4 Employee Perceptions of MO

8/8/2019 4 Employee Perceptions of MO

1/18

Employees Perceptionsof Market Orientation

in a Transitional Economy:China As an Example

Kevin Zheng ZhouJulie Juan Li

Nan Zhou

ABSTRACT.Market orientation places a special emphasis on the dis-semination of and responsiveness to market intelligence throughout thewhole organization. However, it is still not well understood how employ-ees at different levels perceive their firms market orientation. This paperrepresents a first attempt to study market orientation at the employee levelin the whole organization. Based on a survey of 1,357 managers andworkers in China, we find that junior managers and front-line workers areless likely to perceive their firms as market-orientedthan senior managers,group culture facilitates employees market orientation perceptions, and a

positive personal attitude toward change is beneficial to developing mar-ket orientation behaviors. The results also show that market orientationhas a strong, positive impact on employees job satisfaction, organiza-tional commitment, and confidence in the firms future performance. Im-

KevinZheng ZhouisAssistant ProfessorofMarketing and Julie JuanLi isa doctoral stu-dent, both at the School of Business, the University of Hong Kong. Nan Zhou is AssociateProfessor and Head, Department of Marketing, City University of Hong Kong.

Address correspondence to: Kevin Zhou, School of Business, The University ofHong Kong, Pokfulam, Hong Kong (E-mail: [email protected]).

This study is supported by a research grant fromthe Research GrantsCouncil, HongKong SAR Government (CERG CityU 1176/97H) and a grant from the University ofHong Kong (HKU 10204269).

Journal of Global Marketing, Vol. 17(4) 2004http://www.haworthpress.com/web/JGM 2004 by The Haworth Press, Inc. All rights reserved.

Digital Object Identifier: 10.1300/J042v17n04_02 5
http://www.haworthpress.com/web/JGMhttp://www.haworthpress.com/web/JGM


2/18

plications on how to promote employees marketorientation behavior in atransitional economy are discussed. [Article copies available for a fee fromThe Haworth Document Delivery Service: 1-800-HAWORTH. E-mail address: Website: 2004 by The Haworth Press, Inc. All rights reserved.]

KEYWORDS.Market orientation,employee, transitionaleconomy,China

In the past decade, market orientation has received increasing attention fromresearchers and practitioners. Considerable efforts have been advanced to clar-ify its construct (e.g., Day and Wensley 1988; Kohli and Jaworski 1990; Slater

andNarver1995), develop itsmeasures (e.g., Kohli, Jaworski, andKumar 1993;Narver and Slater 1990), and assess its performance consequences (e.g.,Jaworski and Kohli 1993; Matsuno and Mentzer 2000; Matsuno, Mentzer, andOzsomer 2002; Pelham and Wilson 1996; Slater and Narver 1994). While earlystudies have mainly focused on developed markets (especially in the U.S.), afew studies have recently been conducted in developing or transitional markets(e.g., Deng and Dart 1999, in China; Hooley et al. 2000, in Central Europe;Subramanian and Gopalakrishna 2001, in India).

The extant research has studied market orientation mainly at the organiza-tional (e.g., firm and strategic business unit) level. However, given that marketorientation places a special emphasis on the dissemination of and responsive-ness to market intelligencethroughout thewhole organization, it would be veryinteresting to compare perceptions of employees at different levels to un-

derstand better the role of market orientation in a firm (Jaworski and Kohli1993, p. 65, italic added). Studying market orientation at the employee level isalso important for firms to implement their strategicdecisions.Leaders of a firmmaybe marketoriented and think andactstrategically, yetwithout employees tosupport and implement its strategies, the firm will not realize its goal (Shipperand Davy 2002). It is thus critical for the company to get the support of employ-eesfromall ranks to successfully facilitate themarket-orientedactivities. Yet, tothebest of ourknowledge, there hasbeen no publishedresearch that investigatesmarket orientation at employee level throughout the whole organization.

To fill this research gap, we studyperceptions of market orientation of em-ployees at three levels, i.e., senior managers, junior managers, and front-lineworkers in China. We propose that in a transitional economy, market orienta-tion perception may strongly improve employees job satisfaction, firm com-

mitment, and confidence in firm future. However, junior managers andfront-line workers maybe less likely to perceive their firms as market-orientedthan senior managers because of the difficulty in implementing market orien-

6 JOURNAL OF GLOBAL MARKETING
http://www.haworthpress/http://www.haworthpress/


3/18

tation. Hence, it poses a challenge for firms to promote employees under -standing of market orientation. We suggest that one possible solution lies indeveloping a positive group culture to facilitate employees market orienta-tion perceptions. In addition, personal attitudes towards change also play animportant role in employees perceptions toward market orientation.

Overall, our research represents an initial attempt to study an underdevel-oped topic in market orientation literature, and to provide insights for compa-nies to promote their employees market orientation behaviors. Toward thatend, we first briefly review the literature on market orientation. Next, we de-velop hypotheses pertaining to market orientation perception and its anteced-ents and consequences. Then, we describe the empirical study undertaken totest the hypotheses. After presenting and discussing the results, we explain

their implications for managers and researchers.

MARKET ORIENTATION

The marketing concept, the philosophical foundation of a market orienta-tion, has long been acknowledged as the cornerstone of the marketing disci-pline (e.g., Kotler 1984; Drucker 1954). However, little attention had beengiven to its implementation until the late 1980s (Kohli and Jaworski 1990;Narver and Slater 1990). Since then, many studies have been conducted in thisarea and four major perspectives have emerged: the market intelligence per-spective; the culture-based behavioral perspective; the customer-focused per-spective; and the strategic perspective.

The Marketing Intelligence Perspective. Originally developed by Kohliand Jaworski (1990; Jaworski and Kohli 1993) and recently refined byMatsuno and Mentzer (2000; Matsuno, Mentzer, and zsomer 2002), this in-fluential perspective emphasizes the importance of market intelligence, whichincludes information of customers need and preferences, competitors actions,as well as other exogenous factors such as government regulation, technologyand environmental variables. Under this perspective, market orientation isseen as the organization-wide generation of market intelligence pertaining tocurrent andfuture customer needs, dissemination of the intelligence across de-partments, and organization-wide responsiveness to it (Kohli and Jaworski1990, p. 6).

The Culture-Based Behavioral Perspective. This perspective has also beenhighly influential. It conceptualizes market orientation as an aspect of corpo-

rate culture, which places the highest priority on the profitable creation andmaintenance of superior customer value and provides firm-wide norms andbeliefs that guide organizational behaviors (Slater and Narver 1995, p. 67).

Zhou, Li, and Zhou 7


4/18

More specifically, market orientation consists of three behavioral compo-nents: customer orientation, competitor orientation, and interfunctional coordi-nation. To create superior customer value continuously, customer orientationemphasizes the role of sufficiently understanding ones target customers; com-petitor orientation focuses on the understanding of competitors strengths andweaknesses and monitoring their activities; and interfunctional coordinationemphasizes coordinating the use of company resources and coordinating cus-tomer-related activities throughout the entire organization (Narver and Slater1990, p. 21-22). Each of these components is critical in the gathering of, dissem-inating of, and responding to market information. Hence, this perspective is dis-tinct from, but closely parallels, the market intelligence perspective proposedby Kohli and Jaworski (1990).

The Customer-Focused Perspective. This perspective defines market ori-entation as the set of beliefs that puts the customers interest first, while notexcluding those of all other stakeholders such as owners, managers, and em-ployees, in order to develop a long-term profitable enterprise (Deshpand,Farley, and Webster 1993, p. 27). The customer-focused perspective alsoviews market orientation as part of corporate culture and proposes that cus-tomer orientation is actually synonymous with market orientation. This cus-tomer-focused argument is consistent with Peters and Austin (1985) andShapiro (1988), who suggest that customer orientation is the most fundamen-tal aspect of market orientation.

The Strategic Perspective. This perspective deems market orientation asstrategic choices a firm can make to achieve a competitive advantage (Day andWensley 1988; Day 1994; Gatignon and Xuereb 1997). Competitive advan-

tage canbe achieved through theprovision of distinctive customer value or theachievement of lower operating costs (Porter 1985). Customer orientation,with detailed analyses of customer needs and wants, helps a firm develop abetter system to satisfy customers, and thus is more likely to lead to adifferen-tiation advantage. Competitor orientation may lead to a cost advantage be-cause competitor-oriented businesses . . . watch costs closely, quickly matchthe marketing initiatives of competitors, and look for their sustainable edge intechnology. Managers keep a close watch on market share and contracts won orlost to detect changes in competitive position (Day and Wensley 1998, p. 1).Thus, both customer orientation and competitor orientation, as key componentsof market orientation, may lead to a competitive advantage.

Although there are some differences among these perspectives, they allagree that the basic foundation of market orientation includes an emphasis on

customers, the importance of shared knowledge (information), interfunctionalcoordination of marketing activities and relationships, and being responsive tomarket activities by taking the appropriate action (Lafferty and Hult 2001,



5/18

p. 100). This information sharing focus stresses the importance of the marketintelligence perspective in studying market orientation throughout the wholeorganization.

Because of its specific emphasis on organization-wide usage of market in-formation, the market intelligence perspective is highly relevant to our re-search and thus will be used as our theoretical base. From this perspective,three sets of behaviors and processes are specified in the process of market in-telligence utilization. First, intelligence generation represents the initial stepof a market orientation, which collects external information on customers,competitors, as well as other exogenous factors. Further, to fully utilize itsmarket intelligence, a firm need to disseminate the intelligence to virtually alldepartments, from R&D, manufacturing, purchasing, financing, to marketing

departments. Then, responsiveness is the organization-wide action the firmtakes in response to the intelligence (Kohli and Jaworski 1990).The previous discussion shows that market orientation emphasizes the im-

portance of organization-wide coordination in sharing, disseminating and re-sponding to market intelligence. The basic idea is that every individual in acompany can potentially contribute something of value to its customers. If thefirm can coordinate and integrate all its financial, human, and other resources,it can serve its customers better (Kohli and Jaworski 1990; Narver and Slater1990). Therefore, it is important to study market orientation at the individualemployee level to better understand its impacts within a firm (Jaworski andKohli 1993).

A market-oriented business provides a unified focus for individual and de-partmental efforts within the firm. This increases its capability to deliver supe-

rior customer value and achieve a competitive advantage. A number ofempirical studies have shown market orientation to be positively related to or-ganizational performance (e.g., Jaworski and Kohli 1993; Matsuno andMentzer 2000; Matsuno, Mentzer, and Ozsomer 2002; Narver and Slater1990; Slater and Narver 1994). Extending the market orientation research to atransitional economy (India), Subramanian and Gopalakrishna (2001) find astrong positive relationship between market orientation and a number of per-formance indictors such as revenue growth, return on capital, new productsuccess, ability to retain customers, etc. In addition, Deshpande and Farley(2000) and Sin et al. (2000) find that market orientation positively affects firmperformance in China. Hence, with so many studies showing the positive rela-tionship between market orientation and firm performance at organizationallevel, the time is ripe to investigate market orientation at the employee level to

gain more insights of the factors that may improve or hinder employees mar-ket orientation perception in developing or transitional economies. In the nextsection, we try to explore this topic by examining how employee position,



6/18

group culture, and personal attitude towards change influence employee per-ceptions of market orientation and how market orientation perception impactsjob satisfaction and firm commitment in a transitional economy.

HYPOTHESES

Employee Position and Market Orientation

Employee position within a firm is an important factor that affects indi-vidual workers behaviors in China (Lau, Tse, and Zhou 2002). Past researchhas indicated that senior managers play a critical role in shaping a firms val-ues and orientations (cf. Jaworski and Kholi 1993). House, Spangler andWoyke (1991) further suggest that the roles of leaders are most important inconditions full of risk and uncertainty. This is especially true in China. In atransitional process from a planned economy to a market economy, theChina market is experiencing dramatic changes at unprecedented levels(Child and Tse 2001). Senior managers are responsible for the future of thefirm in the face of drastically changing environments. The environmentalturbulence results from a variety of sources, ranging from economic, social,governmental, and even political factors in a transitional economy (Peng andHeath 1996). As senior managers try whatever they can to cushion the uncer-tainty, they aremore likely to understand the importance of being marketori-ented.

When top management team promotes the market orientation concept in

the organization, junior managers and workers are encouraged to track chang-ing markets, share market intelligencewith others in theorganization, and beresponsive to market needs (Jaworski and Kholi 1993). However, to be mar-ket oriented is not an easy task; it takes tremendous time and resources andextensive inter-departmental coordination (Kohli and Jaworski 1990; Narverand Slater 1990). To disseminate market intelligence throughout the wholeorganization, a firm must use various integration mechanisms such asincreasing . . . the frequency of committee meetings, the number offace-to-face contacts in horizontal and vertical relationships, and the degree towhich units share decisions (Han, Kim, and Srivastava 1998, p. 35). How-ever, low-rank employees face a quite different institutional influence in atransitional economy like Chinas. Most front-line workers and junior manag-ers are vulnerable to reengineering and reorganization of their firms and are

worried about the mass layoffs seen in recent years (Lau, Tse, and Zhou 2002).They may believe that market orientation is a concern for senior managers andsharing market information with peers and senior managers through extensive



7/18

interaction is unnecessary. As Kohli andJaworski (1990, p. 16)explain, it ap-pears especially difficult to carry employees who are concerned that a move-ment along the market orientation dimension might jeopardize their power inthe organization or expose other inadequacies related to their jobs. Thus, theimplementation of market orientation may receive resistance and take a longtime to accomplish. As a result, employees perception of their firms marketorientation would be less than that of senior managers. That is:

H1: Seniormanagers aremore likely to perceive their firm as marketori-ented than junior managers and frontline workers.

Group Culture and Market Orientation

Organizational culture is the pattern of shared values and beliefs that help in-dividuals understand organizational functioning and thus provide them with thenormsforbehavior in theorganization (Deshpande andWebster 1989,p.4).In otherwords, organizational culture is the social glue that holds group members togetherand helps employee to understand why things happen the way they do ratherthan simply know whathappens around here (Schneider and Rentsch 1988).

While there are different types of cultures among firms, a firm with a groupculturemay beable toadaptto the changing environment moreeffectively (Quinn1988). Group culture emphasizes the importance of the unity, cooperation, andbelonging of the employees to the firm, promotes employees understanding ofboth the firm and market, and encourages the participation in decision-making(Quinn 1988). In a firm with a group culture, employees share the same identity,understand why changesand new actionsare necessary, and thus aremore willing

to work together and facilitate the dissemination of market intelligence through-out the whole organization. Han, Kim, and Srivastava (1998) further explain howgroup work helps facilitate responsiveness to market intelligence: when func-tional units work autonomously, they tend to follow their own routine modes ofproblem solving and are less likely to be creative; but, if they work together andshare information and understanding, problem-solving capacities will be en-hanced. Hence, group culture is beneficial to market orientation. Consequently,employees perceptions of market orientation should be greater. That is:

H2: The more group-oriented the organizational culture, the more likelythe employees perceive their firm as market oriented.

Personal Attitude Toward Change and Market Orientation

A persons attitude towards change is linked to his/her willingness to inno-vate, as suggested in prior studies (see Rogers 1983 for a review). In a mar-ket-oriented firm, continuous innovations based on customer needs and



8/18

market trends are critical to delivering superior value to customers constantly(Slater and Narver 1995). Because market orientation essentially involvesdoing something new or different in response to market conditions (Jaworksiand Kholi 1993, p. 56), managers willingness to change and acceptance ofthis view should facilitate a firms market orientation.

In a transitional economy, attitudes toward change may become even moreimportant because the whole environment is changing constantly (Peng andHeath 1996; Lau, Tse, and Zhou 2002). It is thus critical for all employees toshare information timely in a changing environment and hold a positive atti-tude toward change in order to integrate the resources of the whole organiza-tion in response to the changes in the market. Therefore, we propose thefollowing:

H3: The more positive employees attitudes towards change, the morelikely the employees perceive their firm as market oriented.

The Consequences of Market Orientation

The effects of market orientation on the financial performance of a firm havebeen frequently studied in both developed and transitional economies (e.g.,Deshpande and Farley 2000; Hooley et al. 2000; Jaworski and Kohli 1993;Matsuno and Mentzer 2000; Matsuno, Mentzer, and Ozsomer 2002; Pelhamand Wilson 1996; Sin et al. 2000; Slater and Narver 1994; Subramanian andGopalakrishna 2001). The psychological consequences of market orientation,

however, have received limited attention. Here, we study the impacts of mar-ket orientation on employees job satisfaction, organizational commitment,and confidence in their firms future performance.

Kohli and Jaworski (1990) propose that a market orientation provides anumber of psychological benefits to employees. The reason is that market ori-entation emphasizes the organization-wide dissemination and responsivenessto the intelligence, and all employees should work closely in order to achievethe same goals. As such, a market orientation leads to a sense of pride in be-longing to the firm. Through the working toward the same goals, employeesfeel worthwhile and, consequently, become more satisfied with their jobs andmore committed to their firm. In addition, because market orientation posi-tively affects a firms current financial performance, even in a transitional

economy like China (e.g., Deshpande and Farley 2000; Sin et al. 2000), mar-ket orientation should also lead to employees confidence in the firms futureperformance. For these reasons, we hypothesize:



9/18

H4: The more the employees perceive their firm as market oriented, thegreater their job satisfaction, organizational commitment, and confi-dence in their firms future performance.

METHOD

Sample

Our study is composed of a large-scale survey among different cities in

China. The survey sample consisted of senior and junior managers and front-

line workers of firms in five major cities (Beijing, Shanghai, Guangzhou,

Nanjing, and Wuhan). Twenty firms were randomly selected from the manu-facturing sector in each city according to the national industrial statistical data

bank supplied by theState Statistical Bureau. In each city we sampled an equalnumber of state-owned enterprises, joint ventures, collectives, and joint stock

companies that employed over 100 employees. Because our unit of analysis is

individual employee, we selected three levels of employees from each firm aspotential respondents. They included two senior executivesthe directors (or

equivalent) of the personnel and marketing departments; ten randomly se-lected middle-level managers; and ten randomly selected front-line employ-

ees. Thus, the sample frame consisted of 2,200 employees.The survey was conducted through face-to-face interviews in order to in-

crease the response rate (Pearce 1983). This method is also better than tradi-tional mail-survey in transitional economies because it could generate morevalid information (Hoskisson et al. 2000). Hoskisson et al. (2000: 258) alsosuggest that in transitional economies, collaboration with local researchers tobe a key means of obtaining reliable and valid information. For these reasons,a major market research company with branches in all five cities was commis-sioned to conduct the survey using personal interview. All respondents wereinformed of the confidentiality of their responses in advance. Each respondentwas given a cash present equivalent to an average workers half-day salary.These efforts were highly effective. Altogether, we got 1,357 complete re-sponses from employees (response rate = 61.7%).

In addition to quality control by the research firm, an experienced research

assistant was hired independently who traveled to these five cities to monitorthe fieldwork. Over 60% of participants were telephoned to confirm that theinterviews had been conducted. No cheating by field workers was found.



10/18

Measures

The measures used in the survey were developed following a thorough re-view of market orientation and related literature as well as informal discussionswith industry practitioners. Some measures were adapted from established stud-ies while others were developed especially for this study to fit the businesscontext in China. All the scales were professionally translated with back trans-lation to secure conceptual equivalence (Mullen 1995). Questionnaire items,unless stated otherwise, were measured using a 5-point scale anchored by 1 =strongly agreeand5 = strongly disagree. In the following analysis, all theseitems are reversed coded so that a larger number indicates a stronger agree-ment with a statement. In this way, the results are more intuitively understand-able.

Market Orientation. We asked respondents to indicate their perceptions oftheir firms market orientation with 20 items adopted from established scale inKohli, Jaworski, and Kumar (1993), among which six items are for intelli-gence generation (Cronbach a = .89), five for dissemination (a = .86), andnine for responsiveness (a = .92). Because the focus of this study is on theoverall effect of market orientation perception rather than on the componentlevel, we treated it as a second-order construct (Cronbach a = .91) with threesummated indicators: intelligence generation, intelligence dissemination, andresponsiveness (cf. Matsuno, Mentzer, and Ozsomer 2002).

Employee Position. For employee rank, two dummy variables (i.e.,worker and junior) were generated: the front-line workers were dummycoded as worker = 1 and junior managers as junior = 1, while the senior

managers were the reference group.Organizational Group Culture. Based on Quinns (1988) cultural valueframework, a six-item scale was specifically designed to measure group cul-ture. These six items are: (1) our firm lets its employees feel that they belonghere; (2) our firm tries to let employees understand what is happening in thefirm; (3) our firm tries to let employees understand the dynamics of the mar-ket; (4) theemployees of our firm have the opportunity to get involved in deci-sion-making; (5) our firm promotes unity and cooperation; and (6) we oftenwork as a team to finish our job assignments (Cronbach a = .89).

Attitudes Toward Change. The measure of attitudes toward change wasspecifically adapted for this study from Lau and Woodmans (1995) culturalchange instrument. It consists of four items: (1) I would like to get more infor-mation about change; (2) Change is inevitable; (3) I know what reform is go-

ing to bring about; and (4) I expect to contribute to reform (Cronbacha= .72).JobSatisfaction, Organizational Commitment, and Confidence in the Firms

Future Performance. Job satisfaction was measured with an 8-item established



11/18

scale adapted from Wood, Chonko, and Hunt (1986). The respondents wereasked to indicate their satisfaction with (1) the salary level, (2) opportunities forpersonal development, (3) howvaluable theboss thinks I am, (4)opportunitiesfor promotion, (5) the fairness the boss treats me, (6) sense of job accomplish-ment, (7) the supervisors, and (8) the supervisors guidance in my work (1 =very satisfied, 5 = very unsatisfied; Cronbach a = .89).

Organizational commitment was measured with a 5-item scale adaptedfrom Mowday, Steer, and Porter (1979). These items are: (1) I am willing toput in a great deal of effort beyond that normally expected in order to help thisfirm be successful; (2) I am loyal to this firm; (3) I really care about the fate ofthis firm; (4) I totally throw myself into the job; and (5) I am willing to staywith this firm in honor or in disgrace (Cronbach a = .86). Confidence in the

firms future performance was measured with a 2-item scale (1 = very good; 5 =very poor) designed specially for this study: (1) after one year, the performanceon our firm will be; (2) after five years, the performance of our firm will be(Cronbach a = .83).

Control Variable. We controlled the effects of firm ownership due to itsprevalent influence in Chinas economy (Deng and Dart 1999). Four types offirm ownership were involved in this study: state-owned, collectives, joint-venture, and joint stock ownership. Because previous research has indicatedthat major differences exist between state-owned and non-state-owned firms(Child and Tse 2001; Deng and Dart 1999), we coded firm ownership as adummy variable with 1 = state-owned and 0 = non-state-owned.

Construct Validity. We assessed the construct validity of the measures by

estimating a nine-factor confirmatory measurement model using Amos 4(Arbukle and Wothke 1999). In the model, three factors (i.e., junior manager,employee, and firm ownership) are observed variables. The other six factors(i.e., market orientation, attitudes toward change, group culture, job satisfac-tion, organizational commitment, and confidence in the firms future perfor-mance) are latent constructs. For these latent constructs, each questionnaireitem was set to load only on its respective latent construct, and the latent con-structs were allowed to correlate, but the measurement items and their errorterms were not correlated. As discussed earlier, market orientation was a sec-ond-order factor with three indicators (intelligence generation, intelligencedissemination, and responsiveness) (cf. Matsuno, Mentzer, and Ozsomer2002). The results of confirmatory factor analysis are reported in Table 1.

This measurement model fits the data satisfactorily (c2 = 1,882.56, df =

401, p < .001; GFI = .91, CFI =.93, IFI = .93; RMSEA = .052), and all factorloadings (varying from .53-.91) were highly significant (p < .001), pointing tothe unidimensionality of the measures (Anderson and Gerbing 1988). Further,



12/18

the coefficient and composite reliabilities were all above the .70 benchmark(Nunnally 1978). All the variance extracted (except one) exceeded .50. Thus,these measures demonstrate adequate convergent validity and reliability

(Fornell and Larcker, 1981).The discriminant validity of the latent constructs was assessed through two

ways. First, all the latent-trait correlations (the highest is .62) were compared


TABLE 1. Construct Measurement Validity Assessment

Constructs Numberof Items

StandardizedFactor Loadings

cCompositeReliability

VarianceExtracted

1. Job Satisfaction 8 .55, .69, .76, .65, .80, .62, .79, .79 .89 .54

2. Firm Commitment 5 .76, .74, .72, .77, .76 .86 .56

3. Confidence in FuturePerformance

2 .87, .75 .79 .66

4. Market Orientation 3 .87, .91, .87 .92 .78

5. Group Culture 6 .80, .87, .84, .76, .72, .56 .89 .59

6. Attitudes towardChange

4 .67, .53, .74, .60 .73 .41

7. Junior 1

8. Worker 1

9. Firm Ownership 1

Goodness-of-fit Statistics

c2

= 1,882.56, df = 401, p < .001; GFI = .91, CFI =.93, IFI = .93; RMSEA = .052

Correlation 1 2 3 4 5 6 7 8 9

1. Job Satisfaction 1.00

2. Firm Commitment .42a 1.00

3. Confidence in FuturePerformance

.35a .28a 1.00

4. Market Orientation .35a .55a .33a 1.00

5. Group Culture .62a .49a .43a .52a 1.00

6. Attitudes towardChange

.13a .50a .02 .30a .19a 1.00

7. Junior .04 .01 .04 .05 .06 .03 1.00

8. Worker .06b .08 .01 .03 .02 .09b .78a 1.00

9. Firm Ownership .03 .02 .21a .05 .04 .09b .03 .04 1.00

Mean 3.35 4.07 3.40 3.93 3.47 3.95 .49 .39 .24

S.D. .53 .61 .85 .68 .75 .50

ap < .01 (2-tailed)bp < .05 (2-tailed)cAll factor loadings statistically significant at p < 0.001.


13/18

to unity and all were significantly (p < .001) smaller than |1.0|, showing thediscriminant validity of the measures (Phillips 1981). Second, the averagevariance extracted for each construct was compared to the square of eachcross-construct correlation and the former far exceeded the latter, providingadditional support for the discriminant validity (Fornell and Larcker 1981).Taken together, these results suggest that the construct measures possess ade-quate reliability and validity (Anderson and Gerbing 1988).

Analysis. Structural equation modeling with the maximum likelihood esti-mation method was used to test the hypotheses. The structural model was de-rived from our hypotheses. Employee position (junior manager and worker),group culture, and attitude toward change were exogenous constructs in themodel, with market orientation as the intermediate variables, and job satisfac-

tion, firm commitment, and confidence in firms future performance the out-comes. Firm ownership, the control variable, was also included in the modeland was linked directly to market orientation and outcome variables (job satis-faction, firm commitment, and confidence in firms future performance). Be-cause theoretically, we do not expect that market orientation should fullymediate the relationships between the antecedents and outcome variables, wealso added the direct effects from the antecedents to the outcome variables.

RESULTS

The structural model fits the data satisfactorily (c2 = 1,882.56, df = 401, p

Documents

4 Employee Perceptions of MO