ENTREPRENEURIAL ORIENTATION, MARKET ORIENTATION, AND PERFORMANCE IN ESTABLISHED AND STARTUP FIRMS Rob Vitale, San Jose State

University Joe Giglierano, San Jose State University Morgan Miles, Georgia Southern University ABSTRACT

The research further explores the relationships between Entrepreneurial Orientation (EO), Market Orientation (MO), and Performance. In this initial study of 89 respondents, we explored differences between startups and established firms. We also examined whether the constructs and their measurement could be used to produce recommendations for improving performance. Startup companies and established companies showed few differences. The analysis also found that the interaction between EO and MO was positively and significantly related to business performance.

INTRODUCTION
Recent progress in the understanding of entrepreneurial orientation and market orientation, and their effect on business performance, confirms a relationship that researchers have suspected for some time. However, some aspects of this relationship remain puzzling. In addition, the authors have concerns about the measures that are commonly employed by researchers, but seldom used by managers in organizational development. Further, we are interested in drawing usable managerial implications from the research that has been done. At this point, research suggests that if you acquire both an entrepreneurial orientation and a market orientation, your firm will tend to perform better in terms of: (1) market share, (2) speed of market entry, and (3) level of product quality (Atuahene-Gima & Ko 2001). However, we still do not understand precisely what it means for a firm to adopt both an entrepreneurial and market orientation. In this paper we hope to begin to address these issues. One view of a firms business orientation is that it is an underlying foundation for all of its activities, policies, strategies and initiatives (Borch 1947). Miles and Munilla (1993) suggest that business orientations bound and define the relationships between a firm, its stakeholders, and relevant environments. Some of the business orientations that marketing scholars have conceived in attempts to understand how businesses operate and perform include: (1) a marketing orientation (an orientation toward creating value for the customer and the firm by meeting customer needs); (2) an entrepreneurial orientation ( an orientation focused on finding and proactively exploiting opportunity through innovation); (3) a production - cost-focused orientation; (4) a sales orientation; and (5) a
1

quality orientation (see for example Craven, Hills, & Woodruff 1987; Taguchi 1987; Miles, Russell, & Arnold 1995; Becherer & Maurer 1997). Most work on orientations has been driven by an academic interest in understanding what drives business decision making. However, an understanding of business orientations should be quite useful for managers, as well. In particular, both entrepreneurial orientation (EO), and market orientation (MO), have been positively and strongly linked to firm performance in numerous studies (see for example Morris & Paul 1987; Miles & Arnold 1991; Zahra & Covin 1995; Hurley & Hult 1998; Wiklund 1999; Atuahene-Gima & Ko 2001; Miles, Munilla, & Covin 2002; Matsuno, et al 2002). Once entrepreneurs, executives, and managers understand the linkages between performance and orientation, they should have a better idea of how to create better performance. However, we are not yet at the point where the outcomes of the EO/MO research can be used extensively to improve managerial practice. While both MO and EO have generally been associated with higher levels of organizational performance, there has been little work that allows these findings to become actionable for managers. To illustrate the problem, consider one such set of findings in this area. One posited relationship is that market orientation leads to increased innovativeness, which in turn leads to higher organizational performance (Han, et al 1998; Lukas& Ferrell 2000). While this chain of relationships has been found to hold generally, it is not clear why it holds. Product innovation may be influenced by a customer orientation one of the dimensions of market orientation. But does adopting a customer orientation insure that product innovation will occur, or is it simply a contributing factor? For example, work by Christensen & Bower (1995) suggests that staying too close to the customers may result in the firm becoming less innovative. This position is further supported by Atuahene-Gima (1996) who found that market orientation is negatively related to the innovativeness of the product. So, how does a firm adopt a customer orientation that will not result in what Atuahene-Gima (1996) terms the tyranny of the market? Are there a few key activities that lead to customer orientation or do several behaviors taken in concert represent a customer orientation that will allow the firm to still be innovative? Further, is it only some of these activities that lead to superior product innovation or must the firm perform all the customer orientation activities to achieve results? A manager may find the research results appealing, but he or she is still left wondering exactly how these orientations may be operationalized in their firm . It is these kinds of puzzles in the MO, EO, and performance relationships that form the impetus for this research. As mentioned above, one problem in this area of research has been that data reduction efforts have created measures of EO and MO that do not give managers and entrepreneurs any guidance on how to implement higher levels of EO and MO. Another unanswered issue is whether EO and MO are consistent over the life of the firm. In particular, is the
2

operationalization of EO and MO different for startup firms than it is for established firms? In the research reported here, we explored differences between startups and established firms in the measurement of MO and EO and in the relationship between MO, EO and performance. We also examined whether a selfadministered quick audit scale, based on the EO and MO constructs, could be used to produce recommendations for improving a companys performance. BUILDING THE SELF-AUDIT QUESTIONNAIRE: CONCEPTUALIZING MARKETING ORIENTATION AND ENTREPRENEURIAL ORIENTATION Our concerns and prior explorations into this area instigated investigations in some new directions. First, we wanted to create an instrument that entrepreneurs and managers could use to diagnose their own situations and make decisions on actions they could take to improve their performance. The reason for doing this was obvious: the measures of the orientations provide little guidance on how an entrepreneur or manager can improve their performance. A second reason was to offer the respondent more reason for completing and returning the questionnaire. Accordingly, we set out to expand the number of questions and cast the questionnaire as a self-audit that offered the respondent an immediate benefit guidance on what can be done to enhance either MO or EO providing incentive for answering the questions. The first version of the questionnaire was based on the MO dimensions conceived by Kohli and Jaworski (1990) and Narver and Slater (1990). EO dimensions were drawn from Covin and Slevin (1989) and the subsequent refinement done by other researchers (see for example Morris & Sexton 1996). The initial MO conceptualization then had dimensions of 1) knowledge of the market, 2) constant updating and dissemination of this knowledge base throughout the organization, and 3) translation of this knowledge into strategies and plans that produce value for customers. The initial EO conceptualization had dimensions of 1) innovativeness, 2) a pro-active, aggressive tendency to discover/create and exploit environmental opportunities; and 3) a willingness to take and manage risk. Through an iterative series of interviews with entrepreneurs, executives, and managers, the initial set of questions were expanded, reduced, and refined. This editing process was undertaken to obtain questions that would distinguish between standard practice and best practice, as observed by the respondents through their experience. Finally, the number of items needed to be pared down to fit in limited space on the questionnaire. Since one of the purposes of this exercise was to make the questionnaire easy to answer, it was crucial to reduce its length. We eventually compressed it to a single page each for the EO and MO questions. To help calibrate the EO and MO scores to obtain a sense of the
3

relationship between the measures and how entrepreneurial or market oriented a company actually is -- global measures of the companys current degree of market orientation and entrepreneurial orientation were added, along with questions on how market oriented and entrepreneurially oriented the respondent thought the company needed to be. METHODOLOGY At this point the analysis is exploratory. We obtained a first data set, whose analysis can suggest relationships and further analysis. The key questions we address in this paper are: 1) What is the relationship between MO, EO, and business performance? In particular, how do startup companies and established companies compare on EO, MO, and business performance? What other patterns or relationships emerge from an exploratory analysis of sample data?

2)

We distributed the questionnaire by having MBA students provide it to a judgment sample of managers and executives in both start-up and established firms. This was done for the first time in the fall of 2002. Ultimately, one important aim of research in the areas of marketing and entrepreneurship is to understand the factors contributing to the performance of a company or venture. Based on feedback at this stage, we revised the performance portion of the questionnaire and made some other minor alterations. The first measures of performance that were used were objective measures of sales growth, profitability and cash flow, compared to the business units objectives, at the end of the companys most recent fiscal year. We found that respondents had difficulty with the objectives part of this measurement scheme, since most companies had seriously revised their objectives downward as the economy worsened. Consequently, we resorted to a Sinking or Swimming measure in which the manager compares the end-of-year performance of the company with that of a swimmer (who is swimming, struggling, or sinking). This fits well with the findings of Chandler and Hanks (1993) who found that managers tend to provide more accurate performance information when characterizing their performance in broad categorical measures. Measuring performance using analogies makes the information much less competitively and ego sensitive, so executives were more willing to answer such questions. These findings also put to rest the concern over the validity and reliability problems associated with memory dependent measures. The questionnaire was administered again through a subsequent MBA class in the winter of 2003, this time including entrepreneurs among the respondents.
4

This paper reports the initial results of data analysis of the two data sets. The first set has 43 respondents; the second has 46 respondents. For most analyses, the two data sets can be analyzed together. Tables 1 through 3 provide summary statistics for the combined data set. Table 1 shows mean scores or proportions on the measures that were not items in the EO and MO scales. Table 2 shows mean scores for all the items in MO scale; Table 3 shows mean scores for items in the EO scale. Table 1: Characteristics of the Respondents Measure N = 89 25 63 75 14 21% of sample 78% 85% of sample 15%

Characteristic Sample size

Startup Companies Established Companies Technology Companies Non-technology companies How entrepreneurially oriented is your organization? For your market, how entrepreneurial do you think your organization should be? How market oriented is your organization? For your market, how market oriented do you think your organization should be? Performance

4.85 mean (7 = Very entrepreneurial; 1 = Not at all) 1.452 s.d 5.77 mean 1.112 s.d.

5.17 mean (7 = Very market oriented; 1 = Not at all) 1.387 s.d. 6.35 mean 0.898 s.d.

3.55 mean (5 = Swimming like an Olympian; 1 = Sinking like a rock) 0.932 s.d.

Growth Objective Aggressive growth Patient Growth Stasis

23 32 15

26% of sample 36% 17%

5

Moderate Reduction Aggressive Reduction No Objective Set

8 7 1

9% 8% 1%

Table 2:
Means of EO Variables and Correlation with Performance mean
3.47 3.67 3.31

Innovating

Corr. w/perf.
.252* .180 .375**

Finding new businesses or markets to target Creating new products that will provide value to new or existing customers Finding non-product ways to create value for new or existing customer, such as through distribution channels, sales force, advertising Finding ways to create value for new or existing customers through partnerships with other vendors

3.19

.180

Acting Proactively
Beating competitors to enter new markets Introducing new products or services before your competitors do Improving value to your customers through nonproduct means- such as through distribution, advertising, or other communications- before your competitors do Pricing proactively (so competitors have to react to your prices) Creating partnerships with the best partners in the industry before competitors enlist them Pushing costs lower faster than competitors do Re-engineering your processes to make them more efficient than your competitors processes Improving the quality or the number of features of your products or services before your competitors do 3.14 3.26 3.26 .253* .198 .338**

3.01 3.23 2.91 3.43

.127 .256* .150 .377**

3.56

.186

Managing Risks
There is almost always a way to avoid failure, one way or another To make effective changes to our offering, we must be willing to accept at least a moderate level of risk of significant losses 3.61 3.74 .104 .211

The risk of missing an opportunity is just as important as the risk of failure: it is important not to miss significant opportunities

4.04

.271*

If a manager takes a risk and fails, 3.62 he or she shouldnt be punished * significant at p=.05; ** significant at p=.01.

.191

Table 3: Means of MO Variables And Correlation with Performance Knowledge of Market

Needs of the most important customers Important needs of average customers Decision processes of the most important customers Decision processes of average customers Toughest competitors strategies Newest competitors strategies Toughest competitors weaknesses Newest competitors weaknesses Channel partners' plans and methods Regulatory trends in your industry 4.24 3.43 3.66 3.08 3.53 2.83 3.67 2.85 3.01 3.64 .291** .220* .347** .350** .330** .159 .296** .139 .396** NC

Dissemination of Market Information

Updating knowledge of customers Updating knowledge of competitors Updating knowledge of distribution channels Updating knowledge of govt. regulations in your industry Disseminating information about customers throughout your firm Disseminating information about competitors throughout your firm Disseminating information about distribution channels thru your firm 3.67 3.37 2.98 3.35 3.18 3.27 2.82 .530** .307** .298** NC .271* .095 .125

Disseminating regulatory information throughout your firm

2.94

NC

Marketing Activities Contribution to Customers Value

Planning marketing strategies based on info in Section A Translating your marketing strategies into implementation plans Performing personal selling Performing marketing communications Performing distribution Performing customer service and technical support Performing pricing (setting and negotiating prices) 3.42 3.69 3.64 3.45 3.45 4.27 3.90 .316** .329** .104 .217* .329** .314** .219*

*significant at p=.05; **significant at p=.05; NC = Not calculated (n too small)

FINDINGS The quick audit instrument can be obtained from the authors. The initial psychometric assessments of the quick audit instrument are encouraging. Internal consistency, or reliability, as measure by Cronbachs Alpha score, was .90 for the marketing orientation scale, and .88 for the entrepreneurial orientation scale. Table 4 summarizes the reliability analysis. Table 4: Reliability Analysis of Marketing and Entrepreneurial Orientations Quick Audit Scales Quick Audit Scale Marketing Orientation Entrepreneurial Orientation Coefficient Alpha .9237 .8776 Number of Items 22 (n=88) 16 (n=88)

Maximum likelihood factor analysis was used as a validity check, with the both marketing and entrepreneurial orientations scale appearing to be unique and consistent constructs based on scree analysis.

Comparison of Established Companies to New Companies One of the key questions we wanted to address was whether startup companies have different EO and MO than established companies. We would expect startup companies to think and act more entrepreneurially than established companies. Over time, we would expect management in companies that become established to become somewhat less entrepreneurial as they attend more to the dictates of their established customer base (Christensen 1997). With respect to market orientation, arguments can be made in both directions, that startup companies may be either more or less market oriented than established companies. We might expect them to be more market oriented than established companies because they need to be market oriented to be able to exploit unmet customer needs. Conversely, we might expect startups to be less market oriented because they have not yet built up the resources or systems to do a good job of learning about customers and market dynamics. Neither have they learned to use this information in formulating and executing strategy. Consequently, we made some comparisons between startups (n=25 in this sample) and established companies (n=63). Initial comparisons on the dimensions of EO and MO produced few significant differences between startups and established firms. One difference that did appear significant pertained to the means scores on the question, How entrepreneurially oriented is your organization? Respondents in startups considered their companies to be much more entrepreneurial than the respondents in established companies. The mean for startups was 5.77 on a 7-point scale, where 7 = very entrepreneurial; the mean for established companies was 4.48 (p = .01). Startup respondents also felt that they were close to being as entrepreneurial as they needed to be. Startup respondents had a mean score of 5.91 (where 7 was very entrepreneurial) on the question For your market, how entrepreneurial do you think your organization should be? Established company respondents were similar, scoring a mean value of 5.70 on the same question. Thus, for respondents in startup companies, there was a mean difference of 0.14 between how entrepreneurial they believed themselves to be and how entrepreneurial they thought they should be; for established companies the mean difference was 1.22. These differences were statistically different (p = .01). Given that there were no differences in their actual scores on the entrepreneurial scale items, it would appear that respondents in entrepreneurial companies think of themselves as more entrepreneurial than do their counterparts in established companies. The question then is whether the firms in the sample are highly entrepreneurially oriented or less so. Since we have no comparison data, we can make no interpretation of the companies EO and MO scores with respect to an objective reality. Instead we have to examine the raw scores and make a preliminary judgment on how high or low they are in an absolute sense. With more data in the future, well be able to better calibrate the scores, and establish categories
9

of score ranges that would have implications for managerial use of the instrument as a self-audit. In the meantime, we can draw some preliminary observations and conclusions. Table 5 shows the mean scores for the dimensions of MO and EO. As can be seen the mean scores range from a low of .6518, for Proactiveness (on the EO scale), to a high of .7584 for Propensity for Taking Managed Risk (also on the EO scale). The scores represent the proportion of the maximum allowable score on each dimension. These scores indicate a high level of propensity to accept managed risk. So even though we do not have more data for comparisons sake, we might suggest that these scores are indicators of a strong EO. This would mean that the respondents in the established companies actually perceive their companies to be less entrepreneurial than they actually are. The respondents in startup companies may actually be fairly accurate in their assessment. We will explore the possible implications of these findings in the final section of this paper. Table 5: Mean Scores on EO and MO Dimensions For All Respondents And Correlations with Performance

*Mean Market Orientation Market Knowledge Information Dissemination Contribution to Customer Value .6744 .6446 .7394

**Corr. with Perf .372 .351 .390

Entrepreneurial Orientation Innovativeness Proactive-ness Risk management .6861 .6518 .7584 .348 .340 .334

10

MO X EO Interaction Total MO Total EO

.4929 .6861 .6998

.446 .417 .401

*Each Dimension Score is a decimal proportion of the total possible score, except MO X EO, which is the product of MO and EO for a respondent) **Performance is measured on a 5-point scale: 5 = Swimming Like an Olympian; 1 = Sinking Like a Rock All correlations are significant at p = .01

Exploratory Analyses: Cluster Analyses Once we determined that there were no differences between startups and established companies in terms of EO, MO, and perceived business performance, we looked for other patterns to help us understand the structure and relationships in the data. We started this analysis with a series of cluster analyses. The idea here was to look for companies that were similar in terms of the activities included in the two orientations. The results were striking. Using a K-Means cluster analysis method, we started by specifying an 8-cluster solution. We started with 8 because this would have given us approximately 10 firms per cluster if the data were evenly distributed (after dropped cases and outliers). We continued running cluster analyses using successively fewer clusters. The most interpretable clustering results arose when 4 or 5 clusters were used. In each instance, one cluster had to be discarded because it had too few members. Table 6 shows the cluster solution when four clusters were used. One cluster was dropped because it contained only two members. Three clusters remained. As can be seen from the mean values for the variables, Cluster 1 is a cluster in which firms are highly EO and MO. Cluster 2 is a cluster in which the firms score low in terms of EO and MO. Cluster 3 firms exhibit medium levels of EO and MO component values.

11

The interesting observation is that the clusters produced were so consistent in the correspondence of EO and MO scores. The robustness of this correspondence in scores is reinforced by K-means analyses with higher numbers of clusters specified. At five, six, seven and eight cluster solutions, the same three clusters dominate. Smaller clusters show variations from these archetypes, but are not vastly different. In other words, the archetype clusters of the 4-cluster solution are not simply averages of wildly divergent sub-clusters. The archetypes do tend to dominate -- at least in this small-sized data set (the data set and cluster solutions are available for other researchers wanting to examine the data). Table 7 shows the variables that tended to distinguish cluster membership. These were not the highest or lowest scoring variables, but rather the variables, which showed the greatest differences from cluster to cluster.

Table 6: Cluster Analysis Results 4 Cluster Solution (3 Clusters remain after one small cluster is dropped) Cluster 1: High EO plus High MO (n = 27)
Variables with highest scores at Cluster Center: Most important customers needs -- 5 Regulatory trends -- 5 Performing customer service & tech support -- 5 Performing pricing -- 5 Important not to miss significant opportunities 5 Variables with lowest scores at Cluster Center: All others had score of 4

Cluster 2: Low EO plus Low MO (n = 17)

Variables with highest scores at Cluster Center Most important customers needs 4 Performing customer service and tech support 4 Variables with lowest scores at Cluster Center: All others had scores of 2 and 3

Cluster 3: Medium EO plus Medium MO (n = 44)

Variables with highest scores at Cluster Center Most important customers needs -- 4 Most important customers decision processes 4 12

Toughest competitors weaknesses -- 4 Updating customers knowledge -- 4 Translating marketing strategies into implem. Plans 4 Performing personal selling 4 Performing customer service and tech support 4 Performing pricing 4 Creating new products - 4 Improving quality or features before competitors 4 All risk management variables -- 4 Variables with lowest scores at Cluster Center: Disseminating regulatory information 2 All others had scores of 3

Table 7: Cluster Analysis Results -- 4 Cluster Solution Variables Contributing Most to Cluster Differences (Highest F Values) Knowing toughest competitors weaknesses Improving quality or features before competitors Disseminating competitors information Knowing toughest competitors strategies Creating partnerships with the best in industry before competitors do Knowing newest competitors strategies Disseminating customers information Knowing most important customers decision processes Knowing most important customers needs Knowing newest competitors weaknesses Introducing new products before competitors Improving value through non-product means
13

F = 44.5 28.5 27.6 21.5 20.7

20.2 20.1 19.1

18.7 16.5 16.4 16.0

before competitors Disseminating distributor channels information 16.0

While the structure of the clusters was unexpected, even more remarkable is the business performance associated with each of the three archetypes. As shown in Table 8, the average performance score is highest for the High MO/High EO group and lowest for the Low MO/Low EO group. The Medium MO/Medium EO group produces a performance score in between. The High/High clusters performance is significantly different from the other two. Table 8: Mean Performance Scores for Three Clusters Cluster Mean Performance (5 = Swimming like an Olympian; 1 = Sinking like a Rock)

High MO / High EO N = 27 Medium MO / Medium EO N = 44 Low MO / Low EO N = 16

4.08*

3.48

2.94

* significantly different from other two means, p=.05 Exploratory Analyses: Correlations and Regressions In measuring EO and MO, researchers have usually totaled the scores from the elements to arrive at total EO or MO scores (c.f. Kohli and Jaworski 1990, Narver and Slater 1990, Covin and Slevin 1989). We have created dimension scores and total EO and MO scores in a similar fashion, though we have had to adjust for the earlier half of the data set lacking questions on regulatory market information.

14

Consequently, our dimension scores are depicted as a decimal proportion of the total score possible on dimension-related questions. The total score for EO or MO then is the sum of the dimension scores. Before examining the regression of EO and MO on the dependent variable of business performance, we examined simple bivariate correlations among the individual scale items and between these items and performance. Referring back to Tables 2 and 3, it is apparent that almost half of the EO variables and nearly all the MO variables are significantly correlated with performance. This suggests that no single variable or small group of variables is driving a relationship with performance. The implication is that the orientations are indeed holistic and reflect underlying attitudes of entrepreneurial opportunity seeking and focus on customer value. Referring back to Table 5, correlations between the dimensions of EO and MO with performance are shown. These are significant and reinforce the idea that the orientations are holistic in their association with performance. Table 9 shows the results of a regression analysis of EO and MO on performance. The overall equation is significant at the p = .000 level. The individual variables have betas that are not significant, though the MO variable approaches significance at the p = .10 level. This suggests that the correlation between EO and MO in this sample is too great to allow interpretation of the individual effects. This result is not unexpected, given the results of the cluster analysis in which firms levels of EO and MO tended to correspond. This overall pattern again reinforces the holistic nature of EO and MO. The correspondence is perhaps too strong and may suggest that the data collection has produced some biases. Table 9: Regression Analysis of EO and MO on Performance

Model Summary R = .430 Coefficients Variable Constant MO EO B 1.270 1.915 1.415 Std. Error 0.566 1.184 1.323 t 2.245 1.617 1.061 Sig. .028 .110 .292 R square = .185 Std. error of est. = .859 F = 9.081

15

ANOVA Sum of Squares 13.393 58.993 72.386 df 2 80 82 Mean Square 6.696 0.737 F (Sig.) 9.081 (.000)

Regression Residual Total

LIMITATIONS, CONCLUSIONS AND DISCUSSION

This study is exploratory in nature and the results cannot be generalized beyond the non-random judgment sample used. In addition, the scales and score ranges are still undergoing development and we hope that this manuscript stimulates further work on the development of managerially useful MO and EO instruments. The exploratory analyses produced three principal conclusions, tentative as they are. The first conclusion is that there is very little difference in EO, MO, and performance between startups and established companies in this data set. We would expect more divergence, both for EO and MO. We believe that two factors may be influencing this result. The first is that the questionnaire itself may tend to suggest a relationship between EO, MO and performance and the respondents provide the answers that fit this relationship. This is a distinct possibility and future data collection efforts will have to be more careful to not lead the respondents. However, the difference in perceived entrepreneurial orientation (as opposed to the measured orientation) between startups and established companies tends to suggest that respondents were not biased very much by question wording or questionnaire directions. Hence the findings may have some validity. If that is the case, then an implication can be drawn for established companies. They indeed may benefit from use of a self-diagnostic tool. Managers and executives in established companies may not a have a good idea of how entrepreneurially oriented their company is, so measurement with the self-audit could provide needed data upon which improvements could be made. In other cases, established firms need a managerial useful and practical metric to determine if organizational development efforts, such as British Gas Technologys project to use a corporate venturing initiative to create a more entrepreneurial business orientation are successful (see Miles and Covin 2002). The second conclusion concerns the relationship between EO, MO, and performance. The striking results that the interaction of EO and MO is associated with performance, combined with the widespread correlation between
16

individual scale items and performance suggests that the orientations are indeed just that orientations. Businesses cannot create superior performance by focusing on only a few EO or MO activities. A range of activities must be done and to accomplish this, the company probably needs to organizationally adopt the attitudes underlying the two orientations. Without organization-wide MO and EO attitudes, it could prove too difficult to score higher on so many activities. The third conclusion is the use of the questionnaire as a self-audit. The patterns in the data associated with higher levels of performance include higher scores across the board in both EO and MO. Hence, individual companies can examine their own scores and the items on which they score lower can be candidates for improvement. If a whole dimension is scored low, then the underlying attitude needs to be addressed. There are no silver bullets no variables stood out as good proxies for a dimension or for the entire orientation. A company cannot improve their fortunes by focusing on a few variables at the expense of the rest. We set out looking for those silver bullets and found the opposite to be the case. In the future, this research must be refined with a more rigorous sampling frame. We still want to examine relationships between the orientations and performance under differing conditions different industries, different cultures, and different stages of the product life cycle. Further, we want to take a closer look at differences between startups and established companies. The measures for startups need to be examined for appropriateness to their situations. Performance needs to be defined in different terms, as well. Even if global measures are used, such as the sinking or swimming scale used in this research, they must be calibrated to be better understood.

17

REFERENCES Atuahene-Gima, K 1996. Market orientation and innovation. Journal of Business Research. 35(2), 93-104. Atuahene-Gima, K. & A. Ko 2001. An empirical investigation of the effect of market orientation and entrepreneurship orientation on product innovation. Organization Science. 12(1), 54-74. Becherer, R. C. and J. G. Maurer 1997. The moderating effect of environmental variables on the entrepreneurial and marketing orientation of entrepreneurled firms. Entrepreneurship Theory and Practice. 22(1), 47-58. Borch, F. J. 1947. The marketing philosophy as a way of business life. New York: General Electric. Bower, J.L. and C.M. Christensen 1995. Disruptive technologies: Catching the wave. Harvard Business Review. 73(1), 43-54. Brown, T. E., P. Davidson, and J. Wiklund 2001. An operationalization of Stevensons conceptualization of entrepreneurship as opportunity-based firm behavior. Strategic Management Journal. 22, 953-968. Chandler, G. N. and S. H. Hanks 1993. Measuring the performance of emerging businesses: A validation study. Journal of Business Venturing. 8(3), 391408. Christensen, Clayton 1997, The Innovators Dilemma, Boston MA: Harvard Business School Press. Covin, J. G. and D. P. Slevin 1989. Strategic management of small firms in hostile and benign environments. Strategic Management Journal. 10(January), 75-87. Craven, D. W., G. E. Hills, and R. B. Woodruff 1987. Marketing management. Homewood, IL: Irwin. Greenley, Gordon E. and Gordon R. Foxall 1998. External moderation of associations among stakeholder orientations and company performance. International Journal of Research in Marketing. 15, 51-69. Han, Jin K., Namwoon Kim, and Rajendra K. Srivastava 1998. Market Orientation and Organizational Performance: Is Innovation a Missing Link? Journal of Marketing. 62(October), 30-45.

18

Hurley, Robert F. and Tomas M. Hult 1998. Innovation, market orientation, and organizational learning: An integration and empirical examination. Journal of Marketing. 62(3), 42-54. Kohli, A. K. and B. Jaworski 1990. Market orientation: The construct, research propositions, and managerial implications. Journal of Marketing. 54(2), 1-18. Kotler, P. 2000. Marketing management. Upper Saddle River, NJ: Prentice-Hall, Inc. Lukas, Bryan A., and O. C. Ferrell 2000. The effect of Market Orientation on Product Innovation. Journal of the Academy of Marketing Science. 28(2), 239-247. Lumpkin, G. and G. G. Dess 1996. Clarifying the entrepreneurial orientation construct and linking it to performance. Academy of Management Review. 21(1), 135-172. Matsuno, Ken, John T. Mentzer, and Aysegul Ozsomer 2002. The effects of Entrepreneurial Proclivity and on Business Performance, Journal of Marketing. 66(July), 18-32. Miles, M. P. and D. R. Arnold 1991. The relationship between marketing orientation and entrepreneurial orientation. Entrepreneurship Theory and Practice. 15(4), 49-65. Miles, M. P. and L. S. Munilla 1993. Eco-orientation: An emerging business philosophy. Journal of Marketing Theory and Practice. 1(2), 43-51. Miles, M. P., G. R. Russell, and D. R. Arnold 1995. The quality orientation: An emerging business philosophy. Review of Business. 17(1), 7-15. Miles, M.P. and J.G. Covin 2002. Exploring the practice of corporate venturing: Some common forms and their organizational implications. Entrepreneurship Theory and Practice, 26(3), 21-40. Morris, M. H. and G. Paul 1987. The relationship between entrepreneurship and marketing in established firms. Journal of Business Venturing. 2(3), 247-259. Morris, M. H. and D. L. Sexton 1996. The concept of entrepreneurial intensity: Implications for company performance. Journal of Business Research. 36, 513. Naver, J. C. and S. F. Slater 1990. The effect of a market orientation on business profitability. Journal of Marketing. 54(4), 20-35.

19

Taguchi, G. 1987. The evaluation of quality. 40th Annual Quality Congress Transactions. American Society for Quality Control. Wiklund, J. 1999. The sustainability of the entrepreneurial orientationperformance relationship. Entrepreneurship Theory and Practice. 24(1), 3747. Zahra, S. A. and Covin, J. G. 1995. Contextual influences on the corporate entrepreneurship-firm performance relationship: A longitudinal analysis. Journal of Business Venturing, 10(1), 43-58.

20