Understanding the layers of a market-oriented organisational culture

Open access

Abstract

Organisations with market-oriented cultures outperform other organisations. Thus, the creation of such a culture is paramount. This paper details how distinct layers of an organisation’s culture can in combination influence market-oriented behaviours. The importance of organisational culture in the successful implementation of a market orientation strategy has been recognised. However, an awareness of how the layers of organisational culture, such as values, norms and artefacts, can contribute to market-oriented behaviour is still under research. The layers of organisational culture were thus investigated in three mixed-method case studies of Irish companies utilising a questionnaire survey, interviews and observations. The core conclusion of the study is that the combined synergistic effect of the particular unique organisational cultural layers in a company encourages market-oriented behaviours. This research adds necessary details for managers who seek to develop and create a market-oriented culture to improve company performance.

Introduction

Kohli and Jaworski (1990: 1) referred to the term ‘market orientation’ to indicate the implementation of the marketing concept. Market orientation provides a unifying focus within a company that can lead to superior performance and a sustainable competitive advantage (Gupta et al., 2013; Kumar et al., 2011). Ignoring organisational culture has implications for the successful implementation of a market orientation strategy (Halliday, 2002; Lee et al., 2006; Tiernan et al., 2015). Despite this, a ‘full and detailed understanding is still lacking’ regarding the relationship between market orientation and organisational culture (Kasper, 2005: 3; Pinho et al., 2014). Consequently, it is necessary to identify the characteristics of the culture of market-oriented companies. Examining the layers of organisational culture will lead to ‘a better understanding of the forces driving market-oriented behaviour’ (Homburg and Pflesser, 2000: 450). Thus, this study examines the layers of organisational culture: values, norms and artefacts that potentially encourage market-oriented behaviours. There are limited previous researches on market orientation that makes a distinction between the layers of culture, ‘the cultural dimensions behind the observable behaviors’ (Hogan and Coote, 2014; Homburg and Pflesser, 2000: 450; Tiernan et al., 2015).

Although the importance of market orientation is acknowledged in the literature, more needs to be performed to address its implementation (Chad et al., 2013; Gupta et al., 2013). Research in the field is limited in identifying concrete actions as to how to bring about a market orientation (van Raaij and Stoelhorst, 2008). Similarly, Foley and Fahy (2004: 220) in an analysis of market orientation from a capability perspective, argued that ‘relatively little has been achieved that is usefully prescriptive to managers seeking to develop a marketing focus’. Gray and Hooley (2002: 982) summarised that relatively little research has been carried out into the ‘the conditions needed to inculcate and nurture a market orientation’. This study by examining the links between the layers of an organisation’s culture addresses this gap in understanding.

The study concludes that the layers of organisational culture such as values, norms and artefacts found in market-oriented companies can encourage market-oriented behaviours. Furthermore, the layers of organisational culture related to market orientation were found to be intra- and inter-connected, unique to the particular companies and, in synergistic combination, encourage market-oriented behaviours. In summary, this research by examining the layers of organisational culture provides a more detailed means of assessing and developing a market-oriented culture.

Literature review

Market orientation can be viewed from two perspectives: behavioural and cultural (Colak et al., 2015; Gebhardt et al., 2006; van Raaij and Stoelhorst, 2008). Thus, Kohli and Jaworski (1990) defined market orientation in terms of the specific behaviours related to a market orientation, namely the generation of information on current and future customer needs, its dissemination and the responsiveness to that information. This view of market orientation is firmly rooted in the behavioural perspective and advocates that the activities of market orientation are separate from organisational culture (Gebhardt et al., 2006). On the other hand, Narver and Slater (1990) defined market orientation in terms of culture that most effectively and efficiently instils the necessary behaviours for creating superior value for customers. This suggests that it is the organisational culture that encourages market-oriented behaviour (Gebhardt et al., 2006). Research advancing the cultural perspective argues that market orientation is part of the culture of the organisation, that is, the organisational culture supports and maintains the marketing concept (Deshpande et al., 1993).

Gray and Hooley (2002: 981) offered a ‘more inclusive’ definition of market orientation as the implementation of a corporate culture which encourages the behaviours to collect, disseminate and respond to market intelligence on customers, competitors and the wider environment. Thus, it is the culture of the organisation that will bring about a market orientation (Gebhardt et al., 2006; Gray and Hooley, 2002).

Organisational culture has been defined in terms of the very visible to the very tacit and invisible (Schein, 2009). Furthermore, Schein (2009) referred to layers of culture which include the visible artefacts and values leading to the invisible underlying assumptions shared by members of an organisation. Deshpande and Webster’s (1989: 4) definition of organisational culture is: ‘the pattern of shared values and beliefs that help individuals understand organizational functioning and thus provide them norms for behaviour in the organisation’. Homburg and Pflesser (2000: 450), building on these definitions, argued that organisational culture is made up of ‘four distinguishable but interrelated components’, namely values, norms, artefacts and behaviours. Thus, each of these four layers can be argued as contributing to market orientation (Lee et al., 2006). A review of the literature related to each of the layers provides a framework for the research.

Values

Values have been identified as ‘social principles, goals and standards considered to have intrinsic worth’ (Hatch, 1993: 659). Values provide a foundation for an organisation’s culture and are a powerful influence on norms and the resultant behaviours (Hogan and Coote, 2014). Similarly, Gebhardt et al. (2006) identified cultural values as the basis for market-oriented behaviours. A broad range of values associated with a market orientation have been identified. Furthermore, the mix of values associated with a market orientation is likely to be unique and specific in a company (Gebhardt et al., 2006; Harris, 1998; Harris, 2002a; Homburg and Pflesser, 2000; Kasper, 2005). For example, Homburg and Pflesser (2000) identified 16 different value dimensions from a literature search; Gebhardt et al. (2006) found that the number and nature of the values that organisations sought to implement varied although identifying six common cultural values. Kasper (2005) found support for the notion that a market-oriented culture would be pragmatic thus meeting with customer needs whatever they may be, in effect, the culture has the required necessary values. Similarly, Harris (2002a: 624) in a study encompassing 12 case studies concluded that how a firm approaches the development of market orientation is context specific ‘linked to organisational and environmental contingencies’. Furthermore, according to Gebhardt et al. (2006) in a multi-firm study and a conceptual analysis undertaken by Harris (1998), there is evidence that the particular values may be working in combination in creating a market orientation. Harris (1998: 368) argued that there is ‘a wide range of interlinked beliefs and values’ and Gebhardt et al. (2006: 42) referred to ‘values that in combination ... create a more market-oriented culture’.

Norms

Norms are described as expectations of acceptable behaviour (Hogan and Coote, 2014) which emanate from the values (Gebhardt et al., 2006) and guide the behaviours (Lee et al., 2006). That is, values and their corresponding norms act as a means of influencing the behaviours of group members in appropriate ways (Hogan and Coote, 2014). Thus, employees within a company will find out ‘how things are done around here’ from their co-workers learning how to be market oriented by working with employees who are market oriented. Norms in Homburg and Pflesser’s (2000) quantitative study were found to have a strong, although indirect, effect on behaviours via the artefacts. Norms that were included under the broader term of marketing cultural artefacts by Harris (1998) are argued as impossible to list exhaustively and are similar to values, being context specific.

Artefacts

Homburg and Pflesser (2000) outlined that artefacts include arrangements (e.g. offices, meeting rooms, common areas and the exterior surroundings), language, stories and rituals and are the easiest level of organisational culture to observe (Schein, 2009). While artefacts are the most visible element of an organisation’s culture, their meaning is symbolically interpreted by those inside the company (Harris, 1998). Artefacts send subtle signals that convey the company values and norms. Homburg and Pflesser’s (2000) research concluded that artefacts play a critical role as determinants of market-oriented behaviours, although this finding was not supported by Farrell (2005).

Behaviours

Behaviours can be understood in the context of this research as ‘behavioural patterns with an instrumental function’ (Homburg and Pflesser, 2000: 450). Gebhardt et al. (2006: 52) concluded from their in-depth multi-form research that it is the cultural values that are the basis for market-oriented behaviours, namely the generation, dissemination and responsiveness to information on current and future customer needs (Kohli and Jaworski, 1990). Hogan and Coote (2014) similarly pointed out that by emphasising certain values, as well as corresponding norms, managers exert a powerful influence on employee behaviour. Values indicate preferences for behaviour while norms indicate the standards of expected behaviour. When values and norms are held over a period of time, there is no need to communicate their implicit message – certain things ‘go without saying’ and these guidelines and cues help the receiver to interpret the message and lead to certain behaviours becoming the taken-for-granted way of doing things (Sathe, 1983: 10). While there is research evidence that supports the proposition that market-oriented behaviours may influence the layers of organisational culture (Tiernan et al., 2015), the literature broadly supports the view that market-oriented values, demonstrated by market-oriented norms and observed through market-oriented artefacts, will lead to market-oriented behaviours (Farrell, 2005; Homburg and Pflesser, 2000). In summary, it is proposed that organisational culture while existing on a number of different levels or layers manifests with each level having an effect on the other levels (Lee et al., 2006) although the empirical research is still limited (Hogan and Coote, 2014).

Investigating a market-oriented organisational culture

There is limited research on how the distinct layers of a market-oriented organisational culture influence market-oriented behaviours (Gebhardt et al., 2006; Tiernan et al., 2015). However, Harris (1998) in a theoretical paper building on the work of Hatch (1993) did acknowledge the linking and interaction of the different cultural components or layers of a market-oriented culture. Furthermore, of greater significance in this area is Homburg and Pflesser’s (2000) study of the cultural characteristics of market orientation. Homburg and Pflesser (2000) contended that there are four distinct but interrelated components of organisational culture: values, norms, artefacts and behaviours, and their research identified the causal link between the layers of culture that support a market orientation. Thus, Homburg and Pflesser (2000: 453) identified ‘the most relevant shared basic values of a market-oriented organisational culture’, such as success, quality and competence, innovation and flexibility, openness to internal communication, appreciation of employees, responsibility of employees, inter-functional cooperation and speed. The research examined whether market orientation was the objective of the values and the corresponding or analogous norms of these values (Homburg and Pflesser, 2000). Furthermore, relevant artefacts (arrangements, language, stories and rituals) were analysed as to their relationship with market orientation. To measure market orientation, Homburg and Pflesser (2000) utilised Kohli et al.’s (1993) MARKOR model of market-oriented behaviours which looks at the three behavioural components of market orientation: generation, dissemination and responsiveness to market intelligence. While the quantitative focus of Homburg and Pflesser’s (2000) research has limitations (Dauber et al., 2012), its conclusions argue for a causal link between the layers of culture and a market orientation. Their research is significant as it proposes a new model of market-oriented culture with previous empirical research not having made the explicit distinctions between the layers of a market-oriented culture.

Thus, in light of the limited research, and as a development of the preceding literature, the aim of this research was to investigate the layers of organisational cultural and their influence on market-oriented behaviours.

Methodology

The purpose of this study was to examine the distinct layers of market-oriented culture and their influence on market-oriented behaviours. The research involved a mixed-method investigation of three case study companies. A mixed-method approach was concluded as appropriate when assessing organisational culture (Trice and Beyer, 1993) with the combination of qualitative and quantitative methods argued as providing greater insight (Brown, 1998). Harris and Ogbonna (1999:185) similarly argued for research on market-oriented culture that moves beyond a positivist methodology, rationalising it reveals ‘breadth and depth’. In addition, Harris (2002a) also investigating market orientation argued for the use of multiple case studies.

Research sample

The research sample consisted of a purposive sample of three companies from an Irish regional business awards competition who responded positively to an invitation to take part in the research.

The companies selected were judged likely to provide data on market-oriented organisational culture based on the following process. From a full list of shortlisted and/or winners of a regional business awards competition, sole traders and non-profit companies were excluded as well as companies with less than 10 employees, as they were deemed to be possibly problematic in size to answer the research questions. The websites of this revised list of companies were screened for evidence of market orientation. A database of 130 companies was thus generated with all invited to participate in the research. As a result of this correspondence, companies who agreed to participate were further screened using secondary research such as company websites and publications to confirm the likelihood of being market oriented. It was proposed that this sampling frame could potentially provide data that would highlight aspects of a market-oriented organisational culture. Finally, a purposive sample of three diverse companies was selected. The investigation of the research questions in more than one case study was deemed appropriate to allow a cross-case or comparative element in ‘tracing’ a market-oriented culture with the aim of finding agreement between the cases (Bennett, 2004; Thomas, 2011). All three companies were industry leaders in an Irish national context.

‘Company One’ is an Irish-owned family business founded almost 100 years ago that has grown to become a leading national hygiene supplier to major industry sectors including health care, work wear and hospitality. It is a limited company that employs approximately 400 employees between its production plant and regional distribution centres and has achieved ISO certification. ‘Company Two’ is an Irish-owned ICT services and supplies company founded in the 1980s and has a number of offices nationwide. It is a limited company that employs approximately 170 employees between its locations and is one of the Ireland’s largest indigenous ICT supplies and services providers. The company that works closely with global partners has achieved an extensive range of advanced-level accreditations and leading international standards and is estimated to have a turnover in excess of €40 million. ‘Company Three’ is an online retail services firm and is one of the Ireland’s fastest growing and most successful web companies. Based in a regional Irish town, the company was founded by a husband and wife team in the mid-2000s before becoming part of an international media group quoted on a national stock exchange. The business today employs over 30 people with a turnover in excess of €8 million.

Thus, the research involved questionnaires (n=65), interviews (n=10) and observations in three diverse case study companies of large, medium and small size (OECD, 2005). Furthermore, each company can be categorised as having a different position along the product–service continuum with Company One having predominantly a production focus, Company Two a mix of product and services and Company Three having a focus on services only.

Research methods and data collection

The questionnaire utilised in the research to examine the layers of a market-oriented culture was adapted from the study by Homburg and Pflesser (2000). Homburg and Pflesser (2000) developed the questionnaire items based on a content analysis of 50 reports of companies who focused on increasing their market orientation. Homburg and Pflesser (2000) validated their content analysis via interviews with 10 managers from five different industries. The research instrument incorporates Kohli et al.’s (1993) MARKOR measurement tool of market-oriented behaviours.

Seventy-eight Likert statements in the original Homburg and Pflesser (2000) research instrument were reduced to 45 statements making up four scales that aimed to still reflect the focus of the original research instrument. In addition, the language of the Likert statements was adapted including modifying the managerial focus of the questions to reflect the multi-informant approach taken in this research. The questionnaire was subject to pretesting. A summary of the questionnaire is provided in Table 1.

Table 1

Research questionnaire

Data collectedSource
Demographic dataRelevant data were sought to identify the company and job title of the respondent
Values scaleAdapted from Homburg and Pflesser (2000), these Likert statements formed an 11-item scale to measure the level of agreement that the values of success, quality and competence, innovation and flexibility, openness to internal communication, appreciation of employees, responsibility of employees, inter-functional cooperation and speed are associated with market orientation
Norms scaleAdapted from Homburg and Pflesser (2000), these Likert statements form a 16-item scale to measure the level of agreement that the norms of success, quality and competence, innovation and flexibility, openness to internal communication, appreciation of employees, responsibility of employees, inter-functional cooperation and speed are associated with a market orientation
Artefacts scaleAdapted from Homburg and Pflesser (2000), these Likert statements form a 6-item scale to measure the levels of agreement that the artefacts of arrangements, stories and rituals are indicators of the level of market orientation in an organisation
Market-oriented behavioursAdapted from Kohli et al. (1993), these Likert statements form a 12-item scale to measure market-oriented behaviours (information generation, dissemination and response to the information)

A multi-informant approach was taken to the interviews to allow a more complete ‘gauge’ of market orientation (Harris, 2002b: 248). Thus, interviews were arranged with at least three employees from each case study company from functions such as marketing and customer relations (n=10). The interviews were semi structured using the research aim as the basis for the interview questions.

As part of the data collection process, a tour of each company’s headquarters took place with observations recorded (Harris and Ogbonna, 2000) and photographs taken. The tours covered canteens, common areas, meeting rooms, offices, reception areas and work areas for employees. Each company’s mission statement and employee handbook as well as the companies’ intranets were reviewed. Field notes detailing data gathered were written-up following each site visit. Data were collected from the three case study companies over a period of 4 months. Details on the data collection are provided in Table 2.

Table 2

Data collection details

Company One
• Semi-structured interviews with the purchasing manager, a member of the purchasing team, the customer service coordinator and a member of the marketing team
• Eighteen questionnaires completed
Company Two
• Semi-structured interviews with the general manager of customer delivery, the sales manager and the sales department manager
• Thirty-two online questionnaires completed
Company Three
• Semi-structured interviews with the marketing manager and the human resource/culture manager
• Fifteen online questionnaires completed

Data analysis

Data from the questionnaire were collated for analysis via SPSS. Subsequently, the data were suitably prepared (frequencies, means and standard deviations) to allow comparison and display in a coherent form as well as the investigation of relationships. As part of assessing the reliability of quantitative data, Cronbach’s a test was carried out on each of the scales (Tavakol and Dennick, 2011). Cronbach’s a is expressed as a number between 0 and 1 and ideally the score should be above 0.7 to 0.8. A value lower than this is an indication of unreliability (Field, 2009; Pallant, 2010; Tavakol and Dennick, 2011). Cronbach’s a was calculated as 0.93 for the Values scale, 0.92 for the Norms scale, 0.47 for the Artefacts scale and 0.90 for the Behaviours scale. As the a for the Artefacts scale was below the acceptable limit, it was discarded as a scale although the mean responses to the individual items are still reported. The low value of alpha suggests the examination of a broad range of artefacts in a scale resulted in a weak interrelatedness between items (Tavakol and Dennick, 2011).

There was a substantial amount of qualitative data gathered from the 10 recorded interviews. Thematic analysis of the transcribed recordings allowed for the identification of patterns and themes within the data (Braun and Clarke, 2006). A general synopsis was compiled of the recurring themes and findings for each interview and for each company followed by a synopsis of common themes across all interviews (Miles and Huberman, 1984). Data quality processes were adhered to in all aspects of the research process to enhance the quality of the analysis findings (Lincoln and Guba, 1986).

The researchers’ personal codes of ethical practice were brought to the research as well as being informed by relevant institutional guidelines which include research which can be of benefit to participants, respecting the dignity and privacy of all participants, honesty and openness with participants, involvement of all significant individuals, negotiation, reporting of progress, confidentiality, authorisation of access, sensitivity and good relations (IT Carlow, 2011a, 2011b).

Limitations in the methodology of the study can be argued to include the use of the business awards list as a sampling frame as not all companies take part in industry award competitions. However, the selection of market-oriented companies was the aim and the awards list could be considered a pragmatic choice. The lack of control over the completion of self-administered questionnaires is also acknowledged although the targeting of respondents for the multi-informant interview approach is offered as a reassurance to allay this concern.

Findings

Market orientation

The aim of the study was to examine the layers of a market-oriented culture including their influence on market-oriented behaviours. Therefore, initially, it was necessary to ascertain whether the three case study companies investigated were market oriented, that is, if they had the characteristics of a market-oriented culture (Homburg and Pflesser, 2000). Thus, in the questionnaire, employees of the three case study companies were asked to indicate their level of agreement with a series of Likert statements describing the values, norms, artefacts and behaviours associated with a market orientation. Tables 3, 4, 5, 6 present the mean level of agreement among respondents to Likert statements on a 5-point scale ranging from ‘strongly disagree’ to ‘strongly agree’ with each level on the scale assigned a numeric value starting at 1 and finishing at 5.

Table 3

Statements describing values associated with a market orientation

Values associated with a market orientationMeanSD
Market-oriented Values scaleWe place great values on performance-oriented employees4.00.85
We are open towards innovation (e.g. related to products or processes) and creativity4.370.76
Open proactive communication across departments and areas is valued4.151.02
Information exchange across departments and areas is valued4.230.86
High-quality and error-free work is valued4.320.81
Every employee aspires to promptness in their work processes (e.g. handling queries or customer requests efficiently)4.070.92
Teamwork and cooperation across different departments and areas are valued4.290.74
Acting and thinking like an entrepreneur is valued in our company3.730.91
Every employee is appreciated in our company3.931.10
Value is placed on a feeling of belonging among employees3.881.09
We aspire to a high degree of employee satisfaction3.851.06
N=59–65.
Table 4

Statements describing norms associated with a market orientation

Norms associated with a market orientationMeanSD
Market-oriented Norms scaleMarket performance (e.g. market share and customer satisfaction) is measured regularly4.380.66
Generally accepted procedures are examined regularly to become more effective in serving our customers and markets4.200.87
There is flexibility when finding solutions to problems4.330.77
New value-adding products and services are identified and developed continuously4.300.64
Cross-departmental/area meetings (e.g. discussions about market trends) are organised regularly with market-related problems mentioned directly and openly3.980.99
The distribution and storage of key information (e.g. contact details) about customers are encouraged4.070.91
The distribution and storage of key information (e.g. contact details) about customers are assessed regularly3.790.97
It is expected that frontline staff with direct customer contact have the necessary social skills and abilities to deal with customers4.590.56
A quick response to market changes is expected4.140.73
Employees expect that customers are involved in the planning of new product or service programmes3.671.06
It is expected that market information (e.g. market share and customer satisfaction) is distributed to different departments or areas3.660.98
The distribution of market information (e.g. market share and customer satisfaction) across different departments or areas is measured regularly3.690.98
The degree of coordination of decision about marketing activities in different departments or areas is managed3.600.94
All employees feel responsible for finding out and solving customer problems4.020.97
In our company, the individuality of each employee is viewed as a competitive advantage3.970.93
A quality performance and a high involvement of employees are expected for the fulfilment of customer needs4.230.80
N=59–65.
Table 5

Statements describing artefacts associated with a market orientation

Artefacts associated with a market orientationMeanSD
Market-oriented ArtefactsThere are unwritten rules within the company that prevent a customer-focused approach*2.381.14
Buildings, the exterior surroundings and the reception area are laid out very clearly so that visitors or customers find their way easily3.941.00
Offices and meeting rooms are built in a way that supports communication among all employees4.290.79
Attractive meeting and common areas (e.g. tea room and canteen) exist where information can be exchanged informally between employees4.170.93
Employees who are customer oriented are rewarded3.660.99
We regularly organise events for customers3.190.88
N=59–65. *A reverse-coded statement.
Table 6

Statements describing market-oriented behaviours

Market-oriented behavioursMeanSD
Market-oriented Values scaleWe meet with customers at least once a year to find out what products or services they will need in the future3.920.84
We are slow to detect changes in our customers’ product preferences*2.140.82
We survey customers at least once a year to assess the quality of our products and services3.660.98
We are slow to detect fundamental shifts in our industry (e.g. competition, technology and regulation)*1.810.84
We have meetings across departments and areas at regular intervals to discuss market trends and developments3.801.04
Time is spent discussing customers’ future needs across departments or areas3.841.00
When something important happens to a major customer or market, the whole company knows about it within a short period of time3.711.06
Data on customer satisfaction are distributed to all levels within departments or areas on a regular basis3.531.06
We regularly review our product or service development efforts to ensure that they are in line with what customers want4.010.82
Several departments or areas get together regularly to plan a response to changes taking place in our business environment3.930.93
The activities of different departments or areas in this company are well coordinated3.920.97
When we find that customers would like us to modify a product or service, the departments or areas involved make a determined effort to do so4.120.85
N=59–65. *A reverse-coded statement.

The tables can be interpreted as indicating the case study companies have values, norms, artefacts and behaviours associated with a market orientation (Homburg and Pflesser, 2000). The employees surveyed can be interpreted as in general agreeing that the values and norms of success, quality and competence, innovation and flexibility, openness to internal communication, appreciation of employees, responsibility of employees, inter-functional cooperation and speed were prevalent in their companies. Similarly, employees in the case study companies agreed that the particular artefacts related to a market orientation as well as the described market-oriented behaviours (Kohli et al., 1993) exist within their organisations (Homburg and Pflesser, 2000).

The qualitative data provide additional support for the existence of market-oriented values, norms, artefacts and behaviours in each of the companies researched. For example, in Company One, there is evidence of the value of quality and competence. The company has a team of 12 staff members who act as internal auditors and ‘audit to our standard’ according to an interviewee to maintain quality standards. In the same company, the research supports the existence of the corresponding norm of quality and competence with the customer service manager explaining ‘employees know it is their responsibility to make sure that their area is clean, that they are clean, that they’re wearing the proper garb’. This quote illustrates that employees know what the norm is, i.e what is expected of them. In addition, the company, demonstrating market-oriented behaviours in the generation of market intelligence, carries out surveys with their customers on a regular basis to assess the quality and competence of the company from the customer’s point of view.

Inter-functional cooperation was found to exist in all the three case study companies. Inter-functional cooperation refers to the degree of formal and informal direct contact between employees across departments (Jaworski and Kohli, 1993). As an illustration in Company One, the customer service manager and the production manager ‘talk first thing every morning’ as their work is connected and they share information that affects both departments. In Company Three, the norm is to have weekly meetings involving all team members. An interviewee explained, weekly meetings ‘feed into the monthly meetings’ so that everyone is informed and up to date, thus the generation and dissemination of market intelligence. The data suggest that, regardless of company size, formal and informal communication is important to market orientation.

There was also evidence of market-oriented artefacts in the three companies. For example, in Company Three, a manager explained the staff that common area was like a family kitchen, ‘the morning break is compulsory ... you have to go out for your tea break at half-ten every day’. This ritual allows for the gathering and disseminating of intelligence among all staff members.

In summary, the research can be interpreted as indicating each of the case study companies exhibited the values, norms, artefacts and behaviours of a market-oriented culture despite their differences in industry, size, ownership, age and product–service mix.

Relationship of market-oriented values, norms and artefacts with behaviours

To address the focus of the research, the relationship between the layers of a market-oriented culture and behaviours was investigated. That is, do the values, norms and artefacts of a market-oriented culture drive behaviours.

To explore the relationship between market-oriented values and norms and market-oriented behaviours, the Likert statements as presented in Tables 3 and 4 were aggregated into scales. These scales were correlated with the Market-oriented Behaviours scale, developed from the 12 statements as summarized in Table 6. Pearson’s correlation indicates that there is a significant relationship between the Values scale and Market-oriented Behaviours scale (r=0.74, p [two-tailed] <0.01) with a coefficient of the determination of R2=54% and between the Norms and Behaviours scales (r=0.75, p [two-tailed] <0.01) with a coefficient of the determination of R2=56%; the relationship between artefacts and behaviours was not investigated due to the previously noted low reliability of the scale. Thus, there is a relationship between the variables of values and norms and market-oriented behaviours. The coefficients of determination (R2=54%, R2=56%) indicate that a significant proportion of variance in market-oriented behaviours is explained by market-oriented values and norms. This gives substance to the claim that values and norms play an important role in determining the market-oriented behaviour of employees within the companies researched.

The qualitative data can be argued as confirming this relationship between market-oriented organisational values and norms and behaviours as well as indicating such a relationship between artefacts and behaviours may also exist in each of the companies researched. Company Two is used to illustrate this relationship. In the company, a manager outlined how, at interdepartmental meetings, there is an open forum where anyone can address an issue but she pointed out that employees know they ‘don’t have to wait for a meeting if the matter is urgent’. Employees know they can take action if they need to before the meeting and this in turn leads to them being active in solving problems and in finding solutions. Employees know they have the flexibility to be innovative to ‘think on their feet and to make decisions’ to maintain a quality service. This vignette outlines how values such as innovation and flexibility, openness to internal communication, speed and inter-functional cooperation influence the norms of behaviour in the company and its subsequent market-oriented behaviours in responding to the needs of customers.

Artefacts can also be identified as an influence on employee behaviour. In Company Two, visual displays were utilised to highlight key targets throughout the day in different departments. For example, in the warehouse, a constantly updated electronic screen showed the number of orders being processed. A manager commented on the use of such displays:

... every hour not every month but every hour they [employee teams] would write up what their figure is and they’ll try to achieve their hourly targets, their daily target ... so there’s that kind of drive to close the deal ... but it’s not just what’s my target, again it’s a team target.

This information is then later used to create reports on the number of calls received, revenue targets met, progress of employees, communication with customers and enhancement of the overall quality of service. This example demonstrates how the artefacts influence the behaviour of employees and enhance the market orientation of the company in terms of information generation, dissemination and response.

There are subtle signals sent through the physical layout of the surroundings, the language including mission statements and the rituals that encourage market-oriented behaviours such as meeting customers, informal meetings and communication and in the resulting inter-functional coordination. In the three companies, researched artefacts in the form of attractive meeting rooms, offices and common areas that support open communication, surroundings that are welcoming and customer oriented, language that was customer focused and rituals such as interdepartmental meetings were all evident.

In summary, the research argues that there is a relationship between the layers of organisational culture and market-oriented behaviours.

Connected

Having established that the particular values, norms and artefacts as identified by Homburg and Pflesser (2000) existed in the case study companies and, furthermore, that they appear related to market-oriented behaviours, the nature of the relationship between the layers of organisational culture and market-oriented behaviours was explored. Two broad themes were identified in the examination of the data. Firstly, the layers of organisational culture were found to be connected both within the layers and between the layers thus there are not only intra-connections between the values and intra-connections between the norms but also inter-connections between the different layers and between values and norms and values and artefacts and so on. Secondly, each company was found to have a particular unique mix of values, norms and artefacts.

In relation to the first theme, the research data support an interpretation that the values, norms and artefacts associated with a market-oriented culture are connected in each of the case study companies. For example, the norm of inter-functional cooperation was found, not surprisingly, to be intra-connected with the norm of openness to internal communication. Evidence in Company Three of this inter-connection was that the employees had the norm of coming together for the morning coffee break daily and in creating the company newsletter as well as in cross-departmental training. A manager outlined these activities: ‘creates a mutual appreciation for what people do’. The intra-connection of these norms of inter-functional cooperation and openness to internal communication was also evident in Company One, where the customer service manager highlighted the fact that she meets with the production manager on a daily basis because ‘our two jobs intermingle, you know if he doesn’t know the information or if I don’t know what he’s doing we’re in trouble ... like what he does impacts on my customers’. Furthermore, the manager explained that during busier times they talk ‘maybe fifty times a day ... up to eleven, half eleven at night’.

An example of evidence of the relationship between the norms of success and innovation and flexibility is in Company Two, where a manager explained that everyone is striving for success ‘everybody is working towards a shared goal or a shared vision and everybody is keen to get to that [goal]’. Furthermore, she explained that employees know they have the flexibility to make suggestions to solve problems:

... employees are encouraged [to] don’t just come with the problem [but] come with the solution. You mightn’t have the full solution worked out. It mightn’t be necessarily the best solution but come with something ... bring something to the table even if you’re not a hundred per cent sure and we’ll work with you to add, to refine it and to make it better.

This example illustrates how innovation and flexibility in finding solutions and in solving problems can lead to success and that employees know they can contribute possible solutions – that it is ‘the normal thing to do’. Thus, in each of the companies researched there appeared to be intra-connections in the layers of market-oriented organisational culture.

These intra-connections in-between the norms in a company can be argued as producing an exponential effect or synergy. It is the influence of a combination of values, norms and artefacts that enhance the market orientation of companies. As an illustration, an interviewee in Company Two commented that in their organisation ‘everything revolves around teamwork’, there is ‘honest communication ... in a flexible environment’ where employees ‘come into work and can achieve something’ where ‘there is a passion for the business ... [and employees] stand up for [the company]’. This comment highlights values that could be described as inter-functional cooperation, quality and competence and openness to internal communication that enhance each other in combination.

The evidence demonstrates intra-connection between the layers of a market-oriented culture. Furthermore, there is evidence of a vertical or inter-connection between the layers of organisational culture, i.e. between the values, norms and artefacts in each of the companies. For example, in Company Three, the relationship between an artefact and values was evident. The human resource (HR) manager explained ‘the first thing [you see when] you come [in] ... is a picture frame with all pictures [from the company] through the years so far’. This collage depicts company employees as well as events such as days out and meeting with customers. The collage, a company artefact, illustrates according to the HR manager a core value within the company that ‘people matter’. Another example from the same company illustrates the connection between artefacts and norms of behaviour where the company had a ‘culture poster’ in place. The HR manager explained what employees were tasked to do in creating it:

... write down what we [the employees] felt was important for customers and for working here ... give me five things that you think of when you think of like culture, us and how this company should make you feel and [the culture poster] is basically a collage of what everyone came back with.

The result according to the HR manager was a collection of phrases and sentences that employees felt were important for them and their customers: ‘never be rude, encourage others, love your job ... do I understand what is being said, more human less robots’. This culture poster resulted in a modification of the behaviours in the company with the HR manager explaining that now when responding to queries from customers ‘instead of just pushing out bog-standard replies’ someone personally signs the emails and the email is never just a standardised response. The ‘culture poster’ had an influence on the behaviour of the company in interacting with customers.

In addition, supporting the argument of a vertical connection between the layers of a market-oriented organisational culture, this study found that when a company that exhibited certain values it also exhibited corresponding norm and related artefacts. For example, in the case of Company Two, there was quantitative and qualitative evidence of the value and corresponding norm of quality and competence – employees know what is expected of them and consequently what they should and should not do. Similarly, where the value of speed was identified, it was also found to be connected with the norm of speed in the swift and efficient ways that employees responded to queries within a 24-hour time frame in one company or an 8-hour time frame in another. As another example, the values of inter-functional cooperation and openness to internal communication were evident in the norm of regular meetings taking place in Company Three with the inclusion of employees from across all different departments in an ‘open forum’ offering everyone the opportunity to address issues. The values of inter-functional cooperation and openness to internal communication exhibited in the norms were also reflected in the artefacts, where a common area was conducive to open communication and in the ritual of everyone taking their morning tea break together. The artefacts embodied the company values and norms.

In summary, the research evidence indicates the inter-connection between and intra-connections within the layers of a market-oriented culture. These connections between the layers of a market-oriented organisational culture have the capacity to produce a synergistic or enhancing effect with values reinforcing values as well as connecting with related and corresponding norms and enabled via company artefacts.

Uniqueness

The second broad qualitative research theme was that each company was found to have a particular unique mix of values, norms and artefacts. While quantitative and qualitative data indicated that the investigated market-oriented values, norms and artefacts existed across all three companies, it was to varying degrees in unique combinations. When survey data were investigated at a company level, the average or mean value of certain values, norms and artefacts varied across the case study companies. Thus, when investigated at company-level employees in all the three case study companies, it was agreed that the value of innovation and flexibility was strongly present in their company. Indeed, employees of Company Three, the services company, ranked it as the value they mostly strong agreed was found in their company. Whereas the employees of the production and the mixed product–services company had quality and competence as the value they most strongly agreed was found in their company, perhaps an indication of the primacy of having a quality product in their industries. The employees of the smaller services company had appreciation of employees, responsibility of employees and speed ranked higher as values that best described their company. Openness to internal communication and inter-functional cooperation also ranked high with the employees of Company Three, the services company, and Company Two, the mixed product–services company. Thus, while the sample size and number of case studies are limited, employees in all companies indicated that innovation and flexibility is a value that describes their company, quality and competence is a value that is strongly held in the product-focused companies with speed and employee-focused values strongly held in the service-type companies.

An example illustrates the uniqueness of the cultural values in the companies. A value that differed in its ranked importance across the three companies was appreciation of employees, which was ranked highest in Company Three while ranked lower in the other companies. In this company, the HR manager explained that one of their core values was that ‘people matter’. Similarly, norms differed in their importance in each company; in Company Three, where the norm of speed was ranked high by employees, there is a set response time in place for dealing with customer queries. The particular values, norms and artefacts that were ranked highest in each individual company appeared to be relevant to its competitive environment and capabilities. In this case, Company Three, a services company, placed an emphasis on people as well as the speed of response in delivering that service.

In summary, this study concludes that there is an identifiable set of values, norms and artefacts related to market orientation. Each layer contributes to the culture of the organisation to encourage market-oriented behaviours. Furthermore, market-oriented values, norms and artefacts influence market-oriented behaviours in a, inter- and intra-connected company, relevant and unique way. Thus, a market-oriented organisational culture is a fusion of layers: values, norms and artefacts that bring about market-oriented behaviours. It is this organisational culture that is the essence of market orientation as described by Narver and Slater (1990).

Discussion and conclusions

This study concludes that the organisational cultural values, norms and artefacts identified by Homburg and Pflesser (2000) as related to market orientation were evident in the case study companies researched. Furthermore, there is evidence in this study that the organisational cultural values (r=0.74), norms (r=0.75) and artefacts were found to influence market-oriented behaviours within the organisations researched.

The findings are in line with previous empirical research (Gebhardt et al., 2006; Homburg and Pflesser, 2000; Kasper, 2005) and have relevance as it suggests, while the possible range of values and norms related to market orientation is broad there may be a finite number or range that can be identified – this study found support also for all eight values and norms identified by Homburg and Pflesser (2000). It is acknowledged that the values and norms that are relevant for a particular company will always depend on the goals of the company and its unique context. However, the findings of this study posit that there is a set of identifiable values and norms that can potentially be selected and imbued within a company to create a market orientation. There is also evidence in this study that pointed out to the significance of artefacts to embody the particular market-oriented values and norms of the companies researched (Brown, 1998). The artefacts in the form of arrangements, language, rituals and stories are also argued as encouraging market-oriented behaviours (Bitner, 1990; Deal and Kennedy, 1982; Homburg and Pflesser, 2000; Jaworski and Kohli, 1993).

Furthermore, this study found that while each layer of the organisational culture had a distinct role in influencing market-oriented behaviours, there is evidence that suggests an intra-connection within each layer in a market-oriented organisational culture and this intra-connection within the layers was found to play a role in implementing a market orientation. In addition to this intra-connection, there is evidence of an inter-connection between the layers, i.e. between the values, norms and artefacts which enhanced the market-oriented behaviours within the companies researched. These findings develop the understanding of the layered perspective of market-oriented culture (Day, 2000; Detert et al., 2000; Gray, 2010; Lai, 2003; Ruekert, 1992). Thus, companies can benefit from a harmonisation of the values, norms and artefacts and the resulting synergistic effect in the implementation of a market-oriented culture.

Each company was also found to have a unique mix of values, norms and artefacts relevant to the particular goals of that company. Argandoña (2003: 19-21) discussing values argued that this is ‘logical, inevitable and even desirable’ as they are developed and fostered according to the company’s mission and distinctive capabilities. Certain values will make sense for particular organisations in specific economic circumstances and the challenges the company faces in the environment (Argandoña, 2003; Deal and Kennedy, 1982). Thus, in summary, it is the combined synergistic effect of the unique mix of relevant values, norms and artefacts in companies which encourages market-oriented behaviour.

Finally, the contribution of this study can be identified as firstly providing additional support for the cultural perspective of market orientation. Secondly, the study findings confirmed the values, norms and artefacts identified by Homburg and Pflesser (2000) encourage market-oriented behaviours. Thirdly, the study contributed to a further understanding of the dynamics of the layers of a market-oriented organisational culture in implementing a market orientation. Fourthly, the study presents a questionnaire survey that can be utilised as a diagnostic tool in evaluating the market-oriented culture of a firm. These contributions can provide managerial guidance to the range of values, norms and artefacts linked to market orientation and the details of their interrelationships; Furthermore, the study can aid in ‘value and norm development’ in the cultural transformation required to be a market-oriented organisation (Gebhardt et al., 2006). Similarly, the study can aid in providing ‘a priori education’ to members of an organisation where the aim is to increase the level of market orientation (Narver et al., 1998). As van Raaij and Stoelhorst (2008) identified, in a review of the literature, developing top-down programmes to change or create norms is an enabler in creating market orientation; this study provides the details of what such a programme may include.

It is recommended that organisations that are seeking to become market oriented will benefit from having organisational cultural values, corresponding norms and related artefacts that have been linked to market orientation, that are compatible and enhancing and are aligned with the specific circumstances of the company. Furthermore, it is recommended that managers understand the aspects and dynamics of a market-oriented organisational culture and their own role in its creation, e.g. in the selection of relevant and related values, in the reinforcement and encouragement of corresponding norms, the creation of appropriate rituals and provision of ideal arrangements such as offices, meeting rooms and common areas.

Limitations and further research

While the current research is argued as providing guidance on the details of a market-oriented culture, it can be subject to critique. Firstly, arguing that market-oriented companies exhibit a market-oriented culture is hardly surprising. However, it is argued that the value of this research is in the understanding it gives of the range of values, norms and artefacts and their interrelationships. Similarly, to understand how to achieve customer satisfaction investigating organisations with high levels of customer satisfaction makes sense. A second criticism of the study is that arguing the values, norms and artefacts required in a company need to be relevant and unique to a company’s context could be considered vague and in essence limited in its usefulness. However, similar to the organisational capabilities literature where the capabilities of a firm are argued as ‘the distinctive, hard-to-duplicate resources the firm has developed’ (Day, 1994: 38) a market-oriented culture appears to be by necessity company relevant. A third critique is that this research provides only part of the requirements for a company aiming to increase their level of market orientation: an argument with which the current authors would agree. For example, van Raaij and Stoelhorst (2008) outlined the broad range of enablers of a market orientation as including the organisational structure, processes, ICT systems, reward systems, leadership and competence management. Other authors have also identified precursors or antecedents to market orientation as including the role of top management, interdepartmental dynamics, employee reward systems and organisational formalisation (Jaworski and Kohli, 1993; Kirca et al., 2005; Ruekert, 1992). Fourthly, the current research could be viewed as a public relations exercise for the companies who are the focus of the research, in essence proclaiming their customer focus. However, the anonymity of the questionnaires, the qualitative research process including the multi-informant approach of the interviews and the fact that the companies were selected due to their perceived market orientation does provide some reassurance that the companies are what they say they are. Finally, it is recognised that organisational culture as a concept is complex in nature and thus researching it is complex. It is acknowledged that there are significant differences in definitions and terms used to describe both culture and organisational culture in a literature ‘fraught with debate regarding definitions, methodologies, perspectives and applications’ (Alvesson, 2011: 13). Harris (1999) argued that difficulties in developing a market-oriented culture include the degree to which it can be considered pluralistic in the organisation, the degree to which it will dominate other organisational cultures and the degree to which it can be managed and subsequently entrenched. Similarly, it is acknowledged that there is corresponding strength in the disagreement in the literature on how market orientation should be defined with no consensus as of yet emerging (Gainer and Padanyi, 2005).

Despite the substantial body of work in the area of market orientation and organisational culture, further understating of market-oriented organisational culture and its implementation is required, e.g. what value, norms and artefacts can be deemed of most importance and in what particular organisational and national contexts. In addition, further research that follows from this study includes the styles and roles of leaders and/or management in an organisation in introducing and influencing the adoption of particular values and norms in developing a market-oriented culture. This could include examining the dynamics of organisational culture with regard to its strength, its receptability, adaptability and transferability (Harris, 1998). In addition, in the light of the expansive discussion in the literature in understanding organisational culture (Alvesson, 2011), the importance of artefacts and the role they play in organisations necessitates further study including better measures. These research directions can be argued as requiring in-depth qualitative methods such as ethnography or a larger-scale quantitative approach or a sequential mix of both.

The core conclusion of this study is that the combined synergistic effect of the particular unique market-oriented organisational cultural values and norms that exist within a company, and which are reflected in artefacts, is central to the development of a market-oriented organisational culture. It is the culture within a company that potentially encourages market-oriented behaviours; thus, understanding the dynamics of this culture has merit.

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  • Alvesson M. (2011). ‘Meaning discourse and identity’ in N. Ashkanasy C. Wilderom and M. Peterson (eds) Handbook of Organizational Culture And Climate 2nd edn London: Sage Publications.

  • Argandoña A. (2003). ‘Fostering values in organizations’. Journal of Business Ethics 45: 1 15-28.

    • Crossref
    • Export Citation
  • Bennett A. (2004). ‘Case study methods: Design use and comparative advantages’ in D. Sprinz and Y. Wolinsky-Nahmias (eds) Models Numbers and Cases: Methods for Studying International Relations Ann Arbor: University of Michigan Press.

  • Bitner M. (1990). ‘Evaluating service encounters: The effects of physical surroundings and employee responses’. The Journal of Marketing 54: 2 69-82.

    • Crossref
    • Export Citation
  • Braun V. and Clarke V. (2006). ‘Using thematic analysis in psychology’. Qualitative Research in Psychology 3: 2 77-101.

    • Crossref
    • Export Citation
  • Brown A. (1998). Organizational Culture 2nd ed. London: Pitman.

  • Chad P. Kyriazis E. and Motion J. (2013). ‘Development of a market orientation research agenda for the nonprofit sector’. Journal of Nonprofit & Public Sector Marketing 25: 1 1-27.

    • Crossref
    • Export Citation
  • Colak M. Husain Z. and Dayan M. (2015). ‘Some antecedents moderators and consequences of market orientation in international joint ventures’. Journal for Global Business Advancement 8: 4 36-450.

  • Dauber D. Fink G. and Yolles M. (2012). ‘Configuration model of organizational culture’. SAGE Open 2: 1 1-16.

  • Day G. (1994). ‘The capabilities of market-driven organizations’. The Journal of Marketing 58: 4 37-52.

    • Crossref
    • Export Citation
  • Day G. (2000). ‘Managing market relationships’. Journal of the Academy of Marketing Science 28: 1 24-30.

    • Crossref
    • Export Citation
  • Deal T. and Kennedy A. (1982). Corporate Cultures Reading: Addison Wesley Publishing.

  • Deshpande R. and Webster F. Jr. (1989). ‘Organizational culture and marketing: Defining the research agenda’. The Journal of Marketing 53: 1 3-15.

    • Crossref
    • Export Citation
  • Deshpande R. Farley J. and Webster F. Jr. (1993). ‘Corporate culture customer orientation and innovativeness in Japanese firms: A Quadrad Analysis’. The Journal of Marketing 57: 1 23-37.

    • Crossref
    • Export Citation
  • Detert J. Schroeder R. and Mauriel J. (2000). ‘A framework for linking culture and improvement initiatives in organizations’. Academy of Management Review 25: 4 850-863.

    • Crossref
    • Export Citation
  • Farrell M. (2005). ‘The effect of a market-oriented organisational culture on sales-force behaviour and attitudes’. Journal of Strategic Marketing 13: 4 261-273.

    • Crossref
    • Export Citation
  • Field A. (2009). Discovering Statistics Using SPSS London: Sage Publications.

  • Foley A. and Fahy J. (2004). ‘Towards a further understanding of the development of market orientation in the firm: A conceptual framework based on the market-sensing capability’. Journal of Strategic Marketing 12: 4 219-230.

    • Crossref
    • Export Citation
  • Gainer B. and Padanyi P. (2005). ‘The relationship between market-oriented activities and market-oriented culture: Implications for the development of market orientation in non-profit service organizations’. Journal of Business Research 58: 6 854-862.

    • Crossref
    • Export Citation
  • Gebhardt G. Carpenter G. and Sherry J. (2006). ‘Creating a market orientation: A longitudinal multifirm grounded analysis of cultural transformation’. Journal of Marketing 70: 4 37-55.

    • Crossref
    • Export Citation
  • Gray B. (2010). ‘Fine tuning market oriented practices’. Business Horizons 53: 4 371-383.

    • Crossref
    • Export Citation
  • Gray B. and Hooley G. (2002). ‘Market orientation and service firm performance – a research agenda’. European Journal of Marketing 36: 9/10 980-989.

    • Crossref
    • Export Citation
  • Gupta M. Sahi G. and Chahal H. (2013). ‘Improving market orientation: The theory of constraints-based framework’. Journal of Strategic Marketing 21: 4 305-322.

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