The role of inter-firm market orientation in B2B business model on market orientation-performance relationship: A field study

Market orientation (MO) explains the culture, behaviors and activities that companies should practice. While initially the MO research focus was explored from the perspective of the focal firm, research has evolved to take into account the role it plays in distribution channels or supply chains. This study aims to expand the theory of market orientation to explain the role played by inter-firm market orientation in business relations. Inter-firm Market Orientation (IMO) was originally conceptualized, similar to MO, as joint activities between the focal firm and its business partner on joint intelligence generation, joint intelligence dissemination, and joint customer response. Specifically, this study focuses on this question; does inter-firm market orientation mediate the focal firm market orientation-performance relationship? Two-stage approach was used in the study. In the first stage, a measurement scale was developed to measure the inter-firm market orientation and experimentally tested using SPSS 26, AMOS 24, SmartPLS3 software. The results show that the FPY structure actually consists of two factors, joint intelligence generation (JIG) and joint intelligence dissemination and responsiveness (JIDR). In addition, the two factors that make up the IMO obtained as a result of the analysis included eight reliable scale items, much less than originally expected. Most JIG efforts focus on gathering this information through collaborative interviews with end customers or through market research, rather than surveys to obtain the information. JIG efforts appear to focus on end-customer information and much less on other market or business trends. Scale items indicate that responsiveness efforts between the focal firm and channel partners are primarily focused on a reactive effort rather than a proactive one. In the second stage, the revised IMO structure with the developed scale was included in a model that mediated the MO-performance relationship. Lots of hypotheses have been developed using various relationship theories such as transaction cost economics, resource-based view, resource dependency theory, and interaction approach theory. The model was tested on a sample of 70 informants using the variance-based structural equation modeling technique called partial least squares (PLS). The analysis showed that all pathways are important and that the IMO and relationship performance constructs partially mediate the MO-performance relationship. The research is expected to help firms better understand which joint activities their main contractor and business partners (subcontractor/supplier) should focus on and invest in to improve their relationships and individual firm performance, and contribute to the improvement of business practices.