MARKET ORIENTATION AND ORGANIZATIONAL PERFORMANCE - IS INNOVATION A MISSING LINK

In recent years, a market-oriented corporate culture increasingly has been considered a key element of superior corporate performance. Altho ugh organizational innovativeness is believed to be a potential mediat or of this market orientation-corporate performance relationship, much of the evidence to date remains anecdotal or speculative. In this con text, the authors present a systematic framework to test the postulate d ''market orientation-innovation-performance'' chain. To this end, th e direct causality assumption of market orientation on organizational performance is examined with Narver and Slater's (1990) market orienta tion framework. Moreover, the authors take a componentwise approach an d examine how the three core components of market orientation (custome r orientation, competitor orientation, and interfunctional coordinatio n) affect the two core components of organizational innovativeness (te chnical versus administrative) en route to affecting corporate perform ance. Using banking industry data, the authors empirically test and su bstantiate innovation's mediating role in the market orientation-corpo rate performance relationship.