The Impact of Market Orientation, Corporate Social Responsibility - Saudi Industrial Organization - Essay Example

Market orientation is an organization-wide set of activities to researching and responding to customer needs. The three main ingredients of the market orientation include; customer orientation, cross-functional coordination and competitor focus.

Market orientation has become one of the widespread topics in business issues and the critical sector. Most companies that are market-oriented avoid getting into trouble because they spend most of their time with their customers thereby gaining a lot of information from the customers.  Indeed the relationship that coexists between the business performance and the market orientation is quite a powerful one. For instance, those businesses that exhibit a strong interrelationship between the business performance and the MO have experienced success and the growth of the market share (Appiah-Adu and Ranchho, 1998).

While the competitor and customer orientation can have a significant and positive impact on the overall MO, only the customer orientation can have a significant and positive impact on the business performance. From the managerial perspective, the measurements scales can be used in assessing the firm’s level of the MO and appropriately identify the “bottlenecks” in the intra-organizational information flows. For this course, the transformation of the business from the MO to the business performance is a rather a more complex phenomenon due to the interventions from the other factors during the process of transformation (Slater and Narver, 1995; Han et al., 1998; Baker and Sinkula, 1999).

Successful organizations create an organizational culture that encourages their employees to feel dedication and commitment to the organization. Corporate social responsibility initiatives are one way of achieving this. Besides giving the employees the invaluable feeling towards making an enormous contribution to the organization, it also offers other positive effects to the business as well. Innovation in the managerial and organizational practices suggest that new and improved ways of enhancing CSR via rebuilding the relationship between the organizations and the community while enhancing the understanding of the social capital found in the social environment that the organization serves (Barlett, 2009).

The relationship between social welfare and company profitability in the modern world constitutes one of the main subjects of the research and study on the theme of CSR. CSR describes the organization’s obligations in the protection and improvement of the social welfare as well as the future through the generation of sustainable benefits for the stakeholders. With the increased global competition and the consumer needs changes, it’s of paramount importance for the companies to organize their business activities with a strong focus on their markets so as to survive (Mahmoud et al., 2010). Saudi organizations are of particular concern in this case as they retain the intangible and tangible products in which the customer orientations are of are the crucial element. It’s therefore obvious that the development and planning of effective innovative strategies is an essential ingredient required for the performance of Saudi organizations. it's evident that the CSR activities are of great vitality for the improvement of the corporate image in order to stimulate the performance of the business (Luo and Bhattacharya, 2006; Prado-Lorenzo et al., 2008). Saudi organizations should therefore embrace MO, innovation, and CSR as they boost the performance of the organizations.

Although much of the study has been based on the determinants of the organization’s innovation performance, the relationship that exists between business performance and innovation is less defined. Indeed successful firms have embraced the idea of business innovation into the organization performance. In this particular research paper, we propose the test model of the relationship between the MO, CSR and the firm performance in a sample that comprises the marketing managers and executives of all the Saudi organizations that are operating in the eastern province. The study also seeks to test the relationship between the MO, CSR and innovation for Saudi organizations while also attempting to describe the impacts of these market variables on business performance. Additionally, the research design is based on two research questions: how does innovation function in the relationship between business performance and MO? And how does CSR affect innovative performance when implemented with the market orientation?

The two research questions are important to the global MO as they examine the relationship between innovation and MO. Additionally, for instance, research question two is vital as it attempts the interrelationship between the three business variables i.e. CSR, MO, and innovation in regard to the business performance (Fey and Birkinshaw, 2005; Borger and Kruglianskas, 2006). This is timely because judging from the literature review, it's not brought out clearly the relationship between the three business variables.

Given the complex nature of the market orientation-performance relationship, firms must therefore heavily rely on some competencies in order to transform MO into a successful business strategy, with CSR and innovation as the two key competencies in this regard.