The impact of market orientation on business performance and website adoption: a study among Iranian SMEs

Abstract: Studying the impact of market orientation on business performance has been a popular research topic in recent years. However, there seems to be lack of empirical studies that measure market orientation in e-commerce environment. This paper reports the study on "the impact of market orientation on business performance and website adoption in Iranian SMEs". According to previous studies market orientation is the prerequisite for a successful business operation, but actually there is not enough evidence in supporting the idea in Iranian context and especially about the impact of being market oriented on the perception of managers toward having website. To test this assertion, this study looks into the nature of the correlation between market orientation, company performance and website adoption using 117 website adopters and 102 non-website adopters as sample data from Iranian SMEs. Narver and Slater's scale (MKTOR) for market orientation, Weerakoon's Multi-Model Performance Framework (MMPF) for business performance and Technology Acceptance Model (TAM) for website adoption are tested and used. Confirmatory factor analysis was used to validate the measures of market orientation, business performance and website adoption. Regression analysis was performed to determine whether market orientation is associated with firm's performance and website adoption, using Partial Least Square (PLS) Technique. Our findings suggest that market orientation and business performance are correlated to each other in both sample groups, Iranian SMEs with higher level of market orientation are more willing to use website as a business tool in comparison with firms with lower level of market orientation. In website adopters, behavioral intention, perceived usefulness and perceived ease of use has positive direct effect on website adoption, although perceived usefulness plays most important role. Among non-website adopters, behavioral intention, perceived usefulness and perceived ease of use don't have any positive impact on website adoption! Managers of both sample groups have positive attitude toward having website while this attitude is greater among website adopters than non-website adopters. Although, website adopters find having website would enhance their job performance and effectiveness, non-website adopters believe website is not so helpful in their jobs. Finally, the implication of the result to both researchers and practitioners has been discussed: limitations and suggestions for further research have been proposed.