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Market orientation and performance in the service industry: A data envelopment analysis

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  • Haugland, Sven A.
  • Myrtveit, Ingunn
  • Nygaard, Arne

Abstract

The relationship between market orientation and performance is a cornerstone in the market orientation literature. However, few empirical studies applying objective performance measures raise concerns about whether or not the most market-oriented firms are the best performers. This article reports a study testing the market orientation model using a multi-method approach to measure performance. The study applies two objective performance measures-relative productivity, calculated by data envelopment analysis (DEA) and return on assets (ROA)-and one subjective performance measure-perceived profitability compared to key competitors. Building on empirical data from the hotel industry, the results indicate that market orientation has only a modest effect on relative productivity and no effect on return on assets. The strongest effect of market orientation on performance occurs when applying the subjective performance measure.

Suggested Citation

  • Haugland, Sven A. & Myrtveit, Ingunn & Nygaard, Arne, 2007. "Market orientation and performance in the service industry: A data envelopment analysis," Journal of Business Research, Elsevier, vol. 60(11), pages 1191-1197, November.
    • Handle: RePEc:eee:jbrese:v:60:y:2007:i:11:p:1191-1197
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    References listed on IDEAS

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