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Market Orientation, Relationship Marketing Orientation, and Business Performance: The

Moderating Effects of Economic Ideology and Industry Type


Author(s): Leo Y. M. Sin, Alan C. B. Tse, Oliver H. M. Yau, Raymond P. M. Chow and Jenny S.
Y. Lee
Source: Journal of International Marketing, Vol. 13, No. 1 (2005), pp. 36-57
Published by: American Marketing Association
Stable URL: http://www.jstor.org/stable/25048999 .
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Market

Orientation,

Marketing
Performance:
Economic

Relationship
and Business
Orientation,
The Moderating
Effects

Ideology
ABSTRACT

and

Industry

of

Type

This study examines how economic


moderate

the impacts
orientation

marketing

through a survey of firms

data

collected
China

ideology and industry type

orientation
and
of market
on business
performance.

and Hong

Kong.

selected

They

relationship
The authors

in both Mainland
two

these

economies

they have similarities in cultural dimensions and dif


ferences in economic dimensions. The authors find support for
the moderating effect of economic ideology and industry type
on the link among market orientation, relationship marketing
because

and

orientation,

Leo Y.M. Sin,


Alan C.B. Tse,
Oliver H.M. Yau,
P.M. Chow,
Raymond
and Jenny S.Y. Lee

Because
more

business

performance.

of the globalization
and more
companies

strategies
requires
associated

decades,
outlook

global

becomes their market. The growth


of business and markets has led to

through which the world


in the internationalization
a greater

the past

process
during
have
adopted

need

for analysis
of the role and the effectiveness
of
an
in different
markets.
Such
geographic
analysis
an examination
are
of whether
strategies
particular
with

market

particular

and with

characteristics

(Manu
particular kinds and levels of business performance
that
Some
studies
have
differences
1992).
previous
suggested
in the market
the
which

environments

of

types
strategies
in turn influence

Rhee 1989; Manu


cations

of different

companies
develop
business
performance

influence
and
(Douglas

1992). The findings have significant

localization

particular

choice

aspect

we

of the strategies

adopt,
and

impli

or strategy
which
has

standardization
of strategy
in international
business
operations,

for the

been the most debated topic throughout


global business (Levitt 1983).
The

countries

that

in

the past decades

to investigate

chose

involves a firm's market orientation


(MO) and relationship
is an
Given
orientation
that marketing
(RMO).
marketing
boundary-spanning
adaptive,
that the business-environment

impact of different
performance.
operating
Submitted

November

2003

Accepted

September

2004

? Journal of International
Marketing
Vol. 13, No. 1, 2005, pp. 36-57
ISSN 1069-031X

Such

are unlikely

studies
or intending

should

we

function,

context

types of marketing

in China

The basic premise


different business

business

be

to enter

believe

moderate

may

the

strategy on business
important
the Chinese

for

firms

market.

of this article is that the characteristics of


environments
suggest that MO and RMO

to have

similar

influences

across

Leo

36

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all markets.

Y.M.

Sin

et al.

The

of external,

effects

by examining

different

approach
exogenous

to the organization

ster
how
of MO

and RMO

This

affects

and

reinforces

the firm (Deshpand?


of this

the purpose
Thus,
1989).
the business-environment

the

and Web

is to examine

research

context

on business

and

a variable

environment

that

norms and behaviors within

studied

economies

environments.

market

the market

considers

can be

factors

in different

based

companies

across

markets

environmental

moderates

the

effect

performance.

Using a survey design, we collected data from firms in two


China and Hong Kong. We
Chinese economies: Mainland
selected Hong Kong and Mainland
China because of their
contrasting

economic

and

political

cal economies

of Hong Kong

the politi

First,

systems.

and Mainland

differ

China

is
is a market-driven
and
economy
Kong
in
of the most
economies
and
free
the
open
is an economy
China
world.
that is
Mainland
Conversely,
a transition
a
a
to market
from
system
undergoing
planned
Hong
one

markedly.
considered

driven
constitutes

in Mainland
the home market
China
Second,
system.
more
1.2 billion
than
Chinese
consumers,

lion

6.7 mil

is approximately
the gross national

home market
Hong Kong's
consumers.
In 2003,
Chinese

whereas

product

in Mainland China
per capita was approximately US$1,100
in Hong Kong (World Bank Group
compared with US$25,430
2003). Thus,
eties provide

eralizability
The

the political

first

of this

section,

we

article
review

and RMO to provide

MO

describe

systems

contrasting

sufficiently

to test

soci
the gen

of the MO and RMO models.

remainder

the

of the two Chinese

economies

is organized
previous

a basis

into

six

research

In

sections.

that

relates

to

for this study. Then, we

the conceptual
and research
framework
hypotheses.
sam
review
the research
methodology,
including
We assess
and measures.
the reliability
data collection,

we

Next,
pling,

and validity of the MO and RMO concept. We then present


the results of the tests of the hypotheses. Finally, we discuss
for further
the managerial
and directions
implications
research.
As

a fundamental

construct

in marketing,

of attention
from marketing
great deal
and Jaworski
1990; Kumar,
Subramanian,

has

MO

received

scholars

(e.g.,
and Yauger

Kohli
1998;

Previous Research
and RMO

to Kohli and Jaworski


and Slater 1990). According
(1990), whereas the marketing concept is commonly defined
as a philosophy or way of thinking that guides the allocation

Narver

of resources

the formulation

sets

of activities?intelligence
and responsiveness
dissemination,
the
represent
operationalization

Market

of strategies

for an organiza

is considered the activities involved in the imple


of the marketing
concept.1 With this definition,

tion, MO
mentation
three

and

Orientation

generation,
to market
of MO.

and Relationship

intelligence

intelligence?
Narver
and Slater

Marketing

Orientation

37

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on MO

(1990) and Ruekert (1992) also report similar conceptualiza


tions and scales and test them for reliability and validity.
a
stream
In the past decade,
of research
steady
on
MO
of
business
the impact
performance.

on

association

the

focused
and

a summary of prior empirical

(2000) provide

leagues
on

has
Sin

MO

between

and

business

col

studies

performance;

they report that nearly all studies find support for a positive
association

such

MO

between

measures

in these

used
as

on

return

and

share,
ment
and

esprit

de

sales

investment,

to soft measures,

Performance

performance.
from
range

studies

including

hard

measures,
and

growth,

market
commit

organizational

corps.

literature on MO has provided sufficient evidence


Although
of the positive relationship between MO and firms' business
some

performance,

have

scholars

the

highlighted

importance

of RMO for firms to compete effectively (Perrien, Filiatrault,


and Ricard 1992). Berry (1983, p. 25) formally introduces the
of relationship
and
ing, maintaining,

concept

it as "attract

defines

marketing

and

enhancing

customer

relationships."

definition
Gr?nroos (1991) proposes a more comprehensive
and delineates relationship marketing as attempts by firms to
and enhance
maintain,
establish,
at a profit
tomers
and other parties

all the parties are met by mutual


after

Furthermore,

promises.

of relationship

definitions

cus

with
relationships
so that the objectives

exchange

of

of 26

review

comprehensive

marketing,

of

and fulfillment

Harker

(1999, p. 16)

"An

the
organization
following
description:
maintain
and
in
developing,
creating,
engaged
proactively
with
and
interactive,
exchanges
profitable
ing committed,
over
in
is
rela
time
customers
selected
engaged
(partners)

proposes

tionship marketing." Although the preceding definitions dif


fer somewhat, they all indicate that relationship marketing
focuses

on

individual

relationships

in nature, and that both parties

benefit.
relationship
buyer-seller
the relationship
from a firm's perspective,
marketing
as a
can be viewed
of doing
business
philosophy
in each

the

that

relationships,

buyer-seller

are longitudinal

individual

In short,
concept
success

or as a distinct
that places
culture/value
organizational
fully
strate
center
of
firm's
the
the
at
the buyer-seller
relationship

gic or operational thinking. Limited empirical research has


examined the relationship between RMO and business per
formance. Several studies in the past decade have indicated
that

on firms'
impact
positive
studies
Smith
(1991)
example,
sector
that rela
and finds
insurance

marketing
relationship
For
business
performance.
direct
tionship

Using
validate
nication,

marketing

in the
helps

marketing

has

maximize

long-term

firms in China, Sin and colleagues


a scale made
shared

value,

up

of six
empathy,

profitability.

(2005) develop

subscales?bonding,
reciprocity,

Leo

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and

commu
and

Y.M.

trust?and

Sin

et al.

a significant

find that RMO yields


tion

of the

firms'

impact on the determina

performance.

Despite the rich body of literature that supports the positive


there is
relationship between MO/RMO and performance,
on
work
the
little
between
competi
relationship
relatively
environment

tive

and

relative

the

of MO

importance

and

RMO.

that a firm can

Both MO and RMO are strategic orientations


in various

adopt
firm's

competitive

in the

acteristics

choice,

in the

the conditions

Previous

and marketing
should
consider

management
that firms

strategics
established

on

degrees,
depending
environment.

in

studies

literature

have

firmly
char

environmental
and

development,

implementation

of strategy (Lusch and Lusch 1987; Slater and Narver


firms'

Often,
ora,

reflect

their

strategies
Tower
and

Hartman,

the

external

1994).

conditions

(Seb
and

Hambrick

1994).
(1983)
and Pride
shown
that the
McKee,
(1989) have
Varadarajan,
a
on
of
orientation
effectiveness
strategic
particular
depends
the dynamics
of the business
environment.
Thus,
depending
on

a firm

of the competitive
environment,
different
levels
of performance
that

the characteristics

may

experience

on its choice

tingent

of the appropriate

are con

of MO

blend

and

RMO.
This

follows

study

the

environment-strategy-performance
a
company's
perform
and the strategy
pur

This

Conceptual
Framework
and Hypotheses

that
suggests
paradigm.
paradigm
ance
is a function
of market
conditions

sued (Lenz 1981). Manu


provide

empirical

With

the

present

and Snow

(1978)

environment-strategy-performance
our
framework
conceptual
in

embedded
two

include

in Figure

factors,

the

that
We

context.

economic

and

ideology

in the middle

Conceptual

we

paradigm,
1. First,

business-environment

the two ellipses

industry, which
and
represent
the "workplace

the

contextual

Development

for this viewpoint.

comprises MO and RMO and its consequences

model
are

(1992) and Miles

evidence

of Figure

as

economic
define
ideology
envi
that
the
business
pervades
philosophy"
eco
et
In
of a country
al.
(Ralston
1997).
general,

ronment

symbolize.

We

nomic ideology evolves from the legal and political systems


and Worthley
of a society (Kelley, Whatley,
1987). In this
we

study,
world

contrast

the

two major
economic
ideologies
Another
and socialism.
type

today:
capitalism
is industry
factor
type. Here,
different
industries:
manufacturing

textual
two
The

second

component

of

the

we
and

framework

and RMO.
is, MO
strategies?that
are important
in
elements
influencing
gies
ance.
in the orientation
Two
ellipses
related

Market

Orientation

compare
services.

and Relationship

These

firms

in

is marketing
two strate

business
box

in the
of con

perform
in

Marketing

Figure

Orientation

39

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Framework

Conceptual

Figure 1.
Framework

Economie

Market
orientation

f
l

ideology

\
_J
"f
_y__
A
_____^ V

Relationship

f
\.

f
V

Industry
type

the strategies.
represent
on business
each
strategy

left-hand

side symbolize
economic

we

marketing
performance
tomer retention)
and

and

inter
on

box

the

type.

industry

the

For

framework:

the pur
performance.
two broad
used
of
measures,
categories
share, and cus
(sales growth, market
performance
of measures
have
on

(return on
been
studied
and

strategy

invest
exten
in

performance

(Douglas and Craig

and international markets

both domestic

type

arrows

side of Figure 1 represents

categories
in previous
research

sively

vary

the

and industry

ideology

financial

Both

ment).

may

of

when

the effects of the two moderating

on the right-hand

component
of this study,

influence

of

In Figure
1, the
from the orientation

ideology

of the

level

performance

variables:

pose

the

effects of economic

considered,
respectively.
the arrow
coming
cepting

last

^)

However,

are

An ellipse

\
J

>^

marketing
orientation

moderating

Business
performance

frame
Sin et al. 2000).
The
1992;
conceptual
a basis
issues
for
the
research
that
work
addressing
provides
a
we
The issues
that there is
condi
suggest
previously.
posed
Manu

1983;

tioning

of business-environment

impact

and

factors,

should not expect MO and RMO to be associated


same

level

of

two

in

performance

thus we

with
or

economies

the
two

industries.

Hypotheses

The Moderating

Effect of Economic

that we

herein

examine

economic

ideologies.

in economies

originate

The samples
with

socioeconomic

Kong's

Hong

Ideology.

different
and politi

different from those of the


cal systems are significantly
People's Republic of China (PRC). Hong Kong has an open
and

almost

approach

totally

free market

up the vast majority


in an environment

of the
that

and

economy

a laissez-faire

InHong Kong, private firms make

to public policy.

economic

consistently

base,

and

encourages

they operate
the use of

Leo Y.M. Sin et al.

40

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forces

market
Hong

Kong

and

exports

resources

to allocate

prices

in the world

competitive

and make
Even

market.

after Great Britain returned Hong Kong toMainland China in


1997, the PRC's government has repeatedly stated that itwill
a bastion
to remain
its promise
to allow Hong
of
Kong
keep
con
at
50
In
free-market
for
least
another
years.
capitalism
a
econ
China was
trast, Mainland
rigid, planned
essentially
to late

1949

from

omy

played

enterprises

1978.

this

Under

a dominant

role

state-owned

system,
in China's

economy,

which left little room for collectively owned organizations to


enter the market and virtually excluded private firms from
the economy (Deng and Dart 1995).
Although both MO and RMO have a direct impact on per
formance, the relative importance of MO and RMO may
in which the firm
environment
depend on the competitive
Prior
operates.
environmental
on

literature

or

personal

has

uncertainty,
institutional

the
that the greater
suggested
are
to
the more
firms
likely
rely
busi
when
doing
relationships

ness (Davies et al. 2003; Peng and Luo 2000; Powell 1990).
Davies, Luk, and Wong (1995) and Sin (1998) have applied
the

personal
economies
port
out

cost

transactional

relationships,
characterized

in areas
a

as transparent
market-institutional

such

strong
to minimize

attempt

to explain
the importance
of
theory
or
in imperfect
guanxi,
competitive
weak
market-institutional
sup
by

building

laws

personal

relationships

economy.

from complete.

Abramson

With
regulations.
firms will
framework,

uncertainties

business

resource
major
a socialist
China,
market-oriented

and

with

by

in

engaging

bodies,

governmental

customers.
Mainland
key
is in an apparent
to a
transition
transition
is
China's
far
However,
and

suppliers,
economy,

and Ai
sector

the business-to-business

(1997) empirically

in China

and

study
that

conclude

to relation

(similar
buyer-seller
relationships
are
to reduced
levels
of per
related
strongly
environment
about
the business
and to a

guanxi-style

ship marketing)
ceived
uncertainty

outcomes. Wong
(1998)
variety of improved performance
studies the effect of guanxi and relationship performance on
industrial buying in China and suggests that firms should
adapt
ment

marketing
relationship
of the Chinese
market.

Thus,
China

we

plans

that
hypothesize
a
in
business
operate

ble

political,
to rely more

to the

changing

in Mainland

because

managers
environment
with

legal, and bureaucratic


on guanxi
when
doing

factors,
business

environ

unsta
highly
are forced
they
In con
there.

trast, although Hong Kong is essentially a Chinese society, its


from Mainland
market-institutional
support is different
China. Hong Kong, with a heritage of British culture, has a
and independent
legal system. In addition,
well-developed
Hong
ment,

Market

Kong's
which

society

has

consistently

Orientation

a stable

and

encourages

and Relationship

open
both

business
local

environ
and

Marketing

interna

Orientation

41

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in Hong Kong to remain competitive

tional firms operating


the use

through

rather

strategies

studies have
on

impact
(Chan

of strategic
and innovative
than personal
relationships.

prior

and positive

in Hong
market
Kong's
we
Therefore,
2003).
expect

performance
1998; Tse et al.

Ellis

Indeed,

that MO has a significant

shown

business

and

customer-driven

is a more

that MO

effective business strategy than RMO in


we
Hong Kong. Thus,
postulate the following hypothesis:
Ha: The relative impact of MO and RMO varies across
Hong Kong and Mainland China, such that (a)MO
a greater

has

on business

impact

than

performance

does RMO in Hong Kong and (b) RMO has a greater


on business

impact
Mainland

than

performance

does

in

MO

China.

The Moderating Effect of Industry Type. Although both MO


and RMO have a direct impact on performance, RMO should
be more

performance
sector.
The
on

relies

in the

sector

services

reason

a close

for

interaction

of firms'

between

relationship
the firm
of a service

feature

business

in the manufacturing

than

is that

this

is a dominant

which

tomers,

in the determination

dominant

marketing
and its cus
firm.

Indeed,

are in the services


the origins of relationship marketing
industry (Gummesson 1999). Many authors have suggested
that the intangibility of services and the maturity of service
have

offerings
service

made
to develop

firms

relationship
marketing
a sustainable
competitive

for

essential
advantage

(Czepiel 1990; Perrien and Ricard 1995). Thus, RMO should


be more

for the

important

sector

services

than

for the manu

facturing sector. This gives rise to the following hypothesis:


on business
H2: RMO has a greater
impact
performance
in the manufacturing
in the services
than
industry
industry.

MO. We began this study with

Research
Scale

Methodology
and Measurement

tion

of MO.

view

MO

istics
tomer

To

whether

determine

as constituting
and
that Narver
orientation,

Slater

conducted

focus

three

propose?that
and
orientation,

line with
group

also
managers
behavioral
character

(1990)

competitor

defini

Chinese

the same

tional coordination?in
we

the traditional Western

Savitt's
with

discussions

is, cus
interfunc

(1999) approach,
20 Chinese

man

agers, of whom 10 worked inMainland China and 10 worked


to express their
in Hong Kong. We asked the participants
and
what
activities
about
they believed
marketing
opinions
were

necessary

for their

enterprises

to outperform

their

com

petitors in the changing marketplace. Managers in both Hong


a surprisingly
China demonstrated
Kong and Mainland
In their
of
level
of
marketing.
understanding
sophisticated
definition of marketing, most of the respondents elicited the
dimensions

of MO

that Western

researchers

cited.2

Thus,

we

Leo Y.M. Sin et al.

42

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were

confident

operating

Narver

and Slater

Narver

and
We

study.

that the activities

in a Chinese

in firms

to those

similar

we

Consequently,

to measure

scale

that

used

construct
in this
=
format
(1
scoring
"strongly
14
for
items.
all
agree")

a
seven-point
7 = "strongly

used
and

disagree"

found.

(1990)

Slater's

were

context

MO

constituting

the MO

measures
orientation
the
marketing
a company
a
in
engages
developing
long
we
term
In this
its customers.
with
relationship
study,
as
a
con
construct
RMO
that
one-dimensional
hypothesize

RMO.

Relationship
to which

extent

sists

of six behavioral

reci
components?bonding,
empathy,
can
and
trust?that
be
communication,
value,
a multi-item
we
with
For
scale.
this study,
reliably

shared

procity,
measured

a measurement

developed
from

a survey.

The

scale

validity,
criterion-related

the

six

dimen

standards

for inter

construct
and
validity,
validity,
we
a
seven
To measure
used
RMO,
=
7 =
and
(1
"strongly
disagree"

validity.
format

scoring

met

successfully

content

nal

point

to capture

scale

(Sin et al. 2002) on the basis of the findings

sions of RMO

"strongly agree") for the six dimensions of bonding (3 items),


communication
(3 items), shared value (4 items), empathy (4
items), reciprocity (3 items), and trust (2 items).
Business
asked

Performance.
each respondent

To measure

business

to evaluate

performance,

or her

his

company's

we
cur

rent business performance in the local market relative to that


of its major competitors with respect to the following four
items: (1) sales growth, (2) customer retention, (3) return on
on
share. We measured
(4) market
responses
=
=
"worse
"better than").
scale
than" and 7
(1

and

investment,
a seven-point

a two-step
the survey
administered
Kong, we
using
we mailed
a questionnaire
In the first phase,
procedure.
a
cover
letter
"Business
Practice
that
titled
and
Survey"
In Hong

the purpose
of selected

explained
tor/manager

of the

to the marketing
on the basis

survey

organizations

Questionnaire

direc
of a ran

dom sampling from a database that the Hong Kong Trade


Council (HKTDC) provided. The HKTDC is a
Development
highly

statutory

respected

that

organization

promotes

trade

in Hong Kong. In an effort to obtain a high level of participa


tion,

we

an executive

offered

findings
five weeks

on

tionnaire,
return
the
In countries

respondents
of
completion

later, we mailed
which
reminded
survey

within

in which

the
a

study.

summary
In the second

follow-up

participants

the prespecified
there

is a general

of the

phase,
a ques
to complete
and
time period.
letter

with

mistrust

of data

gathering techniques and a lack of understanding of contem


porary marketing research methods, Jain (1993) and Terpstra
and Sarathy (1994) advocate the use of alternative data
collection

Market

procedures.

Orientation

In Mainland

China,

and Relationship

we

did not

Marketing

admin

Orientation

43

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All use subject to JSTOR Terms and Conditions

Administration

are evi
because
these characteristics
by mail,
we
an
more
used
thus,
alternative,
appropriate

ister

the survey

dent

there;

data-collection
technique. We collected the data for the study
located in Beijing, the national capital of
from companies
Mainland China. With the help of a major university in Bei
jing, we randomly selected 1200 companies from the Beijing
Yellow

Commercial/Industrial

Pages

made
pany
ment

to the

calls

telephone
to explain
for survey

top
of the

the purpose

agreed to participate. We

agree
300

a total of 300

then hand delivered


in each

to the top administrator

questionnaires

com

study and to solicit


the 1200 companies,

Of

participation.

We

Directory.
of each

Telephone
administrator

company.

The questionnaire that we used in this study contained ques


tions on the following areas: (1)MO (14 items), (2) RMO (19
(4 items), (4) company
items), (3) business
performance
and
(4
(5) respondent background
(3 items),
background
In Hong

items).

in Mainland

use;

businesspeople
questionnaire

in Chinese.

questionnaire

items

In Hong

we mailed

To

that Hong Kong

language
we

China,
ensure
that

the

administered

of all

the meanings
were
the same

version

in the Chinese

in

the questionnaire

administered

and common

the official

English,

we

Kong,

as

those in the English version, we translated all the questions


them into English in
into Chinese and then back-translated
line with the procedure that Brislin (1980) suggests.

Response

Rate

Kong,

to a random

questionnaires

returned

them,

Mainland

them,

test

items

response

square

tests

the

no significant

we

compared

1977).

the

all

along

Overton

chi

The

difference

on demographic
respondents
indicate
that there
t-test results

late

is

the early and the late


measures.

and

performance
bias
that nonresponse

respondents
can conclude

firms in Table 1.

surveys,

between

difference
on MO

We

17.5%.

is no significant

that there

early
In addition,

characteristics.

and

(Armstrong
and

of

late respondents

with

show

the

between

in mail

bias

respondents

early

rate

of the responding

for nonresponse

In

of 26.6%.

the questionnaires

a response

yielding

show the characteristics


To

rate

response

210 firms completed

China,

returned

and

a usable

yielding

sample

the surveys and

of 1000 firms. A total of 266 firms completed

is not

Thus,

a serious

we

problem

in this study.
Table 2 reports the reliability

Reliability Analysis.

Results

scale
cient

Reliability and Validity of the


MO and the RMO Scales

using

Cronbach's

alpha

for the scale

coefficient
is .934 and

alpha.
.869,

The

of the MO
coeffi

overall

for the

respectively,

is greater
China sample, which
Hong Kong and Mainland
to
individ
With
than .7, as Nunnally
(1994) suggests.
regard
ual

subscales,

the

reliability

of all

three

subscales

met

the

standard of .7 for both samples.


Leo

44

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All use subject to JSTOR Terms and Conditions

Y.M.

Sin

et al.

Mainland

Hong Kong
Sample

China

Sample

Number

Number

Industry
80

Manufacturing

30.1
63
30.0

Services 139

No

52.3 60 28.5
16.1

4.5
10 1.5

of Employees
or

100

153

less

57.560 28.6

101-500
43
501-1000

No
Business

17.1
36
3.4

response

15.7

13.95526.2

above

33

6.020 9.5

37

or

5001

16.1

16

1001-5000

3.162.9

Type

State-owned
Private
No

77 36.7

42
Others3
response

Number

Table 1.
Characteristics
Firms

0 .0 176
83.8

enterprises

2110.0
100.0

266

enterprises

0 6.2
13

response

aThis item includes

and construction,

building

.0
and gas, mining

electricity

and iron ore, and

others.

Table 3 reports the RMO scale. The overall coefficient


for the

is .932 and

scale

.841,

alpha

for the Hong

respectively,

Kong

and Mainland China sample. With regard to individual sub


scales, the reliability coefficient of all the six subscales met
the

.7 for the Hong

of

standard

land China sample,


marginally

the Main

are

of the six components

the reliability

agreement
RMO

scales

nents

of the

Convergent

Validity.

or more

in two

We examined

among
.783 across

evidence
through
respective
the three

tions

the

at p <

highly

For

sample.

acceptable.

Convergent

icant

Kong

two

.01.

In addition,

the

among
show

that

ranged
all correlations

were

each

of

the

compo
correla
.627 to

from

of MO

signif
was

components

the overall measure

(.857 or above) with

correlated

construct.

of the MO and

validity

correlations
simple
scale. The results

components
and
samples,

same

of the

of convergent

of

is the degree

validity

measures

of

we

MO.

correlations
obtained
Furthermore,
significant
across
two sam
RMO
six
the
all
the
of
among
components
that
of
indicates
The
correlations
pattern
components
ples.
on a common
of each MO and RMO scale converge
construct,

Discriminant
test

Validity. Discriminant

measures

which

of conceptually

for discriminant

validity,

test on the data collected


Market

of convergent

evidence

thereby providing

Orientation

validity

distinct
we

validity.

constructs

performed

in this study

and Relationship

is the degree to
a

differ.

simple

(see Podsakoff

Marketing

To

factor

and

Orientation

45

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All use subject to JSTOR Terms and Conditions

of Responding

Mainland

Hong Kong

Table 2.
of MO
Scale Reliabilities
Across Cultures

China

Item-to-

Cronbach's
Item
Customer

alpha

2. Create

.671

customer

.510
.412 .642

value

customer

3. Understand

needs
4. Customer

.530

5. After-sale

service

6. Customer

commitment

.492
.547 .704

.807

.714

to

rapidly
actions

.429.627

competitions'
8. Salespeople

share

9. Target

.610.636

information

competitor

for

opportunities

competitive

.468.620

advantage

10. Top managers

discuss

competitors'

.521.633

strategies
.876.722

Coordination

Interfunctional
11. Functional

integration

in strategy

.664
.528

resources

12. Share

Information

functions

shared
.583.798
contribute

.869
.934

scale

Organ 1986). We
The

.444.722

value
for the

coefficient

RMO

.490.755

functions

to customer
Alpha
entire

with
units

business

among
14. All

.389

.405

.633

Orientation

7. Respond

13.

.568

satisfaction

objectives

other

Total
Subscale

alpha

customer

satisfaction

Competitor

Cronbach's

.844
.722

Orientation

1. Measure

Item-to

Total
Subscale

subscales
analysis

the MO

factor analyzed

together,
produced

and the

subscales

components
using principal
two factors with
eigenvalues

analysis.
greater

than unity, which account for a total of 72.3% and 57.3% of


the variance for Hong Kong and Mainland China samples,
(Table 4). A clean solution results from the MO
respectively
and

RMO

Therefore,

subscales,
the results

nated between
ing discriminant

Test of Hypotheses

which
suggest

in two

loaded
that

the

discrimi

respondents

the MO and the RMO constructs,


validity

within

factors.

separate

thus imply

the measures.

Ha postulates that the relative impact of MO and RMO varies


across Hong Kong and Mainland China. To test the hypothe
sis, we

conducted

a regression

analysis

using

business

per

formance as the dependent variable, MO and RMO as the


predicting variables, and industry type and firm size as the
Leo

46

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All use subject to JSTOR Terms and Conditions

Y.M.

Sin

et al.

Mainland

Hong Kong
Item-to-

Item

Item-to

Total
Subscale

Cronbach's
alpha

China

Cronbach's
alpha

Total
Subscale

Table

3.

Scale Reliabilities of RMO


Across

Culture

.844
.697

Bonding
1. We

both

to

try very hard


a
long-term

establish

.728

relationship.
2. We

in close

work

.687

cooperation.
3. We

keep

.713

.504

.701
.588

Communication
communicate

and

our opinions
express
each other frequently.
can

5. We

.460

in touch

constantly.

4. We

.579

.398 .429

our

show

discontent

to

toward

each

other

through
communication.
can

6. We

.532

communicate
.557

honestly.
Shared

the same

share

.674

worldview.
8. We

about most

10. We

.626
.718

things.

the same

share

toward

feelings
around

.524

the same

share

opinion
9. We

.393
.863
.809

Value

7. We

.406

things

us.

.679
.754
the same

share

.711

values.

.693

.828
.584

Empathy
11. We
from
12. We

know

other
13. We

how

.633
.434

each
.400
.641

feels.

understand

other's
14. We

see
things
other's view.

always
each

each

values

care

other's

and

about

.324.653

goals.

each
.699

feelings

.313

.627
.767

Reciprocity
15. My company
"never
forget

regards
a good turn"
as our business
motto.

.471.716

16. We keep our promises


to
each other in any situation.

.329
.447

17.

If our

customers

assistance

gave

when

my
had difficulties,
company
then Iwould
repay their
.522
.655

kindness.
Trust
18. They

are

trustworthy

important
19. My
Alpha

company

coefficient

.654

.495.840

things.
trusts

.495
.840

them.

for the entire


scale

Market

.912

on

Orientation

.932

.841

and Relationship

Marketing

Orientation

47

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All use subject to JSTOR Terms and Conditions

control
into

We

variables.

entered

all variables

simultaneously

the equation.

The results in Table 5 show that for the Hong Kong sample,
both RMO and MO are significant in explaining the variation
in business

an R2 of

with

performance,

.250.

In addition,

the

MO variable is the dominant variable and yields a higher


beta value (.325) than does the RMO variable (.213). In con
trast, for the Mainland China sample, we found RMO to be
the only significant predicting variable associated with busi
ness

(b

performance

=
.187, R2

.92, p <

.01). These

results

show that MO has a greater impact than RMO on business


in Hong

performance

Results of Simple
for Discriminant

Validity

Mainland
2

Factor

Factor

Communication

.743

Empathy

.836

.698

.787

.670

.759

.622

.727

.615

.601

.600

Trust
Bonding
Reciprocity
orientation

Competitor
Customer

orientation

Interfunctional

coordination

Eigenvalue
Percentage

of variance

Dependent

Totalb

uring

Factor 2

.895

.873

.885

.856

.869

.830

3.120

2.746

2.417

37.648

34.661

30.515

26.860

Variable:

Overall

Performance

Mainland

China Sample

Manufact

Manufact-

Independent

3.388

Hong Kong Sample


Variables

China

Sample

.845

value

in

the observed differences

Factor

Variables

in

is reversed

pattern

Hong Kong
Sample

Shared

Table 5.
MO
and
of
Relative
Impact
RMO on Overall Performance:
Standardized
Estimated
Coefficients
Regression

this

China. To test whether

Mainland

Table 4.
Factor Test

and

Kong,

Services

Totalb

RMO
.213*

.551*

.121

.187**

MO
.325*

.051

.348*

.102

uring
-.220
.081

Services
.628*
.144

Industry
type3
11

-.166**

12

-.129

Firm

size

R2

.080

.019

.129

.198

.297**

.087

.250*

.324

.232*

.092*

-.140

.218

.001

.184**

*p<.01.
**p< .05.
and 12 = services.
II = manufacturing,
aIl and 12 are dummy variables.
in the regression analyses
bWe include the "Others" category in the industrial classification
and services
of manufacturing
for the "Total" sample, but we exclude it in the comparison
industries.

Leo Y.M. Sin et al.

48

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All use subject to JSTOR Terms and Conditions

relative impacts of MO and RMO are statistically significant,


we used the Chow test. The results show that the difference
=
is significant
7.792,
(F
results
Ha.
support

sector

p <

449,

hypothesis,
formance
variable,
tion, we

important for the

than

divided

the

overall
and

manufacturing

industry
on each
subsample

regressions

two

into

sample
services

business
we

industry

for

propose,

RMO

impacts on the

7.441,

na

services

to be significant

the difference

4, n2

203, p <

and

industry

the
to

Contrary
sample.
for the manufac
important

is more

for the

than

industry

performed

separately.

of the manufacturing
the Hong
Kong

performance

services

subsamples:

We

industry.

show in Table 5, RMO has differential

turing

the

.01). Thus,

sector. To test this


for the manufacturing
we
ran a regression
with
business
per
analysis
as the
as
RMO
the
variable,
dependent
predicting
In addi
and firm size as control
variables.
and MO

services

what

6, n2

that the impact of RMO ismore

H2 predicts

As we

na

and we

industry,

using

.01). For

the Mainland

found

test (F =

the Chow

sam

China

different. The Chow test


ple, the results are significantly
shows that RMO ismore important for service firms than for
firms

manufacturing

(F

68.358,

na

4, n2

111,

p <

.01).

Thus, the results confirm H2 for the China sample but not for
the Hong

Kong

the study is set in a context of Chinese

Although
our

sample.

motivation

major

examine

context moderates

environment
on business

to

is

how

economies,

the

business

the effect of MO and RMO

Discussion
Conclusion

performance.

Contributions
Two sets of ideas and findings
studies.

previous

measures
mainly
the

we

First,

internationalization

has led to the conjecture


be

Moreover,
suggests.
tion of the experiences
tries

with

from

of U.S.

different

cultural

in those

organizations
several
researchers

from

Market

and

the

have

called

(Weinshall

scales
marketing

and

cultural

decisi?n

borders

of the constructs
without

culture
fallacy,"
emulation

and
vali

any

as Kleinman

(1977)

and

extrapola
to coun
marketing
practices
and economic
environments

of

performances

Therefore,
1993).
(Agarwal
for empirical
work
that dis
from
"universal"
behavior

1977). Our study validates

in a Chinese

Orientation

operations

theories and models

and ineffective

countries

"culture-bound"

tinguishes

behavior
RMO

another

a "category
an uncritical

lead to inefficient

could

national

1966), the direct application

to subjects
create
could

dation

of business

that marketing

across

transportable

(Buzzell
measures

the constructs

developed

of MO and RMO available


for data collection
in the context of the U.S. cultural setting. Although

continued

may

distinguish

this study from

context
makers

data
using
at the

and Relationship

the MO and

that we
corporate

Marketing

obtained
level.

Orientation

49

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All use subject to JSTOR Terms and Conditions

and

the scale was

Although
States

for the

originally
business

strategic

in the United

developed

unit

our

level,

sug

findings

gest that the scale captures the constructs of MO and RMO in


China, two Chinese economies
Hong Kong and Mainland
with

economic
different
and cultural
environments.
There
we
are valid
conclude
that the two scales
fore,
confidently
a
across
and reliable
and can be used
of boundaries?
variety

studies

Second,
previous
or RMO has
MO
formance.
assess

and

industries,

companies,

However,
the relative

have

consistently
association

significant
researchers

have

of these

impact

performance.
this study was

shown
with

made

few

strategy
environmental
the

that either

business

two

an
Through
to
able
identify

business
tive,

cultures.

per
to

attempts
variables

environmental

on

perspec
con

texts in which MO and RMO are effective. Our findings sup


a
that in Hong Kong,
port Ha, which
hypothesizes
MO has a greater
effect on perform
economy,
than does RMO. However,
in
this pattern
is reversed
Mainland
China's
and
transitional
economy.
regulated
market-driven
ance

For

Research

and Managerial
Implications

this

researchers,
of marketing
scholars
have

study

strategies

helps
expand
in a transitional

economy.
economies,
to refine
and test

that

argued

Many
such as

transitional

"offer

China's,
theories

the understanding

fascinating
grounds
existing
new
to develop
reasons
ones"
for two major
see
and
Heath
also
Nee
and
Matthews
1996,
p. 493;
(Peng
an economic
is undergoing
China
transition
First,
1996).
a
to
from a planned
market
The
disconti
economy
economy.
can be
as a
in
China's
business
environment
nuity
regarded
and

that has

experiment"
"quasi
in firm behavior.

resulted

in a significant

change

Such

naturally
occurring
experiment-like
to observe
it possible
in Chi
setting makes
strategic
changes
nese
firms. Currently,
know
researchers
little about
the
very
in
of
firms
transitional
economies,
espe
marketing
practices

cially with
business

regard to the relationship


We

performance.
on
studies

among MO, RMO, and

that our

hope

study

can

stimulate

make

the strategic
behaviors
of firms in tran
can help move
which
the market
transi
economics,
to the center
of
business
and
literature
research
stage
more
to the busi
and relevant
contributions
potential

ness

literature.

additional
sitional
tion

common
regimes

an important
because
China
shares
Second,
with
communist
countries
other
under
legacy
or countries
with
central
the Chi
systems,
planning

nese experiment

can help

market

in

Europe.

systems
Further

studies

shed light on the evolution


and

research
in Russia

of the
Eastern

post-Soviet
republics
must
to determine
be conducted

of the research

generalizability
comparative
sus firms

the

(e.g., on
or Eastern

findings. We

firms

suggest

in Mainland
can

Europe)
of the relationship
the understanding
among
we
herein.
that
investigated
performance

further
MO,

China

the

that
ver

enhance
RMO,

and

Leo Y.M. Sin et al.

50

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All use subject to JSTOR Terms and Conditions

a managerial

From

the continuing
of
perspective,
expansion
or
has
created
international,
multinational,
companies
global
a need
for understanding
in differ
management
imperatives
ent national
market
environments.
who
Managers
implement

business
have

At

the same

agement

time,

views

For

be

1993). This

(Agarwal

who

managers
across

coun

that
study demonstrate
on
in
RMO
stronger
performance
a
a
in
Mainland
than
China,
economy,
Kong,
capitalist
Con
economy.
regulated,
government-involved

has

Hong
highly

example,

the results

imperatives.
to know
the man

for marketing
or diversities

guidelines
similarities

can

settings

management
expected

in every country

practices

provides
environmental

tries.

environmental
about

cannot

they

some

study
handle
MO

in different

strategies
ethnocentric

not

effect

of this

than

does

is a dominant
RMO
and
versely,
land China. Marketing
managers
monitor
customers'
tinuously
to propose

strategies

in Hong
needs
and

integrated

in Main
strategy
con
should
Kong

effective

and

timely

gies in this market. For practitioners


people interested in doing business

competitors'
strate
marketing

inMainland China and


there, our findings sug

is a more
that RMO, not MO,
effective
for busi
strategy
success.
should
be
different
Thus,
marketing
strategies
to
economies.
the two Chinese
explore
employed

gest
ness

this study has provided


relevant and notable
Although
into
of
the
the understanding
impacts of MO on per
insights
in two Chinese

formance
tions

with

associated

sectional

data.

relationships

Consequently,
RMO,
among MO,

cannot be determined
fast-changing

economies,
this
study.
the
and

unambiguously,
The

marketplace.

there

are several

First,
time

we

limita

Limitations
Research

cross

used

of

the
sequence
business
performance

in China's

especially

of a time-series

development

database and the testing of relationships


among MO, RMO,
and performance in a longitudinal framework could provide
more

insight

into probable

causation.

we used
a subjective
Second,
use of similar
ance. Extensive

approach
measures

to measure

perform
on strate

in research

1997; Greenley 1995; Slater


gic orientation (e.g., Appiah-Adu
associated
and Narver 1994) and the practical difficulties
with data collection in Chinese societies made this approach
(Luo and Chen 1996). In addition, although prior
necessary
studies
and

have

subjective

reported
measures

a strong association
between
of business
performance

objective
(Dawes

1999; Jaworski and Kohli 1993; Venkatraman and Ramanu


jam 1986), we could not find any similar studies that used
data

from Mainland

studies

China

should examine

and

Hong

further

Thus,

Kong.

the generalizability

of this relation

in a Chinese
the two measures
ship between
China
is a society
that emphasizes
thermore,

context.
"face

Fur

saving,"

which may have an inflated effect on the reporting of subjec


tive measures

Market

of performance.

Orientation

Further

and Relationship

studies

that

Marketing

include

Orientation

51

This content downloaded from 218.248.44.196 on Wed, 26 Mar 2014 23:40:47 PM


All use subject to JSTOR Terms and Conditions

and Further

this cultural value as a control variable might

Third, we collected
approach.

improve

data for this study by the key-informant


senior

Although

are

managers

able and valid data (Tan and Litschert


that

help

of the results.

the rigor

a firm

is not

generates

the

for reli

adequate

1994), the information


source

only

of

information

about its levels of MO and RMO. It is important to contrast a


firm's degree of MO and RMO as internal information
assesses

it (e.g., managers'

its level of MO and RMO as

in this study) with

have done

and distributors
competitors,
one
of the most
challenging

customers,
be
might

as we

to questionnaires,

responses

perceive
areas
for

it. This
further

research.
Another
moderating

potential
role

area
that

for further

proneness

relationship

and Bitner

Gremler,

(1998)
activities

relationship-oriented

research

is to explore
the
Gwinner,
plays.

suggest

that the success

depends

not

on

only

of

its strat

but also on the preferences


of the
egy or implementation
individual customer. Christy, Oliver, and Penn (1996) use the
to express the idea that
term "psychologically
predisposed"
some

are

customers

involved

predisposed
Not
all types

relationship.

engage

in relationships

Evans,

and

proneness,
Iacobucci
conscious

are prone

of buyers

sellers

to

(Berry 1995; Crosby,

consumer
Thus,
1990).
relationship
and
De Wulf,
which
Odekerken-Schr?der,
as a consumer's
and
stable
(2001) define
relatively
to
in
with
sellers
of
engage
relationships
tendency

particular
ship between

Cowles

researchers

many

2002;

Schoder

whether

(e.g.,

and Madeja

firm

business-to-consumer

the

should moderate
category,
and business
performance.

product
RMO

Furthermore,

operates
market

on business

of RMO

with

a more

to welcome

2004)

in

and

Lindgreen

have

suggested

performance.

Pels

that
or

a business-to-business
has

relation

on

consequences
further
Thus,

the effect
research

should also investigate the role that this moderator plays in


the link between RMO and business performance. Other firm
the
the firm is state owned,
such as whether
characteristics,
so
worth
also
be
the
and
of
of
on,
firm,
country
might
origin

while

to include.

was
we used
drawn
for analysis
the sample
only
Finally,
in greater China,
and
two cities
from Hong Kong
and Beijing,
to
remains
be tested.
of the results
thus the generalizability
Therefore,
by attempting
tion
of the

further

research

a nationwide
study

in other

ensure the population

the present
study
expand
in
China.
Indeed,
survey
replica
could
economies
transitional
could

validity

of the findings.

Leo YM. Sin et al.

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All use subject to JSTOR Terms and Conditions

1. In line with

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orientation"

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synonyms,
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