Essays on supplier responsiveness and buyer firm value - Nyenrode ...

and Lewis (1991) used the objective measures of ROI growth and profit margins.
They found no relationship between market orientation and performance. On the other
hand, Hooley et al. (1990) used the same subjective measure of ROI and found a
positive relationship for market orientation and performance. Why is there a
difference between studies about the market orientation and performance relationship
when they are using similar performance measures? In this specific case, it could that
Hooley et al. (1990) used the chief marketing officer as a respondent, and his vast
knowledge gave him strategic perspective of what was going on in the organization.
Therefore, their subjective assessment was aligned with the objective of ROI. In
Esslemont and Lewis' (1991) study, respondents replied differently because of their
lack of understanding of the objective measures. However, with the model in Chapter
2, we expect that since the managers on average have over seven years of experience
in their current positions and are relatively senior in their respective organizations,
their responses would reinforce objective indicators.
The third category of studies use identical measures of performance, but they
find different results between market orientation and performance linkage. On the one
hand, Tse (1995) found no relationship between market orientation and the objective
performance measure of hotel occupancy rates. On the other hand, Naidu and
Narayana (1991) found that in hospitals, market orientation and occupancy rates have
a positive relationship. In the case of Tse (1995), it could be said that the customers of
the lodges are looking for convenient accommodation rather than a market-oriented
lodge. In the case of hospitals, because of their high interest in personal well-being,
customers assess hospitals on their market orientation. Alternatively, motor lodges are
assessed on convenience of location rather than as a place to spend a pleasure
vacation, so market orientation does not matter. In the model in Chapter 2, the
relational setting are strategic; hence, we expect market orientation would matter to
the customer because a more market-oriented supplier would be more in tune with
their latent and explicit needs.
In the case of companies listed or unlisted on the stock exchange, an
alternative explanation might contribute to the variance in subjective and objective
measurement. Listed and unlisted companies vary on a number of dimensions such as
their approach toward risk, financial leverage, and access to capital. Moreover, the
corporate earnings requirements differ for listed and unlisted companies. This
difference could be why the correlation between earnings estimates for listed and
unlisted firms differ. Since the model in Chapter 2 used a mixed sample of both listed
and unlisted companies, a comparison with a group of listed companies might lead to
potential dissonance in results.
Two streams of research can be used to explain why at times subjective and
objective measurement may not reinforce each other. The first stream emphasizes
optimal choices by management because of heightened information utilization. The
second emphasizes that managers are not adept at making optimal choices with all the
information they have (Porter & Millar, 1985; Cyret & March, 1963). In the context
of objective and subjective measurement of the model in Chapter 2, the decisions
were strategic. Strategic decisions imply that they were high involvement decisions.
Hence, evaluating any specific investment in firm processes by suppliers will be
detailed and comprehensive. Under such circumstances, any subjective evaluation
100