Analysis of the Relationship between Market Orientation and Leadership Style in Hungarian SMEs

Abstract

SMEs' relation towards marketing and their marketing practices are as yet unexplored research areas in Hungary. This study focuses on the market orientation of Hungarian small and medium-sized companies, with a special focus on the interrelation between market orientation and leadership style. Since previous research (e.g.: Blankson et al., 2006, Smart and Conant, 1994) has shown a significant, positive correlation between market orientation and marketing competencies, we have also examined which internal factors influence the level of market orientation of Hungarian SMEs. Quantitative research1 was conducted with the participation of 200 SMEs using the Kohli-Jaworski (1990) scale. The results confirmed previous international studies that market orientation is significantly and positively related to financial performance. This means that the SME leader should pay closer attention to collect information and create market intelligence pertaining to current and future customer needs, to disseminate this intelligence across departments and to respond to it organization-wide. Leadership style was determined based on the Harris and Ogbonna (2001) scale. Our results indicated that a participating and supportive management style leads to higher market orientation. In the case of Hungarian SMEs, there are three factors significantly associated with leadership styles: the industry, the size of the business, and the location of the company.