Market Turbulence as Moderator between Customer Orientation and Firm Performance: An Abstract

Organizations that aspire to achieve competitive advantage must be aware of rapid changes in their markets. The relationships between strategic organizational orientations and performance have been investigated. While marketing studies have tested the direct positive effect of customer orientation (CO) on firm performance, most of these studies have ignored the role of dynamic environments as a potential moderator of this effect. Notably, performance depends on strategy but also involves the adjustment of the organization strategy to external environments (Calantone et al. 2003). Here, we define performance as a unidimensional scale, which reflects firms’ performance compared to competitors. Against this background, we developed and tested a model, which examined the impact of CO on performance while accounting for the moderating role of environmental dynamism, captured as market turbulence (MT). Our major purpose is to examine and identify the role of MT as moderator between CO and performance. Following Homburg et al. (2011), we define CO as a two-dimensional construct: functional and relational customer orientation. The MT scale was taken from Jaworski and Kohli (1993), and performance was taken from Shoham and Fiegenbaum (2002). We hypothesize that the greater the MT, the stronger the relationship between CO and firm performance.