Market Orientation: A Historical Analysis Market orientation has been defined as a stage of development of an organization, or as a level that reflects an organizational maturity that parallels with the development of a national economy, from a historical point of view. A market orientated organization seems to be one that is based on antecedents of market orientation. These antecedents are based on organizational and managerial characteristics. Antecedents to MOAntecedents of market orientation often refer to organizational factors that enhance or impede the implementation of the business philosophy represented by the marketing concept.
According to Kohli et al. (1990) there are three hierarchically ordered categories of antecedents. These are individual managerial, inter-group and organization contextual factors. Individual managerial factorsResearch by Kohli et al. (1990) has indicated that senior managers have a powerful influence in fostering a market orientation. Webster (1988) avers that a market orientation originated with top management and that customer oriented values and beliefs are uniquely the responsibility of top management. Felton (1959) likewise, asserts that the most important element of a market orientation is an appropriated state of mind and that it is attainable only if the board of directors, chief executives and top-echelon executives appreciate the need to develop this marketing state of mind.
In other words the commitment of the leadership of an organization to a market orientation is an essential prerequisite. Inter Group/Departmental DynamicsInterdepartmental dynamics refer to formal and informal interactions and relationships among organizational departments. Ruekert and Walker (1987) suggest that interdepartmental conflict, which often is triggered by departments being more important and powerful, may be detrimental to the implementation of the marketing concept. Kohli et al (1990) argue that interdepartmental conflict tends to lower the market orientation of an organization.
It is further argued that interdepartmental conflict appears to inhibit market intelligence dissemination, an integral component of a market orientation. Factors in the Organizational ContextConcern for ‘others’ ideasConcern for others ideas refer to openness and receptivity to the suggestions and proposals of other individuals and groups. Structural formsStructural characteristics of an organization can influence its market orientation. The Managerial and Organizational Characteristics of a Market Orientated CompanyWhat seems to be the strength of a market orientated company are the organizational characteristics, this consists of three structural variables, theses variables are based on the Antecedents of marketing orientation.
These variables seem to play an important role in the company. They are formalization, centralization, and departmentalization. FormalizationFormalization as a characteristic is the most important characteristic, it holds the strength of the of an organization as it represents the extent to which rules characterize roles, authority relations, communications, norms and sanctions, in addition to procedures. CentralizationAnother characteristic which I would say is important is Centralization as a characteristic of an organization refers to the opposite of the total of delegation of decision-making authority all the way through an organization and the degree of participation by organizational members in the decision-making process DepartmentalizationDepartmentalization; it’s a characteristic of market oriented organization which reflects the number of departments the organization is divided into.