Market orientation, supplier perceived value and business performance of SMEs in a Sub‐Saharan African nation

Abstract

Purpose

In the current customer‐centred business environment, organisations are adopting market‐oriented behaviour in an effort to enhance their value creation and delivery capabilities. This study seeks to investigate whether supplier market orientation leads to the creation of superior supplier perceived value and organisational performance. It is contended that supplier perceived value creation mediates the relationship between market orientation and business performance.

Design/methodology/approach

A model was developed that places supplier perceived value creation as a mediator of the relationship between market orientation and business performance. The model was tested using structural equation modelling on 244 fresh produce suppliers interviewed in face‐to‐face interviews.

Findings

The results indicate that, whilst customer orientation enhances supplier perceived value creation, competitor orientation and interfunctional coordination were negatively associated with it. Supplier perceived value creation had a mediating effect on the link between market orientation and business performance. Additionally, supplier perceived value creation had a negative effect on financial performance, but was positively related to marketing performance.

Practical implications

The study indicates that not all market orientation components lead to positive effects on business performance. For some organisations market orientation can actually reduce business performance. Thus managers should specifically be careful to implement customer orientation as a way of enhancing business performance as the costs may outweigh the benefits.

Originality/value

Limited work has investigated the role of supplier perceived value creation and research has called for empirical work on mediators of the market orientation‐business performance link. The paper adds to existing knowledge by unveiling how supplier market orientation influences their ability to conceptualise supplier delivered value.

Citation

Jekanyika Matanda, M. and Oly Ndubisi, N. (2009), "Market orientation, supplier perceived value and business performance of SMEs in a Sub‐Saharan African nation", Journal of Enterprise Information Management, Vol. 22 No. 4, pp. 384-407. https://doi.org/10.1108/17410390910975013