The impact of market orientation on the performance of MSMEs operating in technology parks: The role of market dynamism.

• Author: Wojcik-Karpacz, Anna

INTRODUCTION

Small enterprises are important for most economies (Zakrzewski & Skowronska, 2019). In general, small- and medium-sized enterprises (SMEs) and micro-enterprises are indicated as important sources of job creation and income generation in market economies, and this honorable role is played especially by those micro, small, and medium enterprises (MSMEs) which are growth-oriented (Rigtering, Kraus, Eggers, & Jensen, 2014; Harbat et al., 2018). Considering the constantly changing nature of the economic environment, these enterprises are continuously striving to take new opportunities in the market, so that they can identify growth paths and develop well. Growth is also a condition of survival for young and small businesses, as growing firms are found to be less vulnerable to failure than non-growers (Gancarczyk & Zabala-lturriagagoitia, 2015). Strategic orientations of enterprises describe the trends and decision-making principles of enterprises that direct their actions and generate behaviors with the intention of achieving better organizational performance in the markets in which they conduct economic activities (Hakala, 2011). Development of strategic orientations in enterprises may therefore have a significant impact on organizational performance (Wales, Beliaeva, Shirokova, Stettler, & Gupta, 2020). That is why enterprises' strategic orientations are the object of scientific research with regard to their relationships with organizational performance (Mu, Thomas, Peng, & Di Benedetto, 2017). Previous research has distinguished several types of strategic orientations, including market orientation (Hakala, 2011; Kirca, Jayachandran, & Bearden, 2005). Market orientation (MO) reflects the degree to which enterprises rely on maximizing customer satisfaction and loyalty as their organizing principle (Gnizy, Baker, & Grinstein, 2014). Market orientation is a phenomenon of universal character and concerns every size of organisation. However, the literature indicates that previous research was focusing on the role of strategic orientations in large multinational corporations (Baker & Sinkula, 2005; McKenny, Short, Ketchen Jr., Payne, & Moss, 2018), rather than in micro- or small- and medium-sized enterprises (Kara, Spillan, & DeShields, 2005; Michna & Kmieciak, 2012).

Thus, there is still a deficit of empirical research on some groups of enterprises, and MSMEs operating in technology parks in Poland are undoubtedly among them (Wojcik-Karpacz, 2019). Therefore, the aim of this article is to identify the role of market dynamism in the relationship between market orientation and performance of MSMEs operating in technology parks in Poland. Explaining these issues is essential in order to be able to treat market orientation as a strategic organizational factor shaping firm performance, including different environmental conditions.

The article is the answer to the needs for systematic research of models between market orientation and firm performance. The subject matter of the article forms part of the broader trend of research on discovering the role of market dynamism while analyzing the effects of market orientation. The two methods used for performing the quantitative empirical research are CAWI and PAPI. The research sample included micro-, small- and medium-sized enterprises (MSMEs) operating in technology parks in Poland. Enterprise size is defined as the number of employees.

LITERATURE REVIEW

Theoretical framework and hypothesis development

Conceptualization of market orientation in literature

Previous research has recognized two main conceptualizations of market orientation (Gupta, Gizem, & Dutta, 2019). One of the main definitions of MO is the one proposed by Kohli and Jaworski (1990), who define it as the organization-wide generation of market intelligence pertaining to current and future customer needs, dissemination of the intelligence across departments, and organization-wide responsiveness to it. In the extant literature, market orientation has been pinpointed as a part of organizational behavior, a facet of organizational culture, a firm resource, or a firm capability (ipek & Bicakcioglu-Peynirci, 2020). Market orientation is closely intertwined with market learning; such that market-oriented firms regularly gather data about their external stakeholders and they convert this information into market offerings with superior customer value. Additionally, firms with high market orientation possess exceptional market sensing, customer linking, and channel bonding competencies, which are supported by effective management practices (ipek & Bicakcioglu-Peynirci, 2020). To be implemented successfully, market orientation requires enterprises to proactively acquire, disseminate and rely on market information when developing marketing strategies and tactics. Kohli and Jaworski (1990) believe that MO relates to organizationwide generation and dissemination of market information, and accompanies organizational responses (Kohli & Jaworski, 1990). This conceptualization of MO was adopted in this research. Knowledge is one of the key assets that needs to be properly managed (Soniewicki & Paliszkiewicz, 2019). By empowering, disseminating, and using customer and market information, MO enables enterprises to tailor their activities to target markets, anticipate and respond to customer needs, as well as build competitive advantage (Atuahene-Gima, Slater, & Olson, 2005). Based on the scientific literature review, it is obvious that knowledge is one of the key factors affecting especially market choices, entry modes (Wach, 2017). Customers are more satisfied with products and services provided by a market-oriented enterprise and their loyalty to such an enterprise increases (Wales et al., 2020). The second important conceptualization presented in the literature is the one proposed by Narver and Slater (1990). These scientists combine dimensions of customer orientation, competitor orientation, and inter-functional coordination. MO refers to strategic inclination and enterprise-level activities directed at the generation of superior value for customers. A market-oriented enterprise is one that most effectively and efficiently creates the necessary behaviors for the creation of superior value for buyers and, thus, continuous superior performance for the enterprise (Narver & Slater, 1990).

Market orientation is perceived as organizational resources (Hult, Snow, & Kandemir, 2003), and more recently - as dynamic capabilities. Market orientation provides the firm with market-sensing, customer-linking, and channel-bonding capabilities (Abbua & Gopalakrishna, 2021). This orientation has been labeled as DCs (Barreto, 2010) because the focus on customers, competitors and the external market environment imbues enterprises with the ability to make informed, proactive adjustments to capabilities (Gnizy, Baker, & Grinstein, 2014). Therefore, the undertaken subject matter is part of the enterprise's resource-based view (RBV) and dynamic capabilities view (DCV). The basic assumption of the enterprise's resource-based view (RBV) is to strive to achieve competitive advantage of large enterprises and MSMEs (Hessels & Parker, 2013). However, RBV does not explain how enterprises maintain competitive advantage in changing and uncertain environments. The DCs framework is an extension of the enterprise's resource-based view (RBV) (Barney, 1991) to fill out these gaps. Through dynamic capabilities, companies are able to sense and seize new business opportunities and to reconfigure the company. The bare existence of dynamic capabilities allows changing business models more proficiently and, thus, tapping the potential of new business opportunities (Freiling, 2015).

Relationships of market orientation with firm performance in the context of market dynamism - research model

Market dynamism, forcing enterprises to adapt themselves to the imposed rules of the game, means that these enterprises, being subject to the influence of internal and external forces, are in a state of permanent change and transformation. The process of shaping capacities and ways of behavior may not be treated as a one-time action, being an ex-post reaction of a given enterprise to changes in the environment, but should be a process allowing for continuous anticipation of change (Cyfert & Krzakiewicz, 2017). A company's capacity to achieve its aims calls for successful adaptation to the changes occurring in its environment as well as for the creation of its own solutions (Bitkowska, 2020).

According to DCV, market orientation facilitates (re)configuration of other performance-related capabilities and behaviors, which are fundamental to evaluation of economic operations. Enterprises with strong MO are likely to be adept at effectively developing and launching innovations in established products and market. If this orientation is weak, it may be seen as a threat that can make it difficult for enterprises to maintain expected business results in new and changing conditions, which generates chances and threats. Nowadays, the general trend in the business environment is to shorten the product's life and business model cycle (Dyduch, 2017). Thus, future profit streams from existing operations are unsure, and the companies have to seek new opportunities all the time.

For this reason, companies should modify, reject or achieve the resources and redesign their business models (Li & Liu, 2014). Like large enterprises, MSMEs need to focus on the market. However, MO is different in SMEs in comparison to large enterprises. The differences result from SMEs' characteristics such as small size, informal organization structure, and being close to the market (Kmieciak & Michna, 2012).

Weak market orientation may be more painful for MSMEs, which, unlike large enterprises, have no resources to cover potential business failures, and especially continuous ones, which may reduce...