Learning orientation and market orientation: Relationship with innovation, human resource practices and performance

Abstract

Purpose: The paper investigates the relationships among learning orientation (LO), market orientation (MO), human resource practices (HRPs) and innovation and their association with organisational performance. The aim is to show that HRPs and innovation are important mechanisms for transmitting the benefit of LO and MO into performance outcomes. Design/methodology/approach: Building on extensive literature, a model of the relationships is developed and empirically tested using survey data collected from 220 businesses. Data are analysed through structural equation modelling and/or path modelling. The primary aim is to assess direct, indirect and total effects of LO and MO on performance outcomes through HRPs and innovation (conceptualised as administrative, process and product innovation) as mediators. The study carefully traces the effects of each variable to distinguish between indirect effects and mediated effects. Findings: HRPs are a major mechanism for transmitting the benefits of LO and MO. In some models this is even more important than innovation. The results also suggest that LO should be viewed as exploration while MO is the interface between exploration and exploitation and, finally, HRPs and innovation must be viewed as exploitation or implementation issues. Practical implications: The study suggests that marketers should include HRPs in models of LO, MO, and innovation to enhance the explanations of these to organisational performance. This study suggests HRPs and innovation are important mediators. Originality/value: The paper suggests that marketers need to consider the impact of HRPs on achievement of marketing goals and organisational performance.