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Importance of Innovation Resources for Market Orientation – Financial Performance Link: Mediating Role of Proactive Market Orientation

Borut Milfelner, Jasmina Dlačić, Boris Snoj, Aleksandra Selinšek

Abstract


The purpose of this paper is to explore the relationship between market
orientation, innovation resources and companies’ financial performance. Focus is
put on the mediator role of proactive market orientation (PMO) in the relationship
between reactive market orientation (RMO), innovation resources and financial
performance in the context of Central and Eastern European (CEE) countries.
Research builds on reliable scales. Four hundred and fifteen usable questionnaires
were collected from companies in Slovenia with more than 20 employees. The
results show a strong and positive relationship between RMO and PMO. The
impact of RMO on innovativeness as an element of organisational culture is both
positive and stronger than the impact of PMO. PMO proved to have a significant
positive influence on the capacity to innovate. While innovativeness alone does
not directly influence financial performance, the results do confirm the positive
impact of an organisational capacity to innovate on financial performance. The
finding of our paper is that when PMO was included as a mediator between
RMO and the capacity to innovate, the result was that this indirect impact proved
to be one of the strongest in the model. Also, it proves that in CEE countries,
it is important to stress the influence of market and market orientation in
building innovation resources and consequently financial performance. The
limitation of the current study is that we considered the relationship only among
few marketing resources and organisational performance. In future research,
additional measures of market performance may be introduced as mediators
between innovation resources and financial performance.


Keywords


proactive market orientation, responsive market orientation, innovativeness, capacity to innovate, financial performance

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