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Market Orientation and Planning Flexibility in SMEs

Performance Implications and an Empirical Investigation

Lütfihak Alpkan

Gebze Institute of Technology, Turkey,alpkan{at}gyte.edu.tr

Cengiz Yilmaz

Bogaziçi University, Turkey,cengiz.yilmaz{at}boun.edu.tr

Nihat Kaya

Gebze Institute of Technology, Turkey,nkaya{at}gyte.edu.tr

The study examines the joint effects of market orientation (an internal, cultural factor) and planning flexibility (an internal, process factor) on business performance in small and medium-sized firms. In addition, the conceptual model incorporates market dynamism (an external factor) as a moderator on business performance. A number of hypothesized relationships are tested with a sample of small and medium-sized manufacturing firms in Turkey.The results suggest that while, in general, both market orientation and planning flexibility positively influence firm performance, contrary to the author's hypothesis, planning flexibility exerts a negative effect on performance in highly dynamic markets.Theoretical and managerial implications of these and other findings are discussed.

Key Words: market dynamism • market orientation • planning flexibility • small and medium-sized enterprises

International Small Business Journal, Vol. 25, No. 2, 152-172 (2007)
DOI: 10.1177/0266242607074518
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