American Marketing Association

Market Orientation, Relationship Marketing Orientation, and Business Performance: The
Moderating Effects of Economic Ideology and Industry Type

Author(s): Leo Y. M. Sin, Alan C. B. Tse, Oliver H. M. Yau, Raymond P. M. Chow and Jenny S.
Y. Lee
Source: Journal of International Marketing, Vol. 13, No. 1 (2005), pp. 36-57
Published by: American Marketing Association
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Market
Orientation,
Marketing
Performance:
Economic
Relationship
and Business
Orientation,
The Moderating
Effects
Ideology
ABSTRACT
and
Industry
of
Type
This study examines how economic

moderate
the impacts
orientation
marketing
through a survey of firms
data
collected
China
ideology and industry type
orientation
and
of market
on business
performance.
and Hong
Kong.
selected
They
relationship
The authors
in both Mainland
two
these
economies
they have similarities in cultural dimensions and dif

ferences in economic dimensions. The authors find support for
the moderating effect of economic ideology and industry type
on the link among market orientation, relationship marketing
because
and
orientation,
Leo Y.M. Sin,

Alan C.B. Tse,
Oliver H.M. Yau,
P.M. Chow,
Raymond
and Jenny S.Y. Lee
Because
more
business
performance.
of the globalization
and more
companies
strategies
requires
associated
decades,
outlook
global
becomes their market. The growth

of business and markets has led to
through which the world

in the internationalization
a greater
the past
process
during
have
adopted
need
for analysis
of the role and the effectiveness
of
an
in different
markets.
Such
geographic
analysis
an examination
are
of whether
strategies
particular
with
market
particular
and with
characteristics
(Manu
particular kinds and levels of business performance
that
Some
studies
have
differences
1992).
previous
suggested
in the market
the
which
environments
of
types
strategies
in turn influence
Rhee 1989; Manu

cations
of different
companies
develop
business
performance
influence
and
(Douglas
1992). The findings have significant
localization
particular
choice
aspect
we
of the strategies
adopt,
and
impli
or strategy
which
has
standardization
of strategy
in international
business
operations,
for the
been the most debated topic throughout

global business (Levitt 1983).
The
countries
that
in
the past decades
to investigate
chose
involves a firm's market orientation

(MO) and relationship
is an
Given
orientation
that marketing
(RMO).
marketing
boundary-spanning
adaptive,
that the business-environment
impact of different
performance.
operating
Submitted
November
2003
Accepted
September
2004
? Journal of International
Marketing
Vol. 13, No. 1, 2005, pp. 36-57
ISSN 1069-031X
Such
are unlikely
studies
or intending
should
we
function,
context
types of marketing
in China
The basic premise

different business
business
be
to enter
believe
moderate
may
the
strategy on business
important
the Chinese
for
firms
market.
of this article is that the characteristics of

environments
suggest that MO and RMO
to have
similar
influences
across
Leo
36

all markets.
Y.M.
Sin
et al.
The
of external,
effects
by examining
different
approach
exogenous
to the organization
ster
how
of MO
and RMO
This
affects
and
reinforces
the firm (Deshpand?

of this
the purpose
Thus,
1989).
the business-environment
the
and Web
is to examine
research
context
on business
and
a variable
environment
that
norms and behaviors within
studied
economies
environments.
market
the market
considers
can be
factors
in different
based
companies
across
markets
environmental
moderates
the
effect
performance.
Using a survey design, we collected data from firms in two

China and Hong Kong. We
Chinese economies: Mainland
selected Hong Kong and Mainland
China because of their
contrasting
economic
and
political
cal economies
of Hong Kong
the politi
First,
systems.
and Mainland
differ
China
is
is a market-driven
and
economy
Kong
in
of the most
economies
and
free
the
open
is an economy
China
world.
that is
Mainland
Conversely,
a transition
a
a
to market
from
system
undergoing
planned
Hong
one
markedly.
considered
driven
constitutes
in Mainland
the home market
China
Second,
system.
more
1.2 billion
than
Chinese
consumers,
lion
6.7 mil
is approximately
the gross national
home market
Hong Kong's
consumers.
In 2003,
Chinese
whereas
product
in Mainland China
per capita was approximately US$1,100
in Hong Kong (World Bank Group
compared with US$25,430
2003). Thus,
eties provide
eralizability
The
the political
first
of this
section,
we
article
review
and RMO to provide
MO
describe
systems
contrasting
sufficiently
to test
soci
the gen
of the MO and RMO models.
remainder
the
of the two Chinese
economies
is organized
previous
a basis
into
six
research
In
sections.
that
relates
to
for this study. Then, we
the conceptual
and research
framework
hypotheses.
sam
review
the research
methodology,
including
We assess
and measures.
the reliability
data collection,
we
Next,
pling,
and validity of the MO and RMO concept. We then present

the results of the tests of the hypotheses. Finally, we discuss
for further
the managerial
and directions
implications
research.
As
a fundamental
construct
in marketing,
of attention
from marketing
great deal
and Jaworski
1990; Kumar,
Subramanian,
has
MO
received
scholars
(e.g.,
and Yauger
Kohli
1998;
Previous Research
and RMO
to Kohli and Jaworski

and Slater 1990). According
(1990), whereas the marketing concept is commonly defined
as a philosophy or way of thinking that guides the allocation
Narver
of resources
the formulation
sets
of activities?intelligence
and responsiveness
dissemination,
the
represent
operationalization
Market
of strategies
for an organiza
is considered the activities involved in the imple

of the marketing
concept.1 With this definition,
tion, MO
mentation
three
and
Orientation
generation,
to market
of MO.
and Relationship
intelligence
intelligence?
Narver
and Slater
Marketing
Orientation
37

on MO
(1990) and Ruekert (1992) also report similar conceptualiza

tions and scales and test them for reliability and validity.
a
stream
In the past decade,
of research
steady
on
MO
of
business
the impact
performance.
on
association
the
focused
and
a summary of prior empirical
(2000) provide
leagues
on
has
Sin
MO
between
and
business
col
studies
performance;
they report that nearly all studies find support for a positive
association
such
MO
between
measures
in these
used
as
on
return
and
share,
ment
and
esprit
de
sales
investment,
to soft measures,
Performance
performance.
from
range
studies
including
hard
measures,
and
growth,
market
commit
organizational
corps.
literature on MO has provided sufficient evidence

Although
of the positive relationship between MO and firms' business
some
performance,
have
scholars
the
highlighted
importance
of RMO for firms to compete effectively (Perrien, Filiatrault,

and Ricard 1992). Berry (1983, p. 25) formally introduces the
of relationship
and
ing, maintaining,
concept
it as "attract
defines
marketing
and
enhancing
customer
relationships."
definition
Gr?nroos (1991) proposes a more comprehensive
and delineates relationship marketing as attempts by firms to
and enhance
maintain,
establish,
at a profit
tomers
and other parties
all the parties are met by mutual

after
Furthermore,
promises.
of relationship
definitions
cus
with
relationships
so that the objectives
exchange
of
of 26
review
comprehensive
marketing,
of
and fulfillment
Harker
(1999, p. 16)
"An
the
organization
following
description:
maintain
and
in
developing,
creating,
engaged
proactively
with
and
interactive,
exchanges
profitable
ing committed,
over
in
is
rela
time
customers
selected
engaged
(partners)
proposes
tionship marketing." Although the preceding definitions dif

fer somewhat, they all indicate that relationship marketing
focuses
on
individual
relationships
in nature, and that both parties
benefit.
relationship
buyer-seller
the relationship
from a firm's perspective,
marketing
as a
can be viewed
of doing
business
philosophy
in each
the
that
relationships,
buyer-seller
are longitudinal
individual
In short,
concept
success
or as a distinct
that places
culture/value
organizational
fully
strate
center
of
firm's
the
the
at
the buyer-seller
relationship
gic or operational thinking. Limited empirical research has

examined the relationship between RMO and business per
formance. Several studies in the past decade have indicated
that
on firms'
impact
positive
studies
Smith
(1991)
example,
sector
that rela
and finds
insurance
marketing
relationship
For
business
performance.
direct
tionship
Using
validate
nication,
marketing
in the
helps
marketing
has
maximize
long-term
firms in China, Sin and colleagues

a scale made
shared
value,
up
of six
empathy,
profitability.
(2005) develop
subscales?bonding,
reciprocity,
Leo

and
commu
and
Y.M.
trust?and
Sin
et al.
a significant
find that RMO yields

tion
of the
firms'
impact on the determina
performance.
Despite the rich body of literature that supports the positive

there is
relationship between MO/RMO and performance,
on
work
the
little
between
competi
relationship
relatively
environment
tive
and
relative
the
of MO
importance
and
RMO.
that a firm can
Both MO and RMO are strategic orientations

in various
adopt
firm's
competitive
in the
acteristics
choice,
in the
the conditions
Previous
and marketing
should
consider
management
that firms
strategics
established
on
degrees,
depending
environment.
in
studies
literature
have
firmly
char
environmental
and
development,
implementation
of strategy (Lusch and Lusch 1987; Slater and Narver

firms'
Often,
ora,
reflect
their
strategies
Tower
and
Hartman,
the
external
1994).
conditions
(Seb
and
Hambrick
1994).
(1983)
and Pride
shown
that the
McKee,
(1989) have
Varadarajan,
a
on
of
orientation
effectiveness
strategic
particular
depends
the dynamics
of the business
environment.
Thus,
depending
on
a firm
of the competitive
environment,
different
levels
of performance
that
the characteristics
may
experience
on its choice
tingent
of the appropriate
are con
of MO
blend
and
RMO.
This
follows
study
the
environment-strategy-performance
a
company's
perform
and the strategy
pur
This
Conceptual
Framework
and Hypotheses
that
suggests
paradigm.
paradigm
ance
is a function
of market
conditions
sued (Lenz 1981). Manu

provide
empirical
With
the
present
and Snow
(1978)
environment-strategy-performance
our
framework
conceptual
in
embedded
two
include
in Figure
factors,
the
that
We
context.
economic
and
ideology
in the middle
Conceptual
we
paradigm,
1. First,
business-environment
the two ellipses
industry, which
and
represent
the "workplace
the
contextual
Development
for this viewpoint.
comprises MO and RMO and its consequences
model
are
(1992) and Miles
evidence
of Figure
as
economic
define
ideology
envi
that
the
business
pervades
philosophy"
eco
et
In
of a country
al.
(Ralston
1997).
general,
ronment
symbolize.
We
nomic ideology evolves from the legal and political systems

and Worthley
of a society (Kelley, Whatley,
1987). In this
we
study,
world
contrast
the
two major
economic
ideologies
Another
and socialism.
type
today:
capitalism
is industry
factor
type. Here,
different
industries:
manufacturing
textual
two
The
second
component
of
the
we
and
framework
and RMO.
is, MO
strategies?that
are important
in
elements
influencing
gies
ance.
in the orientation
Two
ellipses
related
Market
Orientation
compare
services.
and Relationship
These
firms
in
is marketing
two strate
business
box
in the
of con
perform
in
Marketing
Figure
Orientation
39

Framework
Conceptual
Figure 1.
Framework
Economie
Market
orientation
f
l
ideology
\
_J
"f
_y__
A
_____^ V
Relationship
f
\.
f
V
Industry
type
the strategies.
represent
on business
each
strategy
left-hand
side symbolize
economic
we
marketing
performance
tomer retention)
and
and
inter
on
box
the
type.
industry
the
For
framework:
the pur
performance.
two broad
used
of
measures,
categories
share, and cus
(sales growth, market
performance
of measures
have
on
(return on
been
studied
and
strategy
invest
exten
in
performance
(Douglas and Craig
and international markets
both domestic
type
arrows
side of Figure 1 represents
categories
in previous
research
sively
vary
the
and industry
ideology
financial
Both
ment).
may
of
when
the effects of the two moderating
on the right-hand
component
of this study,
influence
of
In Figure
1, the
from the orientation
ideology
of the
level
performance
variables:
pose
the
effects of economic
considered,
respectively.
the arrow
coming
cepting
last
^)
However,
are
An ellipse
\
J
>^
marketing
orientation
moderating
Business
performance
frame
Sin et al. 2000).
The
1992;
conceptual
a basis
issues
for
the
research
that
work
addressing
provides
a
we
The issues
that there is
condi
suggest
previously.
posed
Manu
1983;
tioning
of business-environment
impact
and
factors,
should not expect MO and RMO to be associated

same
level
of
two
in
performance
thus we
with
or
economies
the
two
industries.
Hypotheses
The Moderating
Effect of Economic
that we
herein
examine
economic
ideologies.
in economies
originate
The samples
with
socioeconomic
Kong's
Hong
Ideology.
different
and politi
different from those of the

cal systems are significantly
People's Republic of China (PRC). Hong Kong has an open
and
almost
approach
totally
free market
up the vast majority

in an environment
of the
that
and
economy
a laissez-faire
InHong Kong, private firms make
to public policy.
economic
consistently
base,
and
encourages
they operate
the use of
Leo Y.M. Sin et al.
40

forces
market
Hong
Kong
and
exports
resources
to allocate
prices
in the world
competitive
and make
Even
market.
after Great Britain returned Hong Kong toMainland China in

1997, the PRC's government has repeatedly stated that itwill
a bastion
to remain
its promise
to allow Hong
of
Kong
keep
con
at
50
In
free-market
for
least
another
years.
capitalism
a
econ
China was
trast, Mainland
rigid, planned
essentially
to late
1949
from
omy
played
enterprises
1978.
this
Under
a dominant
role
state-owned
system,
in China's
economy,
which left little room for collectively owned organizations to

enter the market and virtually excluded private firms from
the economy (Deng and Dart 1995).
Although both MO and RMO have a direct impact on per
formance, the relative importance of MO and RMO may
in which the firm
environment
depend on the competitive
Prior
operates.
environmental
on
literature
or
personal
has
uncertainty,
institutional
the
that the greater
suggested
are
to
the more
firms
likely
rely
busi
when
doing
relationships
ness (Davies et al. 2003; Peng and Luo 2000; Powell 1990).
Davies, Luk, and Wong (1995) and Sin (1998) have applied
the
personal
economies
port
out
cost
transactional
relationships,
characterized
in areas
a
as transparent
market-institutional
such
strong
to minimize
attempt
to explain
the importance
of
theory
or
in imperfect
guanxi,
competitive
weak
sup
by
building
laws
personal
relationships
economy.
from complete.
Abramson
With
regulations.
firms will
framework,
uncertainties
business
resource
major
a socialist
China,
market-oriented
and
with
by
in
engaging
bodies,
governmental
customers.
Mainland
key
is in an apparent
to a
transition
transition
is
China's
far
However,
and
suppliers,
economy,
and Ai
sector
the business-to-business
(1997) empirically
in China
and
study
that
conclude
to relation
(similar
buyer-seller
relationships
are
to reduced
levels
of per
related
strongly
environment
about
the business
and to a
guanxi-style
ship marketing)
ceived
uncertainty
outcomes. Wong
(1998)
variety of improved performance
studies the effect of guanxi and relationship performance on
industrial buying in China and suggests that firms should
adapt
ment
marketing
relationship
of the Chinese
market.
Thus,
China
we
plans
that
hypothesize
a
in
business
operate
ble
political,
to rely more
to the
changing
in Mainland
because
managers
environment
with
legal, and bureaucratic

on guanxi
when
doing
factors,
business
environ
unsta
highly
are forced
they
In con
there.
trast, although Hong Kong is essentially a Chinese society, its

from Mainland
support is different
China. Hong Kong, with a heritage of British culture, has a
and independent
legal system. In addition,
well-developed
Hong
ment,
Market
Kong's
which
society
has
consistently
Orientation
a stable
and
encourages
and Relationship
open
both
business
local
environ
and
Marketing
interna
Orientation
41

in Hong Kong to remain competitive
tional firms operating

the use
through
rather
strategies
studies have
on
impact
(Chan
of strategic
and innovative
than personal
relationships.
prior
and positive
in Hong
market
Kong's
we
Therefore,
2003).
expect
performance
1998; Tse et al.
Ellis
Indeed,
that MO has a significant
shown
business
and
customer-driven
is a more
that MO
effective business strategy than RMO in

we
Hong Kong. Thus,
postulate the following hypothesis:
Ha: The relative impact of MO and RMO varies across
Hong Kong and Mainland China, such that (a)MO
a greater
has
on business
impact
than
performance
does RMO in Hong Kong and (b) RMO has a greater

on business
impact
Mainland
than
performance
does
in
MO
China.
The Moderating Effect of Industry Type. Although both MO

and RMO have a direct impact on performance, RMO should
be more
performance
sector.
The
on
relies
in the
sector
services
reason
a close
for
interaction
of firms'
between
relationship
the firm
of a service
feature
business
in the manufacturing
than
is that
this
is a dominant
which
tomers,
in the determination
dominant
marketing
and its cus
firm.
Indeed,
are in the services

the origins of relationship marketing
industry (Gummesson 1999). Many authors have suggested
that the intangibility of services and the maturity of service
have
offerings
service
made
to develop
firms
relationship
marketing
a sustainable
competitive
for
essential
advantage
(Czepiel 1990; Perrien and Ricard 1995). Thus, RMO should

be more
for the
important
sector
services
than
for the manu
facturing sector. This gives rise to the following hypothesis:

on business
H2: RMO has a greater
impact
performance
in the manufacturing
in the services
than
industry
industry.
MO. We began this study with
Research
Scale
Methodology
and Measurement
tion
of MO.
view
MO
istics
tomer
To
whether
determine
as constituting
and
that Narver
orientation,
Slater
conducted
focus
three
propose?that
and
orientation,
line with
group
also
managers
behavioral
character
(1990)
competitor
defini
Chinese
the same
tional coordination?in
we
the traditional Western
Savitt's
with
discussions
is, cus
interfunc
(1999) approach,
20 Chinese
man
agers, of whom 10 worked inMainland China and 10 worked

to express their
in Hong Kong. We asked the participants
and
what
activities
about
they believed
marketing
opinions
were
necessary
for their
enterprises
to outperform
their
com
petitors in the changing marketplace. Managers in both Hong

a surprisingly
China demonstrated
Kong and Mainland
In their
of
level
of
marketing.
understanding
sophisticated
definition of marketing, most of the respondents elicited the
dimensions
of MO
that Western
researchers
cited.2
Thus,
we
Leo Y.M. Sin et al.
42

were
confident
operating
Narver
and Slater
Narver
and
We
study.
that the activities
in a Chinese
in firms
to those
similar
we
Consequently,
to measure
scale
that
used
construct
in this
=
format
(1
scoring
"strongly
14
for
items.
all
agree")
a
seven-point
7 = "strongly
used
and
disagree"
found.
(1990)
Slater's
were
context
MO
constituting
the MO
measures
orientation
the
marketing
a company
a
in
engages
developing
long
we
term
In this
its customers.
with
relationship
study,
as
a
con
construct
RMO
that
one-dimensional
hypothesize
RMO.
Relationship
to which
extent
sists
of six behavioral
reci
components?bonding,
empathy,
can
and
trust?that
be
communication,
value,
a multi-item
we
with
For
scale.
this study,
reliably
shared
procity,
measured
a measurement
developed
from
a survey.
The
scale
validity,
criterion-related
the
six
dimen
standards
for inter
construct
and
validity,
validity,
we
a
seven
To measure
used
RMO,
=
7 =
and
(1
"strongly
disagree"
validity.
format
scoring
met
successfully
content
nal
point
to capture
scale
(Sin et al. 2002) on the basis of the findings
sions of RMO
"strongly agree") for the six dimensions of bonding (3 items),

communication
(3 items), shared value (4 items), empathy (4
items), reciprocity (3 items), and trust (2 items).
Business
asked
Performance.
each respondent
To measure
business
to evaluate
performance,
or her
his
company's
we
cur
rent business performance in the local market relative to that

of its major competitors with respect to the following four
items: (1) sales growth, (2) customer retention, (3) return on
on
share. We measured
(4) market
responses
=
=
"worse
"better than").
scale
than" and 7
(1
and
investment,
a seven-point
a two-step
the survey
administered
Kong, we
using
we mailed
a questionnaire
In the first phase,
procedure.
a
cover
letter
"Business
Practice
that
titled
and
Survey"
In Hong
the purpose
of selected
explained
tor/manager
of the
to the marketing
on the basis
survey
organizations
Questionnaire
direc
of a ran
dom sampling from a database that the Hong Kong Trade

Council (HKTDC) provided. The HKTDC is a
Development
highly
statutory
respected
that
organization
promotes
trade
in Hong Kong. In an effort to obtain a high level of participa

tion,
we
an executive
offered
findings
five weeks
on
tionnaire,
return
the
In countries
respondents
of
completion
later, we mailed
which
reminded
survey
within
in which
the
a
study.
summary
In the second
follow-up
participants
the prespecified
there
is a general
of the
phase,
a ques
to complete
and
time period.
letter
with
mistrust
of data
gathering techniques and a lack of understanding of contem

porary marketing research methods, Jain (1993) and Terpstra
and Sarathy (1994) advocate the use of alternative data
collection
Market
procedures.
Orientation
In Mainland
China,
and Relationship
we
did not
Marketing
admin
Orientation
43

Administration
are evi
because
these characteristics
by mail,
we
an
more
used
thus,
alternative,
appropriate
ister
the survey
dent
there;
data-collection
technique. We collected the data for the study
located in Beijing, the national capital of
from companies
Mainland China. With the help of a major university in Bei
jing, we randomly selected 1200 companies from the Beijing
Yellow
Commercial/Industrial
Pages
made
pany
ment
to the
calls
telephone
to explain
for survey
top
of the
the purpose
agreed to participate. We
agree
300
a total of 300
then hand delivered

in each
to the top administrator
questionnaires
com
study and to solicit

the 1200 companies,
Of
participation.
We
Directory.
of each
Telephone
administrator
company.
The questionnaire that we used in this study contained ques

tions on the following areas: (1)MO (14 items), (2) RMO (19
(4 items), (4) company
items), (3) business
performance
and
(4
(5) respondent background
(3 items),
background
In Hong
items).
in Mainland
use;
businesspeople
questionnaire
in Chinese.
questionnaire
items
In Hong
we mailed
To
that Hong Kong
language
we
China,
ensure
that
the
administered
of all
the meanings
were
the same
version
in the Chinese
in
the questionnaire
administered
and common
the official
English,
we
Kong,
as
those in the English version, we translated all the questions

them into English in
into Chinese and then back-translated
line with the procedure that Brislin (1980) suggests.
Response
Rate
Kong,
to a random
questionnaires
returned
them,
Mainland
them,
test
items
response
square
tests
the
no significant
we
compared
1977).
the
all
along
Overton
chi
The
difference
on demographic
respondents
indicate
that there
t-test results
late
is
the early and the late

measures.
and
performance
bias
that nonresponse
respondents
can conclude
firms in Table 1.
surveys,
between
difference
on MO
We
17.5%.
is no significant
that there
early
In addition,
characteristics.
and
(Armstrong
and
of
late respondents
with
show
the
between
in mail
bias
respondents
early
rate
of the responding
for nonresponse
In
of 26.6%.
the questionnaires
a response
yielding
show the characteristics

To
rate
response
210 firms completed
China,
returned
and
a usable
yielding
sample
the surveys and
of 1000 firms. A total of 266 firms completed
is not
Thus,
a serious
we
problem
in this study.
Table 2 reports the reliability
Reliability Analysis.
Results
scale
cient
Reliability and Validity of the

MO and the RMO Scales
using
Cronbach's
alpha
for the scale
coefficient
is .934 and
alpha.
.869,
The
of the MO
coeffi
overall
for the
respectively,
is greater
China sample, which
Hong Kong and Mainland
to
individ
With
than .7, as Nunnally
(1994) suggests.
regard
ual
subscales,
the
reliability
of all
three
subscales
met
the
standard of .7 for both samples.

Leo
44

Y.M.
Sin
et al.
Mainland
Hong Kong
Sample
China
Sample
Number
Number
Industry
80
Manufacturing
30.1
63
30.0
Services 139
No
52.3 60 28.5
16.1
4.5
10 1.5
of Employees
or
100
153
less
57.560 28.6
101-500
43
501-1000
No
Business
17.1
36
3.4
response
15.7
13.95526.2
above
33
6.020 9.5
37
or
5001
16.1
16
1001-5000
3.162.9
Type
State-owned
Private
No
77 36.7
42
Others3
response
Number
Table 1.
Characteristics
Firms
0 .0 176
83.8
enterprises
2110.0
100.0
266
enterprises
0 6.2
13
response
aThis item includes
and construction,
building
.0
and gas, mining
electricity
and iron ore, and
others.
Table 3 reports the RMO scale. The overall coefficient

for the
is .932 and
scale
.841,
alpha
for the Hong
respectively,
Kong
and Mainland China sample. With regard to individual sub

scales, the reliability coefficient of all the six subscales met
the
.7 for the Hong
of
standard
land China sample,

marginally
the Main
are
of the six components
the reliability
agreement
RMO
scales
nents
of the
Convergent
Validity.
or more
in two
We examined
among
.783 across
evidence
through
respective
the three
tions
the
at p <
highly
For
sample.
acceptable.
Convergent
icant
Kong
two
.01.
In addition,
the
among
show
that
ranged
all correlations
were
each
of
the
compo
correla
.627 to
from
of MO
signif
was
components
the overall measure
(.857 or above) with
correlated
construct.
of the MO and
validity
correlations
simple
scale. The results
components
and
samples,
same
of the
of convergent
of
is the degree
validity
measures
of
we
MO.
correlations
obtained
Furthermore,
significant
across
two sam
RMO
six
the
all
the
of
among
components
that
of
indicates
The
correlations
pattern
components
ples.
on a common
of each MO and RMO scale converge
construct,
Discriminant
test
Validity. Discriminant
measures
which
of conceptually
for discriminant
validity,
test on the data collected

Market
of convergent
evidence
thereby providing
Orientation
validity
distinct
we
validity.
constructs
performed
in this study
and Relationship
is the degree to
a
differ.
simple
(see Podsakoff
Marketing
To
factor
and
Orientation
45

of Responding
Mainland
Hong Kong
Table 2.
of MO
Scale Reliabilities
Across Cultures
China
Item-to-
Cronbach's
Item
Customer
alpha
2. Create
.671
customer
.510
.412 .642
value
customer
3. Understand
needs
4. Customer
.530
5. After-sale
service
6. Customer
commitment
.492
.547 .704
.807
.714
to
rapidly
actions
.429.627
competitions'
8. Salespeople
share
9. Target
.610.636
information
competitor
for
opportunities
competitive
.468.620
advantage
10. Top managers
discuss
competitors'
.521.633
strategies
.876.722
Coordination
Interfunctional
11. Functional
integration
in strategy
.664
.528
resources
12. Share
Information
functions
shared
.583.798
contribute
.869
.934
scale
Organ 1986). We
The
.444.722
value
for the
coefficient
RMO
.490.755
functions
to customer
Alpha
entire
with
units
business
among
14. All
.389
.405
.633
Orientation
7. Respond
13.
.568
satisfaction
objectives
other
Total
Subscale
alpha
customer
satisfaction
Competitor
Cronbach's
.844
.722
Orientation
1. Measure
Item-to
Total
Subscale
subscales
analysis
the MO
factor analyzed
together,
produced
and the
subscales
components
using principal
two factors with
eigenvalues
analysis.
greater
than unity, which account for a total of 72.3% and 57.3% of

the variance for Hong Kong and Mainland China samples,
(Table 4). A clean solution results from the MO
respectively
and
RMO
Therefore,
subscales,
the results
nated between
ing discriminant
Test of Hypotheses
which
suggest
in two
loaded
that
the
discrimi
respondents
the MO and the RMO constructs,

validity
within
factors.
separate
thus imply
the measures.
Ha postulates that the relative impact of MO and RMO varies

across Hong Kong and Mainland China. To test the hypothe
sis, we
conducted
a regression
analysis
using
business
per
formance as the dependent variable, MO and RMO as the

predicting variables, and industry type and firm size as the
Leo
46

Y.M.
Sin
et al.
Mainland
Hong Kong
Item-to-
Item
Item-to
Total
Subscale
Cronbach's
alpha
China
Cronbach's
alpha
Total
Subscale
Table
3.
Scale Reliabilities of RMO

Across
Culture
.844
.697
Bonding
1. We
both
to
try very hard

a
long-term
establish
.728
relationship.
2. We
in close
work
.687
cooperation.
3. We
keep
.713
.504
.701
.588
Communication
communicate
and
our opinions
express
each other frequently.
can
5. We
.460
in touch
constantly.
4. We
.579
.398 .429
our
show
discontent
to
toward
each
other
through
communication.
can
6. We
.532
communicate
.557
honestly.
Shared
the same
share
.674
worldview.
8. We
about most
10. We
.626
.718
things.
the same
share
toward
feelings
around
.524
the same
share
opinion
9. We
.393
.863
.809
Value
7. We
.406
things
us.
.679
.754
the same
share
.711
values.
.693
.828
.584
Empathy
11. We
from
12. We
know
other
13. We
how
.633
.434
each
.400
.641
feels.
understand
other's
14. We
see
things
other's view.
always
each
each
values
care
other's
and
about
.324.653
goals.
each
.699
feelings
.313
.627
.767
Reciprocity
15. My company
"never
forget
regards
a good turn"
as our business
motto.
.471.716
16. We keep our promises

to
each other in any situation.
.329
.447
17.
If our
customers
assistance
gave
when
my
had difficulties,
company
then Iwould
repay their
.522
.655
kindness.
Trust
18. They
are
trustworthy
important
19. My
Alpha
company
coefficient
.654
.495.840
things.
trusts
.495
.840
them.
for the entire

scale
Market
.912
on
Orientation
.932
.841
and Relationship
Marketing
Orientation
47

control
into
We
variables.
entered
all variables
simultaneously
the equation.
The results in Table 5 show that for the Hong Kong sample,
both RMO and MO are significant in explaining the variation
in business
an R2 of
with
performance,
.250.
In addition,
the
MO variable is the dominant variable and yields a higher

beta value (.325) than does the RMO variable (.213). In con
trast, for the Mainland China sample, we found RMO to be
the only significant predicting variable associated with busi
ness
(b
performance
=
.187, R2
.92, p <
.01). These
results
show that MO has a greater impact than RMO on business

in Hong
performance
Results of Simple
for Discriminant
Validity
Mainland
2
Factor
Factor
Communication
.743
Empathy
.836
.698
.787
.670
.759
.622
.727
.615
.601
.600
Trust
Bonding
Reciprocity
orientation
Competitor
Customer
orientation
Interfunctional
coordination
Eigenvalue
Percentage
of variance
Dependent
Totalb
uring
Factor 2
.895
.873
.885
.856
.869
.830
3.120
2.746
2.417
37.648
34.661
30.515
26.860
Variable:
Overall
Performance
Mainland
China Sample
Manufact
Manufact-
Independent
3.388
Hong Kong Sample

Variables
China
Sample
.845
value
in
the observed differences
Factor
Variables
in
is reversed
pattern
Hong Kong
Sample
Shared
Table 5.
MO
and
of
Relative
Impact
RMO on Overall Performance:
Standardized
Estimated
Coefficients
Regression
this
China. To test whether
Mainland
Table 4.
Factor Test
and
Kong,
Services
Totalb
RMO
.213*
.551*
.121
.187**
MO
.325*
.051
.348*
.102
uring
-.220
.081
Services
.628*
.144
Industry
type3
11
-.166**
12
-.129
Firm
size
R2
.080
.019
.129
.198
.297**
.087
.250*
.324
.232*
.092*
-.140
.218
.001
.184**
*p<.01.
**p< .05.
and 12 = services.
II = manufacturing,
aIl and 12 are dummy variables.
in the regression analyses
bWe include the "Others" category in the industrial classification
and services
of manufacturing
for the "Total" sample, but we exclude it in the comparison
industries.
Leo Y.M. Sin et al.
48

relative impacts of MO and RMO are statistically significant,

we used the Chow test. The results show that the difference
=
is significant
7.792,
(F
results
Ha.
support
sector
p <
449,
hypothesis,
formance
variable,
tion, we
important for the
than
divided
the
overall
and
manufacturing
industry
on each
subsample
regressions
two
into
sample
services
business
we
industry
for
propose,
RMO
impacts on the
7.441,
na
services
to be significant
the difference
4, n2
203, p <
and
industry
the
to
Contrary
sample.
for the manufac
important
is more
for the
than
industry
performed
separately.
of the manufacturing
the Hong
Kong
performance
services
subsamples:
We
industry.
show in Table 5, RMO has differential
turing
the
.01). Thus,
sector. To test this

for the manufacturing
we
ran a regression
with
business
per
analysis
as the
as
RMO
the
variable,
dependent
predicting
In addi
and firm size as control
variables.
and MO
services
what
6, n2
that the impact of RMO ismore
H2 predicts
As we
na
and we
industry,
using
.01). For
the Mainland
found
test (F =
the Chow
sam
China
different. The Chow test

ple, the results are significantly
shows that RMO ismore important for service firms than for
firms
manufacturing
(F
68.358,
na
4, n2
111,
p <
.01).
Thus, the results confirm H2 for the China sample but not for
the Hong
Kong
the study is set in a context of Chinese
Although
our
sample.
motivation
major
examine
context moderates
environment
on business
to
is
how
economies,
the
business
the effect of MO and RMO
Discussion
Conclusion
performance.
Contributions
Two sets of ideas and findings
studies.
previous
measures
mainly
the
we
First,
internationalization
has led to the conjecture

be
Moreover,
suggests.
tion of the experiences
tries
with
from
of U.S.
different
cultural
in those
organizations
several
researchers
from
Market
and
the
have
called
(Weinshall
scales
marketing
and
cultural
decisi?n
borders
of the constructs
without
culture
fallacy,"
emulation
and
vali
any
as Kleinman
(1977)
and
extrapola
to coun
marketing
practices
and economic
environments
of
performances
Therefore,
1993).
(Agarwal
for empirical
work
that dis
from
"universal"
behavior
1977). Our study validates
in a Chinese
Orientation
operations
theories and models
and ineffective
countries
"culture-bound"
tinguishes
behavior
RMO
another
a "category
an uncritical
lead to inefficient
could
national
1966), the direct application
to subjects
create
could
dation
of business
that marketing
across
transportable
(Buzzell
measures
the constructs
developed
of MO and RMO available

for data collection
in the context of the U.S. cultural setting. Although
continued
may
distinguish
this study from
context
makers
data
using
at the
and Relationship
the MO and
that we
corporate
Marketing
obtained
level.
Orientation
49

and
the scale was
Although
States
for the
originally
business
strategic
in the United
developed
unit
our
level,
sug
findings
gest that the scale captures the constructs of MO and RMO in

China, two Chinese economies
Hong Kong and Mainland
with
economic
different
and cultural
environments.
There
we
are valid
conclude
that the two scales
fore,
confidently
a
across
and reliable
and can be used
of boundaries?
variety
studies
Second,
previous
or RMO has
MO
formance.
assess
and
industries,
companies,
However,
the relative
have
consistently
association
significant
researchers
have
of these
impact
performance.
this study was
shown
with
made
few
strategy
environmental
the
that either
business
two
an
Through
to
able
identify
business
tive,
cultures.
per
to
attempts
variables
environmental
on
perspec
con
texts in which MO and RMO are effective. Our findings sup

a
that in Hong Kong,
port Ha, which
hypothesizes
MO has a greater
effect on perform
economy,
than does RMO. However,
in
this pattern
is reversed
Mainland
China's
and
transitional
economy.
regulated
market-driven
ance
For
Research
and Managerial
Implications
this
researchers,
of marketing
scholars
have
study
strategies
helps
expand
in a transitional
economy.
economies,
to refine
and test
that
argued
Many
such as
transitional
"offer
China's,
theories
the understanding
fascinating
grounds
existing
new
to develop
reasons
ones"
for two major
see
and
Heath
also
Nee
and
Matthews
1996,
p. 493;
(Peng
an economic
is undergoing
China
transition
First,
1996).
a
to
from a planned
market
The
disconti
economy
economy.
can be
as a
in
China's
business
environment
nuity
regarded
and
that has
experiment"
"quasi
in firm behavior.
resulted
in a significant
change
Such
naturally
occurring
experiment-like
to observe
it possible
in Chi
setting makes
strategic
changes
nese
firms. Currently,
know
researchers
little about
the
very
in
of
firms
transitional
economies,
espe
marketing
practices
cially with
business
regard to the relationship

We
performance.
on
studies
among MO, RMO, and
that our
hope
study
can
stimulate
make
the strategic
behaviors
of firms in tran
can help move
which
the market
transi
economics,
to the center
of
business
and
literature
research
stage
more
to the busi
and relevant
contributions
potential
ness
literature.
additional
sitional
tion
common
regimes
an important
because
China
shares
Second,
with
communist
countries
other
under
legacy
or countries
with
central
the Chi
systems,
planning
nese experiment
can help
market
in
Europe.
systems
Further
studies
shed light on the evolution

and
research
in Russia
of the
Eastern
post-Soviet
republics
must
to determine
be conducted
of the research
generalizability
comparative
sus firms
the
(e.g., on
or Eastern
findings. We
firms
suggest
in Mainland
can
Europe)
of the relationship
the understanding
among
we
herein.
that
investigated
performance
further
MO,
China
the
that
ver
enhance
RMO,
and
Leo Y.M. Sin et al.
50

a managerial
From
the continuing
of
perspective,
expansion
or
has
created
international,
multinational,
companies
global
a need
for understanding
in differ
management
imperatives
ent national
market
environments.
who
Managers
implement
business
have
At
the same
agement
time,
views
For
be
1993). This
(Agarwal
who
managers
across
coun
that
study demonstrate
on
in
RMO
stronger
performance
a
a
in
Mainland
than
China,
economy,
Kong,
capitalist
Con
economy.
regulated,
government-involved
has
Hong
highly
example,
the results
imperatives.
to know
the man
for marketing
or diversities
guidelines
similarities
can
settings
management
expected
in every country
practices
provides
environmental
tries.
environmental
about
cannot
they
some
study
handle
MO
in different
strategies
ethnocentric
not
effect
of this
than
does
is a dominant
RMO
and
versely,
land China. Marketing
managers
monitor
customers'
tinuously
to propose
strategies
in Hong
needs
and
integrated
in Main
strategy
con
should
Kong
effective
and
timely
gies in this market. For practitioners

people interested in doing business
competitors'
strate
marketing
inMainland China and

there, our findings sug
is a more
that RMO, not MO,
effective
for busi
strategy
success.
should
be
different
Thus,
marketing
strategies
to
economies.
the two Chinese
explore
employed
gest
ness
this study has provided

relevant and notable
Although
into
of
the
the understanding
impacts of MO on per
insights
in two Chinese
formance
tions
with
associated
sectional
data.
relationships
Consequently,
RMO,
among MO,
cannot be determined
fast-changing
economies,
this
study.
the
and
unambiguously,
The
marketplace.
there
are several
First,
time
we
limita
Limitations
Research
cross
used
of
the
sequence
business
performance
in China's
especially
of a time-series
development
database and the testing of relationships

among MO, RMO,
and performance in a longitudinal framework could provide
more
insight
into probable
causation.
we used
a subjective
Second,
use of similar
ance. Extensive
approach
measures
to measure
perform
on strate
in research
1997; Greenley 1995; Slater

gic orientation (e.g., Appiah-Adu
associated
and Narver 1994) and the practical difficulties
with data collection in Chinese societies made this approach
(Luo and Chen 1996). In addition, although prior
necessary
studies
and
have
subjective
reported
measures
a strong association
between
of business
performance
objective
(Dawes
1999; Jaworski and Kohli 1993; Venkatraman and Ramanu

jam 1986), we could not find any similar studies that used
data
from Mainland
studies
China
should examine
and
Hong
further
Thus,
Kong.
the generalizability
of this relation
in a Chinese
the two measures
ship between
China
is a society
that emphasizes
thermore,
context.
"face
Fur
saving,"
which may have an inflated effect on the reporting of subjec

tive measures
Market
of performance.
Orientation
Further
and Relationship
studies
that
Marketing
include
Orientation
51

and Further
this cultural value as a control variable might
Third, we collected
approach.
improve
data for this study by the key-informant

senior
Although
are
managers
able and valid data (Tan and Litschert

that
help
of the results.
the rigor
a firm
is not
generates
the
for reli
adequate
1994), the information

source
only
of
information
about its levels of MO and RMO. It is important to contrast a

firm's degree of MO and RMO as internal information
assesses
it (e.g., managers'
its level of MO and RMO as
in this study) with
have done
and distributors
competitors,
one
of the most
challenging
customers,
be
might
as we
to questionnaires,
responses
perceive
areas
for
it. This
further
research.
Another
moderating
potential
role
area
that
for further
proneness
relationship
and Bitner
Gremler,
(1998)
activities
relationship-oriented
research
is to explore
the
Gwinner,
plays.
suggest
that the success
depends
not
on
only
of
its strat
but also on the preferences

of the
egy or implementation
individual customer. Christy, Oliver, and Penn (1996) use the
to express the idea that
term "psychologically
predisposed"
some
are
customers
involved
predisposed
Not
all types
relationship.
engage
in relationships
Evans,
and
proneness,
Iacobucci
conscious
are prone
of buyers
sellers
to
(Berry 1995; Crosby,
consumer
Thus,
1990).
relationship
and
De Wulf,
which
Odekerken-Schr?der,
as a consumer's
and
stable
(2001) define
relatively
to
in
with
sellers
of
engage
relationships
tendency
particular
ship between
Cowles
researchers
many
2002;
Schoder
whether
(e.g.,
and Madeja
firm
business-to-consumer
the
should moderate
category,
and business
performance.
product
RMO
Furthermore,
operates
market
on business
of RMO
with
a more
to welcome
2004)
in
and
Lindgreen
have
suggested
performance.
Pels
that
or
a business-to-business
has
relation
on
consequences
further
Thus,
the effect
research
should also investigate the role that this moderator plays in

the link between RMO and business performance. Other firm
the
the firm is state owned,
such as whether
characteristics,
so
worth
also
be
the
and
of
of
on,
firm,
country
might
origin
while
to include.
was
we used
drawn
for analysis
the sample
only
Finally,
in greater China,
and
two cities
from Hong Kong
and Beijing,
to
remains
be tested.
of the results
thus the generalizability
Therefore,
by attempting
tion
of the
further
research
a nationwide
study
in other
ensure the population
the present
study
expand
in
China.
Indeed,
survey
replica
could
economies
transitional
could
validity
of the findings.
Leo YM. Sin et al.

1. In line with
the work of Slater and Narver
orientation"
and
synonyms,
in the article.
and
"marketing
thus we use
(1994), "market
are
orientation"
the
term
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considered
Notes
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customer
original scale that pertained to interfunctional
calls
after
several
dents.
We
found
interviews
with
target respon
in-depth
are
as
that such
calls
often
perceived
into another
and are con
department's
territory
a
the
and
boat"
schism
among
"rocking
stirring up
stepping
sidered
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in different
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Market Orientation, Relationship Marketing Orientation, and Business Performance: The

Moderating Effects of Economic Ideology and Industry Type

This content downloaded from 218.248.44.196 on Wed, 26 Mar 2014 23:40:47 PM

This study examines how economic

through a survey of firms

ideology and industry type

they have similarities in cultural dimensions and dif

Leo Y.M. Sin,

becomes their market. The growth

through which the world

Rhee 1989; Manu

1992). The findings have significant

been the most debated topic throughout

the past decades

involves a firm's market orientation

The basic premise

of this article is that the characteristics of

This content downloaded from 218.248.44.196 on Wed, 26 Mar 2014 23:40:47 PM

the firm (Deshpand?

norms and behaviors within

Using a survey design, we collected data from firms in two

and RMO to provide

of the MO and RMO models.

of the two Chinese

for this study. Then, we

and validity of the MO and RMO concept. We then present

to Kohli and Jaworski

is considered the activities involved in the imple

This content downloaded from 218.248.44.196 on Wed, 26 Mar 2014 23:40:47 PM

(1990) and Ruekert (1992) also report similar conceptualiza

a summary of prior empirical

literature on MO has provided sufficient evidence

of RMO for firms to compete effectively (Perrien, Filiatrault,

all the parties are met by mutual

tionship marketing." Although the preceding definitions dif

in nature, and that both parties

gic or operational thinking. Limited empirical research has

firms in China, Sin and colleagues

This content downloaded from 218.248.44.196 on Wed, 26 Mar 2014 23:40:47 PM

find that RMO yields

impact on the determina

Despite the rich body of literature that supports the positive

that a firm can

Both MO and RMO are strategic orientations

of strategy (Lusch and Lusch 1987; Slater and Narver

sued (Lenz 1981). Manu

the two ellipses

for this viewpoint.

comprises MO and RMO and its consequences

(1992) and Miles

nomic ideology evolves from the legal and political systems

This content downloaded from 218.248.44.196 on Wed, 26 Mar 2014 23:40:47 PM

(Douglas and Craig

and international markets

side of Figure 1 represents

the effects of the two moderating

should not expect MO and RMO to be associated

different from those of the

up the vast majority

InHong Kong, private firms make

Leo Y.M. Sin et al.

This content downloaded from 218.248.44.196 on Wed, 26 Mar 2014 23:40:47 PM

after Great Britain returned Hong Kong toMainland China in