The influence of market orientation on exploration and exploitation innovation strategies ans organizational performance

Abstract

Objective: The present study aimed to verify the influence of market orientation (MO) on exploration and exploitation of innovation strategies and also organizational performance. Method: The survey was conducted with owners and managers of companies in the food industry in Brazil through an online questionnaire and personal data gathering. The final sample consisted of 112 companies in southern and southeastern of Brazil. The data were first analyzed through descriptive statistics using SPSS software. Structural equation modeling by SMART PLS software was applied to test hypotheses. Relevance: Whereas recent developments in the literature on the themes of market orientation, exploration and exploitation innovation strategies, two theoretical gaps were identified for the proposed study: (1) how much MO contributes to exploration and exploitation innovation strategies, and (2) how much MO contributes to organizational performance when companies use exploration and exploitation innovation strategies. Results: The results of the study indicate that market-oriented companies can achieve both innovation strategies of exploration and innovation strategies of exploitation. Another finding indicates that market-oriented companies can improve their organizational performance by developing innovation strategies of exploration and innovation strategies of exploitation. Theoretical contributions: The understanding of how much market knowledge, proceeding from MO, can contribute to product innovation strategies, technologies, and capabilities beyond existing and more incremental innovations. And, how such relationships promote organizational performance can contribute to the understanding of how much market-oriented firms need the resources investments in innovation strategies.