The current issue and full text archive of this journal is available on Emerald Insight at:
https://www.emerald.com/insight/1471-5201.htm
JRME
23,2
268
Received 14 August 2019
Revised 29 June 2020
6 January 2021
24 May 2021
Accepted 13 August 2021
Journal of Research in Marketing
and Entrepreneurship
Vol. 23 No. 2, 2021
pp. 268-281
© Emerald Publishing Limited
1471-5201
DOI 10.1108/JRME-08-2019-0067
Entrepreneurial and market
orientation interactive effects on
SME performance within
transitional economies
Robert Zacca and Saad Alhoqail
Alfaisal University, College of Business, Kingdom of Saudi Arabia
Abstract
Purpose – The purpose of this study is to examine how the adaptive nature of market orientation (MO) and
the risk-taking nature of entrepreneurial orientation (EO) might be integrated for a complementary and
reinforcing synergetic effect on firm performance within transitional economies.
Design/methodology/approach – The paper suggests links between the EO and MO concepts and
develops propositions informed by prior research and reasonable assumptions. The propositions aim to spur
future research to uncover further evidence that validates the testable hypothesis.
Findings – In particular, the study calls for investigating the interaction effect of EO with MO on new
product entry, market intelligence collection and processing competence. In addition, the study
proposes research studies on whether EO’s interaction effect with MO will tend to mitigate risk in the
development of breakthrough innovation and whether the interacting strategic orientations are creating
a synergetic effect towards firm performance. Finally, the study recommends that research models
should be tested and understood in consideration of conditions and circumstances from varying
contexts, such as the small and medium enterprise sector within transitional economies and the media
industry.
Originality/value – Whilst the performance implications of EO and MO, when modelled separately,
have been extensively studied in developed and diversified market economies, studies are in the early
stages of investigating the joint effect of EO and MO on firm performance, especially within transitional
economies.
Keywords Entrepreneurial orientation, Marketing orientation, Transitional economies, SME,
Performance
Paper type Research paper
Introduction
A firm’s strategic business orientation is a strategic posture that determines the nature and
scope of its operational activities and plans. A shift in orientations results in a movement in
perceptions of organizational priorities, customers and business model. Accordingly, a
firm’s strategic orientation represents the underlying principles, which guide the decision-
making of its members (Khalid, 2020; Miles and Arnold, 1991). Market-oriented enterprises
focus on responding to the articulated needs of the customers lowering the risk of
misalignment of new product development. Entrepreneurial-oriented enterprises are
proactive in taking a leading role in formulating innovative new solutions that customers
may not have been able to describe potentially helping the firm attain market leadership.
Enterprises need to align the two orientations in such a way that the resulting combination
reinforce the benefits of each in achieving overall enhanced enterprise performance
(Atuahene-Gima and Ko, 2001). The interest in the interrelationship between entrepreneurial
orientation (EO) and market orientation (MO) in management literature is taking on Transitional
greater importance (Montiel-Campos, 2018). Whilst the performance implications of EO economies
and MO, when modelled separately, have been extensively studied in developed and
diversified market economies, studies are in the early stages of investigating the joint
effect of EO and MO on firm performance, especially within the small and medium
enterprise (SME) sector of transitional economies (Boso et al., 2013). Both the
entrepreneurial and MOs represent a strategic posture systemic of the challenges posed
by dynamic environments, typified by high growth transitional economies (Bhattarai 269
et al., 2019). Countries in transition typically undertake ambitious reforms to open and
liberalize their economies to competition. Actions include transitioning from a centralized
regulated system of control towards a deregulated market-based system and promoting a
more significant involvement for SMEs within industries. The question arises whether
studies of MO and EO within developed economies are inferable to SMEs within the
transitional economies (Lyles et al., 2004).
The entrepreneurial process involves the following three dimensions: Innovation, risk
taking and proactiveness (Covin and Slevin, 1991; Miller and Friesen, 1982; Morris and Paul,
1987). EO research has frequently been conducted on large corporations in developed
economies and may not be generalizable to SMEs within the dynamic environments of
transitional economies as the latter differs from the former in significant areas. For example,
in comparison of firm size, SMEs differ from large firms in terms of having greater
enterprise-wide contact with customers and competition.; and in comparison of economy
development, transitional economies differ from developed economies in terms of the rate of
change of consumer demand, industrial competitive forces and macroeconomic cycles (Kara
et al., 2005; Kocak et al., 2017). Therefore, because of the nature of SMEs in transitional
economies, a more customer-oriented and proactive entrepreneurial approach might be
required for enhanced performance (Kara et al., 2005). Whilst the extant research literature
informs us to a certain degree the potential interactive effects of MO and EO on SME
performance growth, these study results and theoretical constructs, which are frequently
conducted in developed economies, may not be generalizable to other contexts, in particular,
SMEs in transitional economies (Kocak et al., 2017).
A firm’s MO refers to the extent customer needs are assessed and satisfied i.e. it
represents a customer focused perspective (Frishammar and Hörte, 2007; Kohli and
Jaworski, 1990). Enterprises with high MO have as an objective to satisfy customer better
than their competitors in the pursuit of superior performance. These enterprises pay more
attention to understanding the shift in consumer market demand and competitive
environment than their counterparts in the industry (Kocak et al., 2017). Entrepreneurship as
a spur to enterprise change and growth and marketing as a focus on customer needs have
common and related concerns for organizations engaged in business development activities
(Morris and Paul, 1987). The purpose of this study is to examine the interrelationship
between the two orientations and determine the extent each play in sustainable business
development. The research question investigated in this study is, “How shall the adaptive
nature of MO and the risk-taking nature of EO be integrated for a complementary and
reinforcing synergetic effect on SME performance within transitional economies”? Due to
the greater uncertainty of transitional economies, SMEs must adjust their strategic
orientation to the changing market conditions, as well as be more proactive and innovative
to satisfy consumer needs (Kocak et al., 2017).
This study aims to spur empirical investigations that will advance the understanding of
strategic orientations, particularly in transitional or developing economy contexts (Figure 1).
There are concerns that the generalizability of the findings taken from developed economic
JRME
EO-low
23,2
1 New Product Entry -
1.
in
incremental effect

270 2 Market intelligence collection and

2.
MO
p
processing competence - novel
eeffect
3
3. Risk in developing breakthrough
in
innovation - mitigating effect
Figure 1.
44. Firm performance - positive
Structural effect
framework: SMEs
within EO-high 5. Perception and pursuit of
transformational opportunities - positive effect within
media industry
economies

context, where the vast majority of past research in this area has been conducted, may not
be inferable to other economic systems at different stages in their development (Kocak et al.,
2017). Thus, study results and its implications from developed economies are expected to
cover over significant differential performance outcomes for SME firms operating in a
transitional economy. Specifically, the view that an alignment of high levels of EO and MO
are more salient for the success of businesses in transitional economies than in more
developed economies is up for debate (Williamson, 2009) and very few research studies have
been conducted to empirically support these assumptions. The requirement to take-up
research relevant to transitional economies will further extent research in the field and
support our understanding of how the alignment of EO and MO effects outcomes in varying
economic contexts (Boso et al., 2013; Welter et al., 2016).

Theory development
The entrepreneurial orientation, market orientation interaction effect on new product
development
Entrepreneurship’s popularity in management literature is related to the perceived
vulnerability of firms in an increasingly dynamic and turbulent environment. SMEs in
transitional economies are experiencing faster rates of change and complexity in the
environment than their counterparts in developed economies (Montiel-Campos, 2018; Morris
and Paul, 1987). The transitional economy context has unique characteristics differentiating
it from the developed economy context. SMEs operating in transitional economies face high
instability and lack of maturity in their market and institutional environment. The higher
the environment volatility the greater the uncertainty SME’s face in predicting future
market demand and business conditions. Furthermore, government control of scare
resources in transitional economies is significant, which may have a constraining effect on
SME practices (Sheng et al., 2011). Thus, the interactive relationship between SME’s MO and
EO strategies and their predicted outcomes in transitional economies may not be readily
inferable from studies conducted in developed economies. These unique circumstances of
transitional economies support further research investigation on the interactive relationship Transitional
between MO and EO and their outcomes (Luu and Ngo, 2019). economies
Case in point, new product development is dependent on the environment in which it
operates, and SMEs are not always certain how to respond to changes to the environment.
From a passive or reactive point of view, organizations are seen to be under the control of
their environment and sustainability is contingent on the speed of response to
environmental changes and the ability to build defences that “moderate the impact of
271
significant environmental developments” (Morris and Paul, 1987, p. 249). However, from a
more proactive point of view, organizations are seen as change agents modifying the
environmental context in which they operate through the design of new value added
innovative business models or product and service offerings (Zacca and Selen, 2011; Zacca
and Dayan, 2017).
The reactive approach, i.e. a MO approach, calls for a customer and competitor
orientation that continually assesses environmental changes to consumer demand
preferences and industry competitive factors, combined with a flexible organization
structure to respond to the changes (Narver et al., 1990). MO of an organization is proficient
in managing change in the external environment (Kohli and Jaworski, 1990; Morris and
Paul, 1987). The proactive approach, i.e. an EO, calls for a reconceptualization of strategic
parameters within which the industry operates, leading to an entirely new combination of
productive resources and industry competitive factors (Morris and Paul, 1987). The EO of an
organization is proficient in inducing disruptive value-added change to the industry, leading
to the establishing of new market space (Kim and Mauborgne, 2017).
Whilst the two strategic orientations may be defined as separate constructs they interact
as compliments with potential reinforcing effects that allow a firm to generate new ideas for
product or service offerings or business models (Atuahene-Gima and Ko, 2001; Frishammar
and Hörte, 2007). This reinforcing effect is not guaranteed. A high level of MO, at the
expense of a low level of EO, that strictly adheres to customer information when formulating
a strategic move can lead to new products that are characterized as bland, banal or
conventional. This could be the case as customer perspectives are often restricted to the
familiar. Customers neither rarely have knowledge of cutting-edge technology nor are they
necessarily aware of relevant trends. Thus, a high level of MO tends to lead to incremental
or marginal product improvements and can have minimal or even negative impact on
product innovation and firm performance (Atuahene-Gima and Ko, 2001; Im and Workman,
2004; Matsuno et al., 2002). An over-enthusiasm for or excessive reliance on market research
methods can lead to misdirection or negative feedback on truly breakthrough innovation
products because the inertia of current customers is towards the existing familiar product
offerings in the market (Renko et al., 2009).
A market-oriented enterprise focusing on understanding the articulated needs of
customers tends towards the exploitation of existing opportunities and leveraging current
assets and experience. MO encourages the improvement of current offerings to meet the
evolving needs of the existing customer base as opposed to the development of break-
through innovations aimed at creating new market space. Considering too carefully
customer articulated needs tend to favour incremental improvements to current offerings at
the expense of developing more significant value-added offering. MO reflects adaptive
learning whereby the enterprise recognizes environmental changes and formulates a
response based on previously held beliefs and assumptions in respect to customer needs and
the competitor actions (Atuahene-Gima and Ko, 2001):
JRME P1. When SMEs, within transitional economies, have high levels of MO and low levels
23,2 of EO, their new product/service entry will tend to be incremental with marginal
product improvements as opposed to be novel with high value-added
improvements.

Entrepreneurial orientation and market orientation interactive effect on market intelligence

272 collection and processing competence
MO describes an enterprises’ focus on the collection and dissemination of along with
responsiveness to market intelligence in serving customer needs. Studies are not conclusive
that market information acquisition and market research results are related to new product
development and firm performance (Dubey, 2020; Moorman, 1995). Incremental
improvements on existing products is the likely outcome of focused attention on market
information (Covin, 1991; Frishammar and Hörte, 2007; Atuahene-Gima and Ko, 2001). If a
firm has a strong inclination for breakthrough innovation rather than incremental
innovations, a focused market research orientation likely will not be sufficient to indicate or
guide the development team to their desired objective (Khalid, 2020). Radical new product
designs are beyond the purview and experiences of potential customers, who have existing
behavioural patterns and familiarities that are not necessarily compatible with suggesting
game changing ideas. In developing radically new business models or products and
services, conventional market research methods are of limited utility (Renko et al., 2009). In
this light, being market-oriented is counterproductive for an SME that is trying to be
entrepreneurial and achieve high performance growth in an economic system transitioning
from a known familiar state to an unknown unfamiliar state (Matsuno et al., 2002).
This does not diminish the importance of assessing customer needs throughout the
entrepreneurial or product development process, but there should be a caution to the efficacy
of market information in enhancing success rates of new product development and firm
performance growth in transitional economies. Researchers are justified in examining the
joint effect of market and EO on SME’s performance in varying economic contexts (Lekmat,
2018). When an organization’s market and EOs are aligned there exists the potential to
achieve a maximum positive effect on performance (Li et al., 2008; Masa’deh et al., 2018).
Investigating and addressing non-customer needs, for example, offers wider potential for
new demand outside the existing industry parameters. Existing customers make up a
smaller sample compared to all the non-customers, who can be reached through
entrepreneurial-creating strategies. When existing customers are asked, “How can we serve
you better”? Their feedback tends towards the familiar, e.g. “Improve upon the existing and
offer it for less”. This customer focus drives firms to offer enhanced solutions to the
industry’s existing problem. Industry dynamics then becomes a competition to gain a
greater percentage of existing customers. New demand created by looking to non-customers
is neglected and waiting to be served. By gaining critical insights into non-customers and
what keeps them out of an industry, organizations can uncover the major impediments
imposed by the industry that keep people out. Non-customers, not existing customers, may
provide the greatest insight into new product development and firm performance (Kim and
Mauborgne, 2017).
Furthermore, a market-oriented firm focused on articulating the needs of customers “may
miss opportunities for developing new products that customers cannot articulate unless
they also develop” an EO that proactively ventures beyond the current industry
conventional competitive boundaries, seeking out new ways of competing and satisfying
unarticulated underlying needs of both customers and non-customers (Li et al., 2008, p. 116).
MO is an adaptive capability; whereby firms respond to market environmental conditions. Transitional
EO, in contrast, is an innovative capability; whereby firms proactively initiate change in the economies
competitive landscape (Atuahene-Gima and Ko, 2001; Renko et al., 2009).
Market and EOs are both learning constructs that are a part of a firm’s culture and
influence its success. Learning about markets and industry are common to both orientations
(Mac and Evangelista, 2016; Hernandez-Linares et al., 2018). As such, both orientations
require organizational capacity and systems to generate learning and build capabilities
(Migliori et al., 2019). Generative learning is necessary for firms to adapt to their 273
environment and to challenge conventional views within their industry (Baker and Sinkula,
2009; Atuahene-Gima and Ko, 2001; Pratono et al., 2019; Wang, 2008). Market and EO
determine the type of strategic initiative pursued, as well as the methods used at the
operational level. They shape the way organization members process market and industry
information. They create internal organization “environments in which desired behaviours
are encouraged and supported” (Atuahene-Gima and Ko, 2001, p. 55). Market and EOs are
internal firm capabilities that contribute to the creation of new product offers, new business
models and unique resources that enhance a firm’s performance in a changing and dynamic
transitional economic environment (Bhuian et al., 2005; Boso et al., 2013; Ipek, 2018; Webb
et al., 2011).
Breakthrough radical innovation and the performance growth its spurs require novel
ways of interaction between the organization and its environment. How shall the adaptive
aspect of MO and the risk-taking aspect of EO be integrated for a complementary and
reinforcing synergetic effect on firm performance? Literature is unclear about how market
and EO may interact within SMEs operating in transitional economies to drive performance.
Can the high risk of EO be countered by a strong MO that is more rooted in certainties
(market driven), whilst at the same time, avoid the adaptive myopic nature of a marketing
focus? Similarly, can the adaptive nature of a MO be countered by an alignment with the EO
that is focused on technology driven innovativeness, whilst at the same time, avoid the trap
of innovation for technology sake (Matsuno et al., 2002)? A high level of entrepreneurial
process capability does require a certain level of market intelligence, sharing and
responsiveness capabilities. Entrepreneurial and MO are synergistic. EO as an organization
capability has a modifying effect on market intelligence collection and processing
competence (Bhuian et al., 2005). MO can have a full performance impact within an
organization if MO is driven by a proclivity towards entrepreneurship (Matsuno et al., 2002).
Scholars have called for further studies investigating whether the alignment of high levels of
EO and MO is expected to produce differential performance outcomes for SME firms
operating in the transitional economy compared to SME firms operating in more developed
economies (Boso et al., 2013):

P2. When SMEs, within transitional economies, have high levels of EO, their market
intelligence collection and processing competence will tend to be more novel rather
than conventional.

Relationship of entrepreneurial orientation, market orientation and risk in developing

breakthrough innovation in small and medium enterprises
EO with its exploratory nature is seen as engendering risk seeking behaviour in the
entrepreneurial process. Initiatives fostered by EO tend to require new combinations of
resources along with new capabilities that might not be currently available in the enterprise.
This engenders risk and experimentation. EO, therefore, reflects exploratory learning by
which the enterprise members challenge previously help assumptions regarding the
JRME consumer market, the competitive industry forces and the extended environment. EO
23,2 described as a proactive strategic orientation leads to breakthrough innovation with high
levels of uncertainty and risk. An unbridled EO, without the sufficient interaction effect of
MO, may lead to the erroneous belief that technological supremacy is equated to enterprise
superiority (Atuahene-Gima and Ko, 2001).
Knowing what information to seek, how to seek it (e.g. what questions to ask) and from
274 whom, is more valuable than the capacity to generate a large amount of information relative
to competitors. In addition, a firm’s proclivity for information sharing and its efficacy in use
this information fosters an organization’s culture or predisposition towards innovativeness,
a salient factor affecting SMEs performance operating within transitional economies
(Deshpande et al., 1982; Matsuno et al., 2002). The network capabilities of a firm and its
“ability to initiate, develop and use internal organizational, as well as external inter-
organizational relationships” forms the foundation for knowledge creation and
innovativeness (Zacca et al., 2015, p. 4). In transitional economies, business-supporting
systems tend to be weak. As a result, exclusive reliance on entrepreneurial proclivity is not
sufficient for business success. Entrepreneurial firms operating in transitional economies
must be able to leverage the benefits of their EO efforts by building strong networks with
governmental and partner organizations, as well as internally within the SME confines.
Networking capabilities is critical in explaining variations in outcomes of EO and MO
activities in transitional economies (Boso et al., 2013).
Knowledge creation and innovativeness “evolving from the collaborative activity where
information is exchanged, judgements are tested and opportunities are recognized” become
increasingly important in the dynamic market environments of transitional economies
requiring complex solutions (Zacca et al., 2015, p. 3). EO is a strategic posture directing
market intelligence processes. It influences the way market intelligence is collected and
used, thus how MO processes are executed (Keh et al., 2007). Innovativeness in product and
business development is greatly enhanced by novel ways of collecting and incorporating
market intelligence into the entrepreneurial process (Bhuian et al., 2005). The entrepreneurial
process’ goal is to enhance firm performance and achieve business success. This ultimately
occurs when the new offer stimulates market demand by providing significant added value
in meeting market needs. MO facilitates organization members to mitigate entrepreneurial
risk by their “willingness and ability to engage in market learning activities” especially in
transitional economies where economic infrastructure is under-developed (Matsuno et al.,
2002: 21). Therefore, for an SME operating in a transitional economy leveraging a high level
of both EO and MO can be effective in enhancing business success (Boso et al., 2013):

P3. When SMEs, within transitional economies, have high levels of EO their marketing
capabilities will tend to mitigate risk in developing breakthrough innovation.

The synergetic of the effect of entrepreneurial orientation and market orientation on small
and medium enterprise performance
Entrepreneurial and MOs are independent yet interacting constructs that act as key factors
in contributing to firm performance growth. However, necessarily increasing the quantity of
MO may not lead to the desired firm performance benefits. Emphasizing the quality of
interaction between the MO and EO may attain more desirable performance results. For
instance, a high degree of MO is not always desirable especially if the economy is moving
towards a new state, as is typical of transitional economies, and the SME’s aim is to promote
and develop breakthrough innovations. This suggests that a moderated MO can better serve
the needs or requirements of entrepreneurial goals. Thus, organizations should pay
particular attention to how its EO, and the values and capabilities it imbues, influences its Transitional
marketing activities and processes (Most et al., 2018). In addition, whether the interacting economies
orientations are having a reinforcing effect on each other, creating a synergic combination
that leverages each for an efficient and effective approach to new business development and
enterprise growth.
The alignment of MO and EO processes and practices will enable the enterprise meet
current and emerging consumer needs. MO is an adaptive capability in which enterprises
respond to market environmental condition. EO, on the other hand, is a proactive capability 275
that aims to alter the competitive market space to attain an advantage. Enterprises with the
effective alignment of MO and EO will fear better in yielding superior performance
outcomes and attaining a sustainable competitive advantage. A coalignment of both
orientations will engender product offering that are together pioneering relative to the
industry standard offering with innate market advantages, thus creating and effecting
change within the industry (Atuahene-Gima and Ko, 2001):

P4. In the SME context, within transitional economies, the interacting effect of EO with
MO creates a synergetic effect that tends to enhance firm performance.

Application of entrepreneurial orientation and market orientation analysis within the media
industry
The media industry as the age of the internet browser has experienced fundamental changes
and is still continuously producing opportunities for entrepreneurs seeking new ways to
effectively attract and retain the eyes and ears of the consumer market (Khajeheian, 2017).
Low entry barriers have given rise to SME activity that is driving innovation within the
industry. The fast-changing nature of technology development and business models within
the industry has intensified competition and spurred SME growth. Operating in this high
intensity environment and facing new opportunities of entry, media organizations need to be
equipped with entrepreneurial capabilities to invent new combinations of resources to meet
the demands of the market and to deliver added value service and product offerings (Manrai,
2019). In transitional economies the rapid rate of growth of societies in general and in the
media industry in particular has challenged government bodies to adapt policy and
infrastructure to manage the rate of change. Within transitional economies this means that
emerging sectors such as the media industry might get left behind by other national
priorities especially due to knowledge and infrastructure vacuums that define these
emerging industries. Policymakers may not keep pace with emerging industries in
transitional economies in addressing knowledge and infrastructure vacuums which enable
innovation and creative business model design to flourish. SMEs along with their
institutional supporters are in the development stage as policy guidelines and
infrastructures try to keep pace.
Compounding the challenges faced in transitional setting, studies have shown low levels
of EO among media students (Goyanes, 2015). This low level of EO among media students is
reflected on the professional level, where media professionals are experiencing diminishing
career opportunities within the traditional legacy media companies due to a lack of
innovation and growth within those companies (Achtenhagen, 2017). On the other hand,
technology developments, allowing for media products to become digitalized and
dematerialized, is paving the way for new entrepreneurial start-ups to advance and disrupt
the traditional media industry. These digital media start-up enterprises have revolutionized
the means of “producing, marketing, distributing, and consuming media products”
(Achtenhagen, 2017, p. 2). Their revenue streams and innovative business models challenge
JRME previously established rules within the media industry and notions of how the media
23,2 industry should work (Achtenhagen, 2017; Gustafsson and Khan, 2017). The recognition,
discovery, evaluation and exploitation of opportunities are key outcomes of EO and MO
(Shane and Venkataraman, 2000; Zacca and Dayan, 2017). The investigation of the
interactive effect of EO and MO on SME performance within transitional economies would
provide fertile ground for uncovering interesting results in the potentially highly disruptive
276 media industry:

P5. The interactive effect of EO and MO, within the SME sector of the media industry,
will tend to positively influence the perception and pursuit of opportunities.

Implications for practice

The study’s conceptual framing provides insights for SME managers within transitional
economies. The study indicates that an integrative approach to the business development of
EO and MO may yield enhanced firm performance benefits than a disaggregate approach.
This would imply that SME managers in transitional economies should pursue strategies
that encourage the simultaneous development of high levels of EO and MO activities. This
management approach can maximize the benefits of these reinforcing and complementary
strategic orientations to yield novel market intelligence collection and processing
competence leading to breakthrough product/services introductions, in addition to
mitigating the risk in developing breakthrough innovations together with increasing
the perception of new opportunities to enhance SME performance (Kocak et al., 2017). In the
challenging and uncertain state of transitional economies, SME managers would be
encouraged to leverage their capabilities for EO and MO activities. Adoption of EO at the
exclusion of MO or adoption of MO at the exclusion of EO might be a less effective strategy
in pursuit of organization performance goals (Atuahene-Gima and Ko, 2001).
For illustration, SME managers engaged in business development activities, within
transitional economies, should seek out and use entrepreneurial methods and approaches to
generating market intelligence, for a more efficacious way to inform entrepreneurial
activities. Similarly, these managers should seek out new ways to disseminate market
intelligence within their organization, for instance by developing visual schematic diagrams
that prioritize the relevant information that facilitate understanding and utilization and
abstract out the irrelevant low value potentially distracting information. Managers should
also pay attention to the impact of EO on other areas of the firm, such as its organization
structure, human resource practices and administrative routines to ensure strategic
alignment (Bhuian et al., 2005; Couto and Ferreira, 2017).
Policy implications also exist. Transitional governments and their supporting agencies
can be encouraged to support training and education to help SME managers better
understand how to enhance their levels of EO and MO to spur firm performance gains.
There is potential for the EO and MO activities of SME firms to spur employment growth
and generate new wealth. The growth of SMEs facilitated by strategic orientation practices
aim to offer solutions for economic and employment development within transitional
economies (Global Entrepreneurship Monitor, 2020–21).

Implications for future research

This review of the interaction between entrepreneurial and MO reveals opportunities for
future research inquiry. The premise of the research is that the interactive effect between
entrepreneurial and MO may influences firm performance differently then what extent
research within the field has shown. This premise needs to be tested and understood in Transitional
consideration of conditions and circumstances from varying contexts. As an example, economies
knowledge of how the interaction of entrepreneurial and MO effects small enterprise
performance is limited and is expected to be different than the more extensively researched
large firm context (Frishammar and Hörte, 2007). Similarly, future research is encouraged to
examine the potential distinction of the interactive relationship between entrepreneurial and
MOs in young and nascent firms. Literature has not addressed how young and nascent
entrepreneurial-oriented enterprises seek out, disseminate and use market intelligence to 277
enhance firm performance (Keh et al., 2007). Furthermore, there is a paucity of research into
the interactive effects of entrepreneurial and MO on firm performance in transitional energy
dependent economies. Therefore, examining small and nascent entrepreneurial firms within
the contextual idiosyncrasies of these transitional economies could present a modified view
of the likely performance benefits of the strategic orientation interactive effect on
performance (Boso et al., 2013; Marvel et al., 2014).
Our understanding of the interactive relationship of entrepreneurial and MO and its
effect on firm performance can be further enhanced by viewing the relationship from a
variety of theoretical perspectives. Whilst this interactive relationship is essential to
understanding business development and its performance consequence, an integration of
other theories can provide a deeper understanding. For instance, the research could benefit
from integrating learning theories, which emphasizes the benefit of knowledge acquisition
in the entrepreneurial process. Entrepreneurial opportunities are discovered from new
knowledge and learning of new ways of design and production. These functions may be
appreciably unique within economies in transition. Thus, future research that explores how
entrepreneurs create new opportunities from pertinent new insights and skills learned from
the entrepreneurial process within transitional economies is very helpful (Baker and Nelson,
2005). Another promising area for inclusion is theories on social media, alliances and
(Acosta et al., 2018) capabilities within the transitional economy context. These theories
emphasize the importance of social capital in accessing market and industry intelligence
(Marvel et al., 2014). Past research on the strategic EO and MO – performance relationship
has shown that the performance implication of the strategic orientations is context specific.
Strategic choices taken by managers operating in transitional economies may be enhanced
when aligned with the social capital embedded in the unique contextual specific social,
business and political ties witnessed within transitional economies (Luu and Ngo, 2019).
In light of the above recommendations, future research should investigate potential
contingency relationships among the strategic orientations and firm performance within
transitional economies. Whilst studies have shown that entrepreneurial and MOs have a
direct impact on firm performance, moderating or mediating contingency variables, such as
environmental turbulence, organizational learning and network capabilities, would yield a
more substantial understanding of the phenomenon when studied in varying contextual
situations e.g. the transitional economy setting (Marvel et al., 2014; Pesamaa et al., 2015;
Presutti and Odorici, 2019).

Conclusion
The review of the interrelationship between entrepreneurial and MO presented in this study
identifies progress in this stream of research, potential research gaps and recommendations
for future research investigation. This stream of research has received increased interest
from strategic management scholars and the study highlights promising areas for future
research exploration across different theoretical perspectives, contexts and contingencies. In
particular, the study calls for investigating the interaction effect of EO with MO on new
JRME product entry, market intelligence collection and processing competence. In addition, the
23,2 study proposes research studies on whether EO’s interaction effect with MO will tend to
mitigate risk in the development of breakthrough innovation and whether the interacting
strategic orientations are creating a synergetic effect towards firm performance. Finally, the
study recommends that research models should be tested and understood in consideration
of conditions and circumstances from varying contexts, such as the SME sector within
278 transitional economies and the media industry.

References
Achtenhagen, L. (2017), “Media entrepreneurship – taking stock and moving forward”, International
Journal on Media Management, Vol. 19 No. 1, pp. 1-10.
Acosta, A.S., Crespo, H.A. and Agudo, J.C. (2018), “Effect of market orientation, network capability and
entrepreneurial orientation on international performance of small and medium enterprises
(SMEs)”, International Business Review, Vol. 27, pp. 1128-1140.
Atuahene-Gima, K. and Ko, A. (2001), “An empirical investigation of the effect of market orientation
and entrepreneurship orientation alignment on product innovation”, Organization Science,
Vol. 12 No. 1, pp. 54-74.
Baker, T. and Nelson, R.E. (2005), “Creating something from nothing: resource construction through
entrepreneurial bricolage”, Administrative Science Quarterly, Vol. 50 No. 3, pp. 329-366.
Baker, W.E. and Sinkula, J.M. (2009), “The complementary effects of market orientation and
entrepreneurial orientation on profitability in small businesses”, Journal of Small Business
Management, Vol. 47 No. 4, pp. 443-464.
Bhattarai, C.R., Kwong, C.C. and Tasavori, M. (2019), “Market orientation, market disrup- tiveness
capability and social enterprise performance: an empirical study from the United Kingdom”,
Journal of Business Research, Vol. 96 No. 1, pp. 47-60.
Bhuian, S.N., Menguc, B. and Bell, S.J. (2005), “Just entrepreneurial enough: the moderating effect of
entrepreneurship on the relationship between market orientation and performance”, Journal of
Business Research, Vol. 58 No. 1, pp. 9-17.
Boso, N., Story, V. and Cadogan, J. (2013), “Entrepreneurial orientation, market orientation, network
ties, and performance: study of entrepreneurial firms in a developing economy”, Journal of
Business Venturing, Vol. 28 No. 6, pp. 708-727.
Couto, M. and Ferreira, J. (2017), “Brand management as an internationalization strategy for SME: a
multiple case study”, Journal of Global Marketing, Vol. 30 No. 3, pp. 192-206.
Covin, J.G. and Slevin, D.P. (1991), “A conceptual model of entrepreneurship as firm behavior”,
Entrepreneurship: Theory and Practice, Vol. 16 No. 1, pp. 7-24.
Covin, J.G. (1991), “Entrepreneurial versus conservative: a comparison of strategies and performance”,
Journal of Management Studies, Vol. 28 No. 5, pp. 439-462.
Deshpande, R. and Zaltman, G. (1982), “Factors af- fecting the use of market research information: a
path analysis”, Journal of Marketing Research, February, Vol. 19, pp. 14-31.
Dubey, P., Bajpai, N., Guha, S. and Kulshreshtha, K. (2020), “Entrepreneurial marketing: an analytical
viewpoint on perceived quality and customer delight”, Journal of Research in Marketing and
Entrepreneurship, Vol. 22 No. 1.
Frishammar, J. and Hörte, S. (2007), “The role of market orientation and entrepreneurial orientation for
new product development performance in manufacturing firms”, Technology Analysis and
Strategic Management, Vol. 19 No. 6, pp. 765-788.
Global Entrepreneurship Monitor (2020-21), “Global report”, available at: www.gemconsortium.org/
report/gem-20202021-global-report
Goyanes, M. (2015), “Factors affecting the entrepreneurial intention of students pursuing journalism or media Transitional
studies: evidence from Spain”, International Journal on Media Management, Vol. 17 No. 2, pp. 109-126.
economies
Gustafsson, V. and Khan, M. (2017), “Monetising blogs: enterprising behavior, co-creation of opportunities
and social media entrepreneurship”, Journal of Business Venturing Insights, Vol. 7, pp. 26-31.
Hernandez-Linares, R., Kellermanns, F.W. and Lopez-Fernandez, M.C. (2018), “A note of the
relationships between learning, market, and entrepreneurial orientations: the family business
influence”, Journal of Family Business Strategy, Vol. 9 No. 3, pp. 192-204.
Im, S. and Workman, J.P. (2004), “Market orientation, creativity, and new product performance in high
279
technology firms”, Journal of Marketing, Vol. 68 No. 2, pp. 114-132.
Ipek, I. (2018), “The resource-based view within the export context: an integrative review of empirical
studies”, Journal of Global Marketing, Vol. 31 No. 3, pp. 157-179.
Kara, A., Spillan, J.E. and DeShields, O.W. (2005), “The effect of a market orientation on business
performance: a study of small-sized service retailers using MARKOR scale”, Journal of Small
Business Management, Vol. 43 No. 2, pp. 105-118.
Keh, H.T., Nguyen, T.T.M. and Ng, H.P. (2007), “The effects of EO and marketing information on the
performance of SME’s”, Journal of Business Venturing, Vol. 22 No. 4, pp. 592-611.
Khajeheian, D. (2017), “An introduction to entrepreneurship and innovation in media markets”, Global
Media Journal, Vol. 10 No. 1.
Khalid, S. (2020), “Explorative and exploitative strategies and export performance: the moderating effects of
entrepreneurial orientation”, Journal of Research in Marketing and Entrepreneurship, Vol. 22 No. 1.
Kim, C. and Mauborgne, R. (2017), Blue Ocean Strategy, Hachette Books, Ney York, New York, NY.
Kim, W.C. and Mauborgne, R. (2017), Blue Ocean Shift: Beyond Competing – Proven Steps to Inspire
Confidence and Seize New Growth, Macmillan, London.
Kocak, A., Carsrud, A. and Oflazoglu, S. (2017), “Market, entrepreneurial, and technology orientations:
impact on innovation and firm performance”, Management Decision, Vol. 55 No. 2, pp. 248-270.
Kohli, A.K. and Jaworski, B.J. (1990), “Market orientation: the construct, research propositions, and
managerial implications”, Journal of Marketing, Vol. 54 No. 2, pp. 1-18.
Lekmat, L., Selvarajah, C. and Hewege, C. (2018), “Relationship between market orientation,
entrepreneurial orientation, and firm performance in Thai SMEs: the mediating role of
marketing capabilities”, International Journal of Business and Economics, Vol. 17 No. 3, pp. 213.
Li, Y., Zhao, Y., Tan, J. and Liu, Y. (2008), “Moderating effects of entrepreneurial orientation on market
orientation–performance linkage: evidence from Chinese small firms”, Journal of Small Business
Management, Vol. 46 No. 1, pp. 113-133.
Luu, N. and Ngo, L.V. (2019), “Entrepreneurial orientation and social ties in transitional economies”,
Long Range Planning, Vol. 52 No. 1, pp. 103-116.
Lyles, M., Saxton, T. and Watson, K. (2004), “Venture survival in a transition economy”, Journal of
Management, Vol. 30 No. 3, pp. 351-424.
Mac, L. and Evangelista, F. (2016), “The relative impact of market orientation and entrepreneurship on export
performance: do we really know enough”, Journal of Global Marketing, Vol. 29 No. 5, pp. 266-281.
Manrai, A. (2019), Journal of Global marketing call for papers: media entrepreneurship and innovation
marketing in Eastern Europe and the Middle East.
Marvel, M., Davis, J. and Sproul, C. (2014), “Human capital and entrepreneurship research: a critical
review and future directions”, Entrepreneurship: Theory and Practice, Vol. 40 No. 3, pp. 599-626.
Masa’deh, R., Al-Henzab, J., Tarhini, A. and Obeidat, B.Y. (2018), “The associations among market
orientation, technology orientation, entrepreneurial orientation and organizational
performance”, Benchmarking: An International Journal, Vol. 25 No. 8, pp. 3117-3142.
Matsuno, K., Mentzer, J.T. and Ozsomer, A. (2002), “The effects of entrepreneurial proclivity and
market orientation on business performance”, Journal of Marketing, Vol. 66 No. 3, pp. 18-32.
JRME Migliori, S., Pittino, D., Consorti, A. and Lucianetti, L. (2019), “The relationship between entrepreneurial
orientation, market orientation and performance in university spin-offs”, International
23,2 Entrepreneurship and Management Journal, Vol. 15 No. 3, pp. 793-814.
Miles, M.P. and Arnold, D.R. (1991), “The relationship between market orientation and entrepreneurial
orientation”, Entrepreneurship: Theory and Practice, Vol. 15 No. 4, pp. 49-65.
Miller, D. and Friesen, P. (1982), “Structural change and performance: quantum versus piecemeal-
280 incremental approaches”, The Academy of Management Journal, Vol. 25 No. 4, pp. 867-892.
Montiel-Campos, H. (2018), “Entrepreneurial orientation and market orientation: systematic literature
review and future research”, Journal of Research in Marketing and Entrepreneurship, Vol. 20
No. 2, pp. 292-322.
Moorman, C. (1995), “Organizational market information processes: cultural antecedents and new
product outcomes”, Journal of Marketing Research, Vol. 32 No. 3, pp. 318-335.
Morris, M.H. and Paul, G.W. (1987), “The relationship between entrepreneurship and marketing in
established firms”, Journal of Business Venturing, Vol. 2 No. 3, pp. 247-259.
Most, F., Conejo, F.J. and Cunningham, L.F. (2018), “Bridging past and present entrepreneurial
marketing research: a co-citation and bibliographic coupling analysis”, Journal of Research in
Marketing and Entrepreneurship, Vol. 20 No. 2, pp. 229-251.
Narver, J.C. and Slater, S.F. (1990), “The effect of a market orientation on business profitability”, Journal
of Marketing, October, Vol. 54, pp. 20-35.
Pesamaa, O., Shoham, A., Khan, M. and Muhammad, I. (2015), “The impact of social networking
and learning orientation on performance”, Journal of Global Marketing, Vol. 28 No. 2,
pp. 113-131.
Pratono, A.H., Darmasetiawan, N.K., Yudiarso, A. and Jeong, B.G. (2019), “Achieving sustainable
competitive advantage through green entrepreneurial orientation and market orientation: the
role of inter-organizational learning”, The Bottom Line, Vol. 32 No. 1, pp. 2-15.
Presutti, M. and Odorici, V. (2019), “Linking entrepreneurial and market orientation to the SME’s
performance growth: the moderating role of entrepreneurial experience and networks”,
International Entrepreneurship and Management Journal, Vol. 15 No. 3, pp. 697-720.
Renko, M., Carsrud, A. and Brannback, M. (2009), “The effect of a market orientation, entrepreneurial
orientation, and technological capability on innovativeness: a study of young biotechnology
ventures in the United States and in Scandinavia”, Journal of Small Business Management,
Vol. 47 No. 3, pp. 331-369.
Shane, S. and Venkataraman, S. (2000), “The promise of entrepreneurship as a field of research”,
Academy of Management Review, Vol. 25 No. 1, pp. 217-226.
Sheng, S., Zhou, K.Z. and Li, J.J. (2011), “The effects of business and political ties on firm performance:
evidence from China”, Journal of Marketing, Vol. 75 No. 1, pp. 1-15.
Wang, C.L. (2008), “Entrepreneurial orientation, learning orientation, and firm performance”,
Entrepreneurship Theory and Practice, Vol. 32 No. 4, pp. 635-656.
Webb, J., Ireland, D., Hitt, M., Kistruck, G. and Tihanyi, L. (2011), “Where is the opportunity without the
customer? An integration of marketing activities, the entrepreneurship process, and institutional
theory”, Journal of the Academy of Marketing Science, Vol. 39 No. 4, pp. 537-555.
Welter, F., Gartner, W.B. and Wright, M. (2016), “The context of contextualizing contexts”, in Welter, F.
and Gartner, W.B. (Eds), A Research Agenda for Entrepreneurship and Context, Edward Elgar
Publishing, Northampton, MA, pp. 1-15.
Williamson, C.R. (2009), “Informal institutions rule: institutional arrangements and economic
performance”, Public Choice, Vol. 139, pp. 371-387.
Zacca, R. and Dayan, M. (2017), “Entrepreneurship: an evolving conceptual framework”, International
Journal of Entrepreneurship and Innovation Management, Vol. 21 Nos 1/2, pp. 8-26.
Zacca, R. and Selen, W. (2011), “Unraveling a manager’s proclivity to innovate: an exploratory study”, Transitional
The International Journal of Entrepreneurship and Innovation, Vol. 12 No. 3, pp. 157-167.
economies
Zacca, R., Dayan, M. and Ahrens, T. (2015), “Impact of network capability on small business
performance: the mediating role of knowledge creation and EO”, Management Decision, Vol. 53
No. 1, pp. 2-23.

Further reading
Gasparin, M. and Quinn, M. (2020), “Designing regional innovation systems in transitional economies: a
281
creative ecosystem approach”, Growth and Change, Vol. 52 No. 2, doi: 10.1111/grow.12441.
Lumpkin, G.T. and Dess, G.G. (1996), “Clarifying the entrepreneurial orientation construct and linking
it to performance”, Academy of Management Review, Vol. 21 No. 1, pp. 135-172.

About the authors

Robert Zacca is an Assistant Professor of Entrepreneurship at Alfaisal University, Saudi Arabia. Prior
to this, he held an Assistant Professor position at the United Arab Emirates University. His current
research investigates the drivers and enablers of innovative enterprises and corporate
entrepreneurship. He has won a National Research Foundation grant from UAE and his work has
been published in Management Decision, Journal of Business and Industrial Marketing, International
Journal of Entrepreneurship and Innovation, Creativity and Innovation Management, Journal of Small
Business and Enterprise Development, International Journal of Entrepreneurship and Innovation
Management, Journal of Global Mobility, International Journal of Organizational Analysis and
elsewhere. He was awarded the Alfaisal University Research Excellence Reward for 2016–2017, the
College of Business, Shell Saudi Arabia outstanding research award for 2015–2016 and has been
recognized with an outstanding research award for a paper acceptance in a top ranked journal in
2014. Additionally, his coauthored paper was nominated for the best paper award in the Creativity
and Innovation Management Journal for the year 2013. Robert Zacca is the corresponding author and
can be contacted at: rzacca@alfaisal.edu
Saad Alhoqail is an Assistant Professor of Marketing at Alfaisal University. He focuses his
research on marketing strategy, Chief Marketing Officer, marketing in Fortune companies and
corporate top management team. He is also interested in investigating the impact of well-known
marketing phenomena such as word of mouth, corporate social responsibility and social media using
the advanced empirical methodology. His work has appeared in high quality peer-reviewed journals
such as the Journal of Retailing. Prior to joining academia, he was a marketing researcher in the
Saudi’s Supreme Commission for Tourism and Antiquities. His experience also includes executing in-
house training programmes related to sales and customer service and consulting for several
companies in blueprinting marketing strategy, branding and new product market research. Professor
Alhoqail holds a PhD in marketing from the University of Texas at Arlington, an MBA with a
concentration in marketing from the University of Colorado at Denver, a BA in marketing from King
Saud University.

For instructions on how to order reprints of this article, please visit our website:
www.emeraldgrouppublishing.com/licensing/reprints.htm
Or contact us for further details: permissions@emeraldinsight.com