Understanding Market Orientation in Victorian Schools

Transcription

1 Understanding Market Orientation in Victorian Schools Daniel N. Arifin B.CompSci., B.Sc., M.Ed. ORCID orcid.org/ x Thesis submitted as fulfillment of the requirements of the degree of Doctor of Philosophy June 2016 Melbourne Graduate School of Education The University of Melbourne Produced on archival quality paper i

2 ABSTRACT This thesis examined the notion of market orientation in a school setting. Market orientation has been investigated in a variety of organization sectors around the world and is defined as an organizational orientation towards the market, placing an emphasis on the customer. Past studies have shown evidence of a positive link between market orientation and organizational performance and also that adopting market orientation principles will enhance the magnitude and effectiveness of innovation activities. This has been proven by a number of studies in the profit, not-for profit, health, higher education, and other sectors. Marketing is relevant in education because of the need to enhance school reputation, attract students and resources, and attempt to understand the needs and aspirations of the various stakeholders. Despite these findings there is little research on market orientation in schools. This research developed a market orientation survey suitable for schools, which was then used to explore market orientation in a sample of 24 Victorian schools. A five-dimension model of market orientation was constructed and tested psychometrically to produce a valid and reliable survey, derived from the MARKOR construct by Narver and Slater (1990). The model comprised of customer orientation, competitor orientation, inter-functional coordination, long-term growth, and market intelligence dimensions. A total dataset of 404 participants was used to validate the instrument and investigate the link between market orientation and student performance, as a measure of school performance. The findings provide evidence that Victorian schools are somewhat market oriented, placing a focus on customer orientation but somewhat ignoring competitor orientation and long-term growth. It was found that principals have a significantly higher perception of the school s market orientation level compared to the teachers, which supports the notion that job position is a moderator of market orientation. Furthermore, the level of market orientation ii

3 was found to have a statistically significant and positive impact on student performance, as a measure of school performance. iii

4 STATEMENT OF ORIGINAL AUTHORSHIP I declare that all materials contained in this thesis are my own work towards a Doctor of Philosophy degree. This thesis contains no material that has been submitted for any other degree in any university. To the best of my knowledge and belief, this thesis contains no materials previously published or written by any other person, except where indicated in the preface. The length of this thesis is within the acceptable word limit stated by the Melbourne Graduate School of Education guidelines, exclusive of tables, maps, bibliographies and appendices. Signature Daniel N. Arifin 18 June 2016 iv

5 PREFACE Sections of this thesis have been presented in conferences and appeared in abridged form as published conference proceedings by the candidate: Arifin, D. N., Drysdale, L. (2015). A Market Oriented School. Peer Reviewed Conference Proceeding: Australian Association for Research in Education (AARE), Fremantle, Australia, pp1-15. ISSN Arifin, D. N., Drysdale, L. (2015). Understanding and Measuring Market Orientation and Innovation in Schools. Peer Reviewed Conference Proceeding: The International Conference on Language, Innovation, Culture and Education (ICLICE), 1, ISBN v

6 ACKNOWLEDGEMENT Praise be to Jesus Christ for his blessings and strength that carried me through this lengthy journey, without which, I would not have been able to complete this thesis. I would like to extend my appreciation and deepest gratitude to all those who have supported me to the completion of this thesis. I could not thank Melbourne Graduate School of Education enough, for granting me with the scholarship fund that allowed me to begin my candidature journey. My heartfelt thanks to my supervisors and advisory panel who have assisted in shaping my thoughts as a researcher as well as guiding me through the difficult times of data collection in Assoc. Prof. Lawrie Drysdale as my primary supervisor for overall guidance and mentorship Assoc. Prof. David Gurr as my secondary supervisor for his direction throughout the writing stages of my thesis Prof. John Hattie whose instruction and advice helped shape the statistical analyses and methodology of the research Dr. Richard Cotter, who has provided me with a different perspective during the advisory meetings I thank the school principals and participants, who have given their time to contribute in the research, without which this thesis would not be possible. I thank my wife, Debby N. Christiono, family, colleagues, and friends for their, constant prayers, emotional support, and patience for me through this journey. A special mention to my best friend Chut Pek Choy, for her encouragement through the last four years, as a partner for exchanging and debating ideas. vi

7 TABLE OF CONTENTS ABSTRACT... II STATEMENT OF ORIGINAL AUTHORSHIP... IV PREFACE...V ACKNOWLEDGEMENT... VI TABLE OF CONTENTS... VII LIST OF TABLES... XI LIST OF FIGURES... XIV CHAPTER 1: INTRODUCTION... 1 INTRODUCTION... 1 RESEARCH INTO MARKET ORIENTATION... 2 MARKET ORIENTATION IN SCHOOLS... 3 PURPOSE AND SIGNIFICANCE OF THE STUDY... 5 INSTRUMENTS THAT MEASURE MARKET ORIENTATION... 8 METHODOLOGY... 8 STRUCTURE OF THE THESIS... 9 SUMMARY...10 CHAPTER 2: LITERATURE REVIEW INTRODUCTION...11 THE HISTORY OF MARKET ORIENTATION...15 MARKET ORIENTATION AND ORGANIZATIONAL PERFORMANCE...19 Meta analyses on market orientation BARRIERS AND RESISTANCE TO MARKET ORIENTATION...31 MARKET ORIENTATION MODEL...32 Obtaining superior competitive advantage through focus on customers and competitors The MKTOR construct The MARKOR construct INSTRUMENTS THAT MEASURE MARKET ORIENTATION...39 MKTOR MARKOR Market orientation inventory instrument Empirical research with mixed results MARKETING AND MARKET ORIENTATION IN SCHOOLS...56 Incorporating Market Orientation in the School culture vii

8 The market orientation model for schools SUMMARY...61 CHAPTER 3: RESEARCH METHODOLOGY INTRODUCTION...62 RESEARCH DESIGN...63 Selecting a research method POPULATION AND SAMPLING...65 Sampling procedure Sample size Generalizability of model Statistical power of the study DEVELOPMENT OF THE QUESTIONNAIRE...73 The market intelligence dimension Structure of the MOSQ instrument Pilot testing Validity and reliability of the MOSQ instrument Ethical considerations Data preparation OPERATIONAL DEFINITION OF RESEARCH VARIABLES...89 RESEARCH HYPOTHESIS...92 DATA ANALYSIS METHODS...92 CHAPTER SUMMARY...94 CHAPTER 4: INSTRUMENT VALIDATION OVERVIEW OF THE CHAPTER...95 INTRODUCTION...95 METHOD...96 Participants Data collection procedure MEASUREMENT CONSTRUCTS...98 PRELIMINARY ANALYSIS Distribution of data KMO and Bartlett test Descriptive statistics EXPLORATORY FACTOR ANALYSIS Correlation analysis viii

9 The five factors as dimensions of market orientation Reliability of the MOSQ instrument Validity CONFIRMING THE FIVE-DIMENSION MODEL Goodness of fit test REFINEMENTS TO THE INSTRUMENT SUMMARY CHAPTER 5: ANALYSIS AND RESULTS OVERVIEW OF THE CHAPTER INTRODUCTION SAMPLE Preliminary tests THE VICTORIA GROUP MARKET ORIENTATION LEVEL OF VICTORIA THE EFFECT OF JOB POSITION AND LENGTH OF SERVICE ON MARKET ORIENTATION THE RELATIONSHIP BETWEEN MARKET ORIENTATION AND STUDENT PERFORMANCE SUMMARY CHAPTER 6: DISCUSSION AND CONCLUSION INTRODUCTION PURPOSE OF THE STUDY OVERVIEW OF THE THESIS CONTRIBUTIONS OF THE RESEARCH The development of a dependable market orientation measure for schools The impact of market orientation on perceived school performance The market orientation level of Victorian schools The effect of job position and length of service on perceived market orientation IMPLICATIONS FOR SCHOOLS LIMITATIONS OF THE STUDY Themes for further research CONCLUDING COMMENT BIBLIOGRAPHY APPENDICES Appendix A: Information Flyer Appendix B: Cover letter to principal Appendix C: Plain language statement to principals ix

10 Appendix D: Market Orientation in Schools Questionnaire (MOSQ) x

11 LIST OF TABLES Table 2.1. The evolution of modern marketing (Drysdale, 2002, p. 22) Table 2.2. Measures of performance (Drysdale, 2002, p.64) Table 2.3. Market orientation and firm performance (Bueno et al., 2016, p. 157) Table 2.4. Summary of the meta-analysis results (Ellis, 2006, p. 1096) Table 2.5. Reliability analysis MKTOR (Narver & Slater, 1990, p. 24) Table 2.6. MARKOR summary results (Kohli et. al., 1993, p. 470) Table 2.7. MO Inventory - Section A: customer orientation (Oplatka & Hemsley- Brown, 2007, p. 296) Table 2.8. MO Inventory - Section B: competitor orientation (Oplatka & Hemsley- Brown, 2007, p. 297) Table 2.9. MO Inventory - Section C: inter-functional coordination (Oplatka & Hemsley-Brown, 2007, p. 297) Table Mean, standard deviation, and correlation of MO variables (Caruana et al., 1998, p. 63) Table Regression of MO dimensions with performance items (Caruana et al., 1998, p. 64) Table Goodness of fit comparison table (Caruana, 1999, p. 250) Table Summary of empirical research between MO and business performance (Lado & Maydeu-Olivares, 2001, p. 131) Table 3.1. School population distribution in Victoria Table 3.2. School staff distribution in Victoria Table 3.3. Adjusted school staff distribution in Victoria Table 3.4. Regions in Victoria Table 3.5. Demographic of Victoria respondents Table 3.6. Original market orientation questionnaire by Widing and Speed (1998) Table 3.7. Structure of questionnaire sections Table 3.8. Mapping of measured variables in MOSQ Table 3.9. Statistical analyses methods Table 4.1. Mapping of items in the MOSQ instrument xi

12 Table 4.2 Overall group distribution Table 4.3 Overall job position distribution Table 4.4. Customer orientation items Table 4.5. Competitor orientation items Table 4.6. Inter-functional coordination items Table 4.7. Long-term growth items Table 4.8. Market intelligence items Table 4.9. Test of Normality Table KMO and Bartlett s Test Table Descriptive statistics of all items and constructs Table 4.12: Factor Analysis Pattern Matrix Table Classification of Correlation Coefficient Table 4.14: Factor Correlation Matrix with Eigen values in the diagonal Table 4.15: List of factors and items that load on them Table Cronbach s alpha for the five dimensions of market orientation Table Overall reliability statistics Table Goodness of fit test Table New mapping of items Table New MOSQ Structure with reduced items Table 5.1. Descriptive statistics of market orientation dimensions Table 5.2. Descriptive statistics moderated by job position and length of service Table 5.3. Interpretation of Market Orientation Score Table 5.4. Mean scores across different MO level grouped categories Table 5.5 Summary of multivariate results (Wilks Lambda). Using job position and length of service as moderators of market orientation Table 5.6 Univariate analysis between market orientation dimensions and the two moderating variables Table 5.7. Comparison of market orientation means between university deans and school principals Table 5.8. Frequency count of student performance measure Table 5.9. Descriptive statistics of student performance measure xii

13 Table Perception of student performance among the different job positions Table Overall regression model Table 5.12 Standardized beta and significant values for the five-dimensions of market orientation predicting student performance xiii

14 LIST OF FIGURES Figure 2.1. Evolution of marketing (Drysdale, 2002, p. 11) Figure 2.2. Elements of competitive advantage (Day and Wensley, 1988, p. 3) Figure 2.3. A framework for assessing advantage (Day and Wensley, 1988, p. 8) Figure 2.4. Market orientation concept (Narver and Slater, 1990, p. 23) Figure 2.5. Antecedents and consequences of a market orientation (Kohli and Jaworski, 1990, p. 7) Figure 2.6. Market Orientation Model in Education Figure 4.1. Structural model of the five-dimensions of market orientation Figure 5.1 Combined market orientation level of schools in Victoria Figure 5.2. High group compared to overall average score Figure 5.3. Low group compared to overall average score Figure 5.4. Mid group compared to overall average score Figure 5.5. Mapping of student performance against different MO levels Figure 5.6. Market intelligence moderated by job position and length of service Figure 5.7. Long-term growth dimension moderated by job position and length of service Figure 5.8. Competitor orientation dimension moderated by job position and length of service Figure 5.9. Inter-functional coordination dimension moderated by job position and length of service Figure Customer orientation dimension moderated by job position and length of service Figure Overall market orientation level of school staff xiv

15 Chapter 1: Introduction INTRODUCTION Market orientation has been a topic of investigation in many countries around the world, both by for profit and not-for profit organizations. Market orientation, which is an organization s orientation towards the market, placing focus on the customer, has been found to have a positive link with organizational performance (Kotler, 1984; Kotler & Andreasen, 1996; Narver & Slater, 1990; Ellis, 2006; and others); i.e. a high degree of market orientation is accompanied by high organizational performance. Marketing was primarily viewed as promotion and selling and strongly linked with increase of profit, and, therefore, was regarded essential only by organizations seeking profit. Non-profit and service organizations did not consider marketing as their primary focus, based on that definition. However, further studies conducted in the 1970s (Hunt, 1976; Kotler, 1972; Kotler & Levy, 1969; Robin, 1978) considered and confirmed the applicability of marketing concepts and techniques to other sectors. Over time, the concept of market orientation has emerged as part of the evolution of marketing in the mid 1980s. Fundamentally, market orientation refers to the ability of an organization to understand the targeted market. In this sense, marketing is focused on finding a match between product/service offered with market needs (Payne, 1993) and market orientation is the act of focusing an organization s offerings and values based on an understanding of customer needs (Evans, James, & Tomes, 1996). Previous studies have shown correlation between the successes of an organization with its ability to be market oriented. The findings have shown consistency for both profit and non-profit organizations. Drysdale (2002) reported that schools adopt marketing for three main reasons: attracting higher levels of student enrolment, gathering resources and funding, and increasing reputation in the market place (imaging, branding, and positioning). In respect to enrolments, schools in Australia have also undergone 1

16 a shift in the last two decades in regards to attracting students (Campitelli, 2013). This shift is likely the result of a general shift in the market, in that, in order to get their children into their preferred schools, parents are willing to make major life changes, including residential relocation, compromise on financial security, and increased travelling (Campbell, Proctor, & Sherington, 2009). This change in parent aspiration has caused a shift in market demand, which positioned private schools in direct competition with public schools. These movements in the market clearly show that marketing is becoming a more essential, or possibly even critical, concept for schools to understand and implement. A tool for measuring the degree of market orientation in schools seems timely. However, before a market orientation measurement tool for schools can be developed, it is essential to understand the conceptual model of market orientation that is specific for the school sector. This research aims to extend previous market orientation research by investigating the occurrence of the market orientation phenomenon in school settings. RESEARCH INTO MARKET ORIENTATION Market orientation broadens the reach of the marketing concept, by acknowledging that a sole focus on customer alone is not adequate (Evans et al., 1996; Hunt & Morgan, 1995; Kohli, Jaworski, & Kumar, 1993). Furthermore, organizations need to realize the importance and significance in understanding the various elements of the external environment, which affects the movement of the market and trend. This has expanded the definition of marketing to incorporate competition, long term planning, growth, and survival. Supported by the works of Kohli and Jaworski (1990) and Narver and Slater (1990), the popularity of market orientation started increasing in the 1990s with the establishment of a positive link between market orientation and organizational performance, i.e. a highly market oriented firm was found to be high performing, while a low market oriented firm was found low performing. 2

17 Compared to profit seeking organizations, non-profit organizations face an extra challenge. Due to the nature of non-profit organizations, they need to compete with other non-profit organizations as well as the for-profit organizations, but with less resources and funds. Due to this, some writers (Kotler & Andreasen, 1996; Kotler & Zaltman, 1997; Shapiro, 1973) further advocate and underline the importance of marketing for non-profit organizations. There are numerous studies verifying the existence of a relationship between market orientation and performance (for example: Appiah-Adu & Singh, 1998; Caruana, 1999; Ngansathil, 2001; Pelham, 2000; Siguaw, Brown, & Widing, 1994; Slater & Narver, 1994; Webb, Webster, & Krepapa, 2000; Chen & Hsu, 2013; Jangl, 2015; Lin, Liu, Chuang, and Chang, 2015; Mutlu and Surer, 2015; Bueno, John, Lyra, and Lenzi, 2016; Laukkanen, Tuominen, Reijonen, and Hirvonen, 2016). The performance measures used in these studies range from return on assets and sales growth, to ability to attract non-government funding. The notion of market orientation as a generic determinant of organizational performance is further supported by a few meta-analyses studies (Chang, Franke, Butler, Musgrove, & Ellinger, 2014; Ellis, 2006; Grinstein, 2008; Rodriguez Cano, Carrillat, & Jaramillo, 2004). In the exploration of the link between market orientation and organizational performance, these studies verified that a positive link exists. MARKET ORIENTATION IN SCHOOLS Research into market orientation has been quite extensive in the profit sector, whereas research interest of this topic in the education sector has not been as high in demand. Some studies have been conducted at the higher education level (Hemsley-Brown & Oplatka, 2010; R. L. Webster, Hammond, & Rothwell, 2014), which found support for the notion of a positive link between market orientation and organizational performance. However, there is very little research into whether this phenomenon exists in schools. 3

18 Although schools are educational organizations, which generally do not place an emphasis on profit making, they still have a business side, in that a school s survival is often dependent on its ability to attract students by marketing themselves to the external environment (Davies, 1997; Grace, 1995; Holcomb, 1993; Kotler & Fox, 1995). However, there may be some exceptions, where a school is protected by their geographical position; for example: when a school is the only school of its type in a specific location. Looking into the literature on school research conducted globally, writers have unraveled the various effects of marketing in schools. Studies conducted in Israel, England, and New Zealand found that principals have acknowledged the existence of a link between marketing and competition amongst schools (Ball, 1994; Birch, 1998; Lauder, 1999; Oplatka, 2002a), resulting in schools placing more resources for marketing activity. A study in the school context in Australia has been done by Drysdale (2002), which supported the importance of marketing in schools, demonstrating that the marketing function is essential to increase the reputation of the school, as well as impacting on better student admission. In the last three decades, market mechanisms have started to be introduced in the education sector around the globe. Waslander, Pater, and Weide (2010) noted that countries in Asia (China, Hong Kong, and Pakistan), Latin America (Chile and Nicaragua), Europe (Finland, France, Poland, and Sweden), and North America (United States and Canada) have introduced government policies that broaden parental choice and encourage school competition. Perhaps the function of marketing is becoming more relevant in the educational sector. A school should not solely focus on providing an effective form of teaching at the cost of neglecting marketing, because the school may lose its competitiveness and, as a consequence, lose its appeal to the stakeholders. Foskett (2002) takes a broader view and suggests that there is more to marketing in schools than aiming to successfully sell a school s products and services to the community. Foskett (2002) and Peterson (2006) suggest that 4

19 marketing is a comprehensive approach towards the management structure that aims to satisfy students and parents needs by increasing overall school effectiveness (Foskett, 2002). Consistent with Foskett s (2002) conclusions, the studies of Bell (1999), Birch (1998), James and Phillips (1995), and Oplatka (2002a) found that most schools do not yet have systematic and coherent marketing strategy. Within Australia there are two reported studies (Drysdale, 2002; Holmes, 1998) of market orientation in schools. Both studies employed a qualitative approach based primarily on case studies. Foskett (2002) suggests that markets and marketing are miasmic concepts in the education sector, probably due to unfamiliarity of the teaching profession towards these concepts. However, the push for greater school choice establishes markets, and schools that exist in these environments will most likely need to devote more consideration to developing a market orientation. PURPOSE AND SIGNIFICANCE OF THE STUDY This research aims to extend previous market orientation research by investigating the occurrence of the market orientation phenomenon in school settings. It observes a sample of teaching and non-teaching school staff from public, private, and catholic schools in Victoria. It explores the degree of market orientation of the schools and establishes a positive relationship between market orientation and a measure of school performance. In order to assess market orientation in schools, this thesis develops and provides empirical validation to the Market Orientation in Schools Questionnaire (MOSQ) as a measurement instrument. The MOSQ instrument captures the school s market orientation level around the five-dimensions of market orientation: customer orientation, competitor orientation, inter-functional coordination, long-term growth, and market intelligence. 5

20 In understanding the Victorian context, this thesis provides an insight to the existence of market orientation within schools in Australia and to what extent the schools are market oriented. Furthermore, looking into the different perceptions of teaching and non-teaching school staff and shedding light into the moderating effects of one s role in a school towards market orientation. Victoria provides a good case study of competition in schools and how schools have marketed themselves since the 1860s (Hooper, 2011). Furthermore, as the second largest state in Australia, Victoria is considered a significant state and one of the leaders in Australian education, which performed well in both national and international tests (Barber, Whelan, & Clark, 2010; Branch, 2012) and further demonstrated good practices in school leadership (Barber et al., 2010). The questions guiding this research are: 1. To what extent are schools in Victoria market oriented? 2. What is the relationship between market orientation and school performance? In order to answer these questions, a valid and reliable instrument that measures market orientation in a school setting needed to be developed, which is one of the key aspects of this thesis. This thesis is significant in several ways. First, it adds to and expands the body of literature around market orientation research (detailed in Chapter two). The literature around market orientation research strongly suggests that a positive link exists between market orientation and organizational performance. Although this has been proven in a variety of settings involving different organization types, including: business, not for profit, health, higher education, and others), little research has been conducted in the school setting. The findings from this study will contribute in this area of market orientation and its suggested link with organizational performance. Furthermore, it will fill the gap in research of market orientation in school settings. 6

21 Second, this study is beneficial in understanding the Australian context. Over recent years, the competition among schools in Australia has increased. For example, between 2000 and 2010, the number of schools has overall decreased by 132, with the closure of 223 government schools, whilst an increase of 91 non-government schools occurred (ABS, 2011). The state of Victoria experienced the largest overall number of school decrease (73) over this period (ABS, 2011). This competition in the market has placed a demand on government schools to take action by adopting marketing principles in their practices (Gurr, 1996). As the first known empirical study in Australian schools, this thesis will shed light on the level of market orientation of schools in Victoria, and its implications. Third, this study presents the development and validation of a market orientation measurement tool, which is designed for use in a school setting. The literature shows that there has been development of market orientation instruments outside the school context. However, none has specifically been developed for schools. MKTOR (Narver & Slater, 1990) and MARKOR (Kohli & Jaworski, 1990) are the two most popular models of market orientation used in past research, either as the selected instrument or as the basis for an adapted tool. Despite being prevalent instruments in market orientation research, a number of studies, such as the ones conducted by Farrell and Oczkowski (1997) and Siguaw (1994) have found the constructs to be problematic and they raise issues regarding the structure and reliability of the constructs. More importantly, as context and type of organization are influencing moderators of market orientation, it has been suggested that the model of market orientation may be different for different settings. This brings the need for a market orientation model and a valid measurement instrument that is specific for the school setting. Finally, it is hoped that conducting this study and disseminating publications will increase schools awareness of the topic and importance of being market oriented. It has been suggested that the concepts of marketing is not as well received in a school setting, with evidence of teachers and, in some cases, 7

22 principals rejecting its usefulness in schools (Drysdale, 2002; Oplatka, 2002a). This thesis will benefit both the schools directly participating in the research and other schools in general through publications and conference presentations in national and international forums. This increase in awareness and understanding of the function and importance of market orientation will provide schools the opportunity to take action to assess their level of market orientation. The results of which may be used to support the school leadership team in shaping future strategic directions, with a goal to reach a sustainable competitive advantage in the market. INSTRUMENTS THAT MEASURE MARKET ORIENTATION A five-dimension market orientation model and a measurement instrument are investigated in this thesis, providing a model of market orientation applicable in schools. The five-dimension model in question has been derived originally from the Pulendran, Speed, and Widing (1998b) instrument that was aimed for use in the profit sector and has been revised and refined to be a better fit in the education sector. The Pulendran et al. (1998b) instrument was originally adapted from the MKTOR (Narver & Slater, 1990) construct and designed to assess four market orientation dimensions: customer orientation, competitor orientation, inter-functional coordination, and long-term profit. The market orientation model for schools investigated in this study further incorporates a fifth dimension, market intelligence, as proposed by Narver and Slater (1990) and Drysdale (2002). The five-dimension model is realized in the Market Orientation in Schools Questionnaire (MOSQ), investigated and validated in this thesis. METHODOLOGY This study extends the research of market orientation into schools, investigating whether schools in Victoria are market oriented and examining the link between a school s market orientation level with its performance. 8

23 Following a literature review, the MOSQ instrument that reliably measures market orientation and is suited for use in schools, was developed. A series of statistical analyses was employed to ensure the validity and reliability of the instrument, mainly factor analysis, Cronbach s alpha analysis, and structural equation modeling. In order to assess the market orientation level of schools in Victoria, the market orientation scoring table (Pulendran, Speed, & Widing, 1998a) was used to calculate average scores for the five dimensions of market orientation. A means analysis of the market orientation score was conducted. A regression analysis was performed to investigate the relationship between market orientation and school performance. As there are a variety of school performance measures that differs depending on the context of the school, in alignment with the school s aims and goals, student performance was used as the measure of school performance. The regression analysis aimed to reveal the extent of which the dimensions of market orientation impact on student performance. STRUCTURE OF THE THESIS This thesis is structured into six chapters, detailing the methodology, analyses, findings, and discussions of the study. Chapter one provides an overview of the study; outlining the background on why the study is a topic of interest, providing an explanation on the significance of the study and why it should be pursued, a brief summary of the literature, and the methodology employed in the study design. Chapter two is a literature review, presenting past research findings around the topic of market orientation, the relationship between market orientation and organizational performance, market orientation in different sector types, and instruments that measure market orientation. 9

24 Chapter three describes the methodology employed in this study. It details the hypotheses to be tested in the study. Chapter four describes the development of an instrument that measures market orientation in schools; showcasing the validation process. Through a series of statistical analyses, the validity and reliability of the tool is established. Chapter five presents the findings of the research and addresses the hypothesized theorems. Chapter six discusses the findings within the context of a broader literature and concludes the study. SUMMARY This chapter has provided an overview of the thesis. The background of the study, a brief summary of the current literature, and aims of the study has been outlined. A compelling reason for the significance of the study has been presented. 10

25 Chapter 2: Literature Review INTRODUCTION The previous chapter presented a background to the study and listed the two key research questions guiding the study. This chapter explores the notion of market orientation: how it is defined, how it is measured, and its relationship to organizational performance. In particular it focuses on measurement tools and instruments that have attempted to measure market orientation and performance. This review of the current literature is arranged in seven broad areas: the history of market orientation, market orientation and organizational performance, barriers to market orientation, market orientation model, instruments that measure market orientation, market orientation in schools, and presentation of a conceptual model of market orientation in the education sector. Market orientation was conceived as part of an evolutionary process, which began with the principles of marketing starting in the 50s. Figure 2.1 illustrates the evolution of marketing from the emergence of the marketing concept to the rise of market orientation, which will be further outlined in the next section. Figure 2.1. Evolution of marketing (Drysdale, 2002, p. 11) 11

26 Drysdale (2002) argues that marketing may be one of the most misinterpreted concepts in management. A large number of misinterpretations of marketing leans more towards the negative side, viewing marketing as a non-beneficial, offensive, and even a harmful concept. Brown (1995) suggested that the negative interpretations occurred as a result of offensive practices by marketing practitioners. Marketing may seem as a manipulative attempt to exploit people s vulnerabilities in order to get people to want what they do not need through exaggeration, overstating, misleading, over-promising what the product or service is (Star, 1989). M. J. Baker (1996) argued that the core of the problem is lack of knowledge and suggests that most people believe they know what marketing is, when they do not. McDonald (1989) further suggested that the most widespread mistake is that marketing is confused with sales and advertising. He illustrated that marketing is selling with knobs on (McDonald, 1989). When marketing is mistakenly confused as sales and advertising, the objective becomes skewed and, once again, leads to bad marketing practice. In another instance, McDonald and Payne (1996) finds that the biggest area of misunderstanding is in the subject of customer wants which is manipulating people and groups into wanting things they do not need. One of the reasons behind the confusion around marketing is the number of definitions on the topic, resulting in a lack of clarity on the agreed definition. Fifty definitions of marketing were reviewed by Crosier (1975), who then defined three key classifications: (1) marketing as a process or function, (2) marketing as a business philosophy, and (3) marketing as an orientation. Writers such as P. F. Anderson and Bennett (1988) and Kotler (1994) viewed marketing as a functional activity, while writers such as McDonald (1989), McKenna (1991), and Day (1992) supported the notion of marketing as a philosophy. 12

27 Although defining the term marketing is important, due to the changing nature of the market and the context in which marketing is applied to, no definition can be precise and all-inclusive. Gummesson (1997) states that definitions can only act as a guide and be used as vehicles of thought, as perspectives, or as indications of essential properties of the phenomena (Gummesson, 1997:270). This study acknowledges the multidimensionality of marketing, where marketing can be a function and a philosophy. Research around market orientation has been steadily increasing since the conceptualization of the market orientation constructs by Narver and Slater (1990) and Kohli and Jaworski (1990) in the 90s. The interest in market orientation originated from profit-oriented organizations, but then followed by not for profit, health, education, and others. This continual rise in popularity for research as well as interest from the industry was sparked by the suggestion that market orientation has a positive effect in the various organizational performance measures, such as profitability and satisfaction and research continues to provide evidence for this. In his work titled: What the hell is market oriented? Shapiro (1988) attempted to explain the definition of the market orientation concept, but more importantly, his work captured the differentiation between the concept of market oriented and marketing oriented. Marketing oriented was viewed as an organizational approach that put an emphasis on the importance of marketing activities and would typically be driven by the marketing department. On the other hand, Shapiro (1988) suggested that an organization which implemented a market oriented philosophy would put an emphasis on the market by placing its customers as the main priority in the running and decision making of the organization. In further elaboration, Shapiro (1988) described the three key aspects to being market oriented. First, information on important buying influences be shared and discussed during corporate functions. I.e. in order to be market oriented, a company must understand the people and their decision-making factors in purchasing the product or service. Second, that 13

28 strategic decisions need to be made inter-divisionally. Although the different focus points of each department will no doubt lead to conflicts in the decisionmaking process, a market oriented organization would have mechanisms on managing such discussions, recognizing the departmental differences, and coming to a conclusion. Third, organizational decisions are made collaboratively and implemented with commitment. Aside from the definition suggested by Shapiro (1988), a number of other definitions of market orientation have been suggested in an attempt to clarify the construct and provide a foundation for research, with some overlapping ideas. The works of Deshpande and Webster (1989) and Narver and Slater (1990) both viewed market orientation as an organizational culture, consisting of a set of shared values and beliefs in placing the customers first. The difference is that Narver and Slater (1990) extended this concept by including competitors and inter-functional coordination in the mix. Narver and Slater (1990) stated that an orientation towards the competition is just as critical as understanding the customers. They have also argued the importance of working together to achieving effective and successful coordination internally. Viewing market orientation as an implementation of the marketing concept, Kohli and Jaworski (1990) defined market orientation as a set of activities that focuses on three key functions: market intelligence gathering, market intelligence dissemination, and actions in response to this intelligence. Focusing on the behavioral aspects, Kohli and Jaworski (1990) differed in opinion, in that market orientation was not viewed as an organizational culture. Along similar lines, Caruana, Ramaseshan, and Ewing (1998) view market orientation as a set of activities that gather intelligence, disseminate effectively, and the creation of an organizational response, but further expanding by including potential future target markets in addition of current customers. As a response, Hunt and Morgan (1995) suggested a different view, that market orientation was supplements the marketing concept, instead of an implementation of it. They propose that the emphasis of market orientation is on customers and competitors, without mentioning the internal coordination aspect. 14

29 Kohli and Jaworski (1990) and Narver and Slater (1990) were the first researchers to popularize exploratory work on the topic of market orientation, testing the proposed constructs, and more significantly, examining the link between market orientation and business performance. Other writers who supported the notion that the customers should be the core purpose of a business, which was subsequently known as market orientation include Levitt (1960), Kotler (1977), Drucker (1954), McNamara (1972), Lawton and Parasuraman (1980), and Hooley, Lynch, and Shepherd (1990). Other views on marketing and market orientation are presented in the next section discussing the history and emergence of market orientation. THE HISTORY OF MARKET ORIENTATION To understand the concepts of marketing and market orientation today would be helpful to look at its history and how it has evolved. While it is possible to trace early marketing activities, it is generally acknowledged that modern marketing emerged in the 1950s as a marketing revolution (Brown, 1995). During this time, a number of writers agreed to a similar idea that the main purpose of any business was to reach customer satisfaction (Dalgic, 1998; Drucker, 1954; Felton, 1959; Keith, 1960; Levitt, 1960). This converged idea of taking the customer s point of view then became the foundation of the modern marketing concept, which puts customers at the top of the concept. Among different textbook writers, it has been commonly accepted that a few elements outline the start of the modern era in the 1950s: extent of commitment towards customer needs and the development of more sophisticated marketing tools (Drysdale, 2002). Drysdale (2002) describes the evolution of marketing as the movements or shifts in the focus of marketing, categorized into six eras over a period of five decades. Starting from the inception of the marketing concept (1950s), the era of marketing management (1960s), widening the definition of marketing, taking 15

30 into account all firm types (1970s), strategic marketing (1980s), relationship marketing (1990s), and market orientation (1990s). The term the marketing concept was made popular by Drucker (1954), who succeeded in giving a high priority to marketing in an organization by taking the customer s point of view and placing the customer in the center of the organization s attention and efforts. Supported by other writers such as Keith (1960), Dalgic (1998), Felton (1959), Levitt (1960), and McKitterick (1957), the marketing concept emphasized the view that the purpose of a business is to satisfy its customers. Marketing is not only much broader than selling; it is not a specialised activity at all. It is the whole business seen from the customer s point of view. Concern and responsibility for marketing must therefore permeate all areas of the enterprise. (Drucker, 1954:35-36) The marketing concept comprised of three elements: awareness of customer s needs, integration of activities around basic customer ordination, and regarding profit as the measure of success in marketing activities (Hollander, 1986). The notion of marketing management emerged in the late 50s through to the 60s, replacing sales management. This era emphasized the concept of marketing as a managerial role and concreted marketing as a key function of an organization, detailed in numerous marketing textbooks, such as Kotler (1984), Alderson (1957), K. R. Davis (1961), Boyd and Davis (1971), Howard (1957), Kotler and Keller (2015), and McCarthy (1993). Built on the notion of exchange, marketing management to satisfy the parties involved. A number of core modern marketing principles emerged from this era, including: the 4Ps of marketing product, promotion, price, place (McCarthy, 1960), the marketing mix (Borden, 1984), the product life cycle (Kotler, 1965), and market segmentation (Coleman, 1968). Although the term market oriented was not used until much later, its principles can be traced back to as early as the 50s, through the works of Drucker (1954) 16

31 and McKitterick (1957). Drucker (1954) argued that the key reason for an organization s existence is its customers, while McKitterick (1957) suggested a philosophy that emphasized on understanding and meeting the needs of the customers. Levitt (1960) supported Drucker (1954) view of the marketing concept and described it as a coordinated marketing effort that is customer focused and aimed at profitability. Levitt (1960) then made this concept popular through his research titled Marketing Myopia. Furthermore, Levitt (1977) argued that to be successful, a business would need to be customer oriented, rather than product oriented. Kotler (1977) argued that more was needed for a business to become market oriented. He suggested that apart from an emphasis on the customers, an organization also needed sufficient market information and efficiency in running the business. Shapiro (1988) presented the difference between being market oriented, marketing oriented, and customer oriented. The terms were closely related, but the concept of market orientation was more comprehensive (Shapiro, 1988), suggesting that having a marketing department is not enough and does not necessarily make an organization market oriented. A whole organization approach was needed to ensure market orientation, including a review of the competition and changing the workflow of internal processes and structures. The mid 1980 s brought a revamped emphasis on the marketing concept and was also when the term market orientation surfaced. Through the combined contribution of marketing practitioners and academics, market orientation was viewed as the implementation of the marketing concept, encapsulating a focus on the customers, competition, long-term planning, as well as growth and survival. This change was more evolutionary rather than revolutionary. It was in the 1990s that market orientation gained many interests, due to the emergence of a link between market orientation and organizational 17

32 performance. Kohli and Jaworski (1990) and Narver and Slater (1990) then supported this link with empirical studies. The evolution of marketing is presented in Table 2.1, which outlines the different stages and key writers in each era (Drysdale, 2002). Table 2.1. The evolution of modern marketing (Drysdale, 2002, p. 22) The Evolution of Modern Marketing Era Stage Key features Writers 1950s 1960s 1970s 1980s 1990s 1990s The marketing concept Marketing management Broadening the definition of marketing Strategic marketing Relationship Marketing Market Orientation The main purpose of business was to create a satisfied customer and to see things from the customer s point of view. Marketing was seen as a decision-making or problem-solving process that borrowed analytical frameworks from other disciplines. Marketing is seen as an all-pervasive activity that could be applied to all organisations and the beginning of two new strands of marketing: non-profit and service organisations. The planned and systematic attempt to match the distinctive competencies of the organisation with the external environment Marketing is seen as an interactive process where an organisation is engaged in proactively creating, developing and maintaining committed, interactive and profitable exchanges with selected customers (partners) overtime and so is engaged in relationship marketing. Marketing is more than customer orientation and includes the external environment. The organisation must consider coordination of internal decision making structures, the competitive environment, long term survival and growth. Drucker (1954); Felton (1959); Keith (1960); Levitt (1960), McKitterick (1957). Alderson (1957); Davis (1961); Howard (1957); Kotler (1967); McCarthy (1960). Ames (1970), Arndt (1981); Hunt (1976); Hunt (1991); Kotler (1972); Kotler and Levy (1969); Kotler and Zaltman (1971); Robin (1977). Aaker (1992); Abell (1980); Baker (1992); Brown (1990); Day (1984); Day (1986); Fifield (1993); Foxal (1984); Murray and O Driscoll (1996); Tack (1987). Baker (1996); Christopher el al. (1991); Gordon (1998); Gummesson (1997); Grönroos (1994); Harker (1999); Kotler (1992); Payne (1993), Morgan (1994); Webster (1992); Wensley (1994). Deshpande (1996); Jaworski & Kohli (1993); Kohli & Jaworski (1990,); Liu (1996); Narver & Slater (1990); Shapiro, B. (1988); Slater and Narver (1994); Wrenn (1997). Through the evolution of marketing, writers have suggested that more is required to be market oriented than just having a marketing department. An 18

33 organization needs to employ a philosophy that puts customers as the key focus, but also to for the whole organization to embrace and implement this view. MARKET ORIENTATION AND ORGANIZATIONAL PERFORMANCE As part of a qualitative research, Drysdale (2002) conducted a comprehensive review of studies on market orientation. The study reviewed forty-nine papers from around the world and created two geographical categories: United States of America (18 studies) and other parts of the world (31 studies). A majority of the reviewed studies have provided evidence of a positive market orientationperformance link, with about thirty percent of the studies exposing mixed results. Diamantopoulos and Hart (1993), Au and Tse (1995), and Sargeant and Mohamad (1999) have conducted studies, which have failed to find the connection between market orientation and organizational performance. A larger portion of the market orientation studies has been conducted in the USA. This has initially led to suspicions whether or not market orientation is a phenomenon that is local to the US context only (Chan Hung Ngai & Ellis, 1998). Other studies in Britain (Greenley, 1995), Indonesia (Soehadi, Hart, & Tagg, 2001), New Zealand (Gray & Matear, 1998), seemed to support this notion. However writers such as Homburg and Pflesser (2000), Langerak, Hultink, and Robben (2004), Farrell (2000) have uncovered strong positive results, complemented with the thirty-one studies outside the United States of America reviewed by Drysdale (2002). This has provided evidence that market orientation is a global phenomenon and not unique to the USA context. For the rest of this section, this thesis will build on Drysdale s (2002) research, highlighting significant findings and using more recent studies to enhance this review. A review of current literature shows that the concept of market orientation is still very much a significant topic, with writers such as Ellis (2006), Hammond, 19

34 Webster, and Harmon (2009), R. L. Webster et al. (2014), Jangl (2015), Lin, Liu, Chuang, and Chang (2015), Mutlu and Surer (2015), Bueno, John, Lyra, and Lenzi (2016), Laukkanen, Tuominen, Reijonen, and Hirvonen (2016), and many others continuing to expand on the topic. The conceptual model of market orientation initially developed in the profit sector, which was lead with the desire to achieve high performance in the market compared to the competition. In order to consistently achieve above average market performance, an organization must possess superior skills in understanding and satisfying customers (Lindgreen, 2010) in order to create a sustainable competitive advantage (SCA) (Aaker, 1989, 2013; Day, 1999; Narver & Slater, 1990; Porter, 1980). Having sustainable competitive advantage means that the customers must be able to perceive a greater value in the product/offering compared to other products/offerings, and that this point of view can be sustained through time. This organizational desire will appear in the form of behaviors and should ultimately evolve into a culture within and unique to the organization, which is market orientation. Drysdale (1995), Kohli and Jaworski (1990), and Slater and Narver (1999) supported the notion of market orientation as a continuum. Slater and Narver (1999) suggested that it is best to view an organization s ability to understand customers needs as strategic points on a three-point continuum towards becoming market oriented: low (product orientation), middle (customer led), and high (market oriented). Kohli and Jaworski (1990) shared the view that market orientation is conceptualized as one of the degrees in a continuum, instead of simply being present or not. The majority of research and literature around market orientation can be categorized in two points of views (Homburg & Pflesser, 2000). The first view was expressed by writers such as F. E. Webster, Jr (1992), and Lichtenthal and Wilson (1992), where market orientation as a business philosophy, which represents the marketing concept. The second view interprets market 20

35 orientation as the implementation of the marketing concept (Kohli & Jaworski, 1990; Narver & Slater, 1990). As an increasingly popular area of research, market orientation has received growing attention since the 90s by writers such as Narver and Slater (1990), Kohli and Jaworski (1990), Ruekert (1992), Hult and Ketchen (2001), Drysdale (2003), and Hemsley-Brown and Oplatka (2010). The popularity rise of market orientation is partly due to the idea that market orientation is the implementation of the marketing concept (Kohli & Jaworski, 1990), which theoretically will lean towards a successful business strategy (Ngansathil, 2001). Studies have also shown that market orientation may assist in building sustainable competitive advantage (SCA), resulting in increased organizational performance (Kohli & Jaworski, 1990; V. Kumar, Jones, Venkatesan, & Leone, 2011; Langerak, 2003; Narver & Slater, 1990). Deshpande (1999) noted that literature on market orientation uses a few terms interchangeably, such as market oriented, customer focused, market driven, and customer centric. However, it is important to distinguish between market orientation and marketing orientation. The two concepts are separate in a couple of ways. First, different from marketing orientation, the idea of market orientation is not only the concern of the marketing department, but instead an integral part of the whole organization, with the aim of creating superior value for customers (Kohli & Jaworski, 1990). Secondly, a market oriented organization does not consider that the most important part of the organization is the marketing department (Day, 1990; Shapiro, 1988), but instead, hold the view that tight cooperation is needed between all sections of the organization to achieve superior value (Narver & Slater, 1990). Research around market orientation has generally been focused on: constructs of market orientation, consequences of market orientation, antecedents of market orientation, and moderator effect on the relationship between market orientation and performance (Ngansathil, 2001). 21

36 The literature also presented a broader area of research around market orientation, such the ones by Urde, Baumgarth, and Merrilees (2013) and Laukkanen et al. (2016), which links the market orientation concept with brand orientation and other marketing concepts. These topics, although are connected, are beyond the scope of this study. Since Narver and Slater (1990) and Kohli and Jaworski (1990) presented evidence of a positive link between market orientation with profitability, research on market orientation became an increasingly popular research agenda, followed by studies by Greenley (1995), Farrell and Oczkowski (1997), Homburg and Pflesser (2000), Shoham and Rose (2001), and is still very relevant in the past decade with writers such as Kara, Spillan, and DeShields (2005), Oplatka and Hemsley-Brown (2012), Rojas-Méndez and Rod (2013), Chang et al. (2014), Jangl (2015), Frösén, Luoma, Jaakkola, Tikkanen, and Aspara (2016), expanding on the topic. Organizational performance is a point of discussion that is contextual in nature, in that, how it is defined is very much tied to the local context and will most likely vary among different organizations, most likely tied to the aims and goals of the organization. Furthermore, the organizational goals may change along different time points during the life course of a firm. The literature, unsurprisingly, has recorded a variety of different performance measures between the different studies on market orientation, covering return on asset, sales growth, success of new product, financial performance, market share, salesperson, commitment, customer retention, customer satisfaction, innovation, return on investment, and ability to attract funding. Table 2.2 presents a variety of performance measures used in different studies. A popular element that arises from the different market orientation studies is the general acceptance to use subjective measures, evident from the large proportion of the studies that use them. Writers such as Deng and Dart (1994), Kohli et al. (1993), Narver and Slater (1990), Ruekert (1992), Greenley (1995), and Caruana, Pitt, and Berthon (1995) have used subjective measures in their 22

37 studies, supported by the notion that similar results are obtained from both subjective and objective measures (Dess & Robinson, 1984; Pearce & Robbins, 1987). This notion suggests that a subjective measure of perceived organizational innovation does indeed reflect the actual objective measure of organizational innovation. Table 2.2. Measures of performance (Drysdale, 2002, p.64) Studies by Bozic (2006), Ferraresi, Quandt, Santos, and Frega (2012), Ozkaya, Droge, Hult, Calantone, and Ozkaya (2015), Chang et al. (2014) and Bueno et al. (2016) also supports the notion that enhancing market orientation levels in an organization will result in innovation, which is considered as breaking away from conventional methods and can refer to products as well as processes. In his research, Bueno et al. (2016) listed twenty studies exploring the relationship between market orientation and firm performance (see Table 2.3). Overall, the list showed that there is a positive link between market orientation and performance, with four studies demonstrating strong positive relationship 23

38 and only two studies showing weak relationship, which appears to be mere exceptions to the norm (Bueno et al., 2016). Table 2.3. Market orientation and firm performance (Bueno et al., 2016, p. 157) The culmination of previous research on market orientation has converged around the notion that market orientation is positively related to profitability, customer service retention, sales growth, new product success, overall business performance and employee commitment, innovation-marketing fit, product advantage and inter-functional teamwork, project impact performance, and other measures of organizational performance. Furthermore, strong positive links have been reported by writers such as Ruekert (1992), Siguaw et al. (1994), Pelham (2000), Lindgreen (2010), and others. Meta analyses on market orientation This section reviews the meta-analyses available on market orientation research. In conducting cross-country comparison studies, scholars have agreed to the importance of a meta-analysis (Deshpande, 1999). Three meta-analyses have 24

39 been identified researching the relationship between market orientation and various measures of performance. A meta-analysis was conducted by Rodriguez Cano et al. (2004), investigating the relationship between market orientation and business performance across five different continents. Most international studies of market orientation are conducted in developed countries, leaving out the developing and underdeveloped countries, and are further hurdled by differences in the methodologies used (Mavondo, 1999; Shoham & Rose, 2001). The overall view of market orientation research is: although a few studies have reported nonsignificant relationships (Greenley, 1995; Grewal & Tansuhaj, 2001; Han, Kim, & Srivastava, 1998; Siguaw & Honeycutt, 1995), the evidence of positive relationship between market orientation and business performance is overwhelming (Rodriguez Cano et al., 2004). Rodriguez Cano et al. (2004) conducted a meta-analysis of 53 empirical studies, which represents 12,043 respondents from twenty-three countries in five continents, which comprise of: Australia, Canada, China, Denmark, Germany, Ghana, Hong Kong, Hungary, India, Indonesia, Israel, Malta, Netherlands, Norway, Poland, Saudi Arabia, Slovenia, Spain, Sweden, Thailand, United Kingdom, United States, and Zimbabwe. Investigation was conducted through a series of statistical analyses developed by Lipsey and Wilson (2001) and the means and confidence intervals calculated using sample size and effect size. The first finding was around the relationship between the level of market orientation with business performance. Analyzing the Pearson s correlation coefficient revealed that the relationship between market orientation and business performance was 0.35; and that the degree of market orientation explains about 12% of the variance in business performance. The wide scope of this meta-analysis of published studies suggested that the finding is more conclusive, as it would take 1079 unpublished studies reporting no relationship results in order to invalidate the relationship between market orientation and business performance. 25

40 The second finding was around the impact of market orientation for organizations with different objectives, i.e. profit versus not-for-profit organizations. The results revealed that the relationship between market orientation and business performance was positive regardless of whether the organization was for-profit or not-for-profit; thus being market oriented is beneficial for all types organizations. Furthermore, the findings revealed at the relationship between market orientation and business performance was in fact stronger for the not-for-profit organizations (r = 0.55, CI.5-.61) then the profit oriented organizations (r= 0.31, CI ). Therefore, contrary to common belief, it is more beneficial for not-for-profit organizations to be market-oriented rather than profit-oriented organizations. This supports the previous study conducted by Alderson (1957), which suggested that competition for resources is critical for not-for-profit organizations in order to survive. Another finding was around the difference between service oriented and manufacturing oriented organizations. The results suggested that when the market orientation level is equal between the two types of organizations, the level of business performance would be higher for service oriented organizations rather than manufacturing oriented organizations. This finding is in line with the previous study by Kotler and Andreasen (1996), which stated that service oriented organizations must maintain a close relationship with their customers, thus the marketing concept is a critical element of success. Another meta-analysis was conducted by Ellis (2006) on 56 studies across 20 countries, investigating the effect of market orientation on firm performance. Although the research on market orientation is cumulative in nature, the culmination of past literature reviews fail to provide a definitive answer on whether market orientation has a positive impact on organizational performance (Chan Hung Ngai & Ellis, 1998; Langerak, 2003; Shoham & Rose, 2001). The reason for this is partly that research on market orientation has been narrative, providing an eagle s eye view of the situation. Although a good number of studies have suggested a positive relationship between market orientation and business performance, as discussed in previous sections, the evidence was not 26

41 completely conclusive, complicated by a number of studies reporting weak or non-significant results, such as the ones by Greenley (1995), Gray and Matear (1998), F. Harris and de Chernatony (2001), and Langerak (2003). This discrepancy has led researchers to suggest that there are underlying factors that act as moderators of the relationship. Chan Hung Ngai and Ellis (1998) initially speculated that findings around market orientation and its link with performance had a US bias i.e. research that supported this notion was based in the United States of America, but not demonstrated outside the US context. However, follow up studies around the world by writers such as Homburg and Pflesser (2000) in Germany, Langerak et al. (2004) in Netherlands, Farrell (2000) in Australia, and Lado, Maydeu- Olivares, and Rivera (1998) in Europe, have provided evidence that the market orientation-organizational performance link was not uniquely an American concept. In conducting the meta-analysis, Ellis (2006) used two eligibility criteria in selecting studies for inclusion, which aimed to target studies that used a consistent definition of market orientation and investigate the link with business performance. First, the studies needed to be using a measurement instrument that was inspired by the MKTOR (Narver & Slater, 1990) or MARKOR (Kohli & Jaworski, 1990) models. Second, in order to maintain a consistent definition of organizational performance as business performance, studies that investigated non-profit organizations were excluded. One hundred sixty eligible studies have been identified and included in the meta analysis through scanning published empirical studies between the years 1990 and 2004 (Ellis, 2006). The most widely used measurement for correlation between market orientation and organizational performance was Pearson s correlation coefficient r (Ellis, 2006). In the analysis, Ellis (2006) found that the studies either investigated the link between organizational performance with the components of market orientation (N=6), e.g. customer orientation and competitor orientation, or between the overall construct of market orientation with a variety of 27

42 organizational performance variables (N=38). With the first situation, an average of the market orientation components was calculated to provide an overall market orientation score, while with the second situation, an average of the performance variables was calculated to provide an overall performance measure. In correcting for sampling errors, Ellis (2006) followed the suggested method by Hunter and Schmidt (2004) and weighted the correlation coefficients by the sample size of the study. Ellis (2006) found the average reliability was for the MARKOR Kohli and Jaworski (1990) instrument and for the MKTOR Narver and Slater (1990) instrument. Observing the correlations for the different regions in the study, Ellis (2006) found that market orientation was associated with less than 7 percent of variation in organizational performance. The mean effect size of the 58 correlations is 0.26 (CI = ), as presented in Table 2.4. Ellis (2006) further found differences among the regions with USA (r=0.36, CI = ) showing significantly stronger effect sizes than other regions. Q- statistics were significant for all regions, including the overall sample, except Australasia. Ellis (2006) further investigated the presence of moderating variables appearing from measurement factors (such as the measurement scale used, subjective versus objective approach to performance assessment, and scope of definition on performance) and contextual factors (such as the cultural setting of the study, size of organization s target market, and the extent of which the market was developed). In line with a study by Farrell and Oczkowski (1997), Ellis (2006) also found that market orientation studies using the MARKOR (Kohli & Jaworski, 1990) scale resulted in significantly higher effect sizes when compared to studies using the MKTOR scale (Narver & Slater, 1990). In regards to subjective versus objective measures of market orientation and performance, it was found that studies with subjective measures resulted in significantly stronger correlation compared to those using objective measures. This reinforces the notion that different methods of assessment results in different findings (L. C. Harris, 2001). 28

43 Interestingly, no significant difference was found between business-level versus market-specific performance. Table 2.4. Summary of the meta-analysis results (Ellis, 2006, p. 1096) Investigation into the contextual moderators showed that they were significant moderators of market orientation (Ellis, 2006). In regards to cultural distance, studies conducted in the western hemisphere were found to produce significantly higher effect sizes than those conducted in the eastern hemisphere. Furthermore, when the regions were separated based on their cultural proximity to the United States, studies conducted in countries with similar cultural context with the United States produced higher effect sizes compared to countries that are culturally distant. In regards to economic development, it was found that mature markets showed a significantly stronger link between market orientation and organizational performance compared to developing markets. More importantly, in regards to market size, the analysis showed that large markets had higher effect sizes than small markets. The difference in effect size for market size was the largest among the other elements, suggesting that market size is a prominent moderator (Ellis, 2006). Ellis (2006) concluded two important points on market orientation study. Firstly, verifying the link between market orientation and organizational 29

44 performance. Second, that there were methodological and contextual factors that moderate the level of market orientation. Chang et al. (2014) conducted a meta-analysis to compare manufacturing and service firms in regards to the effects of market orientation on firm performance, using radical and incremental innovation as mediating factors. Apart from supporting the notion that market orientation is applicable to organizations focusing on both goods and services, the study also revealed the extent of the effect of market orientation comparing manufacturing organizations based on goods with organizations based on services. It has been suggested by organizational learning theory (OLT) that one of the significant mediators of the effect of market orientation on organizational performance was product innovation (Argyris & Schön, 1978; W. E. Baker & Sinkula, 2007; March, 1991). A market-oriented organization would actively engage in innovation in order to boost performance measures, such as sales and market share (W. E. Baker & Sinkula, 2007; Hortinha, Lages, & Filipe Lages, 2011). Organizational innovations can come in the form of radical change or incremental developments (W. E. Baker & Sinkula, 2007). Chang et al. (2014) looks at both innovation paths and their contributions towards market orientation. The meta-analysis study (Chang et al., 2014) revealed that market orientation increases both radical and incremental innovations, which indicated that market oriented organizations take a proactive approach to lead the market, rather than a reactive approach towards an ongoing market movement (Narver, Slater, & MacLachlan, 2004). The effect of market orientation on radical innovation was equal on both goods and service based organizations, while the effect of market orientation on incremental innovation was stronger for manufacturing based organizations. Chang et al. (2014) suggested that service based firms regularly interact with their customers, which in turn provided a consistent flow of insights needed, hence market orientation plays a smaller role for service based firms. 30

45 BARRIERS AND RESISTANCE TO MARKET ORIENTATION Past studies (Deng & Dart, 1994; Kohli & Jaworski, 1990; Kohli et al., 1993; Narver & Slater, 1990; Slater & Narver, 1994) have placed a focus on the definition and conceptualization of market orientation. However, another body of research have suggested that marketing practitioners may experience difficulties in becoming market orientated, followed by problems in maintaining the levels of market orientation (Gummesson, 1994; Payne, 1988; Richard Whittington, 1992; Romer & van Doren, 1993). Resistance to marketing has been a common finding in non-profit organizations and service organizations, including those in the education and health services (Drysdale, 2002). Studies by (L. C. Harris, 1999; Hooley et al., 1990; Liu, 1996; Ruekert, 1992) have shown that it can be very slow for organizations to become market oriented in the practical sense, possibly affected by internal and/or external barriers. Narver and Slater (1990) identified organizational culture as a major barrier, suggesting that the staffs attitudes of rejection being the main obstacle. Furthermore, Davies (1997) suggests market structure as a major external factor affecting adoption of market orientation. In other words, the market demands and trends dictate a school s perception of needing to be market oriented. For example, it may be the case that when a popular school has more students applying then the number of available places, the school sees very little need to be market oriented. Internal barriers relate to the two major categories of people and systems (L. C. Harris, 2002). Staff attitudes play a major role in adopting a new school culture. Negative attitudes towards marketing and lack of commitment are examples of barriers of schools in adopting market orientation. Confirming the views of Star (1989) and Brown (1995), Drysdale s (2002) study found that most teachers expressed a negative perception towards marketing, most likely due to their misconception of marketing and interpreting marketing as commercialization and the McDonaldization of education. 31

46 From a systems point of view, process factors and organizational structure have been identified as elements that affect the implementation of market orientation. Pulendran et al. (1998a) argued that process factors such as: reward systems, interdepartmental conflict, and connectedness are tied to the built in culture of an organization. I.e. a reward system to boost the implementation of market orientation would need a prerequisite of an existing appropriate culture. Organizational structure impacts the implementation of market orientation by affecting the distribution of power and where in the authority chain decisions are made. A highly centralized structure, for example, tends to employ a single point of authority and may often be characterized by higher levels of uncertainty and issues with communication flow, leading to slower decision-making (Jaworski & Kohli, 1993; Pulendran et al., 1998a). In summary, the literature of barriers to market orientation has exposed a variety of misconceptions, behavioral, structural, and system-related issues. The attention of this review now focuses on research into the constructs of market orientation. MARKET ORIENTATION MODEL Central to the strategic thinking in marketing and market orientation is the notion of having, building, and maintaining performance in order to achieve superior competitive advantage and is described as a better management method by many researchers (Tomášková, 2009). Aside from the definition of market orientation, past studies have also investigated the impact of market orientation on organizational performance, means of measuring market orientation, and implementation of market orientation. Obtaining superior competitive advantage through focus on customers and competitors It has become conventional wisdom that in order for organizations to succeed they need to create superior customer value. Customer value is achieved when a 32

47 match is created between the customer s expectation with the product or service offered. Customer value is not directly tied to the price of a product; i.e. an inexpensive product does not automatically translate into high customer value. But instead, the price needs to be in line with what the customer expected and is willing to pay for in return for the product or service. Therefore, a position of superior customer value is created when an organizations product or service offering create more value for the customer than it s competitors (Slater & Narver, 2000). An organization s capacity in creating customer value is tied to its ability to continuously generate intelligence about their customers needs, as well as flexibility to change and adapt in order to meet those needs. This adaptability in response to an ever-changing environment is known as the learning organization capability (Slater & Narver, 2000). Day and Wensley (1988) proposed a form of measurement of superior competitive advantage (SCA) through a focus on customer and competitor orientations. Day and Wensley (1988) advised that in order to achieve this, it is necessary to first grasp the current advantages and deficiencies of the running organization. Competitive advantage can be understood by viewing the elements that affect it in a sequential process, as presented in Figure 2.2. Sources of advantage describe an organization s resource inventory of skills (human resources) and other resources (facility, location, distribution coverage, technology, brand, etc.) that represents the organization s potential ability to leapfrog its competitors. Positional advantage is obtained as a result of leveraging an organization s source of advantage. In other words: by leveraging the link with suppliers, location, logistic distribution, and others, an organization is able to obtain the lowest delivered cost positions, through employing an efficient workflow. 33

48 Figure 2.2. Elements of competitive advantage (Day and Wensley, 1988, p. 3) Performance outcomes are contextual to each organization, which is usually aligned with their organizational vision, aim, and goals. Market share and profit are the most popular indicators of marketing and competitive advantage (Day & Wensley, 1988). The issue was that sources of advantage were not automatically converted into positional advantage, and so it became critical to understand the intermediate stage of positional advantages. Figure 2.3 presents a framework to assess the competition as well as customers in order to understand the potential advantage. In summary, Day and Wensley (1988) suggested that timely and actionable outcomes are required from an assessment of both current and potential advantages of the organization in order to obtain effective competitive strategies. Furthermore, the evidence of advantages must satisfy three requirements: (1) adequate information and understanding of the sources of advantage, including their potential to create superior customer value, lowest delivered cost, and superior performance. (2) A balance between customer-focused and competitorfocused methods needs to be maintained, in order to minimize the risk of myopia in decision-making. (3) The diagnosis results need to be credible and accurate without simply confirming the available conventional wisdom. 34

49 Figure 2.3. A framework for assessing advantage (Day and Wensley, 1988, p. 8) The MKTOR construct Based on the assertion that increasing an organization s market orientation will improve its performance, Narver and Slater (1990) developed the MKTOR construct to understand and measure market orientation. The value of market orientation is its usefulness in creating a sustainable competitive advantage (SCA) (Day, 1999), which will lead to consistent abovenormal performance (Aaker, 1989) i.e. creating superior value for customers. Customer superior value is the customer s perception that the value of an organization s offering/product/service is of higher value than the expected cost (Zeithaml, 1988). Thus, increasing the value for customers can be accomplished either by decreasing cost, increasing product benefit, or a combination of both. As argued by Deshpande and Webster (1989), market orientation is the culture that generates superior value for customers by effectively creating the required behaviors and organizational culture. 35

50 Through a review of conceptual literature around market orientation and sustainable competitive advantage (SCA), Narver and Slater (1990) suggested a concept of market orientation that focuses on understanding the market through three lenses: customer orientation, competitor orientation, and inter-functional coordination, including two decision criteria: long-term focus and profitability (see Figure 2.4). Figure 2.4. Market orientation concept (Narver and Slater, 1990, p. 23) Customer orientation is the ability to continuously create superior value for customers through sufficient understanding of the target buyers and is considered the core focus of market orientation. To be customer oriented means to find out the current and future needs of the customer and translate this into creating a value added benefit, by either increasing benefits to customers or by reducing cost (Narver & Slater, 1990). Day and Wensley (1988) suggested that organizations need to understand the customer s entire value chain, both in the current stage as well as an understanding of how this evolves in the future. 36

51 Narver and Slater (1990) argued that the second element of market orientation, which is equally as important as customer orientation, is competitor orientation. They suggested that organizations should be able to identify and understand the strengths and weaknesses of the competition, in both their short-term and longterm agendas, including identifying future competitors. Inter-functional coordination was the third and final suggested component of market orientation, although equal in importance to the first two. Narver and Slater (1990) proposed that good inter-functional coordination is apparent when all parts of an organization take on the role of ensuring customer satisfaction. This is in line with the notion that market orientation is not the same with marketing orientation (Shapiro, 1988). I.e. market orientation suggests that all departments are equally important, whereas marketing orientation places a higher importance in the marketing department. The MARKOR construct Kohli and Jaworski (1990) developed the MARKOR construct as a measure of market orientation which focuses on the generation, dissemination, and action on market intelligence. Through a review of the literature combined with field interviews, Kohli and Jaworski (1990) defined market orientation as: An organization-wide generation of market intelligence pertaining to current and future customer needs, dissemination of the intelligence across departments, and organization-wide responsiveness to it. (Kohli & Jaworski, 1990:6) Kohli and Jaworski (1990) suggested that understanding the market orientation level of an organization requires an understanding of four factors: (1) antecedent conditions of market orientation, which may foster or discourage the presence of market orientation, (2) market orientation construct, (3) the consequences of 37

52 market orientation, and (4) other moderating variables that impact on business performance. This framework is presented in Figure 2.5. Figure 2.5. Antecedents and consequences of a market orientation (Kohli and Jaworski, 1990, p. 7) Senior management factors, interdepartmental dynamics, and organizational systems were the three elements that either enhance or impede the implementation of market orientation describing the categories of: individual, intergroup, and organization-wide factors. Overall, Kohli and Jaworski (1990) suggested that market orientation is related to business performance, however, in some situations it may not be critical. Careful consideration needed to be placed in balancing between the amounts of resources needed to implement a market oriented culture with the benefits that arise as a result. In other words, there may be some instances where becoming market oriented would take more resources and increase the cost of an organization to the extent that outweighs the benefits achieved. The MKTOR construct by Narver and Slater (1990) and MARKOR construct by Kohli and Jaworski (1990) both perceived organizational profit as part of market orientation, but each approach contain a different view of the role of profit in market orientation. The MARKOR (Kohli & Jaworski, 1990) construct suggested 38

53 that profitability is a consequence of being market oriented, whereas the MKTOR (Narver & Slater, 1990) construct maintained the notion that profitability is a business objective; thus profitability and long-term growth was excluded from the main components of the market orientation model. Both constructs view market orientation as a continuum and not a dichotomous value. Furthermore, both focus on obtaining information about customers and competitors in order to achieve superior competitive advantage, with the caveat that the MKTOR construct seemed to place a heavier emphasis on customers compared to competitors. An important difference should be noted between the two constructs. Market orientation was described by Narver and Slater (1990) as organizational culture leading to behaviors with the aim of profit, while Kohli and Jaworski (1990) describes market orientation as the implementation of the marketing concept and not an aspect of organizational culture (Hurley & Hult, 1998). INSTRUMENTS THAT MEASURE MARKET ORIENTATION Since the inception of the market orientation concept, researchers have been intrigued by what effects it may bring to organizations and also how to measure market orientation. Approaches towards measuring market orientation include: the decision making approach (Shapiro, 1973, 1988) the market intelligence perspective (Kohli & Jaworski, 1990), the culturally based behavioral perspective (Narver & Slater, 1990), the strategic perspective (Ruekert, 1992), and the customer perspective (Deshpande, 1999; Deshpande, Farley, & Webster, 1993). Among these approaches, two of the more popular and widely used concepts were the culturally based behavioral perspective by Narver and Slater (1990) with the MKTOR construct, and the market intelligence perspective by Kohli and Jaworski (1990) with the MARKOR construct. 39

54 The previous section discussed the market orientation constructs within the models. This section presents the empirical results from use of the instruments. MKTOR In developing the MKTOR instrument, Narver and Slater (1990) hypothesized that the market orientation construct consisted of three behavioral components and two decision criteria. This suggestion is consistent with a common thread in previous literature (Aaker, 1989; J. C. Anderson & Gerbing, 1991; Kotler, 1984; Levitt, 1960; Porter, 1980). The behavioral components consisted of: customer orientation, competitor orientation, and inter-functional coordination; while the two decision criteria were: long term focus and profitability. Narver and Slater (1990) categorized the three behavioral components into two functions that encompass information gathering, information distribution and coordinated effort in creating value for customers. The first two components customer orientation and competitor orientation functioned as data gathering modules and includes all activities related to attaining information about the customers/clients as well as competitors targeting the same market. The third component, inter-functional coordination, was a function that took the information, analyzed and acted upon the information in order to create superior value. As discussed in the previous section market orientation was hypothesized as a one-dimension construct, illustrated in Figure 2.4. Face validity was established by submitting multiple items that characterized the market orientation model to a panel of academicians, who were recognized authorities on strategic marketing. The items were then rated for consistency with market orientation and additional items were recommended. High rated items were then submitted to a second-round panel. Out of the 440 questionnaires sent, 371 usable questionnaires were returned, providing an 84% response rate. The responses came from a total of 113 strategic business units (SBU), consisting of 36 commodity businesses, 23 40

55 specialty product businesses, 51 distribution businesses, and 3 export businesses. In analysis of reliability, the scale reliability value (coefficient α) was used. Nunnally (1978) stated that the coefficient α needed to be higher than 0.7 in order for the construct to be a reliable one. In the analysis for reliability, the market orientation model has been found to be reliable to a certain degree. The scale reliability value (coefficient α) exceeds the recommended threshold of 0.7 for the three components: customer orientation, competitor orientation, and inter-functional coordination, as presented in Table 2.5. Construct validity was presented through a correlation and factor analysis, with reported Cronbach s alpha value above Present strong correlations among the three market orientation components indicate that the components are converging towards the common construct of market orientation. Narver and Slater (1990) reported that all correlations are significant (p < 0.001) and all correlations exceed The Cronbach s alpha (0.8810) of the combined market orientation construct is high enough to suggest convergent validity. Discriminant validity was assessed by comparing the correlation between the market orientation components with the human resource management policy scale. Both the human resource and management scale and the inter-functional coordination scale are categorized as people management policies. Thus the human resource management policy scale was included to assess and confirm whether the three elements: customer orientation, competitor orientation, and inter-functional coordination were indeed measuring a latent construct of market orientation, or another generic construct describing good management. The results confirmed that correlations between the human resource management policy scale and the inter-functional coordination scale was significantly less than correlations between inter-functional coordination scale with the other two market orientation scales, thus discriminant validity was supported. 41

56 Table 2.5. Reliability analysis MKTOR (Narver & Slater, 1990, p. 24) In testing the hypothesis that market orientation and performance are associated positively, a regression analysis was conducted. The findings supported the notion that market orientation is an important determinant of profitability for both the commodity and non-commodity business, with a slight caveat for the non-commodity business. In this area, positive market orientation-profitability relationship occurs only among businesses that are above the median in their market orientation. MARKOR In the development of the MARKOR construct, Kohli et al. (1993) stated that, although the MKTOR (Narver & Slater, 1990) construct emphasized the point of view of customers and competitors in order to understand the view of the market, it does not account for the speed of market intelligence dispersion in an organization and is further missing a number of specific activities and behaviors that represent market orientation. The MARKOR construct was designed by Kohli et al. (1993) to overcome these shortages. 42

57 The varying definitions of market orientation at the time have made it more difficult to concisely outline the construct. Writers such as Felton (1959) and McNamara (1972) suggested the inclusion of marketing executives in organizational strategic decision making and the integration of activities with the marketing function; Konopa and Calabro (1971) suggested that prioritizing customers needs over production cost is the key; while Viebranz (1967) placed a critical emphasis on leadership roles. The common themes present among these writers are: (1) a focus on customers, (2) a coordinated effort of marketing, and (3) profitability (Kotler & Keller, 2015). The MARKOR construct focuses on four areas. (1) Intelligence generation. The generation of market intelligence refers to: the collection and assessment of both customer needs/preferences and the forces (i.e., task and macro environments) that influence the development and refinement of those needs. (Kohli et al., 1993:, p. 468) Kohli et al. (1993) further stressed the importance of multiple departments engaging in the generation of market intelligence, as different departments would have different lenses as reference, thereby enriching the collated information. (2) Intelligence dissemination. This refers to the process of information distribution, i.e. the extent of information exchange about the market within the organization. Care should be given that the direction of information transfer happens both vertically as well as horizontally. Furthermore, the exchange of information should happen at both the formal venue as well as the informal discussions. (3) Responsiveness. This refers to the action taken as the result of the decisions made based on the market intelligence information previously uncovered. The responsiveness element captures the speed in which the marketing programs are implemented. In summary, Kohli et al. (1993) suggested that the concept of market orientation is defined as: 43

58 an organization-wide generation of market intelligence pertaining to current and future needs of customers, dissemination of intelligence within the organization, and responsiveness to it. (Kohli et al., 1993, p. 468) The main features and differences between the MARKOR (Kohli & Jaworski, 1990) and the MKTOR (Narver & Slater, 1990) concepts are: (1) an expanded view of the market (customer and competitor), rather than just customer intelligence; (2) placing a focus on market intelligence related inter-functional coordination; and (3) concentrating on intelligence processing activities instead of the effects of the activities, such as profitability. Three different market orientation constructs were tested: (1) market orientation as a single factor (MOD1); (2) market orientation is presented as a three-factor model, where the factors can be either correlated or uncorrelated (MOD2 and MOD3); (3) market orientation is a single general factor with three underlying factors (MOD4 and MOD5). The model fit analysis results, including the chi-square, goodness of fit index (GFI), rescaled noncentrality parameter (NCP), rescaled noncentrality index (RNI), Tucker-Lewis index (TLI), and number of significant residuals (NSR) are presented in Table 2.6. Table 2.6. MARKOR summary results (Kohli et. al., 1993, p. 470) Market orientation inventory instrument Oplatka and Hemsley-Brown (2007) conducted a study to measure market orientation in schools using the MO Inventory instrument. The study incorporated a concept of market orientation based on the MKTOR (Narver & Slater, 1990) construct, which consisted of three dimensions: customer 44

59 orientation, competitor orientation, and inter-functional coordination; further emphasizing that market orientation is measured in a continuum rather than a dichotomous scale. The adaptation also brought a significant change in the conceptualization of the market orientation definition. Significantly different from the original design by Narver and Slater (1990), Oplatka and Hemsley-Brown (2007) argued that the dimensions of market orientation were not of equal importance, in that customer orientation takes precedence over the other two dimensions: competitor orientation and inter-functional coordination. The Market Orientation Inventory instrument consisted of 31 items and was designed to measure the extent in which school staff behaved in accordance to market orientation principles. Measured on a six-point Staple Scale, the customer orientation section consisted of 20 items that assessed the level of focus the school staff (school managers, teachers, and administrators) have on customers needs, desires, and concerns. Competitor orientation captured the perception of school staff on other competitor schools and is captured in 7 items in the instrument. This element of market orientation is often rejected or neglected by educational institutions because of the negative perception that school staff have towards the word competition in regards to the principles of education (Drysdale, 2002; Oplatka & Hemsley-Brown, 2003). The component of inter-functional coordination captured the school s organizational behavior, in regards to inter-departmental coordination of marketing activities, which included staff perception of their responsibility and contribution towards school marketing. The customer orientation, competitor orientation, and inter-functional coordination sections of the Market Orientation Inventory instrument are presented in Table 2.7, Table 2.8, and Table 2.9 respectively. 45

60 Table 2.7. MO Inventory - Section A: customer orientation (Oplatka & Hemsley-Brown, 2007, p. 296) 46

61 Table 2.8. MO Inventory - Section B: competitor orientation (Oplatka & Hemsley-Brown, 2007, p. 297) Table 2.9. MO Inventory - Section C: inter-functional coordination (Oplatka & Hemsley-Brown, 2007, p. 297) Oplatka and Hemsley-Brown (2007) did not conduct inferential statistical analysis but a descriptive analysis was used to interpret their findings. A factor analysis of the scales was also not reported in the study. Items in the questionnaire were rated on a six-point scale and reliability was assessed through a pilot study in a higher education setting for the three constructs: total market orientation (32 items) alpha = 0.92, customer orientation (18 items) alpha = 8.32, competition orientation (6 items) alpha = 47

62 0.842, and inter-functional orientation (8 items) alpha = (Hemsley-Brown & Oplatka, 2010). Empirical research with mixed results Since the development of MKTOR (Narver & Slater, 1990) and MARKOR (Kohli & Jaworski, 1990), both approaches have received a large amount of attention from researches around the world, and mixed responses have been given in regards to the suitability of the concept and the validity of the instrument when applied in different contexts. One of the first known studies in the application of MARKOR in the university sector was conducted by Caruana et al. (1998) in Australian and New Zealand universities. An analysis of the alpha coefficient found the MARKOR instrument to perform well in both the overall measure as well as individual dimensions. The mean scores presented in Table 2.10 provide a baseline for universities in Australia and New Zealand for future comparison. Table Mean, standard deviation, and correlation of MO variables (Caruana et al., 1998, p. 63) The study supported the notion of a link between market orientation and overall departmental performance. Further emphasizing that responsiveness aspect of market orientation is critical to overall performance (R-squared = 0.36, p < 48

63 0.001). This suggested that, although collecting and disseminating market intelligence is necessary, it is the response to the gathered information that enables the universities to meet the customer needs, which eventually, resulted in higher performance. This research also signified that the market orientation concept does not only apply to for profit businesses, but also to other sectors, in this case, education. Another finding by Caruana et al. (1998) is that market orientation is positively related to a university department s ability to obtain non-government funding, once again with responsiveness as the critical element (R-squared = 0.14, p<0.001). The regression results are presented in Table Table Regression of MO dimensions with performance items (Caruana et al., 1998, p. 64) When comparing between business versus non-business schools at the university level, Caruana et al. (1998) confirmed that no differences were found in the level of market orientation. Another study conducted by Caruana (1999) suggested that the MARKOR (Kohli & Jaworski, 1990) construct was not generalizable to all industries, economies, and culture. The study reports the results of two investigations into large service firms in the UK and Malta, with an aim to assess the dimensions and stability of the MARKOR scale. 49

64 The reduced 31-item scale suggested by Kohli et al. (1993) was used as the survey instrument, but a seven-point Likert scale was adopted in lieu of the original five-point scale, with a goal to capture more variance. A 13.8 percent response rate was recorded from the 950 invitations to British service firms in a three-week data collection period in the UK. The Malta sample was given the full 32-item instrument once again adapting a seven-point Likert scale in lieu of the original five-point scale. There was also an additional 200 interviews conducted with marketing managers and officers across different sized firms in Malta. The Malta study resulted in 193 valid responses, accounting for 96.5 percent response rate. Study compared their results for the previous study by Kohli et al. (1993), essentially assessing three broad types of goodness of fit (GOF) measures: absolute fit, incremental fit, and parsimonious fit measures. This comparison is presented in Table Table Goodness of fit comparison table (Caruana, 1999, p. 250) 50

65 Caruana s (1999) study also found that the adjusted goodness of fit index (AGFI) was significantly lower the recommended 0.90 standard suggested by Hair (1998), while Kohli et al. (1993) did not report the AGFI measures. Overall, the best fit was found in the MOD4 model, with one general factor and three correlated factors. Both the UK and Malta samples provided fit into the factor structure with items loading into the intended dimensions, except for item 23 from the Malta sample. The dimensions proved to have sufficient reliability, with an alpha value greater than 0.7 (Nunnally, 1978). Problems started to arise when comparing the data with the reduced 20-item final MARKOR (Kohli et al., 1993) construct. Following item reduction suggestions by Kohli et al. (1993) to remove items with factor loadings below 0.30 have resulted in the removal of four items in the UK sample and six items form the Malta sample. Caruana s (1999) study supported the market orientation model suggested by Kohli et al. (1993), which consisted of a single general factor plus three component factors. However, it was found that this model had only a relatively better fit compared to the other models tested. The TLI and AGFI scores, which are below 0.90, are considered troubling when comparing with the marketing literature. Furthermore, when compared with LISREL literature, then none of the models would be considered to have sufficient absolute fit levels. More significantly, Caruana s (1999) study questions the fundamental appropriateness of the MARKOR construct in conceptualizing the concepts of market orientation, as the 20-item scale was not confirmed. Siguaw (1994) examined the dimensionality of the 21-item MKTOR scale by Narver and Slater (1990) and found issues. Through a confirmatory factor analysis, Siguaw (1994) discovered that the overall fit of the model was not good. The analysis resulted in the extraction of five factors, with the first factor proving to be overpowering accounting for more variance (30.8%) than the combination of the remaining factors. Furthermore, a variety of cross loading of items were found in the analysis. As the conclusion, Siguaw (1994) questioned the accuracy of the scale. 51

66 Farrell and Oczkowski (1997) also examined both market orientation constructs: MKTOR (Narver & Slater, 1990) and MARKOR (Kohli & Jaworski, 1990) to assess the uni-dimensionality and validity of the scales through a confirmatory factor analysis. The MKTOR (Narver & Slater, 1990) construct consisted of three elements: customer orientation (6 items), competitor orientation (4 items), and inter-functional coordination (4 items); the MARKOR (Kohli & Jaworski, 1990) construct consisted of three elements: intelligence generation (6 items), intelligence dissemination (5 items), and market responsiveness (9 items). Farrell and Oczkowski (1997) took a sample of the largest 1164 private companies in Australia to maximize the possibility of the presence of a marketing department and systematic intelligence gathering, gathering responses from the CEO or General Manager. After discarding the unusable responses, there were 237 (29.2%) responses from public companies and 190 (17.1%) responses from private companies. Analysis of the three-construct MARKOR model revealed that statistical significance was found for all estimated models, but the overall fit was not acceptable (Chi-square = 386; df=167; p<0.001), goodness of fit index (GFI) = 0.810, adjusted goodness of fit index (AGFI) = 0.762, comparative fit index (CFI) = 0.809, index of non-centrality (MFI) = and Cronbach s alpa = A good fit was achieved after removal of 10 items, leaving a total of 10 items in the model (Chi-square=37,3; df =32; p=0.238), GFI=0.962, AGFI=0.935, CFI=0.986, MFI=0.986, Cronbach s alpha= Analysis of the 14-item MKTOR model also found the model fit unacceptable (Chi-Square=184; df = 4; p < 0.001), GFI = 0.878, AGFI = 0.827, CFI = 0.913, MFI = 0.749, Cronbach s alpha = A good fit was established after removal of six items, leaving a total of 8 items in the model (Chi-square = 24.7; df =17; p = 0.101), GFI = 0.968, AGFI = 0.933, CFI = 0.990, MFI = 0.980, Cronbach s alpha= Finally, correlation of items in the construct exceeded the suggested 0.50 value by (Hildebrandt, 1987) and all reliabilities exceeded

67 In summary, Farrell and Oczkowski s (1997) examination of the MKTOR and MARKOR models in the context of Australian business culture on two separate populations (public and private companies) have revealed that both constructs were initially problematic, with a good fit achieved after adaptation through the removal of several items. Pelham (1995) challenged the MARKOR construct by Kohli and Jaworski (1990) and found that the market orientation model presented in the construct was too narrow. In order to understand and respond to the needs of the market i.e. the customers information analysis leading to decision-making is not sufficient. Pelham (1995) further argues that an effective dissemination and distribution of market information throughout the organization is not enough to guarantee an understanding of customers. Thus, it is more appropriate for a market orientation model that measures customer orientation i.e. how much an organization understands their customers. In regards to the MKTOR construct by Narver and Slater (1990), Pelham (1995) acknowledged that, through an assessment of satisfaction, service, and interaction with customers, MKTOR measures the notion of customer orientation. Pelham (1993) used both MKTOR and MARKOR constructs on a pilot study of 51 company presidents and sales managers and found that a greater reliability measure was obtained by the MKTOR (Narver & Slater, 1990) instrument. Analysis of the MARKOR (Kohli & Jaworski, 1990) construct revealed only one of the market orientation scales achieved a correlation score above 0.60, with a Cronbach s alpha score of 0.71 for the overall market orientation construct. Combining the MKTOR and MARKOR constructs, Deng and Dart (1994) developed a measure of market orientation and used the Cronbach s alpha analysis to assess scale reliability. However, a Crobach s alpha analysis alone is not sufficient to warrant validity and reliability of a scale and should be combined with a confirmatory factor analysis (Steenkamp & van Trijp, 1991). 53

68 Gauzente (1999) compared the two instruments MARKOR (Kohli & Jaworski, 1990) and MKTOR (Narver & Slater, 1990). His findings showed that MARKOR integrated an organizational view of market orientation and developed an assessment of the firm s potentiality, while MKTOR is more centered towards customer orientation and exhibits a checklist approach. Gauzente (1999) further explained that MARKOR is largely consistent with its definition, while MKTOR is only partly consistent with its definition. For both concepts, Gauzente (1999) recommended that researchers should verify the statistical and psychometric characteristics of the scale, and also its semantic structure. Mixed results continued in regards to the MARKOR scale, with Siguaw s (1994) findings that did not support the dimensionality of the scale, while Han et al. (1998) found independent support for each of the three components of customer orientation, competitor orientation, and inter-functional coordination. Božić and Rajh (2008) also found that MARKOR has properties of reliability, convergent and discriminant validity and is suitable for measuring market orientation in Croatian companies. A large number of empirical studies have also reported success in uncovering evidence of a positive relationship between market orientation and organizational performance. Lado and Maydeu-Olivares (2001) summarized the studies containing empirical research on market orientation from the , which is presented in Table A majority of the studies focus on assessing the market orientation as an overall construct, but do not assess the relationship between organizational performance and the individual dimensions of market orientation. The significant amount of literature available on market orientation has been conducted in a variety of different contexts: product versus producers, service suppliers, different size organizations, profit versus non-profit sector, high tech versus low tech industries, and import versus export industries. However, after an observation of the results, Wrenn s (1997) claim that being market oriented 54

69 unfailingly improves organizational performance may not be entirely accurate. It appears that there may be some caveats to this notion. Table Summary of empirical research between MO and business performance (Lado & Maydeu- Olivares, 2001, p. 131) The mixed results from studies presented in this chapter demonstrate that although many studies support the notion of a positive link between market orientation and organizational performance and further cemented by a number 55

70 of meta-analyses in a global scale, there are some studies where the relationship was not proven or was found weak. This isn t to say that the link between market orientation and organizational performance is questionable, but rather that there are exceptions that need to be explained. The literature seems to indicate that the MKTOR and MARKOR s performance and reliability depends a number of influencing moderators, such as type of organization, business strategy, environmental factors. It may well be that a different market orientation model is required to suit different sectors. MARKETING AND MARKET ORIENTATION IN SCHOOLS Past writers, such as Cauzo Bottala and Revilla Camacho (2013), Mainardes, Raposo, and Alves (2014), Lindgreen (2010), Mutlu and Surer (2015), Chan (2009), Hunt (1976), Caruana, Ramaseshan, and Ewing (1999), and Kotler and Levy (1969) have successfully argued that marketing does not only apply to forprofit organizations, but is relevant and should be implemented in all organization types. Studies researching market orientation have been conducted at the higher education level by writers such as Caruana et al. (1998), Hammond et al. (2009), Hemsley-Brown and Oplatka (2010), R. L. Webster et al. (2014), and others, which found support for the notion of a positive link between market orientation and organizational performance. Foskett (2002) noted that there has been an increase of competitive environments in school settings, which was sparked by the popping up of educational markets starting in the 90s. This existence of market has led to the process of marketization, where school principals would place an emphasis on marketing their schools (Foskett, 2002; Hanson, 1991). Staff attitudes towards marketing as well as how the marketing philosophy has been implemented in schools have been one of the key themes researched in the literature. Oplatka and Hemsley-Brown (2003) presented a couple of issues arising from this area. First, it was found that among competing schools, 56

71 marketing becomes a critical activity. Second, the marketing activity is generally viewed in a negative light in education. When competition for prospective students with other education providers can clearly be seen in the local context, principals and some teachers view marketing as a key element in attracting students (Ball, 1994; Birch, 1998; Lauder, 1999; Oplatka, 2002a). Oplatka s (2002a) study even found principals describing the competitive situation as a war. In contrast, there were also schools in particular context that did not feel the need for marketing (Grace, 1995). School staff in less competitive education markets, such as small town and rural areas, indicated that marketing was an unnecessary activity for their school. Likewise, school principals where the number of students applying was greater than the number of places available did not engage in marketing activities. The second issue was that marketing is a generally rejected concept in schools (Drysdale, 2002) and was considered to be incompatible in the education context (Birch, 1998). A study of English principals found that the principals defended their school to be a place for teaching and learning, not a business to market (Birch, 1998). Another study in England by Oplatka (2002b) found school staff arguing that marketing does not apply to education as it does in business, as seen in this quote by the head of science: I m not happy with the idea of advertising, commercializing, considering education to be a product in the same way as sunglasses are (Oplatka, 2002, p. 185). This same problem was mirrored in Drysdale s (2002) study that found negative reactions from teachers in Australia towards marketing activities in their school. Incorporating Market Orientation in the School culture The market intelligence dimension of market orientation suggests that market orientation is not merely a conceptual philosophy, but needs to be one that is practical and embedded in the school culture. Kluckhohn (1951) defines culture 57

72 as a collection of deeply embedded, unwritten shared values, beliefs, attitudes, and norms within a school, which determines the school policies and practices. A culture of market orientation suggests a service orientation that is enthusiastic, highly aware of the competition, and accepting inter-departmental/interfunctional coordination (Oplatka & Hemsley-Brown, 2007). Narver and Slater (1990) argued that the decision to become market oriented requires a fundamental change in the way a school thinks. This clarifies that the issue of commitment towards becoming market oriented is related towards attitude, which involves developing a market driven culture (Deshpande & Webster, 1989; Greenley, 1995; Lichtenthal & Wilson, 1992). The implementation of market oriented behaviors requires a market oriented culture to exist in the school, which is brought together by the notion that intentions precede behaviors (Pulendran et al., 1998a). Oplatka and Hemsley-Brown (2007) described three constructs of organizational culture that conceptualizes market orientation, based on Homburg and Pflesser (2000). (1) The basic values that supports market orientation is shared organization-wide. A market-oriented culture puts an emphasis on the service provided to customers, i.e. students and parents, rather than a focus on student scores i.e. process oriented rather than results oriented. The shared values in a market-oriented school would center on service quality, innovation, openminded, outperforming the competition, striving for excellence, etc. Schools valuing open internal communication have a higher chance to be market oriented because information gathered from the market is more likely to be disseminated throughout the school staff and not kept by school management alone. (2) Organization-wide market orientation norms that connect the value to the practice. This could come in the form of an extension of an available service, decentralized decision-making protocols (which would speed up market orientation processes), or inter-departmental activities and innovation, which is key to increasing value. A culture of openness aligns well with getting to know 58

73 the customers and taking the necessary steps, including learning from past mistakes, in order to increase the school s service performance. (3) Promoting a market oriented culture among school staff by embedding and acknowledging the perceptible actions taken by staff. E.g. acknowledging teachers with strong service commitment, a welcoming reception area, etc. Oplatka (2002a) also suggests the purposeful use of market orientation language in the staff room, such as: in our school we care for the well-being of students, satisfied parents promote learning and school image, and we are attentive to the personal distress of students. The market orientation model for schools Summarizing the past researches on the market orientation presented in this literature review, academics have demonstrated and provided evidence for a positive link between market orientation and various measures of organizational performance. In regards to the construct and the elements that comprise market orientation, it has generally been accepted that the main components of market orientation used in research are the dimensions of: customer orientation, competitor orientation, and inter-functional coordination, as suggested in the MKTOR construct by Narver and Slater (1990), with the addition of long-term growth, also suggested by Narver and Slater (1990), and market intelligence, suggested by Kohli and Jaworski (1990). Narver and Slater (1990) as well as Kohli et al. (1993) confirmed that organizational profit is perceived as part of market orientation, although each had a different point of view on the role of profit in market orientation. Kohli and Jaworski (1990) view profitability as a consequence of market orientation, while Narver and Slater (1990) argues that profitability is a business objective. Therefore, profitability and long term growth was separated from the main components. The researcher, through this thesis, believes that long-term growth should be one of the main constructs of market orientation in an educational 59

74 institution point of view, where profit may not be the main goal, but long-term growth and survival is essential. Customer Orientation Market Intelligence Competitor Orientation Market Orientation Long-term growth Drysdale (2002) and Oplatka and Hemsley-Brown (2003) have shown that competitor orientation is often neglected in schools and perhaps school staff do not consider competitor orientation as a priority. However, the culmination of research strongly suggests the importance of competitor orientation in order to achieve a superior competitive advantage. Furthermore, Oplatka and Hemsley- Brown (2007) supports this notion by suggesting that decision making processes in schools, particularly in regards to new initiatives and additional services provided to students and parents, can be positively impacted by the monitoring of developments in competing schools. Interfunctional coordination Figure 2.6. Market Orientation Model in Education In the context of educational setting, this thesis presents a market orientation model for schools, which combines the theories by Narver and Slater (1990), Kohli and Jaworski (1990), and Drysdale (2002) in order to provide and test a 60

75 broader view of the concept. The suggested model consists of five dimensions: customer orientation, competitor orientation, inter-functional coordination, long-term growth, and market intelligence, shown in Figure 2.6. The five dimensions work together to capture the necessary information regarding the school s attempt to understand its customers, the school s interests in seeking information about other competitors, how the different departments and faculty integrate together as a whole, the school s focus on growth and survival, as well as the availability and consistency of the systematic procedures of data gathering within the school. SUMMARY This chapter has presented a review of the past literature of research on market orientation. More importantly, demonstrating that the concept of market orientation, which started to gain interest in 1990, is still very much relevant in A variety of market orientation constructs have been discussed and definitions of market orientation have been presented. The instruments that measure market orientation have also been presented, focusing on the two most popular instruments: MKTOR (Narver & Slater, 1990) and MARKOR (Kohli & Jaworski, 1990). A model of market orientation has been suggested that draws on the literature and combines theories by Narver and Slater (1990), Kohli and Jaworski (1990), and Drysdale (2002), in order to investigate a broad view of market orientation, which encompasses five dimensions of market orientation: customer orientation, competitor orientation, inter-functional coordination, long-term growth, and market intelligence. This suggested model will be investigated in the following chapters of this thesis for its suitability for use in the education sector, specifically in schools. 61

76 Chapter 3: Research Methodology INTRODUCTION This study explored the topic of market orientation in schools and investigated the five dimensions of market orientation. There were two broad segments in the study. The first segment was the development of an instrument that measures market orientation in schools and assessing the five-dimension model. The second segment was investigation into the market orientation level of Victorian schools and exploring the relationship between market orientation and school performance. The previous chapter has outlined the theoretical literature discussing market orientation and the instruments to measure the level of market orientation as well as presenting the research questions. The aim of this chapter is to elaborate on the research methods by which the stated questions and hypotheses are tested using the Market Orientation in Schools Questionnaire (MOSQ). This chapter is organized into six sections, covering research design, population and sampling, development of the questionnaire, data preparation, operationalization of measurement, and analysis methods. This research specifically aims to investigate the areas of: the market orientation level of schools in Victoria, and the relationship between market orientation and school performance, guided by two questions: 1. To what extent are schools in Victoria market oriented? 2. What is the relationship between market orientation and school performance? 62

77 RESEARCH DESIGN The nature of this study is theory testing. Past research (Ellis, 2006; Kohli et al., 1993; Narver & Slater, 1990; Oplatka & Hemsley-Brown, 2007) have indicated that the level of market orientation is positively correlated to the organization s performance. Furthermore, studies have suggested that this phenomenon is not exclusive to the profit sector, but extends to non-profit (Chen & Hsu, 2013; Shapiro, 1973), health (Raju, Lonial, Gupta, & Ziegler, 2000), education (Oplatka & Hemsley-Brown, 2012; R. L. Webster et al., 2014), and others (Bueno et al., 2016; Kotler & Levy, 1969; Song, Wang, & Cavusgil, 2015). The primary objective of this study is to investigate the level of market orientation in schools in Australia, as well as uncovering the relationship between the levels of market orientation with school performance. In essence this study employs a cross-sectional survey-inferential design, which fundamentally aims to discover relationships that exist between nonmanipulated variables (market orientation, job positions, and length of service) to describe, explain, or infer some aspects of the present. A cross-sectional design employs a single point of data collection (Malhotra, 2010) and is suitable for analyzing a phenomenon by sampling the population at a single point (R. Kumar, 2011). In comparison with a longitudinal research design, the crosssectional design is more cost and time efficient; and has been a commonly used method of market orientation research in the past (Greenley, 1995; Kohli et al., 1993; Lee & Yang, 1990; Narver & Slater, 1990). Selecting a research method Selection of an appropriate research approach is crucial to the success of the study and would define where the research started, how it proceeded, and what types of research techniques are appropriate (Blaikie, 2000). This study builds upon a previous research into market orientation in schools in Victoria by Drysdale (2002). Drysdale (2002) employed a qualitative approach 63

78 in his methodology utilizing case study analysis covering eight sites. To further broaden the scope of data collection, this study accessed a wider sample size in order to have a better representation of the population, which will allow a higher degree of generalization of the findings (Neuman, 2014). A quantitative approach lends itself well to reach this goal. Furthermore the population and sample size that the study aimed to cover included school staff around Victoria. Site visitations for a study of this size can be very costly and time consuming. A quantitative approach has a few benefits such as being a relatively fast and low cost study of a population that is geographically dispersed (D. Davis & Cosenza, 1988). Due to the reasons mentioned above, a quantitative approach has been selected for this study. The current study employed a cross-sectional design, which involves a single stage of data collection process from any given sample of population (Malhotra, 2010). This design is suitable for studies such as this, that aim to analyze a phenomenon through consideration of a cross-section of a population at a single point in time (R. Kumar, 2011). In contrast, a longitudinal design measures the sample of the population throughout multiple points in time. The obvious advantage of the cross-sectional design over the longitudinal design is that it is less time consuming and cheaper. The cross-sectional design has also been widely used as the design choice in past researches relating to market orientation (Greenley, 1995; Kaynak & Wellington Kang-yen, 1993; Kohli et al., 1993; Lee & Yang, 1990; Narver & Slater, 1990; Ngansathil, 2001). A survey method by way of an electronically distributed questionnaire was selected for this study, due to four reasons. First, survey questionnaires are commonly used in in similar types of research into market orientation (Kohli et al., 1993; Narver & Slater, 1990; Ngansathil, 2001; Oplatka & Hemsley-Brown, 2007). Second, it allows the study to cover a wider geographical area simultaneously. Third, an electronic version was chosen rather than a mail version of the questionnaire for ease of delivery, ease of participation, and 64

79 reducing cost. Fourth, self-administered questionnaires can eliminate interviewer bias (Jobber, 1991). Nonetheless, the researcher acknowledges that there are disadvantages to the distributed survey method as well. The distributed survey method tends to result in a much lower response rate when compared with interviews. Furthermore, there is a possibility of incomplete responses, either due to misunderstanding or confusion around the meaning of the question or other reasons (Hair, Black, Babin, & Anderson, 2010) resulting in missing data. Previous studies have shown that the most obvious disadvantage of this method is the potential issue of non-response, which can be as high as percent (Aaker, 2013; Malhotra, 2010). The following guidelines (Aaker, 2004, 2013; Jobber & Mirza, 1991) were used to minimize the issue of non-response: Inclusion of a cover letter, which clearly introduced the researcher and stated out the objectives and importance of the research was used. Schools were offered a feedback report and a copy of the findings of the study as an incentive for the school to participate in the study. A reminder letter was sent to respondents who did not respond after four weeks. Appendix A, B, and C presents the information flyer, cover letter to principals, and plain language statement. POPULATION AND SAMPLING This study took into consideration participants from school staff members in Victoria, looking into different job positions in a school as well as different length of service years. The three different types of school sectors, public schools, catholic schools, and independent schools, are covered. Respondents come from both teaching and non-teaching staff within the school, covering principals (or principal class), school leaders, head teachers, subject teachers, homeroom teachers, as well as administration and non-teaching staff. The duration of the 65

80 study extended from 2011 to 2015 with a single period of data collection from June 2012 till June The Australian Bureau of Statistics (2012) recorded a total of 2234 schools in Victoria in their 2012 report (Table 3.1). This included 1536 government schools, 487 catholic schools, and 211 independent schools. Table 3.1. School population distribution in Victoria Government Schools Catholic Schools Independent Schools TOTAL Primary Secondary Combined Special schools Total The Australian Bureau of Statistics (2012) also recorded a total of 107,301 school staff as an aggregate of teaching staff (73,847), specialist support staff (2,119), and other positions (31,335). There were a total of 63,574 staff in government schools, 22,769 staff in catholic schools, and 20,958 in independent schools, as detailed in Table 3.2. This forms the basis of the sampling framework. The Australian Bureau of Statistics and Department of Early Childhood only lists a collective number of principals together with teachers in the teaching staff group, with a definition as stated below: Teaching staff are staff who spend the majority of their time in contact with students either by direct class contact or on an individual basis, and are engaged to impart school curriculum [which] also includes principals, deputy principals, campus principals and senior teachers mainly involved in administration. Teacher aides and assistants, and specialist support staff are excluded (ABS, 2012) 66

81 Table 3.2. School staff distribution in Victoria Government Catholic Independent Teaching staff, including principals Specialist support Other Total Perhaps it can be assumed that the number of principals quite closely mirrors the number of schools, hence 1536 principals for government schools and 698 principals for non-government schools, consisting of 487 and 211 principals for catholic and independent schools respectively (see Table 3.3). Table 3.3. Adjusted school staff distribution in Victoria Government Catholic Independent Principals Teaching staff Specialist support Other Total Sampling procedure In quantitative research, it is generally the best approach to gather participants through probability sampling in order to obtain a representation of the desired population. However, it is often the case with research where the sampling strategy does not go according to plan. Due to unforeseen circumstances detailed in the section below a pure probability sampling method could not be accomplished, thus a non-probability sampling method was adopted. The initial intention for a pure stratified random sapling method had to be revised and thus, a purposeful sampling approach was undertaken. Previous market orientation research, such as the one by Spillan, Li, Totten, and de Mayolo (2009) have also employed a non-probability method through convenience sampling. It was noted by Suen, Huang, and Lee (2014) that non-probabilistic sampling is commonly used in quantitative studies with the side effects of having a more limited power of generalizability to the population. The intended stratified random sampling approach divided the population into specific sections containing specific types of respondents, and then selects sub- 67

82 samples of the total required sample size from each section/strata. The stratified random sampling approach was selected due to its advantages: assurance of representativeness in the sample, opportunity to study each stratum and make comparison studies, and the ability to estimate/generalize back to the targeted population with greater position and less error. The only issue with this method is determining the basis for stratification (Hair, 2006). Two stages of data collection were performed during the available timeframe. The first stage of inviting participants to take part in the research was through a randomized list of all the schools in Victoria. A list of regions in Victoria published by the Victorian government ( Melbourne and Regional, 2012) was used as the sampling framework and presented in Table 3.4. Table 3.4. Regions in Victoria 1. Banyule 11.Hobsons Bay 21.Moonee Valley 2. Bayside 12.Hume 22.Moreland 23.Mornington 3. Boroondara 13.Kingston Peninsula 4. Brimbank 14.Knox 24.Nillumbik 5. Cardinia 15.Manningham 25.Port Phillip 6. Casey 16.Maribyrnong 26.Stonnington 7. Darebin 17.Maroondah 27.Whitehorse 8. Frankston 18.Melbourne 28.Whittlesea 9. Glen Eira 19.Melton 29.Wyndham 10. Greater Dandenong 20.Monash 30.Yarra 31.Yarra Ranges The regions were randomized and then the schools within the region were placed into a randomized list. Contact details for the schools were taken from publicly available information. An invitation containing the information pack was sent out to the first 100 schools on the list. A follow up was then sent out approximately four weeks after, as suggested by Aaker (2013) to maximize the response rate of a survey distribution. Out of the 100 schools contacted via , two schools agreed to participate and five schools were not interested. Through undelivered s, it was discovered 68

83 that 20 schools have changed their contact details. No response was received from the other 71 schools. A second follow up was sent out to the other schools that had not responded approximately two weeks after the first reminder. A third and final follow up was sent approximately two weeks after. It was unfortunate that throughout the duration of the data collection time frame, socio-political tension between the teacher union and the government in Victoria emerged (Savage, 2012). This tension led to teaching staff going on multiple work strikes and refusing to contribute to any activities other than classroom teaching. The situation inevitably had an adverse effect on the data collection process in terms of the response rate. Due to the lack of responses received in the first method, the second method was employed in order to reach out to schools more effectively. The researcher obtained consent to present the study in a number of classes/lectures in the Master of Education Management programs at The University of Melbourne. The classes/lectures consisted of domestic (Victoria) and international students who were teachers, school leaders, and aspiring school leaders. A total of 8 presentations were conducted to school staffs in the classroom were invited to participate in the research and the researcher s contact information was provided for schools to express their interest for participation. The presentations clearly detailed the research goals, timeline, and voluntary nature of participation. Ethical conduct, data storage, and privacy concerns were also explained. As suggested by Futrell and Lamb (1981), participation in the research was anonymous, in order to increase response rate. Out of the 8 presentations, 24 school leaders, teachers and principals expressed their interest to participate. Two additional schools had heard about the research through word of mouth and expressed interest to participate in the research. 69

84 The school principals were then contacted and an electronic research pack was provided via . The pack consisted of a one-page research flyer, plain language statement, the MOSQ tool, and informational articles on market orientation. Each school principal then distributed the plain language statement and MOSQ tool to their school staff. Participation in the study was voluntary in nature and no form of compensation was given. A total of 404 responses were collected overall with 280 participants from 24 schools in Victoria and 124 teachers and school leaders from various locations outside of Victoria, who were part of the MEd program at The University of Melbourne, including the Master of Education Management, Master of School Leadership, and Master of Education in general. The complete dataset of 404 responses was used in the analysis for validating the MOSQ instrument (see chapter 4), in order to obtain the maximum number of participants and using the biggest dataset for statistical analyses. The subset of 280 Victorian responses was used for the school market orientation analysis (see chapter 5), which is contextual for Victoria. Due to this, categorization data for the non-victoria school staff was not collected. Table 3.5 presents the demographic details of the collected data. From the 280 Victorian responses, 32 (7.5%) were in the principal class, 93 (33.2%) were lead teachers, 89 (31.8%) were teachers, and 25 (8.9%) were non-teaching staff. 41 respondents chose not to disclose their job position. Table 3.5. Demographic of Victoria respondents Respondent Victoria Participants Principal class 32 (7.5%) Lead teacher 93 (33.2%) Teacher 89 (31.8%) Non-teaching staff 25 (8.9%) Did not say 41 (14.6%) Total 280 (100%) 70

85 Sample size Hair (2006) defined sample size as: The determined total number of sampling units needed to be representative of the defined target population; that is, the number of elements (people or objects) that have to be included in a drawn sample to ensure appropriate representation of the defined target population (Hair 2006, p.86). For a conducting research using the method of multiple regression analysis, such as this, Tabachnick (1996) suggested that the sample size of a study depends on the desired statistical power, alpha level, and the number of independent variables i.e. the predictors. Using an alpha level of 0.05 while aiming to achieve a statistical power of 0.8, a sample size of 783 participants is needed to detect a small effect size (r = 0.1), 85 participants to detect a medium effect size (r = 0.3), and 28 participants to detect a large effect size (r = 0.5) (Cohen, 1988, 1992). This study aimed to achieve a medium effect-size, hence the aim for sample size had to be a minimum of 85 respondents. The sample was calculated through the sample size calculator provided by the National Statistical Service Australia (2013). This study takes into account the school staff population of 107,301 individuals, as detailed in the previous section. Employing a confidence level of 95% and a confidence interval of 5%, the optimum sample size is 383. Further research on market orientation in Victoria and its relationship with school performance (detailed in chapter five) used the subset of 280 participants from Victoria, thus providing a confidence interval of 5.8%. Due to the sample size limitation, this study was not able to reliably separate and make comparisons between the different school types or at the individual school 71

86 level. Although the sample size is enough to analyze as and draw findings around schools in general, it is not enough to analyze at more detailed levels. Hence, analysis at the school type or individual school level was not conducted. This is further explained as a limitation and a recommendation for further research in Chapter 6. Generalizability of model The regression model attempted to find the correlation between the perceived market orientation level of a school with its perceived student performance. Due to the fact that the study is conducted on a sample of the population, it is also essential to have an understanding how the results can later be generalized to the population. The R 2 statistics measures how well the data fits the regression model, while the adjusted R 2 value measures how well the population would fit the model (Field, 2009). A good model that is generalizable will have an adjusted R 2 value that is very similar to the R 2 value i.e. the difference between the R 2 value and the adjusted R 2 value should be small. The regression model showed an R 2 value of.191 and an adjusted R 2 value of.176. The difference between the adjusted and unadjusted R 2 value is =.015. This shrinkage suggests that if the model were derived from the population instead of the sample, there would be approximately 1.5% less variance in the outcome. Furthermore, Hair (2006) suggests that a ratio of observations per independent variable is desirable for generalizability of the model, although a ratio of 5 to 1 is acceptable. The current study tests a five-dimension model of market orientation. Following Hair (1998) recommendation, the current study requires a minimum sample size of 25 and an optimum sample size of 100. With a total of 280 Victoria participants, the current study has sufficient sample size to support generalizability of the findings. 72

87 Statistical power of the study The importance of a research finding can be expressed through the effect size. In order to estimate the effect size, Field (2009) suggests that there are three other statistical properties, which are intrinsically linked with effect size, that need to be calculated: (1) The sample size on which the sample effect size is based, (2) The accepted level of statistical significance (alpha level), and (3) The ability of a test to detect an effect of that size (statistical power). The statistical power of the test is the probability that the test will find an effect, where one exists in the population. The probability of finding an effect is calculated through the probability of not finding an effect. Cohen (1992) suggests that we would hope to have a 0.2 probability of failing to detect a genuine effect. It follows that the probability of detecting and effect is the opposite of the probability of not detecting that effect. Hence, using Cohen's (1992) recommended value of 0.2, the corresponding probability of finding an effect is = 0.8. Hence, the suggested level of power is 0.8. This study uses a total sample size of 404, comprising of 280 participants in Victoria and 124 participants outside Victoria. Hence, this study will be able to detect, at least, a medium effect size. Further utilizing Cohen s power table for effect size (Cohen, 1988), the current study has an effect size of 0.23 (CI = ). This is quite similar with the findings from a meta-analysis study by Ellis (2006), which reported an effect size of 0.24 (CI = ) for studies in Australasia. DEVELOPMENT OF THE QUESTIONNAIRE Data collection was conducted via the Market Orientation in Schools Questionnaire (MOSQ) instrument (see Appendix D). Adapted from a previous market orientation instrument by Pulendran et al. (1998b) (see Table 3.6), the MOSQ instrument is refined and validated to be suitable for research in schools. 73

88 The creation of the MOSQ instrument had the primary goal to develop a theoretically sound instrument that is robust in measuring the market orientation construct, which consisted of the five dimensions of market orientation in schools: customer orientation, competitor orientation, interfunctional coordination, long-term growth, and market intelligence. The market orientation construct is presented in Figure 2.6 in chapter 2. Through a review of the available questionnaires for market orientation, as discussed in chapter three, one targeted towards schools, was not found. Hemsley-Brown and Oplatka (2010) have adapted a market orientation instrument for use in higher education setting, however, details of the validation analysis for the instrument was not included. The instrument by Pulendran et al. (1998b) was selected as the basis for an adapted instrument due to its comprehensiveness in capturing four out of the five dimensions of the market orientation construct, although language and contextual issues were found, if the instrument was to be deployed without amendment in schools. The market intelligence construct was incorporated into the questionnaire as five additional items. The issues that were discovered in the Pulendran et al. (1998a) instrument were related to the suitability towards the targeted audience (school teachers and staff) as well as accommodating all five dimensions of the market orientation construct. The instrument was originally targeted towards the business sector and thus incorporated terminology appropriate for the intended audience. This made the instrument unsuitable for direct distribution into schools with teachers and staff as the intended audience. The instrument was quite comprehensive and had included four dimensions of market orientation in its construct. The market intelligence dimension, however, was not included. The original instrument by Pulendran et al. (1998b) is presented in Table 3.6. Table 3.6. Original market orientation questionnaire by Widing and Speed (1998) No Question Dimension Q1 Our sales people regularly share information within our business concerning competitors strategies Competitor orientation 74

89 Q2 Our objectives are driven primarily by customer satisfaction Customer orientation Q3 We discourage employees from outside of sales/marketing from meeting with customers Inter-functional cooperation Q4 We respond rapidly to competitive actions that threaten us Competitor orientation Q5 We constantly monitor our level of commitment and Customer orientation orientation toward customers Q6 We are encouraged to trade off short-term gains (e.g. on Long-term profit view individual sale) in the interests of longer-term advantages (e.g. repeat business) Q7 Information on customers, marketing success and marketing failures are communicated across functions in the business Inter-functional cooperation Q8 Our strategy for competitive advantage is based on our Customer orientation understanding of customers needs Q9 All of our functions (not just marketing/sales) are responsive to and integrated in serving markets Inter-functional cooperation Q10 Our market strategies are driven by our understanding of Customer orientation possibilities for creating value for our customers Q11 We are willing to accept short-term financial losses in order to do what is right for the customer Long-term profit view Q12 We measure customer satisfaction systemically and Customer orientation frequently Q13 We give close attention to after-sales service Customer orientation Q14 Senior management believes long term success requires Long-term profit view some short-term financial sacrifices Q15 We target customers and customer groups where we have or Competitor orientation can develop a competitive advantage Q16 Top management regularly discusses competitors strengths Competitor orientation and strategies Q17 All of our managers understand how of the entire business can contribute to creating value Inter-functional cooperation Q18 We share programs and resources with other business units in the cooperation Inter-functional cooperation Q19 Top management emphasizes longer-term objectives (e.g. Long term profit view customer satisfaction) relative to shorter-term ones (e.g. cost containment) Q20 A fundamental objective of our organization is to provide customers with superior value relative to the competition Long term profit view 75

90 The questions asked were conceptual in nature and thus a Likert Scale was chosen as the appropriate method of measuring responses. Churchill (1979) and Dunn, Seaker, and Waller (1994) found that a Likert scale response was suitable for statistical parametric testing by rating a number of items. Previous research on market orientation does not indicate a popular tendency on the number of scale points, with examples such as Hemsley-Brown and Oplatka (2010) using a six-point scale in a higher education research setting, Ngansathil (2001) used a five-point scale, while Narver and Slater (1990) used a seven-point scale. There is an ongoing debate on using odd and even number scales amongst researchers, with arguments on both sides. In a study comparing a number of different scales, ranging from four-point scale to eleven-point scale, Leung (2011) found no major difference in regards to the internal structure of the scales, i.e. in terms of the means, standard deviations, item item correlations, item total correlations, Cronbach s alpha, and factor loadings. However, Leung (2011) suggested that only the six-point scale and eleven-point scale were best to reduce skewness and follow a normal distribution, which are important assumptions for a regression analysis (Field, 2009). A six-point Likert Scale was employed in this study. The self-reporting method, also known as subjective measure, may come with potential disadvantages. Barker, Pistrang, and Elliott (2002) argued the potential issue around validity of the data gathered, in that the data may become idiosyncratic and personal, hence may be different to the perception of reality as seen by others. However, writers such as Dess and Robinson (1984) and Pearce and Robbins (1987) have provided evidence that no significant difference is found when comparing the two methods. I.e. research using subjective measures will yield similar results to the same research using objective measures. This has resulted in subjective measure being commonly used and generally accepted in market orientation research, by writes such as Deng and Dart (1994), Narver and Slater (1990), Kohli et al. (1993), Ruekert (1992), Greenley (1995), and Caruana et al. (1999). 76

91 In order to minimize the arising of potential disadvantages, a few steps have been taken: respondents have been assured that the data collection process will be anonymous, the data collected will only be used for research purposes (not related to participant s professional performance review), all forms of reporting and publication will be anonymous, and that participation in the research is voluntary. Having put in place the mentioned parameters have minimized the potential of respondents providing misleading or false data. The market intelligence dimension Kohli and Jaworski (1990) and Drysdale (2002) suggested that market intelligence should be one of the five main factors in indicating the level of market orientation of a school. The five components suggested by Drysdale (2002) are: competitor orientation, marketing coordination & integration, longterm survival, market intelligence, and customer orientation as the center of focus. This model emphasizes the importance of a school having an effective market intelligence system as a way to gather and share information. Kotler and Fox (1995) listed five areas in which marketing intelligence applies to the school context. The five areas are: identifying marketing issues, using the institution s existing records, gathering marketing intelligence, conducting market research, and analyzing marketing research data. In order to incorporate these areas of Marketing Intelligence into the questionnaire, five questions were created to correspond with each of the five areas of marketing intelligence. These five questions were added into the set and included in the pretest cycles. The five questions are as below. 1. The school is able to successfully understand and identify the key marketing issues it faces. 2. The school keeps student data and uses them for reference. 3. The school has a set of processes to scan (informal means) the environment and obtain information about current trends and developments. (ex: through newspapers, talking to people, external conferences, etc.) 77

92 4. The results and findings from surveys, research, and other information are regularly analyzed and used in decision-making processes. 5. The school regularly runs a set of formal procedures that attempt to discover the needs of current and prospective students. With the addition of the five questions, the instrument consisted of twenty-five questions. Previous feedback sessions have shown that the approximate time needed to complete the survey was around ten minutes. Therefore, it was concluded that even with the additional five questions, the time needed would still fall within the fifteen-minute range. Based on these factors, it was concluded that adding the five elements of market intelligence system would bring more benefit to the overall effectiveness of the instrument. These five questions are not grouped together, but instead spread out in between the other questions. Structure of the MOSQ instrument The MOSQ instrument consists of two main sections. The first section collects demographic data regarding the participant s job position as well as their length of service in the school. Participants were asked to fill in their job position from the selection of: principal class, head teacher, teacher, and non-teaching staff. Options for filling out their length of service consisted of: 0-3 years, 4-6 years, and more than 7 years. This information was used in the analysis phase to group the participants. The second section collects data on the participants perceptions towards how their school functions. This section consists of twenty-six items and covers the five-dimensions of market orientation in schools as well as student performance in the school. Participants were asked to respond to a series of statements that relate to the different aspects of market orientation by reflecting on how their school operates and filling in their perception on a six-point Likert scale. 78

93 Moreover, participants were asked to rate their perception of overall student performance in their school via a rating scale of one to six. The breakdown of these sections is presented in Table 3.7. Table 3.7. Structure of questionnaire sections Section Description Number of items 1 Demographic data 2 2 Customer orientation 5 3 Competitor orientation 5 4 Inter-functional coordination 5 5 Long-term growth 5 6 Market intelligence 5 7 Student performance 1 Pilot testing As part of the development of the MOSQ instrument, a series of pilot tests were conducted with participants that comprised of active school staff (teaching or non-teaching) as well as experts in market orientation in an academic environment. This is in accordance to J. C. Anderson and Gerbing (1991), Oppenheim and Oppenheim (1992), and Burns and Bush (1998, 2006a) suggestion that a pre-test be conducted with 5 10 representative respondents in order to identify problems with a questionnaire and is essential for achieving substantive validity. For the purposes of the pilot testing, the research was presented in a marketing class of the Master of Education Management at The University of Melbourne. Sixteen people volunteered and thus the survey was distributed in a combination of electronic and hard copies to these participants. The participants worked in education, either as a teacher, principal, or school administration staff in schools across Australia, Singapore, Indonesia, and the United States. The response required for the feedback was to state whether the survey questions were clear and understandable to them or not. The sixteen participants were given to opportunity to provide comments and suggestions on how the questions could be improved in order to clarify the meaning and to contextualize the questionnaire to the education sector. 79

94 The set of questions given out for this first cycle is as listed below. 1. Our staff members regularly share information within our school concerning competitors strategies 2. Our school objectives are driven primarily by customer satisfaction 3. Various units/departments work independently to meet customers needs 4. We respond rapidly to competitive actions that threaten us 5. We constantly monitor our level of commitment toward the school customers 6. We are encouraged to trade-off short term gains (eg. An individual enrolment) in the interests of longer-term advantages (eg, retaining existing students) 7. Information on customers, marketing success and marketing failures are communicated across functions in the school 8. Our strategy for competitive advantage is based o our understanding of customers needs 9. All school functions (curriculum, marketing, finance, staffing) integrated between different sections driven by our understanding of possibilities for creating value for our customers 10. We are willing to accept short term financial losses in order to do what is right for the customer 11. We measure customer satisfaction systemically and frequently 12. We give close attention to follow-up services for our customers 13. We give close attention to follow-up services for our customers 14. Senior management believes long-term success requires some short-term financial sacrifices 15. We target customers and customer groups where we have or can develop a competitive advantage 16. Top management regularly discusses competitors strengths and strategies 17. All sections/departments work together to offer value to our customers 80

95 18. We share programs and resources with other sections/departments in the school. 19. Top management emphasizes longer term objectives (eg, customer satisfaction) relative to shorter term ones (eg. Cost savings) 20. A fundamental objective of our organization is to provide customers with superior value relative to the competition From the sixteen participants chosen as the sample, seven of them responded to the questionnaire and provided feedback for the research, while eleven participants did not respond, even after a follow up . The possible reasons for this are that they did not have time to respond to the research or they did not find enough motivation to partake in the research. A read receipt feature was implied in the s sent to the sixteen participants and was used as an indicator to whether the has been read by the participants. A number of the participants failed to return the read receipt, which indicates that a number of the participants may not have received the . Responses were collated around 15 days after the survey was sent out, which stated that clarification was needed for the questions. The majority of the responses stated that there was ambiguity in the choice of words used and that marketing terms was, in general, resented. For example: Question 3 stated: Various units/departments work independently to meet customers needs. Participants gave opinion that the words units and departments need to be clarified. Were the words referring to primary/secondary units or whether they referred to other school units, such as: marketing, student admission, etc.? Question 5 stated: We constantly monitor our level of commitment toward the school customers. Participants requested clarification on the definition of level of commitment. Question 14 stated: Senior management believes long-term success requires some short-term financial sacrifices. Participants requested clarification on the definition of senior management in this question. Question 16 stated: Top management regularly discusses competitors strengths and strategies. Participants requested clarification on the definition of top management in this question. 81

96 Changes were made to the instrument in accordance with the feedback received. The changes are as described below. 1. The teachers and staff members regularly share information about other school s practices and programs. In question 1, the word staff was expanded to incorporate teachers and staff as well as in the researcher s background, staff refers to non-teaching employees in a school. Another refinement is the change from using the phrase competitors strategies into other school s practices and programs. 2. The school programs/philosophy/practices/goals are mainly driven by students and parents satisfaction. In question 2, change was made in an attempt to clarify the definition of objectives and also to replace the word customer. Therefore, objectives was clarified into programs/philosophy/practices/goals, and the word customer was replaced with students and parents. 3. The various units and departments work independently to meet students and parents needs. In question 3, the word customer was replaced with the phrase students and parents. 4. We are quick to create response to the changes in educational advancements that we see; be it from other schools or from the community. The changes made in question 4 attempts to clarify the meaning of competitive actions. 5. Information on students, parents, program success and program failures are shared with the faculty and staff members in the school. In question 7, there was the need to replace the words customer and marketing with students and parents and programs respectively. Furthermore, the phrase communicated across functions was refined into shared with the faculty and staff members. 6. We give close attention to follow-up services for our customers. We give close attention to follow-up services for our customers. Question 13 was refined to clarify the term services for our customers ; thus it was changed into follow-up parents queries. 82

97 7. Senior management believes long-term success requires some short-term financial sacrifices. The principal and other school leaders believe that long-term success requires some short-term financial sacrifices. In question 14, the term senior management was clarified as principal and other school leaders. 8. We target customers and customer groups where we have or can develop a competitive advantage. Our school tries to attract students where we offer (or can develop) more value compared to other schools. In question 15, there is the need to define the term customer and customer groups as well as to clarify the term develop a competitive advantage. Customer and customer groups is defined into students, while develop a competitive advantage is clarified into offer (or can develop) more value compared to other schools. 9. A main objective of our school is to provide better educational value relative to other schools. In question 20, the terms that needed clarification were organization, customers and superior value relative to the competition. The term organization was further specified as school. The term customers was eliminated without affecting the overall meaning of the question. The term superior value relative to the competition was changed into better educational value relative to other schools. Subsequently, a second round of pilot study was conducted. In this occasion, the feedback was taken from a group of students enrolled in the Masters of School Leaders course at Melbourne Graduate School of Education. This time, the strategy for feedback was adjusted to ensure that a response could be received from the entire sample. The feedback session was done during a class session with the pen and paper method. Feedback was collected from all seventeen students attending class. The changes suggested from this second feedback session were: 1. Formatting preference. One student suggested that the format in the instruction section of the instrument should be written in table form. 83

98 2. The term unit and department could be summarized just by using the word section 3. The word teachers and staff could be summarized just by using the word staff 4. Only one feedback mentioned that the number of questions were too many. The very small number of people providing suggestions in this cycle is a good indication that the instrument is nearing completion and that all the items have been successfully adapted for the education context. The suggestions did not indicate that the questions or the terms were unclear. Instead, the nature of the suggestions was more on how to simplify multiple terms in the Australian education context; ex: the terms units and departments can be summarized just by using the term section. From the suggestion received in this second feedback, the instrument was then once again refined. The changes made are described below. 1. The staff members regularly share information about other school s practices and programs. In question 1, the term teachers and staff is simplified into staff. 2. The school programs are mainly driven by students and parents satisfaction. In question 2, the term school programs/philosophy/practices/goals is simplified into school programs. 3. The different sections in our school work independently (separately) to meet students and parents needs. In question 3, the term various units and departments is simplified into different sections. 4. The school is quick to create a response to the changes in educational advancements in the community. In question 4, the term we is clarified as the school. Furthermore, the overall length of the question is shortened. 84

99 5. The school constantly monitors the level of commitment towards the students and parents. In question 5, the subject is clarified as the school. 6. We sacrifice some short term gains for long term growth of the school. In question 6, the overall length of the sentence is shortened and the examples were deemed unnecessary, therefore omitted. 7. The school is willing to accept short term losses in order to do what is right for the students and parents. In question 11, the word financial has been omitted. 8. The school leaders regularly discuss other school s strengths and strategies. In question 16, the term school board, principal, and other school leaders is simplified into school leaders. 9. All sections work collaboratively to increase value to our parents and students education. In question 17, the term units/sections/departments has been simplified into sections. 10. The school leaders emphasize longer term objectives relative to shorter term ones. Question 19 has been simplified and the examples have been omitted. Validity and reliability of the MOSQ instrument The MOSQ instrument was tested for unidimensionality, reliability, and validity. Unidimensionality measures the existence of one, and only one, underlying construct for a set of items (J. C. Anderson, Gerbing, & Hunter, 1987). A factor analysis was used to assess unidimensionality, with weak loading items eliminated from the scale, as suggested by Hair, Black, Babin, and Anderson (2014). Peter (1979) referred to scale reliability as related to the consistency of a scale in measuring a latent variable. A scale would consist of a number of items, which was designed to work together in measuring the latent variable. Items that are internally consistent form a homogenous set, i.e. they vary together. Reliability of that scale would then be measured to indicate whether the design of the scale, 85

100 including the items that are consisted within, does in fact measure a latent variable. The Cronbach s alpha was used to assess reliability of the construct. A high Cronbach s alpha value indicates a high level of construct reliability. The general rule of thumb suggested by Nunnally (1978) is the alpha value of a scale should be higher than 0.7 to indicate a good measure of internal consistency; however, an alpha value of 0.6 is acceptable. A scale with an alpha value lower than 0.6 would require further investigation. The MOSQ was proven to be reliable, with all Cronbach alpha values above 0.7. The reliability analysis assesses consistency, i.e. how likely will this set of items measure the same latent construct when used in multiple settings, but does not asses the accuracy in which the set of items perform. In order to measure the accuracy of item performance, i.e. does the item actually measure what it was designed to measure (Dunn et al., 1994), a series of validity tests were conducted. In accordance to Dunn et al. (1994) the different validity measures have been assessed: content validity, face validity, construct validity, and criterion related validity. Face validity is a quick assessment or judgment on whether the items appear correct and appropriate, i.e. appear to be able to measure the intended content. Content validity is a judgment of the suitability of the scale to represent the measure (Burns & Bush, 2006b). The pilot-testing phase of the study established the face validity and content validity of the MOSQ instrument. Construct validity is the extent to which a measure is related to other measures consistently with theoretically based concepts (Carmines & Zeller, 1979), which is typically determined by two criteria: convergent validity and divergent validity (Bagozzi, Youjae, & Phillips, 1991). Convergent validity is defined by Bagozzi et al. (1991) as the level of agreement in measuring the same construct through the use of two or more methods. As suggested by Dunn et al. (1994), convergent validity was assessed through the factor analysis and established by 86

101 achieving sufficiently high factor loadings. Nunnally (1978) suggested 0.7 to be the benchmark for a sufficiently high factor loading in order to establish convergent validity. Discriminant validity assesses the degree of separation between factors that emerge from the dataset and, as such, is essential when items in the set are highly correlated with each other and similar in nature. It is critical to establish that the different item sets are not measuring the same construct (Garver & Mentzer, 1999). Correlations between items that are not extremely high coupled with clear separation of items in the factor analysis have established the presence of discriminant validity. Chapter four will elaborate on the reliability and validity assessments in more detail. Ethical considerations This study has taken into consideration the ethical implications that may arise from the data collection procedure and consent for this research has been awarded by the Human Research Ethics Committee (HREC) University of Melbourne, Department of Education and Early Childhood Development (DEECD), Catholic Education Office Melbourne (CEOM), and each participant. There were no perceived power relationship between the researcher and the participants of the study. Participating in the study was clearly stated as voluntary. Furthermore, data was de-identified and all findings were presented anonymously. Data preparation The data collection procedure resulted in 404 responses combined from Victoria and non-victoria groups. 87

102 Prior to running the data analysis procedures, issues pertaining to missing data were examined and addressed. The procedure of missing data analysis followed the three steps suggested by Hair (2006): first, eliminate obvious cases or variables, second, examine pattern of missing data, and third, determine approach to deal with missing data. The first step required the uncovering of clearly visible cases of significantly missing data or other obvious cases. The general rule suggested by Hair (2006) is to remove cases with a larger than 10% missing data and variables with larger than 15% missing data. It was found that no data needed to be removed, as there were no cases or variables above the stipulated limit. A missing value analysis was performed to observe for any missing data patterns as well as indicate whether the data was missing at random. The results show that there are no patterns in regards to the missing data and further indicated that the data was missing at random. Pairwise deletion was selected as the approach to deal with the missing data during analysis in order to maximize data availability. The variables were checked for outliers, normality, linearity, multicollinearity, and homoscedasticity, in order to satisfy the assumptions prior to a multiple regression analysis. A dataset of 404 responses was transferred to computer for analysis using the SPSS software version 20. This dataset contains 280 responses from Victoria and 124 responses from outside Victoria. All 404 responses were used in establishing the validity and reliability of the tool (see chapter four), while the subset of 280 responses from Victoria were used in the set of analyses into market orientation in Victoria (see chapter five). 88

103 OPERATIONAL DEFINITION OF RESEARCH VARIABLES This section elaborates on the operational definitions of the constructs used in this study. A set of items from pre-validated instrument was used to measure the dependent variables (school performance) and independent variables (five dimensions of market orientation in education). A dependent variable or outcome variable is the variable in which the independent variables are hypothesized to predict towards. In the research of market orientation, it has been suggested multiple times that the level of market orientation predicts organizational performance. Hence, the dependent variable in this study is the measure of school performance. There can be many facets to measuring a school s performance, which highly depends on the definition of performance used by a particular school. This presents a matter of contextualization, in which the measure of school performance is highly contextual and depends on the aforementioned school s organizational definition of performance. This may well be tied to their organizational short-term and long-term goals, which commonly is a combination of a variety of factors, such as: student academic performance, student attitude, staff attitude, parent satisfaction, enrollment numbers, etc. It was not feasible to include a comprehensive measure of school performance within the scope of this study. Hence, this study views school performance as a measure of perceived student performance as one of the popular methods for school assessment. Writers such as Caruana et al. (1998), Ellis (2006), Oplatka and Hemsley-Brown (2007), and others have used this approach of overall performance measure in market orientation research. Student performance is captured as one of the self-reported items in the MOSQ instrument, specifically question 26: What is your overall assessment of student performance in your school? Response is provided through a five point Likert scale ranging from 1 (very low) to 5 (very high). 89

104 The independent variables, or predictors, are the factors, which are hypothesized to have an impact on the dependent variables. In the design of this research, the independent variables are the five dimensions of market orientation: customer orientation, competitor orientation, inter-functional coordination, long-term growth, and market intelligence. The heart of market orientation is putting a focus on the customer (Narver & Slater, 1990). Customer orientation is a measure of how schools through its staff explore and identify the needs of its customers, and subsequently, prepare to answer those needs. Establishing the students and parents current and future needs would be the first step in creating a value-add proposition for the school (Kohli & Jaworski, 1990; Slater & Narver, 1994). In order to achieve this, Slater and Narver (1994) have suggested that organizations pay attention to their service delivery performance as well as spending more time with customers. Customer orientation is captured by three items in the MOSQ instrument. Competitor orientation is a measure of how schools investigate and reveal advancements performed or planned by their competitors. Narver and Slater (1990) states that it is critical to identify and understand the weakness, strengths, and strategies of current and potential future competitors. These advancements can be in relation to the various school administration processes, human resource management, as well as pedagogy and academic offerings. While competition encompasses a broad definition of competition as schools look towards other schools in the immediate vicinity, schools of similar category in a different location, and even other after school institutions providing specific services for students. Competitor orientation is captured by three items in the MOSQ. Inter-functional coordination is a measure of the intensity of information flow and sharing within a school. It is important in schools that information and appropriate data is shared and discussed within the different departments and sections. Data and findings around customer (students, parents, other stakeholders) needs and competitor (other schools) advancements should be 90

105 shared with school staff. Shapiro (1973) emphasizes that market orientation is not marketing orientation; hence, the marketing department (or school leader) is not the most important role; but conversely, it is the combined effort of all school staff. Inter-functional coordination is captured by three items in the MOSQ. Long-term growth is a measure of the level of prioritization between short-term benefits compared with longer-term benefits. Schools that plan and have an emphasis on long-term growth will have a vision for their future and is better positioned for growth and survival. Long-term growth is captured through four items in the MOSQ. Market intelligence is a measure of the availability of standard systems and processes within the school, which can ensure sustainability of market orientation without heavy reliance on a particular figure or department. When market orientation is heavily dependent on a current leadership figure in the school without formal processes in place, then the level of market orientation of the school is reliant on the school structure staying exactly the same. A structure change/personnel change in the school would adversely impact its level of market orientation. It is also a possible scenario that schools are conducting acts of market orientation without a purposeful drive or background information. Market intelligence is captured through three items in the MOSQ. Table 3.8 summarizes the mapping of the measured variables to the items in the MOSQ. Table 3.8. Mapping of measured variables in MOSQ Variable Item(s) Measurement Dependent Variable (Outcome) Student performance Q26 Self-assessed via a five-point Likert scale from 1(Low) to 5 (High). Independent Variable (Predictor) Customer Orientation Q2, Q6, Q10, Q13, Q15, Q16 Competitor Q1, Q4, Q19, Orientation Q20, Q25 Inter-functional Q3, Q9, Q11, Coordination Q21, Q22 Long-term growth Q3, Q9, Q11, Q21, Q22 Market Intelligence Q3, Q9, Q11, Q21, Q22 Self-assessed via a six-point Likert scale from 1(Strongly disagree) to 6 (Strongly agree). 91

106 As discussed in the sections above, it is common practice and generally accepted in market orientation research to use self-assessed items, as past research have provided evidence that subjective responses do reflect their objective representations. Thus, the measure of perceived student performance gathered in this research should similarly reflect the actual objective measure of student performance. Likewise, the subjective measures of customer orientation, competitor orientation, inter-functional coordination, long-term growth, and market intelligence should quite accurately reflect the market orientation level of the school in question. RESEARCH HYPOTHESIS The two research questions guiding this study have been expanded into research hypotheses below. Research question 1: To what extent are schools in Victoria market oriented? Hypothesis H1: Schools in Victoria are market oriented in all dimensions Research question 2: What is the relationship between market orientation and school performance? Hypothesis H2: There is a statistically significant positive relationship between student performance and market orientation level DATA ANALYSIS METHODS In order to validate the MOSQ instrument and answer the research questions, a set of statistical analysis methods were used. First, validity and reliability tests were conducted to establish consistency of the MOSQ instrument. Second, an exploratory factor analysis and confirmatory factor analysis via structural equation modeling was employed to confirm the five-dimension model of market orientation in education. Third, a bivariate correlation analysis was used to examine the association levels between the different variables in the model. 92

107 Fourth, a descriptive analysis was conducted to assess the level of market orientation of schools. Job position and length of service was collected as part of the survey and was analyzed for their effect as moderators of market orientation, as suggested by McAleese and Hargie (2004) that different structural roles influence the implementation of market orientation. Fifth, a multiple analysis of variance (MANOVA) was performed to investigate the effects of job position and length of service on the level of market orientation. Finally, a multiple linear regression was conducted to investigate the relationship between the five dimensions of market orientation with student performance. The details of the analyses are provided in subsequent chapters in this thesis. The original intention was to conduct a split analysis method by conducting an exploratory factor analysis with the first half and a confirmatory factor analysis with the second half of the dataset. This was not possible due to the limitation of sample size. Both exploratory and confirmatory factor analyses were conducted on the same dataset to obtain deeper understanding of the fit indices of the model. Table 3.9 recapitulates the statistical analysis methods central to this study. Table 3.9. Statistical analyses methods No Objectives Statistical Method Used 1 Measuring internal consistency of the MOSQ instrument Validity and reliability test 2 Exploring the structure of the model and the presence of the 5 Exploratory Factor dimensions of market orientation analysis 3 Confirming the factor structure Structural Equation Modeling 4 Investigating correlations between variables (both dependent Pearson s bivariate and independent) correlation analysis 5 Investigating the market orientation level of Victorian schools Descriptive analysis 6 Investigating the effects of job position and length of service on market orientation 7 Investigation on the correlation between student performance with the market orientation level of a school Multivariate analysis of variance Multiple linear regression analysis The objectives of this study can be categorized into two main areas. The first is to ascertain that the MOSQ instrument is a valid and reliable tool to measure market orientation in schools. The first two objectives address this first area and 93

108 are elaborated in chapter 4. The second is a study into market orientation and its implications in Victoria, which are addressed by the other four objectives and is presented in chapter 5. CHAPTER SUMMARY This chapter has provided an elaboration of the rigorous methodology employed in this study. The study utilized a cross-sectional design with a quantitative methodology to answer the research questions. The MOSQ instrument was developed as the instrument for data collection and statistical techniques were explained. 94

109 Chapter 4: Instrument Validation OVERVIEW OF THE CHAPTER The previous chapters provided the background the background and significance of the study. A review of the literature has been provided and the research methodology has been explained, which detailed the process of the creation of the Market Orientation in Schools Questionnaire (MOSQ) instrument. This chapter aims to establish the MOSQ instrument as a structurally sound tool that measure market orientation in schools, empirically validate the factor structure of the MOSQ instrument and elaborate on testing the instrument for consistency, structure, and reliability. The approaches used include: exploratory factor analysis, reliability analysis through measuring the Cronbach s alpha coefficient, establishing validity, and confirming the model using structured equation modeling. INTRODUCTION The research of market orientation and it s positive relationship with organizational performance (Kohli et al., 1993; Kotler, 1984; Kotler & Andreasen, 1996; Kotler & Fox, 1995; Lado & Maydeu-Olivares, 2001; Levitt, 1960; Narver & Slater, 1990), different conceptual models of market orientation, such as the MARKOR (Kohli & Jaworski, 1990) model and MKTOR s (Narver & Slater, 1990) 3-aspect model, have been suggested. The different models have been discussed in chapter two and were found unsuitable for use in a school setting. A conceptual model for market orientation that is specific for schools is investigated in this study. The hypothesized market orientation model being investigated in this study consists of five dimensions: customer orientation, competitor orientation, inter-functional coordination, long-term growth, and market intelligence. The MOSQ instrument under investigation has been derived originally from the Pulendran et al. (1998b) instrument that was focused towards the business sector, and has been revised and refined to be a better fit in the education sector. 95

110 One of the primary aims of this study is to provide information regarding the factor structure, reliability, and validity of the MOSQ tool. An exploratory factor analysis and a confirmatory factor analysis have been conducted, which are commonly used in the psychology and education field as the method of choice for interpreting self-reporting questionnaires (Williams, Onsman, & Brown, 2010). The use of a factor analysis here is to provide evidence of construct validity for the self-reported scales of the MOSQ instrument. Table 4.1. Mapping of items in the MOSQ instrument Dimension No of Questions Item no Customer Orientation 6 Q2, Q6, Q10, Q13, Q15, Q16 Competitor Orientation 5 Q1, Q4, Q19, Q20, Q25 Inter-functional coordination 5 Q3, Q9, Q11, Q21, Q22 Long-term growth 4 Q7, Q14, Q17, Q23 Market intelligence 5 Q5, Q8, Q12, Q18, Q24 The MOSQ consists of 25 items that corresponds to the five dimensions of market orientation, with six items for customer orientation, four items for long-term growth, and five items each for the other dimensions: competitor orientation, inter-functional coordination, and market intelligence. Table 4.1 outlines the mapping of items in the MOSQ instrument. METHOD Participants Respondents were identified through a combined sampling method of stratified random sampling and purposeful sampling and consequently invited to participate in the research. Invitations were sent out through and included the QMOS questionnaire. The participants comprised of 404 respondents from two groups, the first group was 280 school staff in Victoria, Australia (69.3%), whilst the second group was 124 school staff from outside of Victoria (30.7%), as shown in Table 4.2. From all 404 respondents, 295 indicated their job position while 109 respondents did not indicate which position they hold at the school. From the 295 respondents who indicated their job position at the school, 13,6% 96

111 (40 respondents) indicated their position as a principal (or principal class), 36.3% (107 respondents) as a lead teacher, 39.7% (117 respondents) as a teacher, and 10.5% (31 respondents) as a non-teaching staff member (see Table 4.3). The missing data regarding job position is not relevant in this section of the study and thus is not a deterrent from continuing with analysis. Table 4.2 Overall group distribution Group Distribution Frequency Percent Valid Percent Cumulative Percent Victoria Valid Non-Victoria Total Table 4.3 Overall job position distribution Job Position Frequency Percent Valid Percent Cumulative Percent Principal Class Lead teacher Teacher Valid Non-teaching staff Total Missing Total Data collection procedure The twenty-five items in the MOSQ were aligned with a six point Likert scale ranging from 1, indicating very strongly disagree, through to 6, indicating very strongly agree. The questions covered the five dimensions of market orientation: Customer Orientation, Competitor Orientation, Inter-functional Coordination, Long-term Growth, and Market Intelligence System. Schools were contacted via through the principals and permission to conduct research was acquired. A set of research materials including the QMOS instrument was sent via to schools that indicated their interest to participate. The principals then forwarded the QMOS to their staff members informing them of the value of the research as well as the voluntary nature. Each 97

112 participant then filled out the questionnaire and forwarded it back to the researcher. All participants had the option asking for clarification both about the research as well as about filling in the questionnaire. It was informed to the principals that feedback to the school would be provided at the conclusion of the analysis and a copy of the full research would be available at the completion of the study. There were no fees or rewards as compensation for participating in the research. MEASUREMENT CONSTRUCTS The model being tested consists of five independent variables and one dependent variable. The five independent variables are the five dimensions of market orientation: customer orientation, competitor orientation, interfunctional coordination, long-term growth, and market intelligence. As suggested by Hair et al. (2014), a set of analyses have been conducted to assess validity and reliability of the constructs. This study employs the recommended four steps: 1) defining the individual concepts; 2) developing the overall measurement model; 3) designing a study to produce empirical results; 4) assessing measurement model validity. The dimension of customer orientation consists of all activities that capture information regarding the targeted customers of the organization; with the aim of understanding their needs and desires. Gathering accurate information on customers perception will create an understanding of whether there is a direct fit between the organization s offerings with customer s needs. This understanding of customer perception, specifically what the customer values (Day & Wensley, 1988) not only captures current trends, but should also extend towards market shifts in the future. The customer orientation construct is captured by six items in the MOSQ tool, as presented in Table

113 Table 4.4. Customer orientation items No Question 2 The school programs are mainly driven by students and parents' satisfaction. 6 The school constantly monitors the level of commitment towards the students and parents. 10 Our programs are designed and created based on our understanding of students and parents needs. 13 Our school strategic plan is driven by our understanding of possibilities for creating value for our students and parents. 15 The school regularly runs a set of formal procedures that attempt to discover the needs of current and prospective students. 16 The different sections in our school work independently (separately) to meet students and parents needs. Competitor orientation is a measure of how schools investigate and reveal advancements performed or planned by their competitors. Narver and Slater (1990) argues that it is critical to identify and understand the weakness, strengths, and strategies of current and potential future competitors. These advancements can be in relation to the various school administration processes, human resource management, as well as pedagogy and academic offerings. While competition encompasses a broad definition of competition as schools look towards other schools in the immediate vicinity, schools of similar category in a different location, and even other after school institutions providing specific services for students. The competitor orientation construct is captured by five items in the MOSQ, as presented in Table 4.5. Inter-functional coordination is a measure of the intensity of information flow and sharing within a school. It is important in schools that information and appropriate data is shared and discussed within the different departments and sections. Data and findings around customer (students, parents, other stakeholders) needs and competitor (other schools) advancements should be shared with school staff. Shapiro (1973) emphasizes that market orientation is not marketing orientation; hence, the marketing department (or school leader) is not the most important role; but conversely, it is the combined effort of all school 99

114 staff. The inter-functional coordination construct is captured by five items in the MOSQ, as presented in Table 4.6. Table 4.5. Competitor orientation items No Question 1 Teachers regularly share information about other school s practices and programs. 4 The school gives close attention to following up parents queries. 19 Our school tries to attract students by offering more value compared to other schools. 20 The school leaders regularly discuss other school s strengths and strategies. 25 A main objective of our school is to provide better educational value relative to other schools. Table 4.6. Inter-functional coordination items No Question 3 The school is quick to respond to the changes in education in the community. 9 Information on students, parents, program success and program failures are shared with teachers. 11 School meetings (curriculum, marketing, finance, staffing) are integrated between different sections and are driven by our understanding of possibilities to increase value in students education. 21 All sections work collaboratively to increase value to our parents and students education. 22 We share programs and resources with other sections in the school. Long-term growth is a measure of the level of prioritization between short-term benefits compared with longer-term benefits. Schools that plan and have an emphasis on long-term growth will have a vision for their future and is better positioned for growth and survival. The long-term growth construct is captured by four items in the MOSQ, as presented in Table 4.7. Market intelligence is a measure of the availability of standard systems and processes within the school, which can ensure sustainability of market orientation without heavy reliance on a particular figure or department. When market orientation is heavily dependent on a current leadership figure in the school without formal processes in place, then the level of market orientation of the school is reliant on the school structure staying exactly the same. A structure 100

115 change/personnel change in the school would adversely impact its level of market orientation. It is also a possible scenario that schools are conducting acts of market orientation without a purposeful drive or background information. The market intelligence construct is captured by five items in the MOSQ, as presented in Table 4.8. Table 4.7. Long-term growth items No Question 7 The school sacrifices some short term gains for long term growth of the school. 14 The school is willing to accept short-term losses in order to do what is right for the students and parents. 17 The school leaders believe that long-term growth requires some short-term sacrifices. 23 The school leaders emphasize longer term objectives relative to shorter term ones. Table 4.8. Market intelligence items No Question 5 The school is able to successfully understand and identify the key marketing issues it faces. 8 The school keeps student data and uses them for reference. 12 The school has a set of processes to scan (informal means) the environment and obtain information about current trends and developments. (ex: through newspapers, talking to people, external conferences, etc.) 18 We measure student and parent satisfaction systemically and frequently. 24 The results and findings from surveys, research, and other information are regularly analysed and used in decision-making processes. PRELIMINARY ANALYSIS Preliminary analysis has been performed as an initial check to assess the suitability of a factor analysis on the dataset. The assessment will cover an investigation over the distribution of data, issues of multicollinearity, and skewness. Distribution of data Observation of data distribution requires a look into the normality, skewness, and kurtosis. Table 4.9 presents the result of the K-S and S-W test of normality 101

116 on items of the QMOS questionnaire. The results show that items are significant, indicating that the dataset follows a non-normal distribution and thus further observation into the skewness and kurtosis was conducted. The skewness and kurtosis of the dataset, as presented in Table 4.11, fall within the acceptable range of -2 to +2 (George & Mallery, 2003). This establishes confidence to proceed with further analysis. KMO and Bartlett test The Kaiser-Meyer-Olkin Measure of Sampling Adequacy (KMO) (Kaiser, 1970) is another way of assessing the suitability of a factor analysis. The KMO value ranges from 0 to 1 and represents the ratio of squared correlation between variables to the squared partial correlation between variables. The closer the KMO value is to 1 indicates that patterns of correlations are relatively compact and thus distinct and reliable factors would result from a factor analysis. The result value of the KMO analysis is.934, indicating high suitability for a factor analysis. Results from the Barlett s test reveals the closeness to an identity matrix and overall significance of the correlation. The result of the KMO test revealed an acceptable KMO statistic of (> 0.5), which suggests that the sample size is adequate (Field, 2009). Analysis of the Bartlett s test of sphericity revealed high significance (p < 0.005), which indicates that the variables (items) are independent of one another; thus, is suitable for a factor analysis (Field, 2009). This further suggests that there are no issues with multicollinearity in this study. The results of the KMO and Bartlett s tests are presented in see Table

117 Table 4.9. Test of Normality Kolmogorov-Smirnov a Shapiro-Wilk Statistic df Sig. Statistic df Sig. Q1 Share information Q2 Satisfaction driven Q3 Quick to respond Q4 Follow parents Q5 Identify key market issues Q6 Monitor level of commitment Q7 Sacrifice short term gains Q8 Keep student data Q9 Share information with teachers Q10 Base on student needs Q11 Meetings are integrated Q12 Scan environment for info Q13 School strategy based on value Q14 Except short term loss Q15 Attempt to discover needs Q16 Sections don t work independently Q17 Long term growth requires sacrifice Q18 Frequent measure satisfaction Q19 Offer more value Q20 Discuss school strengths Q21 Work collaboratively increase value Q22 Share resources with other sections Q23 Emphasize long term objective Q24 Analyze findings from surveys Q25 Provide better value a. Lilliefors Significance Correction Table KMO and Bartlett s Test KMO and Bartlett's Test Kaiser-Meyer-Olkin Measure of Sampling Adequacy..934 Approx. Chi-Square Bartlett's Test of Sphericity df 120 Sig

118 Descriptive statistics The means, standard deviation, skewness, and kurtosis of all items and scales are presented in Table The five scales are the five dimensions of market orientation. Mean scores were computed by equal weighting of the average of items in the particular factor. For example, the mean score of customer orientation is the average of item 2 (Q2), item 6 (Q6), item 10 (Q10), item 13 (Q13), and item 16 (Q16). On a six-point scale, the mean score of customer orientation is 4.55 with a standard deviation of The mean score of its components are 3.76 (Q2), 4.5 (Q6), 4.43(Q10), 4.73(Q13), and 3.19(Q16). The standard deviations range from 1.13 to On a six-point scale, the mean score of competitor orientation is 4.16 with a standard deviation of The mean score of its components are 4.08(Q1), 4.31(Q19), 3.72(Q20), and 4.46(Q25). The standard deviations range from 1.24 to On a six-point scale, the mean score of inter-functional coordination is 4.25 with a standard deviation of The mean score of its components are 4.07(Q3), 4.29(Q9), 4.29(Q11), 4.25(Q21) and 4.43(Q22). The standard deviations range from 1.22 to 1.3. On a six-point scale, the mean score of long-term growth is 4.14 with a standard deviation of The mean score of its components are 4.95(Q4), 4.06(Q7), 4.17(Q14), 4.11(Q15), 4.13(Q17), and 4.21(Q23). The standard deviations range from 1.04 to On a six-point scale, the mean score of market intelligence is 4.4 with a standard deviation of The mean score of its components are 4.25(Q5), 4.95(Q8), 3.99(Q12), 4.1(Q18), and 4.15(Q24). The standard deviations range from 1.07 to

119 Table Descriptive statistics of all items and constructs Descriptive Statistics N Mean Std. Dev. Skewness Kurtosis Customer orientation Q2 Satisfaction driven Q6 Monitor level of commitment Q10 Base on student needs Q13 School strategy based on value Q16 Sections don t work independently Competitor orientation Q1 Share information Q19 Offer more value Q20 Discuss school strengths Q25 Provide better value Inter-functional coordination Q3 Quick to respond Q9 Share information with teachers Q11 Meeting integrated Q21 Work collaboratively to increase value Q22 Share resources with other sections Long-term growth Q4 Follow up with parents Q7 Sacrifice short term gains Q14 Except short term loss Q15 Attempt discover needs Q17 Long term growth requires sacrifice Q23 Emphasize long term objective Market intelligence Q5 Identify key market issues Q8 Keeps student data Q12 Scan environment for info Q18 Frequent measure satisfaction Q24 Analyze findings from surveys Q26 Student performance EXPLORATORY FACTOR ANALYSIS Preliminary screening was conducted on the data according to standardized procedures recommended by (Hair et al., 2014) in order to ascertain the integrity of the data before conducting analyses. 105

120 The QMOS instrument consists of 25 items that is conceptually linked with the 5 dimensions of market orientation. The aim of a factor analysis is to reduce a large number of variables to a smaller number of variables by summarizing the patterns of correlations between the variables (Tabachnick, 1996). In other words, to summarize the pattern of correlation of items and combining them to make factors. There are two types of factor analyses: exploratory factor analysis and confirmatory factor analysis. This section focuses on exploratory factor analysis, which is used in the early stage of research as a tool to consolidate the correlated items. Items were considered to contribute to the factor if the items had a loading of equal to or greater than 0.4 (Maslach & Jackson, 1981). It is the assumption that participants in this study has been somewhat randomly gathered and that the variables measured constitute the whole population of variables in this study. Through this assumption, the maximum-likelihood technique has been chosen over the principal component factor extraction approach. The maximum-likelihood technique will allow the results to be generalized to the greater population, whilst the principal component factor extraction technique is suitable if the sample size constitutes of the whole population (Field, 2009). The five dimensions of market orientation are the latent factors in this model. Furthermore, the assumption for the market orientation in schools model is that the five factors/dimensions are correlated to each other and that there is a latent variable combined market orientation that links all factors together. Due to these assumptions, an oblique rotation has been selected as the more appropriate approach, as suggested by Field (2009). In this case, the pattern matrix represents the regression coefficient for each variable on each factor and the structure matrix represents the correlation coefficient for each variable on each factor. A maximum-likelihood factor analysis with oblique (Oblimin) rotation was conducted on the 25-item Likert scale questions of the MOSQ to ascertain the presence of the assumed five-factor solution. The analysis revealed that various 106

121 indicators of factorability were good with each item loading on its expected factor, with all factor loadings at least.3. The five factors were in accordance with the five dimensions of market orientation: Customer Orientation, Competitor Orientation, Inter-functional Coordination, Long Term Growth, and Market Intelligence. The best solution was found with 16 out of the original 25 items. There were a total of 14 cases of missing data with a maximum of 3 cases in one item. Missing data was handled by SPSS using pairwise deletion. In the 5-factor model of 25 items proposed in this study, 3 items loaded on Market intelligence, 4 items loaded on Long Term Growth, 3 items loaded on Competitor Orientation, 3 items loaded on Inter-functional Coordination, and 3 items loaded on Customer Orientation. 9 items were removed (Q1, Q2, Q4, Q5, Q9, Q11, Q12, Q15, Q16). The items loaded above 0.4 except item Q6, which loaded on Customer Orientation by 0.3, and item Q22, which loaded on Competitor Orientation by Table 4.12 shows the factor analysis results. Table 4.12: Factor Analysis Pattern Matrix Factor Items Market Long term Compet. Interfunc. Intel. growth Or. Coord. Cust. Or. Q18 Frequent measure satisfaction Q24 Analyze findings from surveys Q8 Keeps student data Q17 Long term growth requires sacrifice Q7 Sacrifice short term gains Q14 Except short term loss Q23 Emphasize long term objective Q19 Offer more value Q25 Provide better value Q20 Discuss school strengths Q10 Base on student needs Q13 School strategy based on value Q6 Monitor level of commitment Q21 Work collaboratively increase value Q22 Share resources with other sections Q3 Quick to respond Extraction Method: Maximum Likelihood. Rotation Method: Oblimin with Kaiser Normalization. 107

122 Two items item Q6 and Q20 loaded on more than one factor. Item Q6: The school constantly monitors the level of commitment towards the students and parents. loaded on Customer Orientation and Market Intelligence. Item Q20: The school leaders regularly discuss other school s strengths and strategies. loaded on Competitor Orientation and Market Intelligence. Both anomalies mentioned are related to the market intelligence dimension. Perhaps this indicates the possibility of the concept of market intelligence being somewhat overlapping with customer and competitor orientation. As suggested by Kohli and Jaworski (1990), placing a focus on the customers involves translating market intelligence data into action, which considers the competition, as one of the exogenous factors. Correlation analysis Assessing the factorability of the correlation matrix requires inspection of the correlation matrix, assessment of the overall significance of the correlation matrix using Bartlett s test of sphericity and assessing the measure of sampling adequacy (Hair, 1998; Tabachnick, 1996). Extremely low item correlations would look very similar to an identity matrix and would indicate the items are highly independent (uncorrelated) to each other. The current model assumes that the five-dimensions are correlated and together are measuring a latent variable of market orientation. Interpretation of the strength of relationships between items followed the guidelines suggested by Rowntree (1987). The suggested classifications of the correlation coefficient (r) is shown in Table Table Classification of Correlation Coefficient r Correlation interpretation Very weak, negligible Weak, low Moderate Strong, high, marked Very strong, very high 108

123 Table 4.14 shows that the correlations between factors are substantial. All correlation values are greater than 0.3, which is the suggested cut-off value for a factor analysis (Tabachnick, 1996; Tabachnick & Fidell, 2014). Table 4.14: Factor Correlation Matrix with Eigen values in the diagonal 2 Long term growth 4 Inter functional Coordination Factors 1 Market Intelligence 3 Competitor Orientation Market Intelligence Customer Orientation Long term growth Competitor Orientation Inter functional Coordination Customer Orientation Observation of the correlation table shows that all factors have moderate correlation, with a correlation of 0.4 or greater. If low correlation between factors were found, then an orthogonal rotation would be appropriate, since this is not the case; the choice of using an oblique rotation was appropriate (Field, 2009). The five factors as dimensions of market orientation A total of nine items were removed during the factor analysis to obtain the best factor solution. The removed items are: Q1, Q2, Q4, Q5, Q9, Q11, Q12, Q15, Q16. The new item distribution is presented in Table Table 4.15: List of factors and items that load on them 1 Market Intelligence 2 Long term growth 3 Competitor Orientation Q18 Frequent Measure Satisfaction Q17 Long term growth requires sacrifice Q19 Offer more value 4 Inter functional Coordination Q21 Work collaboratively to increase value 5 Customer Orientation Q10 Base on student needs Q24 Analyze info from surveys Q7 Sacrifice short term gains Q25 Provide better value Q22 Share resources with other sections Q13 School strategy based on value Q8 Keeps student data Q14 Except short term loss Q20 Discuss school strengths Q3 Quick to respond Q6 Monitor level of commitment Q23 Emphasize long term objective 109

124 Reliability of the MOSQ instrument Reliability is defined as the extent to which measurements of a particular test are repeatable (Nunnally, 1970). In other words, a reliable instrument would yield consistent measurement results when repeated. The higher the consistency of the results when repeated, the higher the reliability of the procedure used (Carmines & Zeller, 1979). There are at least four suggested methods for reliability estimation: test-retest, alternative form, split-half method, and methods concerning internal consistency (Nunnally, 1970). The test-retest method basically administers the same measurement procedure on the same participants twice in different times. After which a correlation between the two measures are calculated. Alternative form is a method where two different, but equivalent, forms of a scale are constructed and subsequently administered at two different times to the same respondents. The split-half method is a variation of the test-retest and is useful when a test was only administered one time. This method will split the single set of items in half, creating two sets of items. The correlation of the two halves is then estimated to calculate the reliability coefficient. Internal consistency methods (Carmines & Zeller, 1979) are ones that do not require the repeating or splitting of items. Internal consistency is fundamentally a measure based on the correlations between different items in the test and measures whether the items in the same factor produce similar scores (Field, 2009). A scale that has high internal consistency would suggest that the items are measuring the same thing (DeVellis, 2012) hence, the scale is a reliable one. Cronbach s (1951) alpha ( provides a good estimate of reliability in most situations and is the most recommended measure of internal consistency. The value of ranges from 0 to 1, where 1 is the highest reliability value. A low reliability value suggests that there is little commonality between the items in the scale or there are too few items (Churchill, 1979). Nunnally (1970) 110

125 suggested that a reliability coefficient of.5 to.6 is sufficient for the early stages of any research, although the desirable value is.7 or above (Hair, 2006). The estimates of reliability (Cronbach' s alpha) for the five dimensions of market orientation were computed using the reliability procedure in SPSS. The results were sufficiently high to provide confidence in using total scores: market intelligence =.79, Long term growth =.86, inter functional =.79, Competitor orientation =.67, and Customer orientation =.79. Table 4.16 shows the reliability scales for each dimension of market orientation. Table Cronbach s alpha for the five dimensions of market orientation Reliability Statistics Dimension Cronbach's Alpha N of Items Market Intelligence Long-term growth Interfunctional cooperation Competitor orientation Customer orientation The estimate of reliability (Cronbach s alpha) for the overall market orientation construct was computed using the reliability procedure in SPSS. The result was =.869, which is sufficiently high to provide confidence in using total score (presented in Table 4.17). Table Overall reliability statistics Reliability Statistics Cronbach's Alpha Cronbach's Alpha Based on Standardized Items No of Items A meta-analysis by Rodriguez Cano et al. (2004) consisting of 53 empirical studies representing over 12,000 respondents across 23 countries revealed that reliability measures of market orientation scales were in the range of 0.70 to The 0.87 Cronbach s alpha measure of reliability index in this study sits 111

126 well within the range of past empirical research, thus providing confidence in the reliability of the market orientation scales (dimensions) presented. Validity The validity of an instrument is essential as it indicates the alignment between the purposes of the instrument with the results. In essence: whether or not the instrument accurately measures what it was intended to measure and in an interpretable way (DeVellis, 2012; Peter, 1979). P. Kline (1986) further discusses that the internal consistency of an instrument is only valuable to the degree that it is held to ensure high levels of validity. In other words, no matter how high the reliability level of a tool is, it is only useful if it is also valid. In research, there are two kinds of validity assessment that are applicable: content validity and construct validity. This section will discuss the assessments of face validity, content validity, and construct validity. Face validity Face validity is a measure that refers to a judgment towards whether a test appears to measure what it was set out to measure (Cohen, 1988; P. Kline, 1986). Or to put plainly, whether a test looks about right and is conducted by untrained personnel to have a first look. Face validity needs to be brought into context considering the target audience and content of material and was achieved during the pilot testing period. Content validity Content validity is a judgment of the suitability of the scale to represent the measure (Burns & Bush, 2006b). Previous studies (Churchill, 1979; Malhotra, 2010) suggest that researchers should review the scale items and should be screened by experts, as well as undergoing a pilot test. Content validity in this study has been achieved as the instrument was derived from a previous instrument by Pulendran et al. (1998b). Furthermore, experts in market orientation in education have reviewed the instrument and a pilot study 112

127 has been conducted in the refinement process to ensure that the questions were suitable in the school context. As suggested by J. C. Anderson and Gerbing (1991) and Oppenheim and Oppenheim (1992), pilot test is essential for achieving substantive validity. Construct validity Carmines and Zeller (1979) define construct validity as the extent to which a measure is related to other measures consistently with theoretically based concepts. Construct validity consists of two categories: convergent validity and discriminant validity. Convergent Validity refers to the homogeneity of items within the same construct while discriminant validity refers to the heterogeneity among different constructs. The testing of construct validity is done through the factor analysis procedure previously described in this chapter. The factor analysis resulted in a pattern matrix that represents the unique contribution the each item makes to a factor. To assess discriminant validity, the factor loadings of each factor are analyzed to investigate the relationship between an item with the associated factor. Five constructs (factors) emerged as a result, representing the five dimensions of market orientation: customer orientation, competitor orientation, interfunctional coordination, and market intelligence. Hence, discriminant validity is confirmed. Each of the five constructs has sufficiently high loadings of items. The construct of market intelligence comprises of three items with factor loading values of.63 to.75. The construct of long-term growth comprises of four items with factor loading values of.62 to.89. The construct of competitor orientation comprises of three items with factor loading values of.32 to.74. The construct of interfunctional coordination comprises of three items with factor loading values of.46 to.76. The construct of customer orientation comprises of three items with factor loading values of.30 to.54. All constructs had sufficiently high factor loading values to support convergent validity. 113

128 In summary, the resulting construct of market orientation in this study is comprised of 16 items and revealed five underlying constructs that represent the five dimensions of market orientation in school customer orientation (3 items), competitor orientation (3 items), inter-functional coordination (3 items), longterm growth (4 items), and market intelligence (3 items). CONFIRMING THE FIVE-DIMENSION MODEL A structural equation modeling (SEM) approach was used for a confirmatory factor analysis. The SEM approach allows the testing of theory based hypothesized models against the observed dataset and encompasses two components: a structural model and a measurement model (Schreiber, Nora, Stage, Barlow, & King, 2006). Hair (2006) recommended a four-stage process in conducting a confirmatory factor analysis. The first stage is defining the individual constructs. The second stage is developing the overall measurement model. The third stage is designating a study to produce empirical results; and finally, assessing the validity of the measurement model. The Goodness of Fit (GOF) indicators are assessed to show validity of the measurement model. Byrne notes that there are two core features of SEM (Byrne, 2013). First, structural (i.e. regression) equations are used to represent causal processes. Second, that structural relations can be visually modeled, which allows for clear conceptualization of the theory being studied. Furthermore, analyzing the goodness of fit indicators of the model allows the study to assess the accuracy of the proposed model (Byrne, 2013). This study used the AMOS software to conduct the structural equation modeling. The results of the analysis revealed the existence of five factors (dimensions) that are correlated to each other, as presented in Figure

129 Figure 4.1. Structural model of the five-dimensions of market orientation A structural equation model approach requires the data set to not have missing data and thus a mean estimation function in the AMOS software has been used to fill in missing data with approximate values. Goodness of fit test The validation of the model is revealed through the goodness of fit indicators. As suggested by Hair et al. (2014) the goodness of fit indices show how well model reproduces the covariance matrix among the indicators of the items. In other words: how well the model is reflected in the data. This study observed five goodness of fit indices: normed chi-square, adjusted goodness of fit index (AGFI), comparative fit index (CFI), normed fit index (NFI), and root mean squared error of approximation (RMSEA). 115

130 The normed chi-square index indicates model fit by measuring statistical differences between the model and the data, taking into account the complexity of the model (Hair et al., 2014). The sample size of 404 participants in this study is within the acceptable range for a chi-square analysis. Bollen (1989) has suggested chi-square values of 1-4 to be an acceptable fit. The model Chi-square was observed as a means of assessing fit of the data to the model. The model exhibited a non-significant (alpha >.05) Chi-square score ( , df = 136), suggesting a good fit to the model. The RMSEA (root mean square error of approximation) index measures discrepancy per degree of freedom (Dunteman & Ho, 2006), i.e. analyses the average size of residuals; which estimates the lack of fit of the model when compared with a perfect (saturated) model. Dunteman and Ho (2006) suggests that values less than 0.05 implies good fit, while values ranging from 0.05 to 0.08 indicate mediocre fit, and values larger than 0.10 denotes poor fit. The statistical software AMOS also has the ability to calculate two other values: a hypothesis test if RMSEA is a close fit, called PCCLOSE, and a confidence interval on the population value of RMSEA. PCCLOSE is a p-value, testing close fit of RMSEA. PCCLOSE 0.05 indicates that the close fit hypothesis can be accepted (Holmes- Smith 2007). The lower and upper limits of the confidence interval are represented by the values of LO90 (lower limit) and HI90 (upper limit). LO90 = 0 means that the hypothesis is supported and the model is an exact fit (Holmes- Smith 2007). Investigation of the RMSEA value for the default model indicated a good fit (<0.05). The normed fit index (NFI) and comparative fit index (CFI) are widely used as indicators of fit (Hair, 2006). Despite being used as the practical criterion of choice (Bentler, 1992), the NFI has a propensity to underestimate the model fit in relation to sample size, whereas CFI is more independent of sample size. CFI values ranges from 0 to 1, with values close to 1 representing a good fit (Hair et al., 2010). Assessment of the CFI resulted in a CFI value of 1.0, indicating a good fit. 116

131 The AGFI (adjusted goodness of fit index) ranges from 0 to 1 and assesses fit and model parsimony by comparing a hypothesized model with no model at all. R. B. Kline (2005) suggests values close to 1 as good fit. The AGFI value of the model was observed at 0.807, indicating a good fit. The output values of the goodness of fit test are presented in Table Table Goodness of fit test Model NFI (delta 1) CFI RMSEA GFI AGFI Default model Saturated model Independence model REFINEMENTS TO THE INSTRUMENT Through the confirmatory factor analysis process, as presented in the above section, the number of items in the MOSQ tool was reduced by nine items: three items removed from the customer orientation scale, two items removed from the competitor orientation scale, two items removed from the inter-functional coordination scale, and two items removed from the market intelligence scale. The initial twenty-five items has been tightened to sixteen items, measuring the five-dimensions of market orientation. The new mapping of items is presented in Table 4.19, with the customer orientation, competitor orientation, inter-functional coordination, and market intelligence constructs containing three items each, and four items in the longterm growth construct. Table New mapping of items Dimension No of items No of Item no removed questions Customer Orientation 3 3 Q6, Q10, Q13 Competitor Orientation 2 3 Q19, Q20, Q25 Inter-functional coordination 2 3 Q3, Q21, Q22 Long-term growth 0 4 Q7, Q14, Q17, Q23 Market intelligence 2 3 Q8, Q18, Q24 The new 16-item questionnaire structure of the MOSQ is presented in Table 4.20 below. 117

132 Table New MOSQ Structure with reduced items Previous New Question item no item no Q3 Q1 The school is quick to respond to the changes in education in the community Q6 Q2 The school constantly monitors the level of commitment towards the students and parents. Q7 Q3 The school sacrifices some short-term gains for long-term growth of the school. Q8 Q4 The school keeps student data and uses them for reference Q10 Q5 Our programs are designed and created based on our understanding of students and parents needs. Q13 Q6 Our school strategic plan is driven by our understanding of possibilities for creating value for our students and parents. Q14 Q7 Our school strategic plan is driven by our understanding of possibilities for creating value for our students and parents. Q17 Q8 The school leaders believe that long-term growth requires some shortterm sacrifices. Q18 Q9 We measure student and parent satisfaction systemically and frequently. Q19 Q10 Our school tries to attract students by offering more value compared to other schools. Q20 Q11 The school leaders regularly discuss other school s strengths and strategies. Q21 Q12 All sections work collaboratively to increase value to our parents and students education. Q22 Q13 We share programs and resources with other sections in the school. Q23 Q14 The school leaders emphasize longer-term objectives relative to shorter term ones. Q24 Q15 The results and findings from surveys, research, and other information are regularly analyzed and used in decision-making processes. Q25 Q16 A main objective of our school is to provide better educational value relative to other schools. This study addresses the issues found with the previous MKTOR (Narver & Slater, 1990) and MARKOR (Kohli & Jaworski, 1990) constructs. Farrell and Oczkowski (1997) and Siguaw (1994) are among those who examined the MKTOR and MARKOR constructs and found them to be problematic. The reliability analysis conducted on the MKTOR (Narver & Slater, 1990) scale revealed a Cronbach alpha value of for the long-term horizon factor. The model investigated in this study revealed a significantly higher reliability score of for the long-term growth dimension. Moreover, a factor analysis was not conducted by Narver and Slater (1990) on the MKTOR model during its development. Siguaw (1994) examined the 21-item MKTOR (Narver & Slater, 1990) instrument through a factor analysis and 118

133 discovered that the overall fit of the tool was not good. This study has assessed the factorability of the model and revealed a tight solution, which provides confidence to proceed with using the MOSQ instrument for further research in schools. Farrell and Oczkowski (1997) found the fit of the MKTOR and MARKOR constructs to be unacceptable. The MKTOR had a Chi2 = 184 (df = 4, p < 0.001), GFI = 0.878, AGFI = 0.827, CFI = 0.913, MFI = 0.749, alpha = 0.905, with 17 (16.2%) large standardized residuals. The MARKOR was equally problematic with Chi2= 452 (df = 167, p < 0.001), GFI = 0.821, AGFI = 0.775, CFI = 0.776, MFI : 0.548, alpha = 0.867, with 37 (17.6%) large standardized residuals. The analysis of the five-dimension construct presented in this thesis has revealed sufficient values for goodness of fit of the model. Thus, providing evidence of the suitability of the model in a school setting and confidence to proceed with using the MOSQ instrument in the research. SUMMARY The aim of this chapter was to present the development of an instrument that measures the level of market orientation, specifically aimed for schools the Market Orientation in Schools Questionnaire (MOSQ) and to establish its validity and reliability through a series of statistical analyses. An elegant model has been developed through a rigorous process presented in this chapter, which is sufficiently comprehensive and parsimonious. Stringent criteria were used for selecting items into factors. As a result, there were 5 factors extracted by the maximum likelihood analysis, which is in line with the original assumption of the five dimensions of market orientation, consisting of: customer orientation, competitor orientation, longterm growth, inter-functional coordination, and market intelligence. From the original questionnaire of 25 items, the MOSQ has been reduced by 9 items in order to maintain sufficient validity and reliability measures, resulting in 16 question items pertaining to market orientation. Results of the reliability and 119

134 validity analyses have demonstrated that the MOSQ instrument is robust. Furthermore the goodness of fit analyses have provided evidence of the suitability of the model in a school setting and confidence to proceed with using the MOSQ instrument for further research. 120

135 Chapter 5: Analysis and Results OVERVIEW OF THE CHAPTER The previous chapter presented the development and validation of the Market Orientation for Schools Questionnaire (MOSQ) through a series of validity and reliability tests. The structural equation modeling confirmed the five-dimension model of market orientation in schools: customer orientation, competitor orientation, inter-functional cooperation, long-term growth, and market intelligence. The aim of this chapter is to present the investigation of an in-depth analysis towards the extent of market orientation level of schools in Victoria as well as examining the relationship between market orientation and student performance in schools. This chapter details a set of statistical analyses and is divided into three main sections, exploring: (1) the market orientation level of schools in Victoria, (2) job position and length of service, as moderators of market orientation, and (3) the relationship between market orientation with student performance. INTRODUCTION Since the rise of popularity of market orientation in the 90s, measures of market orientation has been introduced. The most popular used instruments for market orientation research around the world are the MKTOR and MARKOR (Kohli & Jaworski, 1990; Narver & Slater, 1990). Studies have found positive relationship between market orientation and organizational performance (for ex: Ellis, 2006; Levitt, 1960; Narver & Slater, 1990; Rodriguez Cano et al., 2004). This phenomenon is not only applicable in the profit sector, but has also been established in other sectors: health (Raju et al., 2000), non-profit (Caruana, Ramaseshan, & Ewing, 1997), as well as education (Drysdale, 2002; Holmes, 1998; Oplatka & Hemsley-Brown, 2007). Various measures have been used as a measure of performance, contextually tied to the sector being investigated, such as: profit, growth, import and export (Ngansathil, 2001). This study investigates 121

136 market orientation in Victorian schools. The investigated market orientation model consisting of five dimensions have been established in the previous chapter and the validity and reliability of the Market Orientation in Schools Questionnaire (MOSQ) has been established. The MOSQ tool was used for data collection in order to measure the level of market orientation of schools, as well as investigating the relationship between market orientation and school performance. SAMPLE The complete dataset of 404 responses was used in the analysis for validating the MOSQ instrument (see chapter 4), in order to obtain the maximum number of participants and using the biggest dataset for statistical analyses. The sample used in the analyses in this chapter uses the subset of 280 responses from active school staff members in Victorian private, public, or Catholic schools. The respondents were asked to identify their job position and length of service (in years) in the school where they are currently employed. In regards to the type of job position they are currently holding, unsurprisingly, there was a significantly larger group of teachers and lead teachers compared to principals and nonteaching staff; 32 respondents (7.5%) came from the principal class, 93 respondents (33.2%) were lead teachers, 89 respondents (31.8%) were teachers, and 25 respondents (8.9%) were non-teaching staff (see Table 3.5). On years of experience as a staff member in their current schools, there was a slightly larger group with more than seven years of experience: 91 respondents had 3 years experience or less, 47 respondents had 4 6 years experience, and 97 respondents had more than 7 years experience. Preliminary tests A number of preliminary analyses have been conducted in accordance to Hair s (1998) suggestion. An analysis of the skewness and kurtosis was conducted on the dependent variables (the five dimensions of market orientation) in the ANOVA. For the assumption of normality to be fulfilled, it is required that the value of kurtosis fall within the range of -3 to 3 (Field, 2009). The results show 122

137 that all dimensions fulfill this normality test. The correlations between the five factors (see Table 4.14) are not so high as to suggest multicollineraity (correlations range between -.4 and.65). These tests provide confidence to proceed to the multivariate analysis of variance. THE VICTORIA GROUP The means, standard deviations, skewness, and kurtosis of the five dimensions of market orientation and the measure of student performance are presented in descending order of the mean scores in Table 5.1 below. The mean scores are calculated by equally weighting the scores of all items in each scale. On a sixpoint scale, the mean score of market orientation dimensions, in decreasing order are: customer orientation (4.58), market intelligence (4.52), interfunctional coordination (4.33), competitor orientation (4.17), and long-term growth (4.14). The Traditional market orientation score is calculated by equally weighting the three scales: customer orientation, competitor orientation, and inter-functional coordination. The Expanded market orientation score is calculated by equally weighting four scales: customer orientation, competitor orientation, interfunctional coordination, and long-term growth. The combined market orientation score is calculated by equally weighting five scales: customer orientation, competitor orientation, inter-functional coordination, long-term growth, and market intelligence. Table 5.1. Descriptive statistics of market orientation dimensions N No of items Mean Std. Deviation Skewness Kurtosis Customer orientation Market intelligence Inter-functional coordination Competitor orientation Long-term growth Traditional market orientation Combined market orientation Expanded market orientation

138 Job position and length of service data was collected on the school staff. There are four job position categories: principal, lead teacher, teacher, and nonteaching staff; and three length of service categories: 0-3 years (early career), 4-6 years (mid career), and more than 7 years (late career). The categories for length of service were created based on the sample characteristics. When moderated by the four job positions and three categories of length of service, the descriptive stats are presented in Table 5.2. Measuring the market intelligence dimension on a six-point scale, early career principals have a mean of 4.67 (SD=0.84), mid career principals have a mean score of 5.20 (SD=0.51), and late career principals have a mean score of 4.93 (SD=0.91). Early career lead teachers have a mean score of 4.60 (SD=0.88), mid career lead teachers have a mean score of 4.84 (SD=0.91), late career lead teachers have a mean score of 4.44 (SD=0.94). Early career teachers have any score of 4.70 (SD=0.91), mid career teachers have a mean score of 3.78 (SD=1.42), and late career teachers have a mean score of 4.35 (SD=0.92). Early career non-teaching staff have a mean score of 4 (SD=0.86), mid career nonteaching staff have a mean score of 4.38 (SD=1.08), late career non-teaching staff have a mean score of 4.89 (SD=0.65). Measuring the long-term growth dimension on a six-point scale, early career principals have a mean score of 4.85 (SD=0.80), mid career principals have a mean score of 4.7 (SD=0.45), and late career principals have a mean score of 4.93 (SD=0.91). Early career lead teachers have a mean score of 4.06 (SD=0.81), mid career lead teachers have a mean score of 4.22 (SD=0.77), and late career lead teachers have a mean score of 4.33 (SD=0.85). Early career teachers have a mean score of 4.70 (SD=0.91), mid career teachers have a mean score of 3.12 (SD=1.32), and late career teachers have a mean score of 3.63 (SD=0.93). Early career non-teaching staff have a mean score of 4.29 (SD=0.67), mid career nonteaching staff have a mean score of 3.84 (SD= 1.09), late career non-teaching staff have a mean score of 3.94 (SD= 0.85). 124

139 Table 5.2. Descriptive statistics moderated by job position and length of service Principal Lead teacher Teacher Non-teaching staff Mn sd N Mn sd N Mn sd N Mn sd N Market intelligence 0-3 years years >7 years Long-term growth 0-3 years years >7 years Competitor orientation 0-3 years years >7 years Inter-functional coordination 0-3 years years >7 years Customer orientation 0-3 years years >7 years

140 Measuring the competitor orientation dimension on a six-point scale, early career principals have a mean score of 4.0 (SD= 1.41), mid career principals have a mean score of 4.53 (SD=1.12), and late career principals have a mean score of 4.33 (SD= 1.35). Early career lead teachers have a mean score of 4.17 (SD= 0.99), mid career lead teachers have a mean score of 4.61 (SD= 0.98), and late career lead teachers have a mean score of 4.05 (SD= 1.0). Early career teachers have a mean score of 4.26 (SD= 0.89), mid career teachers have a mean score of 3.09 (SD= 1.5), and late career teachers have a mean score of 3.81(SD= 1.13). Early career non-teaching staff have a mean score of 4.38 (SD= 0.87), mid career non-teaching staff have a mean score of 4.08 (SD= 1.08), and late career nonteaching staff have a mean score of 4.63 (SD= 1.16). Measuring the inter-functional coordination dimension on a six-point scale, early career principals have a mean score of 4.51 (SD= 0.92), mid career principals have a mean score of 5.07 (SD= 0.37), and late career principals have a mean score of 4.74 (SD= 0.67). Early career lead teachers have a mean score of 4.40 (SD= 0.90), mid career lead teachers have a mean score of 4.26 (SD= 1.05), and late career lead teachers have a mean score of 4.34 (SD= 0.98). Early career teachers have a mean score of 4.55 (SD= 0.97), mid career teachers have a mean score of 3.27 (SD= 1.61), and late career teachers have a mean score of 4.23 (SD= 1.10). Early career non-teaching staff have a mean score of 3.62 (SD= 0.76), mid career non-teaching staff have a mean score of 4.0 (SD= 0.76), and late career non-teaching staff have a mean score of 4.48 (SD= 0.50). Measuring the customer orientation dimension on a six-point scale, early career principals have a mean score of 4.90 (SD= 0.63), mid career principals have a mean score of 5.13 (SD= 0.18), and late career principals have a mean score of 4.83 (SD= 0.99). Early career lead teachers have a mean score of 4.77 (SD= 0.80), mid career lead teachers have a mean score of 4.82 (SD= 0.86), and late career lead teachers have a mean score of 4.50 (SD= 0.81). Early career teachers have a mean score of 4.78 (SD=0.91), mid career teachers have a mean score of 3.67 (SD= 1.77), and late career teachers have a mean score of 4.01 (SD= 1.21). Early career non-teaching staff have a mean score of 4.90 (SD= 0.5), mid career non- 126

141 teaching staff have any score of 4.17 (SD= 1.07), and late career non-teaching staff have a mean score 4.85 (SD= 0.41) MARKET ORIENTATION LEVEL OF VICTORIA The analysis of the school staff responses collected from the 32 schools revealed that most schools in Victoria converged in their level of market orientation (see Figure 5.1). An overall market orientation score combined market orientation score was calculated, taking into account the five different dimensions of market orientation. This was justified given the positive correlations between the factors (in previous chapter). This combined market orientation score was calculated by averaging the means of each of the five dimensions through the equation: CMO = Ave(CustO)+Ave(CompO)+Ave(IFC)+Ave(LTG)+Ave(MI) 5 Where: CMO = Combined market orientation score Ave(CustO) = Overall average score for customer orientation Ave(CompO) = Overall average score for competitor orientation Ave(IFC) = Overall average score for inter-functional coordination Ave(LTG) = Overall average score for long-term growth Ave(MI) = Overall average score for market intelligence The combined market orientation score is an overall score that depicts the level of market orientation of the school. The resulting scores were matched up against the market orientation scoring table (Pulendran et al., 1998b). The market oriented scoring table (Pulendran et al., 1998b) allows the market orientation score to be interpreted in to six different bands, ranging from 1 to 6. Scores less than 2.0 fall under the Extremely low market oriented category, scores fall in the Low market oriented category, scores 3.0 3,99 fall in the Somewhat low market oriented category, scores between fall under the Somewhat market oriented category, scores fall under the 127

142 Market oriented category, scores fall under the Highly market oriented category. The score interpretation table is presented in Table 5.3. Table 5.3. Interpretation of Market Orientation Score Score Range Interpretation Highly Market Oriented Market Oriented Somewhat Market Oriented Somewhat Not Market Oriented Not Market Oriented Less than 2.0 Extremely Low Market Oriented Analysis of the combined market orientation score revealed that a majority of Victorian schools were somewhat market oriented (See Figure 5.1). Combined Market Orientation Level of Schools in Victoria Highly market oriented 1 Market oriented 3 Somewhat market oriented 23 Somewhat not market oriented 3 Not market oriented Very not market oriented Figure 5.1 Combined market orientation level of schools in Victoria Twenty-three out of the thirty-two schools fell in the somewhat market oriented category, while were only 3 or less schools that fall in the other market orientation score bands: one school rated highly market oriented, three schools 128

143 rated market oriented, 23 schools rated somewhat market-oriented, three schools rated somewhat not market-oriented, one school rated not marketoriented, and one school rated very not market-oriented. This supports a previous study by Drysdale (2002), which similarly found schools in Victoria to be somewhat market oriented. A further analysis is conducted on the different market orientation level categories to show how this affects the five dimensions of market orientation. Mean scores were calculated by aggregating participant responses from schools and categorized into three groups. The LOW group consisted of schools within the bottom two market orientation categories: very not market oriented and not market oriented ; the MID group comprised of schools in the two middle categories of market orientation: somewhat not market oriented and somewhat market oriented ; and schools within the top two categories of market orientation: market oriented and highly market oriented, were aggregated in the HIGH group. This categorization is presented in Table 5.4. Table 5.4. Mean scores across different MO level grouped categories LOW Group MID Group HIGH Group Extremely Low + Not Market Oriented Schools Somewhat Not Market Oriented + Somewhat Market Oriented Schools Market Oriented + Highly Market Oriented Schools Market intelligence Long-term growth Competitor orientation Inter-functional coordination Customer orientation Schools in the High group exhibited a profile as presented in Figure 5.2 when compared to the overall average scores. Analyzing the mean scores of the market orientation dimensions, it appears that schools in this group prioritized customer orientation the most, while long-term growth was last. 129

144 High Group Customer orientation Inter-functional coordination Market intelligence Overall avg High Competitor orientation Long-term growth Figure 5.2. High group compared to overall average score. In comparison, schools in the Low group demonstrated a profile as presented in Figure 5.3 when compared to the overall average scores. Schools in this group were not as concerned with being customer oriented, which is in direct contrast with how schools in the High group prioritize their customer orientation first. This is to be expected as past literature noted customer orientation to be the central focus of being a market oriented organization. Schools in the Mid group demonstrated a profile as presented in Figure 5.4 when compared to the overall average scores. Their performance in market orientation from high to low is market intelligence, customer orientation, interfunctional coordination, competitor orientation, and long-term growth. In response to hypothesis H1, schools in Victoria are overall: somewhat market oriented, with customer orientation being the dimension with the highest priority, followed by market intelligence, inter-functional coordination, competitor orientation, and long-term growth. As expected, the data suggests that schools in the high group placed customer orientation first in their priority, in direct contrast with schools in the low group, which placed customer orientation last in their priority. 130

145 Low Group Competitor orientation Long-term growth Market intelligence Overall avg Low Inter-functional coordination Customer orientation Figure 5.3. Low group compared to overall average score. Mid Group Market intelligence Customer orientation Inter-functional coordination Competitor orientation Overall avg Mid Long-term growth Figure 5.4. Mid group compared to overall average score. Furthermore, the measure of student performance increases as the school progresses in their level of market orientation (see Figure 5.5). This is a good indication that supports the value of market orientation in increasing student performance. A set of statistical analyses will be described at a later stage in this chapter to provide empirical evidence of the relationship between market orientation and student performance. 131

146 Student Performance Highly Market Oriented Schools Market Oriented Schools Somewhat Market Oriented Schools Somewhat Not Market Oriented Schools Not Market Oriented Schools Extremely Low MO Schools Figure 5.5. Mapping of student performance against different MO levels THE EFFECT OF JOB POSITION AND LENGTH OF SERVICE ON MARKET ORIENTATION The influence of market orientation on organizational performance can be explained by the organization s ability to understand and thus, anticipate the market through reliable information gathering of customers and competitors, leading to evidence based decision making and ultimately deliver superior value (Day, 1999; Kumar et al., 2011). McAleese and Hargie (2004) revealed that managers play an important role in creating and maintaining a level of market orientation in an organization, as part of the organizational culture. Thus, it is equally essential to understand how the different job positions in a school factor moderate the level of market orientation. A set of statistical analyses of variance was conducted on the market orientation dimensions, moderated by job position and length of service, in order to uncover the perceived differences of market orientation of a school. A Multivariate analysis of variance (MANOVA) was conducted to determine whether there were statistically significant differences in the means of the five dimensions moderated by Job Position (Principal, lead teacher, teacher, non- 132

147 teaching staff), and Length of Service (0-3, 4-6, > 7 years). The analysis model would show whether statistical significance is present in the main effect or interaction effect. Main effect significance is analyzed by assessing each variable (job position and length of service) separately as a moderator of market orientation, while an interaction effect is analyzed by assessing the combined effect of job position and length of service as a moderator of market orientation. The results reveal that there was statistical significance (p<0.05) in all three models: when job position was used as a moderator for market orientation, when length of service was used as a moderator of market orientation, and when the combined interaction between Job position and Length of Service was used as a moderator of market orientation: λ =.775, F (30, 866) = 1.895, α <.05, as presented in Table 5.5. This combined interaction was investigated prior to evaluating any main effects. Table 5.5 Summary of multivariate results (Wilks Lambda). Using job position and length of service as moderators of market orientation. Effect Wilks Lambda F Hypothesis df p Job Position , Length of Service , Job Position * Length of Service , A univariate analysis was conducted in order to understand how the moderating variables (job position and length of service) affect the five dimensions (customer orientation, competitor orientation, inter-functional coordination, long-term growth, and market intelligence). The univariate analysis conducted revealed that the contribution of the five dimensions of market orientation was statistically significant to this overall interaction between job position and length of service (see Table 5.6) for all of the five dimensions: market intelligence (F(6, 220) = 2.87; p<0.05), long-term growth (F(6, 220) = 3.18; p<0.05), competitor orientation (F(6, 220) = 2.85; p<0.05), inter-functional coordination (F(6, 220) = 2.83; p<0.05), and customer orientation (F(6, 220) = 2.15; p<0.05). In regards to the main effects, job position is a significant moderator for all five dimensions: market intelligence (F(6, 220) = 3.29; p<0.05), long-term growth (F(6, 220) = 6.27; p<0.05), competitor orientation (F(6, 220) = 5.13; p<0.05), 133

148 inter-functional coordination (F(6, 220) = 4.25; p<0.05), and customer orientation (F(6, 220) = 5.81; p<0.05); while length of service is a significant moderator for only one dimension long-term growth (F(6, 220) = 2.58; p<0.05) Table 5.6 Univariate analysis between market orientation dimensions and the two moderating variables Mean Source Dependent Variable F df Sig. Square Job Position Market intelligence , Long-term growth ,220 <.001 Competitor Or , Inter-functional Co , Length of Service Customer Or , Market intelligence , Long-term growth , Competitor Or , Inter-functional Co , Customer Or , Job Position * Market intelligence , Length of Service Long-term growth , Competitor Or , Inter-functional Co , Customer Or , The presence of a significant combined interaction between job position and length of service supersedes the main effects and hence, is the focus of the following results. Figure 5.6 presents the graph of the market intelligence dimension moderated by job position and length of service. Comparing the different job positions among early career (0-3 years) school staff, the data reveals that principals, lead teachers, and teachers are equally high in their perception of their school s market intelligence, while non-teaching staffs have the lowest perception of market intelligence. The most prominent difference is the disparity between the 134

149 principal group and the teacher group that appears when analyzing the different job positions among mid career (4-6 years) school staff, with principals having the highest perception of market intelligence and teachers having the lowest perception. In other words, principals consider their schools to have good systematic procedures in place to collect market data, whilst teachers do not share this view. A similar trend seems to emerge in the late career category (>7 years) with principals and non-teaching staff have a high view of market intelligence, while teachers have the lowest view, although the difference is not as pronounced as the mid career category Market Intelligence years 4-6 years >7 years Principal Lead Teacher Teacher Non-teacher 0-3 years years >7 years Figure 5.6. Market intelligence moderated by job position and length of service Differences in perception among the length of service categories within the principal group appear to be minimal and statistically non-significant, as is the case with the lead teacher group. Within the teacher and non-teaching staff group, however, vast differences can be seen. The early career teacher group scored significantly higher than the mid career teacher group; i.e. early career teachers have a higher perception of school market intelligence compared to mid career teachers. In the non-teaching group, the significant difference can be seen 135

150 between the early career and late career staff. Early career non-teaching staff scored significantly lower than late career non-teaching staff, with mid career staff scoring in between. Figure 5.7 presents the graph of the long-term growth dimension moderated by job position and length of service. Overall, the long-term growth dimension seems to be lower than the previous market intelligence dimension Long-term Growth years 4-6 years >7 years Principal Lead Teacher Teacher Non-teacher 0-3 years years >7 years Figure 5.7. Long-term growth dimension moderated by job position and length of service In the early career category (0-3 years), the principal has the highest perception, while lead teacher has the lowest perception, with the teacher and non-teaching staff scoring almost identically in between. In the mid career category (4-6 years) the principal has the highest perception, while the teachers have the lowest perception by a significant amount. In other words, principals viewed that their school is doing well in the long-term growth dimension having an emphasis on long-term focus compared to short-term benefits. Teachers, however, do not share this view. In the late career category (>7 years), principals and lead teachers are about equally high in their perception, while 136

151 teachers have the lowest perception of market orientation, although the disparity is not as vast as in the mid career category. Looking at the differences in perception among the length of service categories within each job position suggest that there is almost equal perception within the lead teacher position. Late career principals appear to have a slightly lower score then that of early career principals. Some variation can also be observed within the non-teaching category, with early career staff scoring slightly higher then mid career and late carrier staff. The teacher group reveals significantly vast variations between the length of service categories especially when comparing between early career and mid career teachers. Midcareer teachers scored significantly lower than early career teachers. As the two previous dimensions, a similar pattern is found when analyzing the other three dimensions: competitor orientation, inter-functional coordination, and customer orientation. The analyses reveal a significant difference when comparing the different job positions of staff in their midcareer stage. The principals score significantly higher than the teachers i.e. midcareer teachers have a significantly lower perception of their school market orientation level compared to the principals. A similar pattern also is revealed when comparing the different length of service categories within the teacher group: midcareer teachers score significantly lower than early career teachers. Figure 5.8, Figure 5.9, and Figure 5.10 presents the competitor orientation dimension, inter-functional coordination dimension, and customer orientation dimension, respectively, each moderated by job position and length of service. 137

152 Competitor Orientation years 4-6 years >7 years Principal Lead Teacher Teacher Non-teacher 0-3 years years >7 years Figure 5.8. Competitor orientation dimension moderated by job position and length of service 5.50 Inter-functional Coordination years 4-6 years >7 years Principal Lead Teacher Teacher Non-teacher 0-3 years years >7 years Figure 5.9. Inter-functional coordination dimension moderated by job position and length of service 138

153 Customer Orientation years 4-6 years >7 years Principal Lead Teacher Teacher Non-teacher 0-3 years years >7 years Figure Customer orientation dimension moderated by job position and length of service Studies by Gummesson (1994), Gummesson (1991), F. Harris and de Chernatony (2001), and McDonald, de Chernatony, and Harris (2001) have strongly advocated the significance of the role of an employee in regards to market orientation, suggesting that different job positions would contribute to different levels of market orientation. Other studies by King and Grace (2006), Donthu and Sang Hyeon (1993), Cavusgil and Zou (1994), and Beamish, Ron, and McLellan (1993) further suggested that the commitment of employees with a managerial role plays a critical aspect in creating, reinforcing, and implementing a market orientated organization culture. A study by Drysdale (2002) has supported this notion for the school context. These findings would suggest a prediction that school staff with leadership roles (principals and lead teachers) would have a significantly higher perception of market orientation compared to ones without (teacher and non-teaching staff). This study has significantly contributed to this knowledge base by revealing the effects of job position and length of service as moderating variables of the five dimensions of market orientation. 139

154 The findings reveal that, although job position was indeed found to be a moderator for the five dimensions of market orientation, it was also the combined interaction between job positioning and length of service of school staff that contributed significantly towards the difference in market orientation. Analysis of the data sets in this study, proven by the main effects, has demonstrated support for previous research that principals have a significantly higher perception of market orientation to teachers. However, the interaction effects show an even bigger disparity between principals and teachers at the midcareer stage (4 to 5 years of experience), where midcareer teachers have a significantly lower perception of market orientation compared to principals. This finding further adds to the literature by suggesting that, within the school context, this differentiation appears in the mid career stage. Observing the differences within teacher group would further support the notion of an issue present in the midcareer stage of the teaching profession. In all five dimensions of market orientation, midcareer teachers have a significantly lower perception of market orientation when compare to early career teachers, while late career teachers scored somewhere in between. Perhaps the drop from early career to midcareer teachers can be explained by observing teacher s experience in their transition as early career teachers. The transition that teachers experience as they enter the profession has dramatically affected their energetic attitude as the reality of day-to-day school life sets in, and has been described as confronting (Manuel, 2003; Schultz & Coleman-King, 2012; Tim Goddard & Foster, 2001). This significant drop in teachers perception of market orientation in their midcareer also aligns with the drop in teacher attrition rates within 3-5 years of experience (Manuel, 2003). Another explanation could be attributed to midcareer teacher s dissatisfaction in regards to workplace politics. A study by Boehm, Vigoda-Gadot, and Segev (2011) suggests a correlation in the opposite direction between staff perception of organizational politics with their market orientation adoption level; i.e. a high level of perceived organizational politics in the workplace translates into a low adoption level of market orientation. Perhaps, the dissatisfaction of teachers on 140

155 educational policies and administration (Ololube, 2006) reflects their frustration in school politics, which may help to explain the low levels of market orientation perception in the mid career teacher group. In the principal group, midcareer principals have a marginally higher perception of market orientation compared to early career and late career principals, except in their view of long-term growth. Perhaps in their mid career stage, principals have become more confident in the market orientation performance of the school, possibly reflecting on their own performance perceiving that the school now understand their customers and competitors, have better resource sharing and coordination, and conduct market intelligence. The exception is in their perception of long-term growth, where midcareer principals perceive that the school is doing less in its focus on long-term growth, which is more pronounced in the late career stage (see Figure 5.7). In other words, midcareer and late career principals are more concerned with short-term benefits instead of longterm growth. Customer orientation measures a school s performance in identifying and understanding their customer s needs and has been argued as the most important aspect of market orientation (Narver & Slater, 1990). Observation of the patterns that emerge from the various job positions throughout the different career stages reveal different patterns for school staff in leadership roles (principles and lead teachers) compared to school staff in non-leadership roles (teachers and non-teaching staff). Midcareer principals and lead teachers have a slightly higher perception of their school s customer orientation performance compared to early career principals and lead teachers. Conversely, midcareer teachers and non-teaching staff have a lower perception of their school s market orientation performance compared to the early career teachers and non-teaching staff. This comparison is presented in Figure This suggests that school staffs that hold leadership positions are more confident in their school s customer orientation performance in their midcareer stage, which conflicts with the view of teachers and non-teaching staff, who arguably have more direct contact with the students and the parents. 141

156 A previous study of market orientation in a higher education context was conducted by R. L. Webster et al. (2014). The study surveyed 131 business school deans on their perception of customer orientation, competitor orientation, and inter-functional coordination. The survey in his study used a seven-point scale item measure, from 1 (not at all) to 7 (an extreme extent). In order to compare the means with the current study, the scores have been converted to a six-point scale value, through mathematical ratio calculation. It appears that school principals of all career stages scored higher in all three dimensions (customer orientation, competitor orientation, and inter-functional coordination) when compared to university deans. This comparison is presented in Table 5.7. Table 5.7. Comparison of market orientation means between university deans and school principals Market orientation dimension University deans Early career Mid career principals Late career principals principal Customer orientation Competitor orientation Inter-functional coordination Observing the school staff s perception of overall market orientation, the data shows that principals have the highest perception of market orientation (4.71), while the teachers scored the lowest (3.97). This comparison is presented in Figure Studies such as the one conducted by McAleese and Hargie (2004) suggests that managerial roles considerably contribute to the shaping of the culture of an organization, thus influencing the implementation of market orientation. This study supports the notion that job position is a moderator of market orientation and further suggests that, in schools, the moderator of market orientation is not only job position, but is an interaction effect between job position and length of service of school staff. 142

157 Overall MO Principal Lead teacher Teacher Non-teaching staff Figure Overall market orientation level of school staff Being market oriented should be the concern of all school staff, not only that of the school principal or marketing department. Furthermore, a market-oriented school would not view the marketing department as more important than other departments (Day, 1994; Shapiro, 1973). On the contrary, it is critical that all parts of the school work together to create superior value for the parents and students compared to other schools. THE RELATIONSHIP BETWEEN MARKET ORIENTATION AND STUDENT PERFORMANCE Previous research (Appiah-Adu & Singh, 1998; Caruana, 1999; Ellis, 2006; Narver & Slater, 1990; Ngansathil, 2001; Pelham, 2000; Rodriguez Cano et al., 2004; Siguaw et al., 1994; Slater & Narver, 1994; Webb et al., 2000) has shown positive correlation between market orientation and organizational performance; i.e. a highly market oriented organization will perform highly as well. This concept of relationship between level of market orientation and organizational performance translates into the non-profit sector (Deshpande, 1999), health sector (Lonial & Raju, 2001), as well as education sector (Kotler & Andreasen, 1996; Kotler & Zaltman, 1997). 143

158 In investigating the relationship between the market orientation levels of a school with its student performance, a multiple regression analysis was conducted to examine the predictive value of the perceived level of market orientation of a school on its student performance. In the model, the five dimensions of market orientation: customer orientation, competitor orientation, inter-functional coordination, long-term growth, and market intelligence, were taken as the predictors (dependent variable), while a perceived measure of overall student performance was taken as the outcome (independent variable). The student performance item is a perceived measure of overall student achievement. The following parameters are used for assessing the results of the regression in regards to support for the hypotheses. The sign of the Beta coefficient indicates whether or not the hypothesis is supported, while the significance value indicates whether or not the finding is statistically significant. In summary: if the beta coefficient of the variable is in the same direction with the hypothesis and the contribution of the variable is significant, then the hypothesis is supported. If the beta coefficient of the variable is in the same direction with the hypothesis but the contribution of the variable is not significant, then the hypothesis is supported but not significant. If the beta coefficient of the variable is in the opposite direction with the hypothesis and the contribution is significant, then the hypothesis is not supported, but significant. Finally, if the beta coefficient of the variable is in the opposite direction with the hypothesis and the contribution is not significant, then the hypothesis is not supported and not significant. The predictors for the regression are the five-dimensions of market orientation: customer orientation, competitor orientation, long-term growth, inter-functional coordination, and market intelligence, while the outcome variable is the measure of student performance. Student performance is measured through a self-assessed item in the questionnaire: What is your overall assessment of student performance in your school? The response is captured through a five-point Likert scale from 1 (very 144

159 low) to 5 (very high). Table 5.8 presents the frequency counts for each of the five Likert-scale values from 280 responses from Victoria, with only 1 case of missing data. Table 5.8. Frequency count of student performance measure Student Performance Frequency Percentage (%) 1 (Very low) (Very high) Missing Total The responses are distributed over the five scales with a tendency towards the higher end of the scale. One (0.5%) respondent indicated very low student performance, 28 (10%) respondents indicated low student performance, 86 (31%) respondents indicated medium student performance, 90 (32%) respondents indicated high student performance, and 74 (26%) respondents indicated very high student performance. On a five-point scale, the average score of student performance is Table 5.9 presents the descriptive statistics for the student performance measure. Table 5.9. Descriptive statistics of student performance measure N Minimum Maximum Mean Std. Deviation Q26 Student performance The data further allows an analysis to be conducted on how the perception of student performance differs among the different job positions. 6% of principals perceived their student performance as low, 42% perceive their student performance as medium, 21% perceive their student performance as high, and 30% perceive their student performance as very high. Overall, principals views towards their student performance is medium to high, with the biggest group (42%) rating their students performance at medium. The majority (41%) of lead teachers rate their student performance at high. 9.7% rated their student performance as low, 24% rated their student performance as medium, 25% 145

160 rated their student performance as very high. Overall, teachers perception of student performance is more distributed along the scores, compared to the other job position groups. 1% of teachers rated their student performance as very low, 13% rated low, 32% rated medium, 28% rated high, and 26% rated very high. In regards to non-teaching staff s perceptions of their student scores, the data revealed that 35% rated medium, 35% rated high, and 31% rated very high; with no respondents rating low or very low. Table Perception of student performance among the different job positions Principal Lead teacher Teacher Non-teaching Score Freq. % Freq. % Freq. % Freq. % 1 (Very low) (Very high) Total The regression equation is expressed by: Y 1 = +β 1 CustO + β 2 CompO + β 3 IFC + β 4 LTG + β 5 MI + e i Where: Y = Student Performance CustO = Customer orientation CompO = Competitor orientation IFC = Inter-functional coordination LTG = Long-term growth MI = Market intelligence The regression analysis of the model using the five dimensions of market orientation to predict principal, teacher, and non teaching staffs estimate of student performance yielded an R-squared value of (F=12.86, df=5, 273, p<.001) presented in Table This statistically significant finding indicates that the five-dimensions of market orientation work together to contribute to the change in student performance and accounts for 19% of the variance. This 146

161 finding supports previous research (Ellis, 2006; Kohli et al., 1993; Narver & Slater, 1990) into market orientation that has revealed a positive relationship with organizational performance. Furthermore, it significantly adds to the research around market orientation in schools (Drysdale, 2002; Oplatka & Hemsley-Brown, 2007), by empirically establishing the link between market orientation and a measure of school performance student performance. Further analysis of the beta values for each predictor indicates the significance of the specific predictor towards the variance (Field, 2009), i.e. indicating the amount of variance in student performance, that each of the five dimensions is accounting for. The relative order of significance of the variables from high to low was: competitor orientation and customer orientation (both factors contributed an equal amount towards predicting the outcome), followed by longterm growth, market intelligence, and inter-functional coordination. It was found that two out of the five dimensions are statistically significant predictors of student performance with positive beta values: customer orientation (β = 0.26, p < 0.05) and competitor orientation (β = 0.26, p < 0.05). Long-term growth makes a statistically significant contribution in the opposite direction (β = -0.22, p < 0.05). Market intelligence (β = 0.09, p > 0.05) and inter-functional coordination (β = 0.02, p > 0.05) reveals a non-significant contribution. Table 5.12 presents the beta values and significance of each market orientation dimension as a predictor of student performance. A previous study conducted by Ngansathil (2001) indicated that customer orientation explains 2% of variance of the output variable in a business context. These findings suggest that in an educational context, customer orientation accounts for a larger amount of variance. This supports past studies and the definition of market orientation, where focus on the customers is emphasized. 147

162 Table Overall regression model Model Summary Model R R Square Adjusted R Square Std. Error of the Estimate Change Statistics R Square Change F Change df1 df2 Sig. F Change Durbin-Watson 1.437a a Predictors: (Constant), customer, competitor, long_term_growth, market_intelligence, interfunctional b Dependent Variable: Q26studentperformance Table 5.12 Standardized beta and significant values for the five-dimensions of market orientation predicting student performance Beta* t p Market intelligence Long-term growth Competitor orientation <0.001 Inter-functional coordination Customer orientation *Standardized value 148

163 The results presented in Table 5.12 indicate that change in the level of customer orientation of a school brings about a 26% variation of student performance in the same direction i.e. a positive change in customer orientation will cause a positive change in student performance. Furthermore, it reveals that customer orientation and competitor orientation both account for 26% of the variance of market orientation; hence, this is a strong indication that both dimensions are equally important predictors of market orientation. Past research on market orientation has mostly agree that customer orientation is the core aspect; i.e. placing an organizational focus on understanding customers needs is key. Oplatka and Hemsley-Brown (2007) believe that customer orientation is so important that it takes precedence over the other dimensions. The findings of this study indicate otherwise; it suggests that competitor orientation plays an equally important role with customer orientation both accounting for 26% variance of student performance. Competitor orientation has been an unpopular concept among school teachers (Drysdale, 2002; Oplatka & Hemsley-Brown, 2003), with school staff mainly believing that competition goes directly against the principals of education and collaboration. This study reveals that, not only is competitor orientation important, it is one of the most important dimensions of market orientation, accounting for 26% of variance in student performance. Market orientation research utilizing the MKTOR (Narver & Slater, 1990) concept assumed that all dimensions of market orientation were equally important and equally weighted. Among the three dimensions conceptualized in MKTOR, inter-functional coordination was seen as having equal value with customer orientation and competitor orientation. This study suggests that this is not the case. Inter-functional coordination accounts for 2% of variance on student performance. Perhaps the sharing of information and resources, as measured by inter-functional coordination, is more directly associated with a different measure of school performance, such as workflow efficiency and effectiveness or interdepartmental connectedness (Shoham & Rose, 2001). 149

164 Although the increase of workflow efficiency, effectiveness, and resource sharing in the school would translate into teachers having more time creating quality learning plans, which ultimately leads to increased student performance, it is through a set of moderators and not a direct association. While all other dimensions have a positive relationship with student performance, it is worth noting that long-term growth has a negative relationship with student performance. This suggests that, while long-term growth is indeed a significant predictor of market orientation, it contributes towards market orientation in the opposite direction i.e. market-oriented schools are scoring low in the long-term growth dimension. This suggests that the hypothesis around long-term growth aspect of market orientation is not supported. The hypothesis around long-term growth was: an increase in longterm growth would positively impact student performance. The revelation from the data, which shows a negative direction, suggests that although a focus on long-term growth has a significant contribution, it does not suggest a positive impact on student performance. In short, a focus on long-term growth does not lead to better student performance. In fact, it is quite the opposite: a focus on short-term growth would lead to better student performance. This finding suggests that student performance is viewed as a short-term measure of school performance. This finding could be explained by a previous study conducted by Oplatka (2002a) in Israeli schools, which revealed that principals are including teachers and other staff members in marketing, increasing awareness of staff member s roles in marketing the school (Oplatka, 2002a). However the focus seems to be highly placed on the upcoming student enrolments, which is more of a short-term effect. Market intelligence explains 9% of the variance in student performance. While Kohli and Jaworski (1990) suggests that market intelligence plays an important role in market orientation, this study suggests that this may not be the case when predicting student performance. While market intelligence is an important dimension, it may be a direct predictor of another measure of school performance and not directly associated with student performance. Oplatka 150

165 (2002a) wrote that while principals are trying to be inclusive of teachers and other school staff in regards to creating awareness of marketing, they still perceive that the marketing role is and should be held by principals and school marketing departments. The principals view themselves as the leaders of the marketing function in their school. Although the analysis of beta values reveal three out of the five market orientation dimensions to be statistically significant, this does not mean that the other two dimensions: market intelligence and inter-functional coordination, should be disregarded as important. The overall regression model presented is significant, and thus is evidence that the five dimensions work together, through a complex set of integration processes, that make up the market orientation level of a school, which is a significant predictor of student performance. Cauzo Bottala and Revilla Camacho (2013) strongly suggested that the positive effects of market orientation are visible in the long term and maintains that organizations must sustain their level of market orientation for a number of years. In their study using the MKTOR instrument, Narver and Slater (1990) investigated the relationship between business profitability and market orientation as a whole construct, without investigating details of each market orientation dimension, due to sample size. This thesis extends the study of market orientation by investigating the contribution of each of the dimensions. An empirical study in schools by Oplatka and Hemsley-Brown (2007) used descriptive statistics to investigate and did not employ any inferential statistics method. This study further extends the literature in schools to explain how the different dimensions of market orientation impact on student performance in schools. This regression analysis also answers hypothesis H2. It was found that change in three out of the five predictors, namely customer orientation, competitor orientation, and long-term growth, significantly results in change in student performance. Overall, the level of market orientation does have a significant 151

166 effect on student performance and accounts for 19.1% variance. This supports previous research on the relationship between market orientation and organizational performance (Ellis, 2006; Frösén et al., 2016; Lin et al., 2015; R. L. Webster et al., 2014; and others) and suggests that it is important for schools to focus on increasing their overall level of market orientation in order to increase student performance. SUMMARY This chapter aimed to present results of the analyses of this study and to answer the research questions using the Market Orientation in Schools Questionnaire (MOSQ) instrument to measure the extent of market orientation of Victorian schools and investigate the relationship between market orientation and school performance specifically student performance. A detailed analysis of the Victoria group has been presented, ascertaining that schools in Victoria are, overall, somewhat market oriented in support of findings from a previous study by Drysdale (2002). Comparative analyses between the different job positions and length of services have been explored and presented to provide evidence that, in a school context, it is the interaction between job position and length of service that is proven to be a statistically significant moderator of market orientation. Furthermore, this chapter has demonstrated that the biggest discrepancy in market orientation perception is present between principals and teachers in the midcareer stage of the profession; with implications to this finding discussed. A multiple regression analysis has been presented, underlying assumptions for a regression analysis have been met, and explanation on the selection of the techniques has been included. The results concluded that the relationship between the different dimensions of market orientation and their power to predict student performance has been uncovered. It has been found that five dimensions of market orientation: customer orientation, competitor orientation, inter-functional coordination, long-term growth, and market intelligence work 152

167 together in a complex process, where the model, as a whole, is a significant predictor of student performance. The next chapter presents further discussions and interpretations around the findings of this study. 153

168 Chapter 6: Discussion and Conclusion INTRODUCTION The previous chapters presented the findings of this study and addressed the research questions outlining the study. This chapter provides an overall summary of the study, followed by the key findings in response to the research questions detailed in chapter 3. Discussions around the findings will be made, conclusions, as well as limitations to the research, followed by recommendations for further research to be conducted. PURPOSE OF THE STUDY The purpose of this study was to investigate the area of market orientation in education, within the scope of schools in Victoria, Australia. Specifically, this thesis aimed to address current issues of developing a specific instrument for measuring market orientation in schools, exploring the level of market orientation in Victorian schools, and investigating the relationship between the market orientation level of a school and its performance. Market orientation is an attitude pertaining to an organization s culture that places focus on customers, creating superior customer value, and aiming to achieve high customer satisfaction. The literature review led to identification of five dimensions that underpin the concept of market orientation in education: customer orientation, competitor orientation, inter-functional coordination, long-term growth, and market intelligence, as well as the need for an instrument that measures market orientation in a school setting. The research questions below were posed to guide the study, as detailed in chapter three. 1. To what extent are schools in Victoria market oriented? 2. What is the relationship between market orientation and school performance? 154

169 OVERVIEW OF THE THESIS Chapter one of this thesis outlined the background to this study and presented the aims and significance of the research. Chapter two reviewed the literature around market orientation research. Market orientation has received increased attention because it has been suggested to have a positive impact in organizational performance. This desirable phenomena not only is believed to take place in for-profit organizations, but has been suggested to be applicable in all other types of organizations as well, be it not-for-profit, health, and education (Drysdale, 2002; Kohli & Jaworski, 1990; Narver & Slater, 1990; Oplatka & Hemsley-Brown, 2007; Raju et al., 2000). Research around market orientation in education has increased as well with Drysdale (2002), Oplatka and Hemsley-Brown (2007), and Holmes (1998). Furthermore, studies such as the ones by Bueno et al. (2016), Ozkaya et al. (2015), Chang et al. (2014) and Lado and Maydeu-Olivares (2001) show a link between market orientation and innovation of an organization. Having reviewed the literature, a five-dimension model of market orientation was proposed for a school setting. The five dimensions are: customer orientation, competitor orientation, inter-functional coordination, long-term growth, and market intelligence. The purpose of chapter three was to present the methodology employed in the investigation. This thesis presents a quantitative approach through statistical analyses of survey data. Research participants taken from staff members of public, independent, and catholic schools in Victoria were invited to take part in the study. As part of this study, the Market Orientation in Schools Questionnaire (MOSQ) was developed as an adaptation from a Market Orientation Questionnaire by Pulendran et al. (1998b). The original instrument assesses four dimensions of market orientation: customer orientation, competitor orientation, interfunctional coordination, and long-term growth. The MOSQ is further enhanced 155

170 to include a fifth dimension of market orientation: market intelligence, as suggested by Kohli and Jaworski (1990) and Drysdale (2002). As recommended by Oppenheim and Oppenheim (1992) and Burns and Bush (2006a), a pilot study was conducted to refine the language and terminology to be fitting to staff in schools. Participants of the pilot study included experts in the field, teaching, and non-teaching school staff. Chapter four detailed the validation process of the MOSQ instrument. The MOSQ was scrutinized through a factor analysis and structural equation modeling to verify its validity and reliability as an instrument that measured the five dimensions of market orientation in education. The maximum likelihood analysis resulted in the five-factor model provided validity evidence for the fivedimension market orientation model, with excellent factor loadings of mostly 0.7 and above. The five dimensions of market orientation are: customer orientation, competitor orientation, inter-functional coordination, long-term growth, and market intelligence. Further reliability tests were conducted by analyzing the Cronbach alpha scores. Reliability of the tool was established with sufficiently high alpha values in all of the five dimensions, which indicates that the total scores from these five scales can be used in a meaningful manner to explore further relations. The successful validation of the MOSQ instrument is an important advancement in market orientation research in schools. The review of the literature exposes that, as the origins of market orientation research began in the business sector (Kohli & Jaworski, 1990; Narver & Slater, 1990), the majority of available instruments are aimed for this sector. The MOSQ instrument would be one of the first developed instruments that measures market orientation for a school setting. The only other identified instrument used in education was developed in a university setting by Oplatka and Hemsley-Brown (2007). Findings from the research were presented in chapter five. In order to investigate the extent of market orientation in schools in Victoria, a MANOVA analysis was conducted with data from the Victorian respondents. The analysis 156

171 explored the 32 participating Victorian schools and measured their level of market orientation for each dimension and their results were interpreted. Furthermore, this study explored how job position and length of service affected the level of market orientation of a school. Finally, through a multiple linear regression analysis, this study investigated the relationship between market orientation and perceived school performance in the context of Victoria. This chapter now turns to the contributions made by this thesis. CONTRIBUTIONS OF THE RESEARCH This study contributes to the body of knowledge in market orientation in schools and to the broader topic in two key areas. The first contribution is the development of an instrument that measures a school s level of market orientation. The second contribution expands the body of knowledge. To the author s knowledge, this is the first study that provides empirical evidence of market orientation in schools in Australia. The development of a dependable market orientation measure for schools In the past decade, two important streams of work in strategic marketing have developed, covering both empirical and conceptual aspects: market orientation and relationship marketing. Market orientation puts an emphasis on placing customers as the center focus in determining organizational behavior (Deshpande & Farley, 2004; Lindgreen, 2010; Narver & Slater, 1990; Slater & Narver, 1992, 2000). While measures of market orientation are available in the business sector, there aren t any readily available instruments that measure market orientation in the education sector for use in schools. Oplatka and Hemsley-Brown (2007) conducted studies of market orientation in higher education, however, validation around the tool used was not found. It is apparent that an instrument is needed 157

172 in the education sector to assist further important research in measuring and investigating the topic of market orientation in schools. Through the pilot study phase of this research, the non-adapted version of the Pulendran et al. (1998b) instrument was distributed. It became very apparent that an instrument designed for a business setting was unusable in a school setting. This was evident through the subsequent feedback from university academics and school staff who identified a variety of marketing terms commonly used in non-school settings that did not translate well in a school setting. This condition supports a previous study that found some school staff having an apprehensive and even rejecting attitude towards marketing (Drysdale, 2002). This study has successfully filled the above gap, by developing the Market Orientation in Schools Questionnaire (MOSQ) a valid and reliable instrument to measure the level of market orientation in schools. To the author s knowledge, this thesis is the first attempt in developing a market orientation measurement instrument for schools in Australia. The MOSQ adapted the Pulendran et al. (1998b) questionnaire, which is based on the four dimensions of market orientation; and further added the market intelligence dimension proposed by Drysdale (2002). The reliability measures of the MOSQ instrument were found to be statistically strong with good fit compared with other market orientation instruments used in past research. Rodriguez Cano et al. (2004) conducted a comparison study through a meta-analysis. In their study, 53 empirical studies in market orientation across 23 countries were analyzed. A Cronbach s alpha value of was found as the summary of studies in the meta-analysis. The reliability measure of 0.87 for the MOSQ instrument in this thesis falls nicely within the parameters of other instruments. Another meta-analysis study found that the mean reliability of the MARKOR construct was and the mean reliability for the MKTOR construct was (Ellis, 2006). This places the current reliability results of the MOSQ instrument on a better position then the MKTOR construct 158

173 that was used as the basis. A comparison with a similar study in a school setting was not possible, as none were available. Whereas Narver and Slater (1990) suggested a three-dimension model of market orientation in the business sector, and other writers have made adaptations for different contexts with different dimensions, findings from this study suggest that in a school setting, the five-dimension model of market orientation is appropriate. Furthermore, the MOSQ instrument has been validated as a capable instrument to comprehensively measure the level of market orientation of schools within the five dimensions and thus can be utilized in future research to further expand the body of knowledge. The impact of market orientation on perceived school performance Past studies have suggested that market orientation has a positive effect towards organizational performance in general. Building on Narver and Slater s (1990) findings, further studies have also confirmed that being more market oriented has a positive correlation with a variety of organizational performance measures such as: in profitability, customer service and retention, new product success, employee satisfaction, commitment and trust, overall business performance, and many others. Additional studies such as the ones written by Ellis (2006) and Bueno et al. (2016) further suggested that the link between market orientation and organizational performance extends to non-profit, health, and education sectors. Research on marketing in the education sector has received increased attention, with a bigger portion investigating into the higher education sector (Mainardes et al., 2014; R. L. Websteret al., 2014; Hemsley-Brown & Oplatka, 2010; Foskett, 2002). There is very little research into whether this phenomenon exists in schools. Within Australia there are two reported studies (Drysdale, 2002; Holmes, 1998) of market orientation in schools. Both studies employed a qualitative approach based primarily on case studies. Both studies used qualitative methods based on case studies. It appears that this study is the first 159

174 empirical study in market orientation in schools conducted in Australia translating to a significant contribution to the body of knowledge. This thesis significantly adds to the body of knowledge by supporting previous studies on the positive effect of market orientation towards organizational performance, and, more importantly, further revealing the contribution of the level of market orientation towards the change in perceived student performance, in the context of Victorian schools in Australia. The regression model employed in this study used the five dimensions of market orientation as the predictor variables regressing towards perceived student performance as the outcome variable. The overall model yielded high significance towards the prediction, with an R-squared value of.191 (F=12.86, df=5, 273). This evidence suggests that market orientation does significantly contribute towards perceived student performance, accounting for 19% of the variance. In other words, the data exhibits a pattern where an increase in the overall level of market orientation of a school is, consequently, followed by an increase in perceived student performance. This further supports the market orientation literature and the notion of a positive link between market orientation and organizational performance as well as suggesting that this notion is true for the school setting. In their model of market orientation, Narver and Slater (1990) suggest that customer orientation, competitor orientation, and inter-functional coordination are of equal importance, hence is depicted in an equilateral triangle. However, the findings in this study does not support this notion of equality, but instead indicate that the market orientation dimensions may not be of equal importance, as explained by the different beta values from the regression analysis. The results seem to indicate that customer and competitor orientation are the two most important constructs, followed by long-term growth and market intelligence. Inter-functional coordination was found to provide the most insignificant contribution towards perceived student performance compared to the other dimensions. This finding on inter-functional coordination supports the 160

175 research conducted by R. L. Webster et al. (2014), which also indicated the nonsignificant contribution of inter-functional coordination in a higher education setting. A conclusion, however, should not be taken that schools do not need to have inter-functional coordination. The significance of the overall model suggests that the five dimensions work together to significantly contribute towards perceived student performance. Furthermore, this study broadens the body of knowledge in regards to linking performance measures to the components of market orientation. In a metaanalysis study conducted by Ellis (2006), it was found that only a small number of papers (N=6) discussed the link between performance measures with individual market orientation dimensions (e.g. customer orientation), whereas the majority of publications (N=38) considered the overall construct of market orientation as a whole and compared it with multiple measures of performance. This thesis adds to the body of research by providing analysis at the dimension level of market orientation in addition to the overall market orientation construct. The market orientation level of Victorian schools Drysdale (2002) confirmed the view of marketing as one of the most misunderstood concepts. In regards to attitude towards marketing, it was found that schools, in general, had a negative view towards marketing. However, Drysdale (2002) also found that overall, schools in Victoria were somewhat market oriented. This finding was an improvement from a previous significant study by Holmes (1998), which suggested that schools did not adopt a marketing culture and further stated that the application of a generic marketing framework in schools was problematic. There are six categories for the level of market orientation: Highly market oriented, market oriented, somewhat market oriented, somewhat not market oriented, not market oriented, very low market oriented. This study investigated whether schools in Victoria are market oriented in someway. Out of the

176 schools that participated, only 4 schools were in the top bands of market oriented or highly market oriented, 23 schools were rated as somewhat market oriented, while the other 5 schools were in the lower three bands of somewhat not market oriented, not market oriented, and very not market oriented. This supports the study by Drysdale (2002), which also found that schools in Victoria were somewhat market oriented. Looking into the overall market orientation level of schools, the ranking order of the five dimensions from high to low was: customer orientation, market intelligence, inter-functional coordination, competitor orientation, and long-term growth. This supports Drysdale s (2002) argument that while schools were customer oriented, they were not competitor oriented, due to the reason that marketing was viewed as an unhealthy way to promote competition with other schools. It is possible that schools have not fully embraced the idea behind competitor orientation, which defines competition for the sake of development. Drysdale s (2002) study has shown that the concept of competition among different schools is not a generally accepted idea by school staff, with the exception of the principal, and in fact, the notion of competition among schools was accepted as an unhelpful aspect that may well be destructive. Perhaps not too dissimilar to the practice behind the notion that students should not be compared against other students, but to their own performance. An interesting point of discussion is what the level of market orientation in a school means in the bigger picture. Most schools in Victoria were found to be somewhat market oriented. Whether or not this should be interpreted as a satisfactory accomplishment is yet to be established. Is it enough for schools to be somewhat market oriented or do schools need to strive to reach a level of highly market oriented? The literature suggests that market orientation is not a dichotomous concept, but rather a continuum (Kohli & Jaworski, 1990). I.e. it is not the case that a school is either market oriented or not market oriented, rather the level of market orientation of a school is a continuum on a progressive scale. Furthermore, this 162

177 study confirms the literature, which suggests that the more market oriented an organization is, the better it will perform. In other words, as a school s market orientation level increases up the continuum scale, the better its performance should be. This school of thought carries a suggestion for schools to aim to increase their level of market orientation, regardless of their current level. Meaning, not only is it suggested for the low market oriented schools to increase their position, but also for schools that are already market oriented to become highly market oriented. However, Greenley (1995) argued that organizations that were heavily market oriented performed better than other groups, although the difference was marginal. Perhaps as schools reach the higher end of the market orientation continuum, there is a need for greater emphasis on feasibility and resource management. At that time a decision needs to be made whether the benefits of becoming even more market oriented will outweigh the resources and cost needed to further increase a school s market orientation level. For now, this study has set a benchmark of school market orientation level in Victoria for used in future comparative research. Whether or not schools take market orientation as a matter of priority will depend on a variety of contextual local factors. The idea that increasing market orientation will result in increasing performance is a generic one that has been proven many times. However, the strength (read: change) in the increase is moderated by contextual factors and depends on the definition of performance (Ellis, 2006). For schools, this may translate to local goals, such as: enrollment numbers, subject score performance, entrepreneurship, and others. Contextual moderating factors may include: population growth in the area, which commonly translates to higher demand in education, other schools available, geographical location, and others. Cook (2013) reported a case example of a multicultural girls Victorian school, which has been operating since 1928, continued to have decreasing enrollments, even though the physical location seem to be in its favor being the only government school in the area. It seems that competition from catholic and private schools may have been the cause of its demise (Cook, 2013). Perhaps, if long-term survival was emphasized and prioritized earlier on, 163

178 through studying the market trends and customer demands, the school may have been able to find a solution to stay relevant in its community and market context. The effect of job position and length of service on perceived market orientation This study reveals that the positive correlation between market orientation and perceived student performance is moderated by job position and length of service. The current study conducted a multivariate analysis of variance to investigate whether differences were found in the level of market orientation moderated by job position and length of service. There were four different job position groups (principal class, lead teacher, teacher, and non-teaching staff) and three different length of service groups (1-3 years, 4-6 years, more than 6 years). The data demonstrated that there was a statistically significant interaction between job position and length of service. Further investigation into the univariate analyses confirmed that, when moderated by job position and length of service, statistically significant differences could be found in all of the five dimensions of market orientation. As the first empirical study of market orientation in Australian schools, this study has also provided benchmark values of school staff s perception of market orientation, which account for valuable contribution for comparative studies in the future. Holmes (1998) and Drysdale (2002) suggested that a majority of the teacher group expressed negative point of view towards marketing, classified marketing as a non-educational concept, and associated the concept to commercialization, manipulative, misleading, and sometimes offensive. This negative view of marketing, however, was not present in the principal group, which viewed marketing as necessary (Holmes, 1998). This study indicates a similar trend where, looking at the overall market orientation score, the principal class is most positive about being market oriented, followed by the lead teacher group, non-teaching staff, and finally the teacher group. 164

179 Similar to the findings of Oplatka and Hemsley-Brown (2012) and Drysdale (2002), this study found that in regards to the original three dimensions (customer orientation, competitor orientation, and inter-functional coordination), teachers were most positive about customer orientation and least positive towards competitor orientation. However, when considering all five dimensions, it appears that teachers scored highest on market intelligence and lowest on long-term growth. Furthermore, the teacher group demonstrated a consistent pattern of change in their perception of the school s market orientation level as they progress through their career as an early career teacher (0-3 years) continuing to late career (more than 6 years). The pattern emerging from the data suggests that teachers start their career with a positive view of market orientation; however, a statistically significant drop in market orientation score is visible in all dimensions for mid career teachers. Teachers in their late career stage showed an increase in their score of market orientation, although still lower than early career teachers. It was suggested that a possible reason is that teacher candidates expectation of the profession and work was vastly different from their real life classroom experience (Riggs, 2014). Numerous early career candidates are shocked with the amount of after hours commitment required as a teaching member of a school staff. Exhaustion and burn out quickly overcomes the initial joy and motivation of becoming a teacher. Those who stay in the profession and progress into their mid career stage have a changed view of market orientation albeit negatively. Drysdale s (2002) finding that market orientation was moderated by job position was confirmed in this study. The data supports this notion, providing evidence of a statistically significant difference between the principals scores with those of the teachers. As leaders in the school, it is expected that principals have an overview at the organizational level and comparisons with other schools. The lower score of the teacher group compared to the principal group is unsurprising and could perhaps be explained by the differences in the 165

180 managerial function of the roles, which impacted on their perception of market orientation. The notion of teachers confusion on marketing is further supported by Oplatka and Hemsley-Brown (2012), finding that that teachers were responding to the market orientation survey incoherently. In one sense, teachers believed that being market oriented was not the sole responsibility of school management and further supported their [teacher s] active involvement in school image building, promotional activities, and marketing research, but conflictingly, did not believe that a teacher s role extended beyond teaching in the classroom and included attracting prospective students (Oplatka & Hemsley- Brown, 2012). Perhaps professional development for to increase teachers awareness and knowledge in this area would be beneficial to the school. IMPLICATIONS FOR SCHOOLS It has been suggested (Kohli et al., 1993; Narver & Slater, 1990; Slater & Narver, 1994) that it would be beneficial for practitioners to measure and identify their organization s degree of market orientation, with the aim of increasing and improving their market orientation, resulting in higher organizational performance. This study confirms the notion that the level of market orientation of a school will affect its perceived student performance, thus it is essential for schools to strongly take into consideration their positioning in terms of market orientation. Furthermore, in the last three decades, market mechanisms have started to be introduced in the education sector around the globe (Waslander et al., 2010) in hope to increase performance by encouraging school competition. Countries in Asia (China, Hong Kong, and Pakistan), Latin America (Chile and Nicaragua), Europe (Finland, France, Poland, and Sweden), and North America (United States and Canada) have introduced government policies that broaden parental choice and encourage school competition. Whether or not a similar approach of encouraging competition in schools will be taken in Australia is yet to be seen. But if the decreasing number of public school enrollments compared to other 166

181 sectors is any indication (ABS, 2006), competition may need to be considered more seriously in the future of Victorian schools. In regards to marketing, perhaps it can be said that schools in Victoria need to adjust and follow the ongoing marketing trend in education observed in other countries. However, the application of this in practice can erroneously take on a somewhat narrow form of advertising. Not all schools may yet be fully aware of the concept of market orientation and its benefits. By uncovering and presenting the link between the degrees of market orientation with the perceived student performance, it is hoped that schools will take more notice of the importance of market orientation. Although schools may be perceived by many as an educational organization that does not need to place an emphasis on profit making, a school s survival can often be dependent on its ability to attract students by marketing themselves to the external environment (Davies, 1997). As mentioned in the first chapter, the Australia Bureau of Statistics reports that there has been a change in school demographics in Australia from 1995 to Within the ten-year period, the number of government schools has decreased by 4% compared to other school sectors (ABS, 2006). The different school sectors have existed since 1848, while the decline in proportion of student enrollments to government schools has started in the late 70s (ABS, 2006). Furthermore, there the Australia Bureau of Statistics reported 132 government schools shutting down across Australia within a ten-year time frame between , while the number of non-government schools experienced an increase (ABS, 2011). Perhaps this suggests that government schools, or any school for that matter, are not immune to the effects of market shift and should therefore consider the long-term benefits of being market oriented, which can be essential in increasing the reputation of the school and resulting in better student admission (Drysdale, 2002). Foskett (2002) further supports this by suggesting that schools that neglect its marketing function will inevitably lose its competitiveness in the market and consequently lose its appeal. 167

182 Both practitioners and scholars have long established the importance of an organization to have a learning attitude (Kohli & Jaworski, 1990) in application of becoming market oriented. A school as a learning organization would have the ability to change and adapt to changes in the environment, increasing their level of market orientation, and thus having a source of competitive advantage by creating superior customer value. The involvement of school staff in the whole process is key to ensuring a high level of market orientation (Kohli & Jaworski, 1990; Shapiro, 1988). Each of the five dimensions of market orientation has a deep dependency on the participation from staff of different layers in a school, but perhaps best described in the dimensions of: inter-functional cooperation and market intelligence. The inter-functional cooperation dimension describes how well a school collaborates inter-departmentally, how much information and resource are shared, and how effective is the process of sharing. Having a high level of inter-functional cooperation would mean that the system of information and resource sharing is effective and efficient that all vertical layers and horizontal departments within the school are collaborating and participating in the process. The market intelligence dimension describes that a set of systems and procedures are embedded within the culture and processes and policy of the school. This implies that a variety of roles have been established and that different school staffs from different levels and departments are actively participating in the implementation of the process and policies. With the current changes and anticipating for future changes in the education landscape, ability to adapt and compete in the midst of change may well be critical for schools as an organization. When students and parents perceive that they have found added value in a school, as a result of a school being highly market oriented, they would more than likely perceive this value is unique and difficult for other schools to imitate. This may well be a significant advantage over other less-market oriented competitors (Ferraresi et al., 2012). 168

183 It has been suggested that becoming market oriented can be a time and resource intensive process and that it will take some time for a newly market-oriented school to yield the benefits (Balabanis, Stables, & Phillips, 1997). A common approach in the matter of viewing the cost of becoming market oriented is to assess the variable of supply and demand. This notion, also originally suggested by Kohli and Jaworski (1990), proposes that an organization may be able to survive without being market oriented if market demand is strong enough. The alternative view is to have a long-term investment in the notion of market oriented. Although at first, this may not seem as a good business strategy, in the long run, all markets, including education, will experience a slowing growth and increased competition (Slater & Narver, 1992), thus a market oriented approach may well be essential to survive. Perhaps the better long-term strategy is to start becoming a market oriented school while the environment is more lenient. A later study by Kohli et al. (1993) has led them to support the second approach, as their finding revealed that the positive link between market orientation and business performance was robust even through change in the supply-demand variable. LIMITATIONS OF THE STUDY This study was limited by a few factors, both methodologically and procedurally. This includes limitations around the sample size, which has further impact on the ability to reliably categorize the data into different demographic aspects/categories, and the complexity in defining a measure for school performance. Data collection for this study was conducted in 2012, at which time, tension was high between the teachers labor and the Victorian government (Savage, 2012), as discussed in chapter 3. As a result, the teachers union came to an agreement that teachers would not engage in other school activities aside from the core classroom engagement with students. This has become a significant barrier towards teachers involvement in research. Members of the teachers union did not partake in any after school activities and did not engage in school research 169

184 projects. This has affected in the number of participants in this study to be extremely limited. Due to this condition, a non-probability sampling model was taken as the necessary step. Although the sample size was sufficient for the statistical analyses to be conducted reliably, the author acknowledges the limitations of the study and the subsequent limitation to generalizability of the findings. It is suggested that a follow up research be conducted through a pure non-probability sampling method in Australia to verify that the model stays relevant. A suggested method for increasing sample size is to allocate more resources for the data collection process. Ngansathil (2001) has suggested that using a drop-off and pick-up approach for surveys lead to a better response rate, at the expense of cost, which was not available in this study. The design of the current study used a single measure of perceived school performance. As one of the more popular measures of school performance, student performance was selected. One item in the market orientation in schools questionnaire (MOSQ) was included as a self-reported measure of perceived student performance. The researcher acknowledges that school performance can be measured in different ways and/or use a combination of aspects as part of the overall measure. Further study is recommended to investigate a more complex measure of school performance and to analyze its relationship with the five dimensions of market orientation in schools. Themes for further research Considering the limitations of the current study and the prevalence of the topic, there are other areas and branches of market orientation in schools to be investigated further. Furthermore, the next essential step is to investigate into the implementation and impact of a school being market-oriented. Once Schools have awareness of the concept of market orientation and have measured their level of market orientation, it will be essential to have a further understanding of how long it wouldn t take to see the effects of the change. 170

185 Another area of interest is to explore the differences among school sectors. For example, in Australia, as was noted previously, schools could be categorized into one of three broad categories: public schools, independent schools, and Catholic schools. A public school belongs to the government and hence has a line of responsibility to the department of education in each State and Territory in Australia. Independent schools are privately governed and as such, have a greater autonomy in the management of the school. Catholic schooling is an interesting category, where schools are independent, as they do not belong to the government, but are not privately governed. Catholic schools have a line of responsibility to the relevant Catholic Diocese, and as such, are managed and controlled to an extent by the Catholic Diocese. Due to the nature and differences in which the three types of schools operate, it is an interesting study to explore the differences in market orientation within schools in the separate categories. Due to a limitation and sample size, this study was not able to reliably separate between the different school types. In general, the Australian system consists of three broad categories: primary school, secondary school, and early childhood. There are, however, other special categories, such as: P-12 school, special education school, etc. A further investigation into these different types of schools will provide valuable information of the differences in their level of market orientation. Location of the school is another point of interest for further study. Is there a difference in the level of marker orientation of schools that are located in the metropolitan area versus schools that are located in the rural or regional areas? Furthermore, as the location is a proxy for social economic status, this study would further investigate whether the different socio-economic statuses of the students in the school help to determine the level of market orientation of the school. 171

186 The combination of these studies will help shed light on which demographic aspect or criteria that determines a school s level of market orientation, hence, help further understanding on what aspects in a school ecosystem that accounts for a significant increase in a school s market orientation level. In addition to organizational performance, the level market orientation has been studied and suggested to also be positively related to product innovation (Lado & Maydeu-Olivares, 2001). Writers such as Drucker (2014), Chen and Hsu (2013), and Ozkaya et al. (2015) noted that innovation is dependent upon the market. It would be important to translate this finding into the education sector, where schools are racing to innovate in order to boost student performance and outcomes. Further research publications would include suggesting a new model of market orientation in schools, explaining the main findings in light of the unique characteristics of schools and education, and explaining the correlation between market orientation and student achievement based on past research and theories of education achievements and learning. CONCLUDING COMMENT This thesis has responded to the global need of research into the importance of being a market oriented organization, more specifically, investigating the current market orientation landscape in schools in Victoria, researched into the contributions of market orientation towards perceived school performance, and presented a capable instrument that measures the level of market orientation, purposefully designed for schools. Market orientation is an organizational culture that places a concentrated focus on their customers needs and adapts to changes in the environment. The results of the study have been presented and discussed. In regards to the availability of a measurement instrument for market orientation research in schools, this thesis has successfully developed a dependable tool, capturing the 172

187 five-dimension model of market orientation. In regards to the context of Victorian schools, it was found that most schools in Victoria are somewhat market oriented, with job position and length of service having a significant effect on the market orientation level of the school. The findings from this study further suggest that schools with a higher level of market orientation demonstrate a higher level of perceived student performance. This is consistent with previous studies on the relationship between market orientation and organizational performance. Furthermore, confirming the concept of market orientation extends across different organization types and is relevant in a school setting. In summary, marketing is the act of finding a match between a school s offer with market demand. Market orientation goes further by building a school culture that places customers needs up front and center and responds to those needs, while innovating and responding to the changes in the local context, thus creating customer value that is unique. As a result, a highly market oriented school would lead to a high level of customer satisfaction and loyalty, yielding long-term growth and the ability to stay relevant in an evolving community. 173

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209 APPENDICES Appendix A: Information Flyer Market orientation is defined as an organizational culture that has orientation to the market with focus on the customer. Market orientation has been investigated in for-profit and not-for-profit organisations in many countries around the world. Past research shows that there is a positive link between market orientation and organisational performance; and also that adopting market orientation principles will enhance the magnitude and effectiveness of innovation activities. Despite these findings there is little research on the relationship between market orientation and school performance. In short, a market-oriented school would be one that: 1. finds out and tends to the needs of its customers 2. finds out about the development of other schools in the area, and therefore, how it can improve itself 3. distributes information (whether student/parent/competitor related or other information) effectively through all levels in the hierarchy of the school, so that staff are well informed 4. is willing to sacrifice short term benefit in favour of long term growth 5. has all the above items embedded in the culture of the school My research attempts to measure the level of market orientation in schools in Victoria and to uncover the link between market orientation and school performance. 195

210 The research conduct is short and effective. I require 10 responses from each school that includes: principal (highly recommended), teaching staff, or nonteaching staff to fill out a 10-minute questionnaire (28 items). Your school will receive detailed feedback on the level of market orientation of the school and also a copy of the study at the completion of the research. Please contact me if you are interested. Daniel Arifin darifin@student.unimelb.edu.au Mobile: Phone:

211 Appendix B: Cover letter to principal Dear Principal, I am writing to invite you to participate in a research opportunity that will provide a valuable contribution to your school and to the education landscape of Victoria. I am investigating the market orientation in Victorian schools under the supervision of Dr Lawrie Drysdale and Dr David Gurr. Market orientation is how a school relates to the market; that includes students, parents and other community groups and agencies that have an interest in the school. Market orientation (as distinct from marketing) is a crucial factor because research shows evidence of a strong correlation between the level of market orientation with organizational performance. Your participation in this research will have significant benefits for the development of your school. Feedback will be given on your school s level of market orientation. Your school will also have the option to access the whole study which reports on the level of market orientation of schools in Victoria for comparison. My research will measure the level of market orientation and school performance using a specifically devised instrument for schools. The aim of the research is to verify the relationship between market orientation and school performance, as well as to develop a profile of schools in Victoria as a whole. Your contribution to this research will involve your consent and support to distribute, via , a voluntary 28-item questionnaire to all teaching staff members at your school. The questionnaire should take approximately 10 minutes to complete. The anonymity and confidentiality of participants contributions will be protected to the fullest extent, within the limits of the law. This project has been reviewed and approved by the University of Melbourne Human Research Ethics Committee ( ), the Department of Education and Early Childhood 197

212 Development (2012_001498) and the Catholic Education Melbourne (GE12/0009). Once the findings have been completed, a copy will be made available to your school. If you would like your school to benefit from this opportunity, please distribute the electronic questionnaire (Instrument Market Orientation in Schools v2.2.xlsx) to all staff (teaching and non-teaching), including yourself, and reply to this stating your agreement to participate. All completed questionnaires should be ed directly back to me at d.arifin@student.unimelb.edu.au, before October 30, I have attached a few articles on Market Orientation that may be of interest to you. Should you require any further information, or have any concerns, please do not hesitate to contact: Mr. Daniel Arifin: , Dr. Lawrie Drysdale: , Dr David Gurr, Should you have any concerns about the conduct of the project, you are welcome to contact the Executive Officer, Human Research Ethics, The University of Melbourne, on ph: , or fax: Best Regards, Mr. Daniel Arifin (PhD Student) d.arifin@student.unimelb.edu.au Dr. Lawrie Drysdale (Supervisor) dysdale@unimelb.edu.au Dr. David Gurr (Co Supervisor) d.gurr@unimelb.edu.au

213 Appendix C: Plain language statement to principals MELBOURNE GRADUATE SCHOOL OF EDUCATION Plain language statement for the Principal Market Orientation Level of Schools in Victoria My name is Daniel Arifin and I am a PhD student at The University of Melbourne. I am investigating the market orientation in Victorian schools under the supervision of Dr Drysdale and Dr Gurr. Market orientation is how the organisation relates to the market that includes students, parents and other community groups and agencies that have an interest in the school. Market orientation (as distinct from marketing) is important because research in a range of organisations outside of education has demonstrated that there is a strong correlation between the level of market orientation and performance. In short, a market oriented school would be one that: 1. finds out and tends to the needs of its customers 2. finds out about the development of other schools in the area, and therefore, how it can improve itself 3. distributes information (whether student/parent/competitor related or other information) effectively through all levels in the hierarchy of the school, so that staff are well informed 4. is willing to sacrifice short term benefit in favour of long term growth 5. has all the above items embedded in the culture of the school Your participation in this research will have significant benefits for the development of your school. Feedback will be given on your school s level of market orientation. Your school will also have the option to access the whole study which reports on the level of market orientation of schools in Victoria for comparison. My research will measure the level of market orientation and school performance using a specifically devised instrument for schools. The aim of the research is to verify the relationship between market orientation and school performance, as well as to develop a profile of schools in Victoria as a whole. Your contribution to this research will involve your consent and support to distribute, via , a voluntary 28-item questionnaire to all teaching staff members at your school. The questionnaire should take approximately 10 minutes to complete. The principal researcher, Mr. Daniel Arifin will be collecting and analyzing the data. He has a total of 8 years experience working in a K12 school environment. His experience ranges from classroom teaching of high school students, teacher training, and school administration. Daniel has been involved in quantitative and qualitative 199