Market orientation and firm performance: The case of Russian companies and international comparison

Abstract

The aim of the paper is to explore the direct relationship between market orientation and firm performance in the context of an emerging Russian economy using both objective and subjective performance indicators. Taking on the cultural approach to market orientation, which defines market orientation as a construct consisting of three equally important components – Customer Orientation, Competitor Orientation and Interfunctional Coordination – empirical research has been conducted in order to achieve the research aim. The results show that two elements of Market Orientation – Customer Orientation and Competitor Orientation – significantly influence business performance of a firm in Russia. However, the results are mixed: Customer Orientation has significant positive influence on firm’s revenue-based performance indicators (Growth), but does not directly influence cost-based performance indicators (Profitability). Competitor Orientation, in turn, has significant positive influence on firm’s profitability, but, at the same time, has significant negative influence on firm’s growth. Contrary to the research hypothesis, interfunctional coordination has no significant direct influence on business performance.