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European Journal of Marketing

Leadership style and market orientation: an empirical study


Lloyd C. Harris Emmanuel Ogbonna
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To cite this document:
Lloyd C. Harris Emmanuel Ogbonna, (2001),"Leadership style and market orientation: an empirical study",
European Journal of Marketing, Vol. 35 Iss 5/6 pp. 744 - 764
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European
Journal of Leadership style and market
Marketing
35,5/6
orientation: an empirical study
Lloyd C. Harris and Emmanuel Ogbonna
744 Cardiff Business School, Cardiff University, Cardiff, Wales, UK
Keywords Market orientation, Leadership, Retailing, Management styles
Received September 1998
Revised April 1999 Abstract There has been considerable research into the barriers to the development of market
orientation. However, whilst researchers have alluded to the importance of top management
knowledge, skills and commitment, the issues of leadership style has been largely overlooked. This
lacuna in marketing theory is despite numerous indirect references to the importance of leaders in
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developing a market oriented culture. The objective of this study is to explore and describe the role
of top management leadership style in influencing the process of market orientation development.
Begins with a review of existing definitions of and perspectives on the content and components of
market orientation. Thereafter extant research into the barriers and processes of market
orientation are examined and critically appraised. Following a discussion of the research
methodology adopted, the findings of a survey of leadership style and market orientation are
presented. Concludes with a discussion of the implications of this study for theory and practice,
highlighting the importance of this avenue of research.

Introduction
Despite significant advances in the early 1990s in improving understanding of
the components of market orientation (see for example Kohli and Jaworski,
1990; Narver and Slater, 1990), as the millennium approaches, many theorists
continue to argue that further research is needed (recent examples include
Hurley and Hult (1998); Day (1998)). Indeed, ever increasing academic attention
is matched by expanding practitioner interest into the concept of market
orientation (see Foreman, 1997; Eppes, 1997). The continuing fascination with
developing a market orientation can be ascribed to the growing number of
contexts wherein market orientation is found to be appropriate. Studies find
that market orientation is valuable in a huge range of contexts, including:
professional services (Whittington et al., 1994; Harris and Piercy, 1998); the
public sector (Graham, 1995); the non-profit sector (Wood and Bhuian, 1993);
education (Coates and Koerner, 1996); the health care sector (Herzlinger, 1997);
services industries (Egan and Shipley, 1995); and industrial markets
(Balakrishnan, 1996).
However, many theorists and practitioners persist in noting that further
research is required to explore the barriers and processes of market orientation
development (see for example, Narver et al., 1998; Slater and Narver, 1995;
Siguaw et al., 1998). Indeed, even after the presentation of the results of a
seminal study of the barriers to market orientation, Jaworski and Kohli (1993,
p. 65), in their directions for further research, conclude that, ``it seems desirable
to assess the role of additional factors in influencing the market orientation of
European Journal of Marketing,
Vol. 35 No. 5/6, 2001, pp. 744-764.
The authors wish to express their gratitude to the editors and to the two anonymous reviewers
# MCB University Press, 0309-0566 whose constructive comments helped in restructuring this paper.
an organization''. Unfortunately, few studies have responded to this suggestion, Leadership style
leading Morgan and Strong (1998, p. 1052) to note recently ``the relative dearth and market
of research investigating such antecedents''. Furthermore, while there is no orientation
shortage of anecdotal claims that leadership styles and culture are linked (Bass
and Avolio, 1993; Nicholls, 1988; Quick, 1992; Schein, 1992; Simms, 1997), there
have been very few empirical examinations (cf. Hennessey, 1998) and no study
which focuses specifically on the links between leadership and market oriented 745
culture.
The aim of this study is to explore and describe the impact of top
management leadership style in influencing the process of market orientation
development. In examining the links between leadership style and market
orientation, this paper intends to contribute empirical evidence and extend
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extant theory pertaining to the barriers to market orientation and to provide


insight into the process of market orientation development. The paper begins
with an overview of existing perspectives on the components of market
orientation. Thereafter, research into the barriers and processes of market
orientation is examined and appraised. Following a discussion of the research
methodology adopted, the findings of a survey are presented. The paper
concludes with a discussion of the implications of this study for theory and
practice, highlighting the importance of this avenue of research.

The content of market orientation


A review of extant literature finds huge variation in the labels used to denote
``market orientation'' (see Shapiro, 1988; Kohli and Jaworski, 1990). For instance,
examples include: ``customer-oriented'' (Kelley, 1992); ``integrated marketing''
(Felton, 1959); ``market oriented culture'' (Harris, 1998a); ``marketing oriented''
(Gummesson, 1991), and; ``market-led'' (Piercy, 1997). However, most theorists
agree that there are few substantive differences between these labels (see
Shapiro, 1988) although the term ``market orientation'' is generally considered
most appropriate (Kohli and Jaworski, 1990; Slater and Narver, 1998).
Consequently, for reasons of consistency and ease of expression this paper
harmonises the diverse terms of other authors and uses the term ``market
orientation'' throughout.
Greenley (1995) claims that, since 1990, the majority of definitions and
conceptualisations of market orientation (for example Deshpande et al., 1993;
Deng and Dart, 1994; Cadogan and Diamantopoulos, 1995) have been largely
based on the earlier work of Kohli and Jaworski (1990) or Narver and Slater
(1990). Indeed, many authors have recognised the seminal nature of these two
conceptualisations (see Deng and Dart, 1994; Harris, 1998b). Kohli and Jaworski
(1990) view market orientation as comprising market intelligence generation
and dissemination, supported by organizational responsiveness. In contrast,
Narver and Slater (1990), drawing on organizational theory, develop a view of
market orientation as the form of organizational culture which most efficiently
and effectively creates superior value. Whilst a full analysis of these views is
beyond the scope of this paper, it is expedient to note that the Kohli and
European Jaworski (1990) conceptualisation has limitations (see Diamantopoulos and
Journal of Hart, 1993; Harris, 1996).
Marketing
The barriers to developing market orientation
35,5/6 Numerous studies have examined strategies, structures and systems as
potential barriers to developing market orientation (including Lear, 1963;
746 Ruekert, 1992; Slater and Narver, 1993; Jaworski and Kohli, 1993; Pulendran
and Speed, 1996). However, given the aims of this paper, the following review
of literature on the obstacles to market orientation will centre on that which
could be labelled ``behavioural'' barriers.
Arguably, the earliest study of behaviour as an obstacle to market
orientation is that of Felton (1959). In a detailed investigation of potential
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impediments, Felton (1959) identifies and discusses four potential pitfalls to


market orientation, namely: lack of inter-functional integration; political
manoeuvring; weak management skills; and executive inexperience. Felton
(1959) argues that such behavioural obstacles can severely restrict market
orientation development and thus organizational performance. This study
forms the basis for a wide range of later studies into the links between
employee behaviours and market orientation.
Harris (1998b) undertakes a study of shopfloor employee behaviour and
market orientation with the aim of exploring operational level behavioural
barriers. Harris (1998b) uncovers seven main barriers to developing market
orientation at the shopfloor level including: instrumentalism; short-termism;
and weak management support. While Harris (1998b) focuses on shopfloor
workers, he also suggests that management attitudes and actions are
important. Hence, given similar claims in the wider organizational literature
that leadership is a major determinant of company performance (Thorlindsson,
1987; Fiedler, 1996; Hennessey, 1998), it is necessary to review studies into
senior management barriers.
Chaganti and Sambharya (1987) find that the orientation of an organization is
contingent on the ability and commitment of executives. Similarly, in a study of
the difficulties encountered by Du Pont in developing a market-oriented culture,
Messikomer (1987) argues that managers and executives often espouse the
notion of improving market orientation levels but behave in a different manner
(this is akin to that which culture theorists call ``behavioural compliance'' (see
Ogbonna, 1993)). Messikomer (1987, p. 53) claims that such ``illogical'' behaviour
is caused by entrenched cultural beliefs and concludes that ``the difficulty often is
not so much in getting management to accept this vision, but rather in
overcoming the inertia bred of individual corporate cultures''.
The findings of Messikomer (1987) and Chaganti and Sambharya (1987) are
consistent with the research of Wong et al. (1989). In a survey of manufacturing
industry, Wong et al. (1989) calculate that the most prevalent obstacle to
market orientation identified by functional managers is, again, management
attitudes and behaviours (although the study also identifies a number of less
common systems barriers beyond the scope of this review).
Two further studies provide additional evidence of a link between top Leadership style
management behaviour and market orientation. First, in a major study of the and market
antecedents and consequences, Jaworski and Kohli (1993) hypothesise that the orientation
greater the top management emphasis on market orientation and the lower the
risk aversion of top managers, the greater the level of market orientation. The
analysis of survey results reveals a strong statistical association between top
management emphasis and all aspects of market orientation. 747
However, it is the second study of Harris and Piercy (1999) which provides
one of the most comprehensive studies of management behaviour and market
orientation. Based on a review of extant literature and the in-depth case study
of three companies, Harris and Piercy (1999) hypothesise links between four
key management behaviours and market orientation. In a secondary stage of
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descriptive research, Harris and Piercy (1999) conduct and analyse a small
survey of UK retailing companies. Briefly, their findings indicate that
management behaviour which is formalised, conflictual or politically
motivated is negatively associated with the extent of market orientation.
Overall, a review of existing research into the barriers to market orientation
finds a recurring theme centred on management behaviour. While recognising
that systems, structures and strategies may also impede market orientation
(see Ruekert, 1992; Jaworski and Kohli, 1993), a range of theories and empirical
findings suggest that management behaviour may be the key to market
orientation (see Harris and Piercy, 1999).

Studies of the process of market orientation development


A probable consequence of the general recognition of the magnitude of barriers
to market orientation is a range of studies analysing the means of market
orientation development. Unfortunately, an unlimited review of such studies is
beyond the scope of this paper. However, in order to present an overview of
extant research a number of key studies are examined below.
Payne (1988) presents a typical management-focused view of market
orientation development, theorising that management development is the key
to the installation of market orientation, other activities playing a supporting
role. Thus, consistent with Kanter (1983), Payne (1988) contends that market
orientation will only occur when management knowledge, skills and attitudes
are sufficiently developed and when a suitable management change-master
appears. Judd (1987) offers a wider means to implement market orientation,
contending that in order to gain competitive advantage it is vital that a fifth ``P''
of ``people'' be added to the marketing mix and to broader strategy. This view is
consistent with organizational behaviour and human resource management
literature wherein it has been argued that human resources could represent an
important source of competitive advantage (see for example, Delery and Doty,
1996; Kochan and Dyer, 1993).
Working from a micro-political perspective, Whittington and Whipp (1992)
provide an analysis of professional competitive ideology and marketing
implementation. Their main contention is that marketers themselves need to
European become more professional in order to increase their power and implement a
Journal of market orientation (a view first articulated by Felton (1959)). The theme of
Marketing power is also favoured by Piercy (1989), who theorises that market-led strategic
change can be achieved through the successful management of the corporate
35,5/6 environment, which is dependent upon managers' political skills. Similarly,
Kelley (1992) studies market-oriented change but presents organizational
748 culture at a more cognitive level. The conclusion of Kelley (1992) is that the
implementation of market orientation is strongly linked to personal and
cultural acceptance of strategy. Consequently, consistent with the theory of
Sathe (1983), Kelley (1992) suggests that the development of a market oriented
culture is reliant on inculcating employee values, while maintaining orientation
may be achieved through the socialisation of new employees.
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However, it is the work of Day (1994) which provides the most


comprehensive discussion of the development and maintenance of market
orientation. Utilising a capabilities approach, Day (1994) develops a six
component programme for the management of market orientation
development. The change programme of Day (1994, p. 37) entails:
(1) the diagnosis of current capabilities, (2) anticipation of future needs for capabilities, (3)
bottom-up redesign of underlying processes, (4) top-down direction and commitment, (5)
creative use of information technology, and (6) continuous monitoring of progress.

Day (1994) argues that the implementation of such a programme greatly


enhances the probability of market orientation development.
In overall summary, existing research into the obstacles to market
orientation finds that management behaviour is consistently mentioned as a
significant barrier to market orientation development. Furthermore, a review of
studies of the process of market orientation development reveals that
management behaviour is again repeatedly specified as an essential factor in
instigating and installing improved market orientation. However, while some
advances have been made in this area, a key limitation of extant research is
that existing studies overlook or ignore the potential impact of leadership style
on market orientation. As stated earlier, the aim of this study is to fill this gap
in knowledge through exploring and describing the links between leadership
style and market orientation development.

Research methodology
In order to evaluate the research issues, a descriptive quantitative research
design was deemed appropriate. Consequently, a multi-industry sample of
1,000 units was collated from the FAME database of registered UK firms. The
FAME database contains descriptive information on over 270,000 major
private and public limited UK companies. The FAME database was used in
preference to others because past studies of market orientation in the UK which
have utilised the database have reported acceptable response rates (for
example, Pitt et al., 1996). A list of 1,639 potential sampling units was
developed based on a variety of criteria including: turnover (over £500,000);
date of registration (over three years); and number of employees (over 5,000). Leadership style
Thereafter, 1,000 units were selected via a systematic random selection and market
procedure. orientation
A number of authors have argued that the overall success of data generation
and the achievement of satisfactory responses is greatly dependent on efficient
and effective administration and implementation of a survey (see for example
Dillman, 1978; Churchill, 1991; Faria and Dickinson, 1992). Indeed, there is a 749
wealth of prescriptive articles which offer advice on effective survey design
(see for example Diamantopoulos et al., 1991). An important feature of such
literature is the generally accepted value of survey pre-notification (Murphy et
al., 1990), response incentives (Duncan, 1979) and follow-up mailings (Paxson,
1992). Possibly the most influential work in this area is provided by the total
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design method of survey administration advocated by Dillman (1978). A full


discussion of all the issues considered in Dillman (1978) is impractical due to
limitations of space. However, it should be noted that in an effort to improve
content validity, response reliability and response rates, the survey was
conducted in a manner which closely followed the administration and design
recommendations of a variety of authors including Dillman (1978), Churchill
(1991), Conant et al. (1990), and Faria and Dickinson (1992). Such
recommendations encompass questionnaire design and layout, survey piloting
and pre-notification and post-survey follow-up reminders.
The research instrument was developed using a procedure for developing a
questionnaire based on the framework recommended by Churchill (1991),
which in turn is based on the earlier work of Kornhauser and Sheatsley (1976).
Briefly, the framework suggested by Churchill (1991) suggests a nine-step
iterative procedure for developing a questionnaire. The information
requirements of the study enabled the adoption of two measures adapted from
extant literature. The precise wording of questions and items are presented in
Tables I and II.
Two main measures of market orientation have been developed, first, the
Kohli et al. (1993) MARKOR measure, and second, the Narver and Slater (1990)
construct. Despite the obvious attractions of the Kohli et al. (1993) measure, the
construct has been subject to detailed academic criticism (see Diamantopoulos
and Hart, 1993). In contrast, the Narver and Slater (1990) construct has been
applied in a number of differing contexts (see for example, Greenley, 1995).
Consequently, the Narver and Slater (1990) measure of market orientation was
used to gauge the levels of market orientation.
The measure of leadership behaviour was adapted from that of House (1971)
and House and Dessler (1974), which in turn was partially based on the earlier
work of Fleishman (1957) and Stogdill (1963). This measure of leadership
behaviour has been widely used in the marketing and strategy literatures and
has been generally accepted as a good measure of subordinate's perceptions of
leadership style and behaviour (see Teas, 1981; Kohli, 1989).
Churchill (1991) argues that to determine the form of response to individual
questions is a crucial aspect of empirical data collection. Consequently, it was
European Factor loadinga
Journal of Inter-
Customer Competitor functional
Marketing Itemb orientation orientation co-ordination Communality
35,5/6
Focusing on customer
commitment 0.84758 0.80684
750 Creating value for customers 0.79870 0.73290
Setting customer satisfaction
objectives 0.76327 0.34221 0.74014
Measuring customer
satisfaction 0.58280 0.50231 0.69976
Understanding customer needs 0.53770 0.40282 0.40451 0.68586
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Responding rapidly to
competitors' actions 0.79764 0.66761
Top managers discussing
competitors' strategies 0.72007 0.41707 0.69395
Targeting opportunities for
competitive advantage 0.50483 0.59041 0.68680
Sharing information about
customers 0.42069 0.47530 0.39681 0.56035
Sharing resources across the
whole company 0.81006 00.75516
Sharing information across
departments 0.31177 0.33888 0.77155 0.80733
All departments contributing
to company strategy 0.44142 0.60917 0.56606
Getting all functions to
contribute to customer value 0.43005 0.54001 0.64992
Eigenvalues 7.03605 1.20769 1.08893
Percentage variance explained 54.1 8.5 7.0
Cumulative percentage
variance 69.6 2.5 4.166
Notes:
a
Principal components analysis with varimax rotation, converging in eight iterations (all
Table I. loadings less than 0.3 suppressed)
b
Principal components Question wording was ``To what extent does your company place a high priority on the
analysis of measures of following?'' measured on a seven-point Likert-type scale respectively anchored by (1) Not at
market orientation all and (7) Very great extent

decided to adopt the commonly used seven-point Likert-type scoring (Likert,


1932a, 1932b) for all items. Past uses of measures of market orientation and
perceived leadership behaviours had previously utilised five-point scales.
However, Barnes et al. (1994) argue that a switch to seven-point scales has no
effect on principal components analysis but often improves the reliability of
answers. Thus, seven-point scales were used for reasons of reliability and
validity (Churchill and Peter, 1984), as well as for the ease of response and
administration (Malhorta, 1993).
A total of 342 responses were received after two follow-up reminders.
Unfortunately, 20 of these responses were ineligible for a variety of reasons
Factor loadinga Leadership style
Participative Supportive Instrumental and market
Itemb leadership leadership leadership Communality
orientation
Before making decisions,
he/she considers what
his/her subordinates have to
say 0.86698 0.76974 751
Before taking action he/she
consults with subordinates 0.85945 0.80183
When faced with a problem,
he/she consults with
subordinates 0.84408 0.76046
He/she asks subordinates for
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their suggestions 0.82952 0.76434


He/she listens to subordinate's
advice on which
assignments should be made 0.81643 0.73284
He/she helps people to make
working on their tasks more
pleasant 0.78876 0.71243
He/she looks out for the
personal welfare of group
members 0.30527 0.73875 0.64240
He/she does little things to
make things pleasant 0.69752 0.49712
He/she treats all group
members as equals 0.62806 0.57087
He/she explains the way tasks
should be carried out 0.78005 0.61568
He/she decides what and how
things shall be done ±0.30433 0.69205 0.60737
He/she maintains definite
standards of performance 0.66436 0.60645
He/she schedules the work to
be done 0.66361 0.52182
Eigenvalues 5.19226 2.00325 1.40784
Percentage variance explained 39.9 15.4 10.8
Cumulative percentage 39.9 55.4 66.2
variance
Notes:
a
Principal components analysis with varimax rotation, converging in five iterations (all
loadings less than 0.3 suppressed)
b
Question wording was ``Please indicate the extent to which the following statements are Table II.
true of the chief executive officer (or equivalent) of your company by circling the appropriate Principal components
point'' measured on a seven-point Likert-type scale respectively anchored by (1) Strongly analysis of measures of
agree and (7) Strongly disagree and (1) Very true and (7) Very unlikely leadership style

which included; company liquidation; company policy of non-participation in


surveys, and inadequate completion of the survey instrument. In accordance
with the recommendation of Council of American Survey Research
Organisations (CASRO, 1982) response rates were calculated in the method
European which removed ineligible responses from the sample size. This resulted in a
Journal of return rate of 34.22 per cent. This response rate is noticeably above comparable
Marketing studies and possibly reflects the success of the adoption of the survey design
and administration recommendations discussed earlier. The majority of
35,5/6 respondents were male (87 per cent), the average age was 41.3 years, the
average length of company service was 5.96 years, whilst the average length of
752 time in their current position was 4.4 years. In keeping with common practice,
tests were conducted to gauge the possibility of response bias. No major
differences were found between the early and late respondents or between the
population and sample industrial classifications. This suggests that response
bias may not be a problem. Responses to the questionnaires were analysed
using a variety of techniques ranging from univariate analyses to more
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sophisticated multivariate techniques using the SPSS package. The following


section details the findings of these analyses.

Findings
In order to enable the construction of indices of market orientation and
leadership style, two separate principal components analyses with varimax
rotation were conducted. In each of the two factors analyses, factors were only
retained if they possessed an eigenvalue greater than one, accounted for over 5
percent of variance and if they were conceptually clear and interpretable
(Kaiser, 1958; Churchill, 1991; Hair et al., 1995).
As expected, the principal components analysis of market orientation items
led to the extraction of three factor solutions (see Table I) which cumulatively
explain nearly 70 per cent of variance. As anticipated, whilst three factor
solutions emerged, notable cross loadings between factor solutions were
evident. The first factor of five items loads very heavily onto a vector
generating an eigenvalue of over seven. Comprising the Narver and Slater
(1990) items designed to measure customer orientation, the solution is approved
and labelled customer orientation. The second and third factors load onto
vectors, generating respective eigenvalues of 1.20709 and 1.08893. The items
for the second and third factor are composed of items derived from the Narver
and Slater (1990) measures of competitor orientation and inter-functional co-
ordination. Consequently, the two factors are approved and given the
respective labels of competitor orientation and inter-functional co-ordination.
The principal components analysis of the items of the House (1971) and
House and Dessler (1974) measure of leadership style, led to extraction of three
factor solutions which explain over 66 per cent of variance (see Table II). The
first factor solution loads very heavily onto a vector generating an eigenvalue
of over five. Each of the five items which comprise this solution appears to be
geared toward the measurement of leadership participation. This style of
leadership a is non-directive form of role clarifying behaviour which is gauged
by the extent to which leaders allow subordinates to influence decisions by
requesting input and contribution. The items in the factor are conceptually
consistent and easily interpreted into a label of ``participative leadership style''.
The second factor solution again loads heavily onto a vector generating an Leadership style
eigenvalue of over two. Accounting for over 15 per cent of variance, the four and market
items of this solution appear to measure leadership consideration. This orientation
measure of supportive leadership (sometimes called leadership consideration)
focuses on the extent to which the behaviour of a leader can be viewed as
sympathetic, amicable and considerate of subordinate needs. Consequently, the
second factor is accepted and given the label ``supportive leadership style''. The 753
third solution is composed of those items geared toward the measurement of
leadership instrumentality. This measure of leadership style is akin to directive
leadership and is designed to gauge the extent to which leaders specify
expectations, allocate tasks and establish procedures. The solution is therefore
labelled ``instrumental leadership style''. Consequently, indices were
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constructed for the three measures of leadership style, the three dimensions of
market orientation and for an overall measure of market orientation by
calculating the summated means of scales.
Prior to exploring and describing relationships between measures of market
orientation and leadership style, the scales were examined and assessed to
gauge reliability and validity. Since market orientation is often studied as a uni-
dimensional construct, the examination of reliability included the inspection of
the dimensions of market orientation and an overall measure. The Cronbach
alpha coefficient (Cronbach, 1951) was used to evaluate the extent of reliability
(see Table III). This test resulted in the calculation of coefficients which ranged
from 0.9259 (for overall market orientation) to 0.6688 (for instrumental
leadership). The high coefficient scores led to the conclusions that the scales
were acceptably reliable.
As mentioned previously, the survey instrument was piloted and adjusted to
improve content validity (see Dillman, 1978; Churchill, 1991). However, in order
to assess the validation of index operationalisation, items in each scale were
correlated to the whole scale. This analysis indicated that each of the
correlations was both high and in the expected direction, indicating convergent
validity (see Table III). Discriminant validity was gauged in an approach akin

Cronbach
Number of alpha Inter-item correlationsa
Scale scale items coefficient Lowest Highest

Overall market orientation 13 0.9259 0.5042 0.7783


Customer orientation 5 0.8879 0.6754 0.7944
Competitor orientation 4 0.7816 0.5333 0.6174
Inter-functional co-ordination 4 0.8238 0.5332 0.6903
Participative leadership 5 0.9279 0.7936 0.8409 Table III.
Supportive leadership 4 0.7693 0.4233 0.6751 Reliability and scale
Instrumental leadership 4 0.6688 0.4222 0.5267 validation test results
for scales of market
Notes: orientation and
a
Pearson correlation coefficient. All correlations significant at the 0.001 level leadership
European to that of Gaski (1986), commonly used in strategic marketing studies (see
Journal of Jayanti and Burns, 1998). This analysis involved correlating all measures
Marketing adopted in the study and gauging the correlation coefficients against the alpha
coefficients (see Table IV). For obvious reasons, this analysis was conducted in
35,5/6 two parts, first, with the dimensions of market orientation, and second, for
different leadership styles. Since no correlation coefficient was higher than the
754 alpha coefficient of the scale, it is suggested that the scales used in the study
exhibit discriminant validity. Overall, tests of reliability and validity indicate
that all scales are acceptably reliable and valid.
The initial exploration of data was undertaken via the calculation and
examination of descriptive statistics (see Table V). All items were measured on
seven-point scales, resulting in a mid-point of four. The measures of market
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orientation display consistent results for the overall and the dimensional
indices of market orientation. The four measures of market orientation all
exhibit mean scores notably above the mid-point of four. Few inferences can be
gained from this analysis, however, the relatively high market orientation
scores suggest that the extent of market orientation displayed by the sample
organizations is high. Indeed, given that the sample is constituted of larger
companies, it may be argued that these scores lend support to theories which

Customer Competitor Inter-functional


orientation orientation co-ordination

Customer orientation 0.8879


Competitor orientation 0.7134 0.7816
Inter-functional co-ordination 0.7406 0.7420 0.8238
Participative Supportive Instrumental
leadership leadership leadership
Participative leadership 0.9279
Supportive leadership 0.5483 0.7693
Instrumental leadership ±0.0487 ±0.0816 0.6688
Table IV. Note:
Discriminant validity Italicized entries are Cronbach's alpha coefficients; others are correlation coefficients

Standard
Mean deviation Valid cases

Overall market orientation 4.89 1.05 321


Customer orientation 4.63 1.22 322
Competitor orientation 4.63 1.18 321
Inter-functional co-ordination 5.30 1.11 322
Participative leadership 3.39 1.37 302
Table V. Supportive leadership 3.89 1.24 311
Descriptive statistics Instrumental leadership 3.74 1.17 311
suggest an association between organizational size and market orientation (see Leadership style
for example Liu, 1995). In contrast, two of the three measures of leadership and market
style (supportive and instrumental styles) are narrowly below the mid-point, orientation
whilst the mean for participative leadership is notably lower (mean = 3.39).
Table VI presents the results of Pearson-product moment correlation analysis
between the three measures of leadership style and the overall and factor
analysed measures of market orientation. The correlation of leadership style 755
measures to measures of market orientation finds that the three leadership
styles each exhibit a monotonic relationship with market orientation. The
measures of participative and supportive leadership styles are positively and
significantly associated with the overall and dimensional measures of market
orientation at the 0.001 level. In contrast, the measure of instrumental leadership
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style is negatively and significantly associated with the overall and dimensional
measures of market orientation at the 0.001 level. These findings suggest that a
leadership style characterised by leader behaviour geared towards expectation
specification, task allocation and procedure setting (that is an instrumental
leadership style) impedes all aspects of market orientation. This is partially
consistent with the findings of Bass and Avolio (1993) who find that a similar
style of leadership is not conducive to superior organizational performance.
However, a leadership style characterised by non-directive role clarification
(leadership participation) or consideration (supportive leadership style) fosters
all facets of market orientation. This provides empirical verification in support
of the anecdotal evidence found or implied in broader organizational research
(see Quick, 1992; Schein, 1992) which suggests links between such leadership
styles and organizational effectiveness.
Whilst the analysis presented in Table V provides a strong indication of
associations, it should be noted that zero-order correlation analysis may over-
estimate the strength and direction of association. Consequently, some form of
multivariate analysis was deemed necessary. A review of a range of
multivariate techniques found that regression analysis was potentially
appropriate. However, despite common usage (McIntyre et al., 1983), Bryman
and Cramer (1994, p. 245) argue that some forms of regression analysis are
controversial since they ``afford priority to statistical criteria for inclusion
rather than theoretical ones''. Consequently, according the recommendations of

Overall Inter-
market Customer Competitor functional
orientation orientation orientation co-ordination

Participative leadership 0.3671* 0.3627* 0.2833* 0.3485* Table VI.


Supportive leadership 0.3617* 0.3325* 0.3278* 0.3243* Product-moment
Instrumental leadership ±0.3382* ±0.2757* ±0.3117* 0.3297* correlations between
measures of market
Note: orientation and
* Significant at the 0.001 level leadership style
European Everitt and Dunn (1991) and Bryman and Cramer (1994), the use of forward,
Journal of backward and stepwise selection methods were rejected and the enter method
Marketing of model specification adopted.
Table VII presents the results of the ordinary least squares multiple linear
35,5/6 regression analyses indicating partial coefficients (B), standard errors,
standardised regression coefficients (beta) and t-statistics. It should be noted
756 that (respectively) the Belsley et al. (1980), Ramsey (1974), Hair et al. (1995) and
Goldfeld and Quandt (1965) tests for multicollinearity, linearity, normality and
homoscedasticity were conducted and no problems encountered.
Table VII details a series of regression analyses designed to gauge the
association between leadership styles and overall market orientation and
between leadership styles and the dimensions of market orientation. In each of
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the regression equations, the association between leadership styles and the
dependent variables (overall market orientation, customer orientation,
competitive orientation and inter-functional co-ordination) remains monotonic.
That is, the relationship between participative and supportive leadership styles
is consistent across each dimension of market orientation and the overall
market orientation measure. Similarly, the association between instrumental
leadership style and the dimensions and overall measures of market orientation
is consistently negative. Furthermore, the coefficient of multiple determination
(R2) of each of the regression equations is similar. As expected, the coefficient of
multiple determination where overall market orientation is the dependent
variable is the greater at 0.27. This suggests that over 27 per cent of the
variation of the measure of overall market orientation around its mean can be
attributed to varying leadership styles, indicating that leadership style is a key
antecedent to market orientation.

Conclusions and implications


In an evaluation of existing literature, it emerged that management behaviour
is frequently mentioned as a key barrier to developing a market-oriented

Dependent variables
Overall Inter-
market Customer Competitor functional
Independent variables orientation orientation orientation co-ordination

Participative leadership 0.24** 0.26** 0.15* 0.24**


Supportive leadership 0.21* 0.17** 0.22** 0.17*
Instrumental leadership ±0.31** ±0.25* ±0.29** ±0.30**
R2 0.27 0.22 0.20 0.24
Significance of F 0.0000 0.0000 0.0000 0.0000
N 323 323 323 323
Table VII.
Regression of market Notes:
orientation and ** p < 0.001
leadership measures * p < 0.01
culture. Furthermore, an examination of studies of the process of market Leadership style
orientation development finds repeated references to the importance of and market
management behaviour in improving levels of market orientation. However, a orientation
limitation of current theory is the lack of research into the relationship between
leadership style and market orientation. This gap in theory is surprising given
that a broader body of literature in organizational theory alludes to the
important role leaders play in improving organizational performance (see for 757
example Fiedler, 1996; Hennessey, 1998). In an effort to redress this imbalance,
this study finds monotonous relationships between participative, supportive
and instrumental leadership styles and market orientation. Notably,
participative and supportive leadership styles were strongly positively linked
to market orientation, whilst an instrumental leadership style was negatively
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linked to market orientation.


The findings of this study lead to a number of interesting implications for
both theorists and practitioners. As discussed previously, the regression of the
three measures of leadership style against market orientation found that over
27 per cent of the variation of market orientation can be explained by analysing
leadership style. As such, this study contributes empirical verification that
leadership style is a critical antecedent of market orientation. The findings that
instrumental leadership constitutes a key barrier to market orientation whilst
participative and supportive leadership styles are pivotal facilitating factors
are important for two linked reasons. First, in terms of the barriers and second,
in relation to the process of market orientation development.
While considerable advances have been made in identifying and analysing a
range of barriers to market orientation (see for example Jaworski and Kohli,
1993), the findings of this study suggest that the effect of leadership style on
market orientation has been underestimated in past research. Past studies have
produced a considerable and daunting array of obstacles to market orientation,
commonly focusing on system, strategy, structural or procedural barriers (see
Harris, 1996). This concentration on the tangible impediments to market
orientation has been to the detriment of the study of less intangible (and
arguably elusive) obstacles. This issue has long been acknowledged in the
organizational behaviour literature where researchers have examined the
relationship between leadership style, culture and performance (see for
example Bass and Avolio, 1993; Hennessey, 1998). The current examination of
the association between market orientation and leadership style constitutes an
attempt to redress this imbalance. Indeed, given the strength of associations
uncovered, it would appear that this is long overdue. Consistent with the
recommendation of Johnson (1992), the findings of the study indicate that
theorists and practitioners interested in organizational effectiveness should
review intangible barriers (such as leadership style) in conjunction with the
more tangible creations of a company.
A further contribution of this study is in relation to the process of developing
market orientation. Although there is an increasing body of research into the
barriers to market orientation, considerably less is understood of the process of
European market orientation development. The identification of systems and structures
Journal of which impede market orientation is undoubtedly useful, however, such
Marketing knowledge is pointless without an understanding of the process through which
change can be managed. The finding of strong and positive associations
35,5/6 between supportive and participative leadership styles and market orientation
provides an indication of how this process can be driven. Specifically, the
758 results of the study indicate that leaders with supportive or participative styles
may provide an appropriate environment in which market-oriented culture
change may be possible. In this sense, an understanding of these leadership
styles is crucial to the ongoing process of market orientation development.
Given the fact that no single individual can achieve organizational goals
without the help of others, it is important to gain an understanding of how and
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why certain leaders are able to transform their organizations and instil a
genuine belief in focusing on market needs. It is widely acknowledged by both
theorists and practitioners that developing a market orientation is a complex
and arduous process. The findings of this study suggest that an awareness of
the role of leaders and the effect of leadership style provides a partial
explanation of why the process of developing a market oriented culture proves
so elusive in some organizations and yet achievable in others. This is consistent
with the findings of leadership theorists who suggest that the presence of
certain leadership styles may significantly influence employee motivation and
ultimately company performance (see Bycio and Hackett, 1985; Howell and
Avolio, 1993). Thus, given the clear links between market orientation and
organizational performance (see Slater and Narver, 1994), an indirect link
between leadership style and company performance can be claimed.
A further implication of this study can be derived from the application of
wider organizational concepts to strategic marketing issues. If a genuine
understanding of intra and extra-organizational dynamics is ever to be
accomplished then an appreciation of concepts outside of the traditional
domain of marketing is imperative. This study provides humble evidence of the
utility of such an approach in that the application of a concept derived from
broader organizational theory (leadership style) has provided an important
insight into a central strategic marketing issue (market orientation). Indeed,
given the strength of associations, it is arguable that a true understanding of
the antecedents to market orientation is impossible without this appreciation.
In addition to the implications mentioned above, a number of issues
specifically relevant to practitioners require discussion. Given the finding of
positive associations between participative and supportive leadership styles
and market orientation, it would appear prudent to advise marketing and
general management practitioners to concentrate on developing or encouraging
supportive or participative leaders or leadership styles. One of the most cited
researchers on leadership, Fiedler (1996), has identified the limited theoretical
and practical attention devoted to leadership training as undermining the
potential contribution of leaders to the success of organizations. This study
endorses this view and argues that appropriate leadership training will help
existing and new managers to improve their effectiveness. Leadership training Leadership style
can be achieved in a variety of different ways and on a number of differing and market
occasions. For example, during recruitment and induction, managers may be orientation
vetted for leadership skills and training needs in this area identified. Training
may also be required for current managers. It would also appear to be judicious
to involve employees as far as possible in decision making, especially where
such decisions are likely to have a direct effect on them. In this way, an 759
environment can be created where employees (at all levels) can have a sense of
``ownership'' and involvement which will be manifested in their interactions
with customers of all types.
This study is designed to provide an initial insight into this issue and to
supply a foundation for further research in this area. The limitations of this
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study provide a number of different avenues for future research. A major


limitation is that the cross-sectional nature of the data collected precludes
claims of causality. In this context, it is suggested that longitudinal research
could provide a means of determining the directionality of associations. The
utilisation of survey methodology to examine market oriented culture and
leadership styles could also be construed as a limitation of the study. In
particular, some culture theorists have suggested that organizational cultures
cannot be accurately gauged using survey instruments (see Schein, 1996).
Consequently, a potentially fruitful avenue for future research could be the in-
depth case study of the impact of leaders' actions and attitudes on the
development of market orientation. The replication of this study in different
contexts would also add insight and contribute to the generaliseability of the
results. In particular, studies outside of the UK context or within specific
sectors or industries appear, potentially, most worthy. Extensions to the
research could re-examine the focus of leadership styles, possibly studying
leadership style at all levels of the organization from senior executives to junior
supervisors. Finally, further research is necessary to uncover additional
barriers to market orientation and to elucidate the process of developing
market orientation. In particular, the study of inter-personal, team and
departmental dynamics seems a potentially fertile field for future studies.
Indeed, given that this special issue focuses on people, it is arguable that the
process has begun.

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