Market Orientation and Firm Performance in Emerging Markets

The effects of market orientation on firm performance have been examined in many settings over the past several decades. Most studies have supported its role in improving firm performance, fostering innovativeness, and contributing to the creation of market-driven organizations. However, most of these studies have taken place in developed countries with typically predictable environments. This study examines the effects of market orientation on firm performance through innovation in an environment of emerging markets, competition, technological change and government regulations. The study surveyed 147 managers from manufacturing firms throughout Kenya. Data were examined using moderated regression. Results indicate that market orientation positively affects innovation, innovation positively affects performance, and various environmental forces negatively moderate the relationship between innovation and performance.