Miles A. Zachary Aaron F. McKenny Jeremy C. Short G. Tyge Payne

 Premise of the paper  The Market Orientation (MO) construct  Theory  Methods  Results  Discussion  Concluding Remarks  Questions

 Family firms represent a 80% of all firms in the US (Lee, 2006); 12% of GDP (Shanker & Astrachan, 1996)  Despite significant family firm research, none have examined the possible differences between family firms and non-family firms regarding MO  We bridge this gap by examining the differences from a unidimensional as well as multidimensional MO approach

 Concept developed in the late 1980’s/early 1990’s  Two foundational definitions-  MARKOR: Kohli & Jaworski (1990)  Three (3) core components—customer focus, coordinated marketing, and profitability  MKTOR: Narver & Slater (1990)  Five (5) dimensions—customer orientation, competitor orientation, interfunctional coordination, long-term focus, and profitability

 Kohli & Jaworski (1990, 1993)  Generation, dissemination, and responsiveness  Antecedents  Individual factors  Intergroup factors  Organization-wide factors  Consequences of MO  Sustainable competitive advantage (performance)  Esprit de Corps

 Narver & Slater (1990, 1995)  Expand/focus on the dimensions of MO  Customer Orientation  Competitor Orientation  Interfunctional Coordination  Long-term Focus  Profitability  A singular construct comprised of five (5) dimensions  Contributes to a learning organization

 MO has been associated with greater firm performance (Kohli & Jaworski, 1990, 1993; Narver & Slater, 1990; Kumar, Subramanian, & Yauger, 1998; Ellis, 2006)  Increased sustainable competitive advantage  Higher employee satisfaction  Improved organizational learning (Narver & Slater, 1995)

 MO is a function of an organization’s identity (Cunnington, 1996)  Within identity, the organizational culture of a firm is affects and is affected by MO (Carr & Lopez, 2007; Leisen et al., 2002)  MO enhances organizational culture (Carr & Lopez, 2007)  Promotes awareness of and learning from customers/competitors  Emphasizes the generation and dissemination of market information

 Family firms are unique and possess inherent characteristics that are difficult to replicate (Habbershon & Williams, 1999)  The “familiness” of a firm lends itself to a unique organizational identity (e.g. Dyer & Whetten, 2006)  Family firms are strengthened by the long- surviving influence of the founder (Davis & Harveston, 1999)

 Very limited research between MO and family firms  Only study to date (Tokarczyk et al., 2007) examined the “familiness” influence on the implementation of a MO  Case-analyzed 8 firms in two industries  Found significant relationship between the “familiness” factor and the implementation of a MO

 We intuitively believe a relationship exists based on the predisposition of family firms to the antecedents of MO  We state the first hypothesis along these lines of thought  H1: Family businesses will exhibit a greater level of market orientation than non-family firms as demonstrated in their shareholder letters.

 Characterized by actions towards seeking superior value for customers  Analyzing the market for current and future customer opportunities  H2: In large, publically held companies, family businesses will exhibit greater levels of customer orientation, a dimension of market orientation, compared to non-family businesses.

 Involves a continual commitment to understanding the threats/opportunities presented by current and future competitors  Improves the cognition of an organizations strengths and weaknesses in the market  H3: In large, publically held companies, family businesses will exhibit greater levels of competitor orientation, a dimension of market orientation, compared to non-family businesses.

 The coordination of information collection and shared utilization of such information between departments  Firms focusing on synergistic departmental dynamics  H4: In large, publically held companies, family businesses will exhibit a greater level of interfunctional coordination, a dimension of market orientation, compared to non-family businesses.

 Organizational focus on long-run, sustainable goals influenced by customer orientation, competitor orientation, interfunctional coordination, and profitability  H5: In large, publically held companies, family businesses will exhibit a greater long-term focus, a dimension of market orientation, compared to non- family businesses

 An organizations focus on the profitability of the firm’s operations  Seen as both a goal and consequence of an MO (Narver & Slater, 1990)  H6: In large, publically held companies, family businesses will exhibit less emphasis on profitability, a dimension of market orientation, compared to non-family businesses.

 The link has been established between MO and performance (Ellis, 2006)  If family firms differ from non-family firms in their level of MO, does this translate to performance differences?  H7: Being a family business moderates the relationship between market orientation and organizational performance

 Content analysis via DICTION 5.0 (Hart, 2000)  Word lists determined based on Narver & Slater (1990) dimensional definitions  Rated by 3 authors independently  Shareholder letters for were analyzed on the five dimensions of MO for 224 firms  Family firms were measured based on the direct proximity of senior management and/or board members to the founder (Dyer & Whetten, 2006; Chua et al., 1999)

 Family firms display significantly less MO than non- family firms on the summated measurement of MO  Family firms display significantly less competitor orientation and profitability focus on the multidimensional measurement approach  Mixed evidence from the performance regression; indicates a more complicated relationship between family firms and ROA/Tobin’s q performance measures regarding MO

 Content analysis word lists were based on subjective definitions of each dimension of MO; difficult to determine specifically MO-related words  Word counts begin the analysis of MO and family firms, however, a bigger story exists within the context of word usage; future studies should examine this  The performance aspects of analysis were mixed and should be given further scrutiny  While large cap firms are crucial to macroeconomic performance, they are only one class of companies to be analyzed

 First to identify a difference between the implementation of a MO between family and non- family firms  The generalizability of these results allows future research to examine specific facets of MO that family firms can improve upon  Establishes the grounds upon which future research can examine the sustainability of family firms and MO dynamics, hopefully leading to specific family firm contributions

 This study represents the first step in a long process of examining the family firm dynamics of MO  Family firms are at a distinct disadvantage regarding MO currently, however, we believe they have the necessary antecedents to successfully transition to a greater MO level  Future research should focus on other specific implications for family firms using MO as a strategic orientation

 Currently in the process of seeking clearer significance in the multidimensional analysis of MO and family firms using a matched pairs data set  Working on improving the performance study by using the same matched pairs data set as above  Need to clarify and improve the contributions of the study to the management field; hopefully this can be accomplished through greater results in the performance analysis