How will Market Orientation and External Environment Influence the Performance Among SMEs

Many researchers have explored the relationship between market orientation and firm performance in manufacturing and services industries but such studies in agro-food SMEs are scarce. Previous research conducted has conceptually and empirically supported the notion that market orientation independently or collectively have positive correlations with the business performance of organization (such as Narver and Slater, 1990; Jaworski and Kohli, 1993; Lee and Peterson, 2000). The aim of this paper is to examine the marketing practices and the marketing orientation-business performance relationship among SMEs in agri-food sector in Malaysia. This study also investigated the role of the external environment in the market orientation-performance linkage. From an analysis of a survey data of 102 agri- food organizations, three dimensions namely customer-competitor orientation, inter-functional coordination and information dissemination extracted from factor analysis result of market orientation. The study revealed that customer-competitor orientation and information dissemination were positively related to business performance. In terms of the role of external environment, two dimensions produced by factor analysis, market-technology turbulence and competitive intensity did not moderate the relationship between market orientation and business performance. Findings are discussed and implications are highlighted