Market orientation, learning orientation, and innovation capabilities in SMEs: An extended model

Abstract

Purpose: The purpose of this paper is to examine the nomological relations among market‐orientation, learning‐orientation and innovativeness in medium‐sized business (SMEs) of developing countries. Design/methodology/approach: The study involves a questionnaire‐based survey of managers from small‐sized‐firms operating in Turkey. A total of 157 usable questionnaires were received from managers. These were subjected to a structural equation modeling (SEM) analysis. Findings: The results show that firm innovativeness positively affects firm performance; firm learning‐orientation positively influences firm innovativeness; firm market‐orientation positively impacts firm learning orientation; firm learning‐orientation mediates the relationship between firm market‐orientation and firm innovativeness; and firm market‐orientation indirectly impacts firm performance via firm innovativeness and learning. Practical implications: This study has implications for SEMs aiming at increasing their performance and innovativeness. Originality/value: The interrelationships among a firm's market‐orientation, learning‐orientation, and innovativeness are an important research area for investigators in the literature of management, strategy, and marketing. However, most of the empirical studies were conducted in large‐scale firms in developed countries and ignored small and medium‐sized business (SMEs) in general, and in developing countries in particular. The results offer both theoretical and managerial implications.