms into the four groups developed here approximatereality (Rick 1992). The second question that must be addressed is whether our findings are generalizable to firms in Australia and other countries. As reported earlier, our sample is a judgmental sample that may not be representativeof all firms in Australia. Given our interest in testing the impact of the alignment between market and entrepreneurshiporientations, this study focused on firms likely to introduce new products. Hence, the judgmental sampling suggests that our results are unlikely to apply to firms in Australia and elsewhere where product innovation may not be of central importance. A third limitation is the study's cross-sectional design. It is acknowledged that market and entrepreneurshiporientations are not stable orientations but take time to evolve and change over time. Hence, our results do not capture the dynamics of these changes and their effects on product innovation. Future research should study how the four types of firms identified here evolve, and their evolutionary paths. For example, it is theoretically and practically important to understand the factors that lead to the development of each strategic type. If ME firms are more effective in product innovation, as our results seem to suggest, how do firms move to this type of orientation? A furtherlimitation is that this study focused on a small set of variables pertaining to product innovation. Future research should investigate other aspects of product innovation. Such a study should also investigate marketing, human resource, and other strategies associated with an alignment of market and entrepreneurship orientation. We also did not examine the dimensions of both orientations because we focus on only four groups of firms. It could be argued that some MO firms may be more competitor than customer oriented (Slater and Narver 1994). Likewise, some EO firms may be cautious and risk averse, or may imitate ratherthan lead productinnovation under certain conditions (Lumpkin and Dess 1996). It would be desirable to examine each of the three dimensions of both orientations in classifying firms into strategic groups in future research. Furthermore,the measures were self-reports, and therefore the potential for common method variance inflating the relationships cannot be completely discounted. However, because common method variance hinders differential validity, it is unlikely that it will lead to the significant differences obtained across the four groups of firms. Further,our factor analysis of all variables measured with
70
ORGANIZATION SCIENCEVol. 12, No. 1, January-February2001
Effects of Market and Entrepreneurship Orientation Alignment oniProduct Inniovation
multiple items did not reveal problems with common method. Nevertheless, future research needs to explore the potential impact of common method variance. Our findings on managerial supportfor innovation hint at a potential avenue for furtherresearch. It indicates the need to study background factors and styles as drivers of each strategic combination of market and entrepreneurship orientation. Hart (1992) and Covin and Slevin (1988) suggest that strategic types require specific or appropriate managerialbackgroundcharacteristics,managerialstyles, and organizational structurefor effective performance. It could be argued that given their high focus on market and entrepreneurshiporientations, ME firms requiremanagers who are young, formally educated, flexible, and have risk-seeking personalities. The extent to which these characteristics might differ from those in EO, MO, and CO firms needs investigation. Finally, the concept of congruent strategic orientations suggests that firms with effective alignment of their strategic orientations perform better than the groups with incongruent orientations (Covin and Slevin 1988, Hart
1992). The rationale is that such firms are likely to have structures and management styles that effectively blend to ensure that these orientations are utilized effectively at the chosen level of emphasis. From this perspective, ME and CO firms are congruent, the former at a higher level and the latter at a lower level. In contrast, MO and EO firms are incongruent. Restated, both of these types of firms have a predominant single orientation suggesting that they are unlikely to be significantly better at product innovation than CO firms that are congruent with respect to both orientations at a lower level. Contraryto this reasoning, our results indicate that the single-orientation firms MO and EO are superiorin product innovation than CO firms. We await future research to help support the results presented here. Acknowledgments
The authorsacknowledgethe valuablecommentsand guidanceof Marshall Poole, senior editor,as well as the helpful suggestionsfrom the anonymous reviewers. This research was partially supportedby a strategic research grantfrom City University of Hong Kong.
Appendix A: Results of Factor Analysis of Measures

Variable Factor 1: Market Orientation: Intelligence Generation We have interdepartmentalmeetings at least once a quarter to discuss market trends and developments. We are slow to detect fundamental shifts in our industry (e.g., competition, technology, regulation) (reverse coded). We periodically review the likely effect of changes in our business environment (e.g., regulation) on customers. We are slow to detect changes in our customers' product preferences (reverse coded). Marketing personnel spend time discussing customers' future needs with other functional departments. In this business we do a lot of in-house market research. We survey end users and customers at least once a year to assess the quality of our products and services. In this business, we meet with customers at least once a year to find out what products/services they will need in the future. Factor Loading
0.77 0.71 0.66 0.65 0.57 0.51 0.48 0.47
Eigenvalue
Percent of Variance Explained Factor 2: Management Involvement in New Product Project Management provides a conducive environment for different functional groups to communicate and understand each other. Management encourages employee participation in innovation decisions. Management does a good job marketing new products to employees. New product activities are important in performance reviews.
9.5
18.3
0.70 0.64 0.61 0.53
Eigenvalue
Percent of Variance Explained Factor 3: New Product Performance Sales and customer use objectives Sales or customer use growth objectives Market objectives since product launch Profit objectives
4.6
8.8
0.84 0.81 0.81 0.73
Eigenvalue
Percent of Variance Explained
3.5
6.8
ORGANIZATION SCIENCE/Vol. 12, No. 1, January-February2001
71
Effects of Market anidEntrepreneurship OrienitationAlignment on Product Innovation
Appendix A: (contd.)
Factor 4: Intensity of Market Competition Extremely aggressive competition Intense price competition Strong competitor sales, promotion and distribution systems Very similar competitor product offerings Eigenvalue Percent of Variance Explained Factor 5: Market Orientation: Intelligence Dissemination When something important happens to a major customer or market, the whole business knows about it in a short period. When one department finds out something important about competitors, it is slow to alert other departments (reverse coded). For one reason or another, we tend to ignore changes in our customers' product/service needs (reverse coded). When we find that customers would like us to modify a product or service, the departments involved make concerted efforts to do so. We periodically review our product/service development efforts to ensure they are in line with what customers want. Eigenvalue Percent of Variance Explained Factor 6: Entrepreneurship Orientation A tendency for low-risk projects (with normal and certain rates of return-A strong tendency for high-risk projects (with chances of very high returns). In dealing with its competitors, my firm: Typically responds to actions that competitors initiate-Typically initiates actions that competitors respond to. Typically seeks to avoid competitive clashes, "live-and-let live preferring a live" posture-Typically adopts a very competitive, "undo-the-competitor" posture. Changes in product or service lines have been mostly of minor nature-Changes in product or service lines have been quite dramatic. A strong emphasis on marketing true and tried products-A strong emphasis on R&D, technological leadership and innovations. Eigenvalue Percent of Variance Explained Factor 7: Innovation Orientation of Human Resource Strategy New product development experience is a definite plus in hiring managers. New product development experience is a definite plus in promotion. There are high rewards for employees who get involved in innovation activities. Managers engaged in new product activities are influential and have high status. Eigenvalue Percent of Variance Explained Factor 8: Marketing Synergy Product fits the sales force, promotion, distribution and delivery system resources and skills of the firm. Product fits marketing research resources and skills of the firm. Product fits the existing customer service resources and systems of the firm. Product fits the requirements for existing company products. Eigenvalue Percent of Variance Explained Factor 9: Market Orientation: Responsiveness to Market Intelligence It takes forever to decide how to respond to our competitors' price changes (reverse coded). Even if we came up with a great marketing plan, we probably would not be able to implement it in a timely fashion (reverse coded). Several departments get together periodically to plan a response to changes taking place in our business environment. If a major competitor were to launch an intensive campaign targeted at our customers, we would implement a response immediately. Customer complaints fall on deaf ears in this business (reverse coded). Eigenvalue 0.79 0.77 0.76 0.67 2.7 5.2
0.68 0.67 0.60 0.60 0.50 2.1 4.1
0.84 0.67 0.58 0.55 0.51 2.0 3.8
0.84 0.80 0.66 0.50 1.9 3.7
0.83 0.74 0.73 0.71 1.8 3.6
0.67 0.56 0.51 0.43 0.41 1.6
Percent of Variance Explained
3.0
72
ORGANIZATION ScIENCE/Vol. 12, No.1, January -February 2001
Effects of Market and Entrepreneurship Orientation Alignment oniProduct Innovation
Appendix A: (contd.)
Factor 10: Product Quality Product provided unique benefits superior to competitors. Customers perceived the product as giving superior performance outcomes relative to the competition. Product provided higher quality than the competitors' product. Eigenvalue Percent of Variance Explained Factor 11: Proficiency of Market Launch The effectiveness of a formal post-launch evaluation procedure Training of production, sales, and front-line personnel undertakenfor launch Effectiveness of tests of the product with customers before launch Eigenvalue Percent of Variance Explained Factor 12: Environmental Hostility Degree of perceived safety-riskiness of the environment for the firm Extent to which environment is rich in marketing opportunities and benign Perceived degree of control the firm has in shaping the environment to its own advantage Eigenvalue Percent of Variance Explained 0.75 0.71 0.60 1.5 2.9
0.79 0.76 0.68 1.3 2.5
0.78 0.69 0.53 1.2 2.4
Endnotes
'We also measured perceived overallorganizational performance with a singleitem askingrespondents indicateon a seven-point to scale the degreeto whichtheperformance thefirmcompares of withcompetitors in the last threeyears.This subjectivemeasureof organizational performance correlated withthe threeobjectivenew product performance measures follows (r = 0.20, p < 0.05), (r = 0.15, p < 0.10), and as (r = 0.18, p < 0.05). These correlations suggest that objectivenew product performance correlates significantly with subjectivefirmperformance.
makingandorgaecology of strategy . 1991. Intraorganizational Organ.Sci. 2(3) Theoryandfieldresearch. nizational adaptation: 239-262. 1994. Calantone, Roger J., C. A. di Benedetto,S. Bhoovaraghavan. and betweendegreeof innovation new Examining relationship the product success.J. Bus. Res. 30 143-148. and structure, environments performance: Child,D. 1972.Organization choice. Sociology6 1-22. The role of strategic A for metaphor straB. Chakravarthy, S. 1982.Adaptation: promising
tegic management. Acad. Management Rev. 7 35-44.
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An Empirical Investigation of the Effect of Market Orientation and Entrepreneurship Orientation Alignment on Product Innovation Author(s): Kwaku Atuahene-Gima

Kwaku Atuahene-Gima * Anthony Ko

(Market Orientation; Entrepreneurship Orientation; Product Innovation; New Product Development)

l/0054/$05.00 1526-5455 electronic ISSN

KWAKU ATUAHENE-GIMA AND ANTHONY KO

Effects of Market and Entrepreneurship Orientation Alignment on Product Innovation

Theoretical Background: Alignment Between Market and Entrepreneurship Orientations

12, No. 1, January-February 2001

KWAKU ATUAHENE-GIMA AND ANTHONY KO

Effects of Market and Entrepreneurship OrienitationAlignment on Product Innovation

ORGANIZATION SCIENCE/VO1.12, No. 1, January-February 2001

KWAKU ATUAHENE-GIMA AND ANTHONY KO

Effects of Market and Entrepreneurship Orientation Alignment on Product Innovation

Market/Entrepreneurship Orientation Combination of Firms

Market-orientedFirms (MO) Low adaptability and environimentalmanagement capability

Conservative Firms (CO) Lowest adaptability and environmiieintal management capability

High Orientation Eintreprencurship

12, No. 1, January-February 2001

KWAKU ATUAHENE-GIMA AND ANTHONY KO

Effects of Market and Entrepreneurship Orientation Alignment on Product Innovation

SCIENCE/VO1.12, No. 1, January-February 2001 ORGANIZATION

KWAKU ATUAHENE-GIMA AND ANTHONY KO

Effects of Market and Entrepreneurship Orientation Alignment on Product Innovation

ORGANIZATION SCIENCE/Vo1. 12, No. 1, January-February 2001

KWAKU ATUAHENE-GIMA AND ANTHONY KO

Effects of Market and Entrepreneurship Orientation Alignment on Product Innovation

ORGANIZATION SCIENCE/Vo1. 12, No. 1, January-February 2001

KWAKU ATUAHENE-GIMA AND ANTHONY KO

Effects of Market and Entrepreneurship Orientation Alignment on Product Innovation

ORGANIZATION SCIENCE/Vo1. 12, No. 1, January-February 2001

ORGANIZATION SCIENCE/VO1.12, No. 1, January-February 2001

KWAKU ATUAHENE-GIMA AND ANTHONY KO

Effects of Market and Entrepreneurship Orientation Alignment on Product Innovation

SCIENCE/VOl. 12, No. 1, January-February 2001 ORGANIZATION

Analysis and Results

12, No. 1, January-February 2001

KWAKU ATUAHENE-GIMA AND ANTHONY KO

Effects of Market and Entrepreneurship Orientation Alignment on Product Innovation

14. 13. 12. R&D

-0.13 0.12 0.34b -0.04 -0.05 -0.17 0.60b

-0.21 -0.11 0.08 0.29a -0.14 -0.09 -

-0.13 -0.02 0.12 0.09 -25a

-0.01 -0.13 0.03 0.02

0.33b -0.32b 0.83b

13 _0.24a 0.43b 0.15

12, No. 1, January-February 2001

KWAKU ATUAHENE-GIMA AND ANTHONY KO

Effects of Market and EnitrepreneurshipOrientation Alignment on Product Itinnovation

ME > EO, MO, CO

3.66 5.93 5.61 5.03

(1) (1) (2) (1)

3.50 5.23 5.04 4.30

(2) (4) (4) (3)

3.04 5.26 6.11 4.91

(3) (2) (1) (2)

2.56 5.24 5.55 3.99

(4) (3) (3) (4)

3.12 5.46 5.50 4.54 4.59 4.29

5.46 (1) 4.95 (1)