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Procedia - Social and Behavioral Sciences 109 (2014) 837 - 840
2nd World Conference On Business, Economics And Management - WCBEM 2013
Conceptualization of MILE Orientation (Market Innovative Learning Entrepreneurial) for Global Businesses
Dalia Velean a, Aviv Shoham b, Yoel Asseraf c *
abcUniversity of Haifa, 31905, Israel
Abstract
A major research stream on effective global strategies has recognized business orientations as key drivers of global performance (e.g., Cadogan et al. 2001; Knight and Kim 2009; Zou and Cavusgil 1996). For example, since the seminal conceptualizations of market orientation were introduced (Kohli and Jaworski 1990; Narver and Slater 1990), it has been found to impact performance positively in domestic and international operations (e.g., Cadogan et al. 1999; Knight 1997). However, the complexity of the global market and the difficulties associated with availability, accessibility, and quality of needed information present firms with a need for additional strategic emphases (Diamantopoulos and Cadogan 1996). Accordingly, this research model focus on four strategic orientations, which separately and in combinations, have been discussed in the literature as international performance drivers. To our best knowledge, no previous study has assessed MILE orientation (Market, Innovative, Learning, and Entrepreneurial) as a high-order construct in the context of international operations and performance.
© 2014 The Authors. Published by Elsevier Ltd.
Selection and peer review under responsibility of Organizing Committee of BEM 2013.
Keywords: Market orientation, innovation orientation, learning orientation and entrepreneurial orientation;
1. Introduction
How to achieve competitive success in the global marketplace is a central topic for international marketing researchers. Recently, Bouquet et al. (2009) pointed out a broad repertoire of capabilities that is critical for multinational organizations, which included an understanding of competitive dynamism, the proper construction of the managerial philosophy and design of organizational strategies, and the adoption of new ideas. Such an integrative/eclectic approach is common in international marketing research. Based on it, researches have recognized numerous business orientations as key resources in global markets (Cadogan et al. 1999; Knight 1997). Even though market orientation has been the most heavily researched, other orientations, such as entrepreneurial, learning, and innovativeness orientation, be they global or not, have also been discussed as resource drivers of global performance.
However, previous research on global business activities has mostly considered one business orientation at a time. It has neglected to account for the synergism potential of combinations of such orientations. Thus, the first major contribution of the proposed study is to conceptualize and operationalize a higher-order global orientation construct, namely, the Market Innovativeness Learning Entrepreneurial (hereafter MILE) orientation. MILE will describe a bundle of synergistically operating market, learning, innovativeness, and entrepreneurial global
* Corresponding Author: Yoel Asseraf. Tel.: +972-54-5799-301 E-mail address: research.yoel@gmail.com
1877-0428 © 2014 The Authors. Published by Elsevier Ltd.
Selection and peer review under responsibility of Organizing Committee of BEM 2013. doi: 10.1016/j.sbspro.2013.12.550
orientations as drivers of international performance. We recognize here that all four components, separately and in some combinations, have been discussed in the extant literature as international performance drivers. However, to the best of our knowledge, no previous study has assessed them as a high-order orientation in the context of international/global operations and performance.
Second, in contrast to prior studies that generally used diverse and non-integrated antecedents for the four orientations included in MILE, our model examines international businesses within a more comprehensive set of organizational dimensions. The model considers the so-called soft dimensions (cultural values and behaviors). Thus, the second major contribution of the proposed study is to develop and test an integrative model that combines the organizational values that drive MILE orientation directly.
In sum, the proposed model will make two important contributions. Below, we introduce the conceptual model
2. MILE strategic orientations
2.1 Market orientation (MO)
MO describes the "organizational culture that most effectively and efficiently creates the necessary behaviors for the creation of superior value for buyers and, thus, continuous superior performance for the business" (Narver and Slater 1990, p. 21). Like Jaworski and Kohli (1993), and following Cadogan, Diamantopoulos, and de Mortanges' (1999) definition for export MO, this study views MO as a three-activity concept with intelligence generation (about customers and competitors), intra-organization intelligence dissemination, and organizational responsiveness.
2.2 Innovation orientation (IO)
Innovation is a possible organizational response to external environmental changes. It is conceptualized as the adoption of ideas concerning processes, products, or systems that are considered as new by the adopting unit (Augusto and Filipe 2009). Therefore, IO enhances organizational probability of survival and continued success, because it helps bring new products to market as an organizational response to environmental changes (Hurley and Hult 1998).
2.3 Learning orientation (LO)
Organizational learning orientation (LO) is typically conceptualized as a process of knowledge acquisition through four primary constructs: information acquisition, distribution, interpretation, and memory (Day 1994; Nevis et al. 1995; Sinkula 1994). The organizational learning process is characterized by a series of features. First, learning is a continuous process. Second, leaning is not an independent entity to be acquired or transmitted. Third, learning is cumulative - the amount of knowledge at a certain point in time is a function of the cumulated knowledge acquired until then. Fourth, it is a process designed to improve the development of the organization by means of new initiatives (technological, productive, or commercial). This requires a move from simply putting more knowledge into databases to levering the many ways that knowledge can migrate into an organization and impact it.
2.4 Entrepreneurial orientation (EO)
Lumpkin and Dess (1996) conceptualized EO as the processes, practices, and decision-making activities employed by entrepreneurs to lead to new entries, which build on entrepreneurial opportunities. Several scholars have noted that the central idea underlying entrepreneurship is new entry, that is, entering new or established markets with new or existing goods (Lumpkin and Dess 1996; Slater and Narver 1995). Hult et al. (2003) argue that today's entrepreneurship is likely to be viewed as a process, rooted in an organization's culture, which plays a role in an organizational quest to achieve superior performance.
Research design
The current study approach follows the tradition of research methodologies used in market orientation studies; a knowledgeable expert from each firm/strategic business unit (SBU) will provide information on the firm's MILE orientation behavior, business environment, and export success (Cadogan et al. 2009). Based on the proposed model, a questionnaire will be designed using scales drawn from previous research. The pretest will include an administration of the questionnaire to relevant managers (as defined in the previous section). A pre-test will include three stages. First, relevant scales identified from the extant literature will be translated into Hebrew using backtranslation. Second, managers will be asked to comment on the structure, contents, and wording of the questionnaire and their comments will be used in designing the final questionnaire. Finally, the pre-test will allow an initial examination of the scales' reliability.
The sampling frame will include internationally active Israeli hi-tech firms. Accordingly, the sample will be multi-industry allowing some measure of generalizability to the results (Sousa et al. 2010) and, at the same time, to enjoy reasonable internal validity since all industries are high-tech. Although export through foreign distributors is common (because it provides relatively easy and low cost export market access) the current study will include both firms that export through foreign distributors and firms using direct export. The sample size will be determined according to the size of the longest scale of the final questionnaire (at least five firms per item in this scale) and according to additional requirements of the statistical tools we will use (e.g., at least 100 firms for SEM analyses). Based on the preliminary version of the questionnaire and the techniques we expect to use, the sample will include approximately 100 SBUs.
3. Summary
To summarize, the literature review suggest that the four orientations, MO-IO-LO-EO, are not necessarily mutually exclusive, but rather that they can partially overlap and complement each other. Thus, we can infer that the four orientations are moderately correlated factors (Grinstein 2008). Items related exclusively to one's orientation and an item that indicates other orientations indicate each. Therefore, they might represent additional factors that form a new construct, termed MILE orientation.
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