1. Welcome How sustainability orientation makes market-oriented firms more market oriented Dr. Satyendra Singh Director, Centre for Emerging Markets Professor, Marketing and International Business Editor, International Journal of Business and Emerging Markets University of Winnipeg, Canada s.singh@uwinnipeg.ca www.uwinnipeg.ca/~ssingh5

2. Outline Model, Definitions, and Theory Hypotheses Development Methodology –Data collection and Sample Characteristics Analyses – Moderated Regression Results Discussions References 2

3. The Model Market Orientation -Customer -Competitor -Interfunctional Sustainability Business Performance -ROI -Market Share Growth -New Product Success Rate H1 H2 Control Variables -Rel. Size, and cost -competitor conc. 3

4. Sustainability 4

5. Definitions Sustainability Orientation (OS) Consumption that can continue indefinitely without the degradation of natural, physical, human, and intellectual capital (Costanza, 1991) Market Orientation (MO) Firms’ ability to satisfy present and future needs of customers by developing products or services (Slater and Narver, 1994) Business Performance (BP) Return on Investment, Market Share Growth, New Product Success Rate 4

6. Resource Agency Theory (Hunt and Morgan, 1995) Marketing strategies and activities are inextricably linked to the future of natural environment that sustains all life. ↓ consumption of scarce resources Not harming natural environment Ensuring sustainable supply chain management ↓Reducing climate change impact Global warming, Child labor, Water supply 5

7. Hypotheses H1: MO leads to superior BP H2: SO moderates MO—BP relationship ↑ SO  ↑ BP SO=sustainability Orientation MO= Market Orientation, BP= Business Performance 6

8. Data Collection Data Collection from Kompass Directory/Database New Delhi (Okhla Phase, PIN 110020; Naraina, PIN 110028; and, Wazirpur, 110052) Mumbai (Laxmi, PIN 400053; Powai, PIN 400076; and, Thane Wagle, PIN 400604) Stratified Sampling 18% percent response rate Telephone calls (1100) made, then followed up by personal interviews if agreed to participate Three graduate students were recruited in each city 78% asked for a copy of the results Questionnaire Respondents were knowledgeable (6.3 on 7-pt scale) 7

9. The Scales… Market Orientation (Narver and Slater, 1990) Measured on a 7-pt. scale, 1=strongly disagree, 4=neutral, and 7=strongly agree Customer Orientation (6) We have customer commitment We create customer value We understand customer needs We have customer satisfaction objectives We measure customer satisfaction We do after-sales-service Competitor Orientation (4) Our salespeople share competitors’ information We respond rapidly to competitors’ actions Our top managers discuss competitors’ strategies We target opportunities for competitive advantage Inter-functional Coordination (5) We make inter-functional customer calls We share information among functions We integrate functional strategy All functions contribute to customer value We share resources with other business units 8

10. The Scales… Sustainability Orientation (Dow Jones Sustainability Index, (2009); Based on disclosure) Measured on a 7-pt. scale, 1=strongly disagree, 4=neutral, and 7=strongly agree Economic Orientation (5) Products and services breakdown Market share by region Information on major suppliers or creditors Employee stock option or bonus program Dividend distribution Social Orientation (5) Employee benefits – health, disability, retirement Human rights Job satisfaction Community involvement and charitable donations Employee training and education Environment Coordination (5) Energy, water or pollution related strategies Recycling strategies Waste management Environmental expenditures Environment non-compliance incidents 9

11. The Scales (Slater and Narver, 1994) Relative Size Measured on 7-pt scale, -3=Much smaller, 0=same, and +3=Much bigger to that of your largest competitor Relative cost Measured on 7-pt scale, -3=Much smaller, 0=same, and +3=Much bigger Average total operating cost relative to the largest competitor in your main market segment Concentration Within served market(s), the sales are dominated by Measured on 7-pt scale, 1=less than 10 firms, 4=about 10 firms, and 7=by many firms Business Performance Measured on 7-pt scale, -3=very poor, 0=same, and +3=very good Return on Investment Market Share Growth New Product Development 10

12. Sample Characteristics Total Sample Size205 Manufacturing Products115 (56%) Providing Services90 (44%) Sales Turnover (<Rs.99m)88 (43%) Sales Turnover (between Rs.100 and Rs. 149m)74 (36%) Sales Turnover (>Rs.150m)43 (21%) Employee Turnover (<49)66 (32%) Employee Turnover (between 50 and 99) 84 (41%) Employee Turnover (>100)55 (27%) Respondents’ designation (CEO/MD/Proprietor) 125 (61%) Respondents’ designation (senior manager)57 (28%) Respondents’ designation (mid-level manager)23 (11%) Respondents’ relevant business experience (in years)11.8 Respondents’ international business experience (in years)10.7 Proportion of outsourcing activities48% 11

13. MO – Factor Analysis… Customer Orientation (α =.79, adjusted α =.76) Customer commitment.73 Create customer value.77 Understand customer needs.79 Customer satisfaction objectives.83 Measure customer satisfaction.78 After sales service.74 Customer Orientation (α =.82, adjusted α =.81) Salespeople share competitors’ information.78 Respond rapidly to competitors’ actions.80 Top managers discuss competitors’ strategies.83 Target opportunities for competitive advantage.78 Interfunctional Coordination (α =.79, adjusted α =.77) Interfunctional customer.80 Information shared among functions.77 Functional integration in strategy.74 All functions contribute to customer value.80 Share resources with other business units.83 Reliability and Validity Assessment of the Theoretical Construct Measures Variables Factor loading 12

14. SO – Factor Analysis… Economic Orientation (α =.75, adjusted α =.73) Products and services breakdown.74 Market share.76 Information on major suppliers and creditors.74 Employee stock option or bonus program.75 D1vidend distribution.73 Social Orientation (α =.73, adjusted α =.71) Employee benefits – health, disability and retirement.73 Human rights.72 Job satisfaction.71 Community development and charitable donations.73 Employee training and education.75 Environment Orientation (α =.72, adjusted α =.70) Energy, water, pollution related strategies.72 Recycling strategies.71 Waste management.73 Environmental expenditure.72 Environmental non-compliance incidents.70 Reliability and Validity Assessment of the Theoretical Construct Measures Variables Factor loading 13

15. BP – Factor Analysis… Business Performance (α =.75, adjusted α =.73 ) Return on Investment.76 Market Share.77 New Product Success rate.73 Reliability and Validity Assessment of the Theoretical Construct Measures Variables Factor loading (std.) 14

16. Moderated Regression Analyses Standardized Coefficients (Standard Error) DV=Business PerfBPBPBPBP IVModel 1Model 2Model 3Model 4 Relative Size.21*(.07).20*(.05).18 *(.06).15(.04) Relative Cost -.11(.06)-.14(.08)-.16 (.09)-.18(.06) Concentration.13(.09).07(.06).10(.07).11(.07) Market Orientation (MO).23*(.07).21 *(.07).22*(.08) Sustainability orientation (SO).23*(.08).21*(.05) MO * SO.23*(.06) F8.54* 8.23* 9.37* 9.35 * R 2.21.26.32.36 VIF max 2.232.412.192.31 N205203201202 15 * = p<.05 ↑5%↑6%↑4%

17. Discussion H1: MO leads to superior BP Supported (b=.23*,.21*,.22*; p<.05) H2: SO moderates MO—BP relationship ↑ SO  ↑BP Supported (b=.23*, p<.05) SO=Sustainability Orientation MO= Market Orientation, BP= Business Performance 16

18. References Costanza, R., Daly, H.E. and Bartholomew, J.A. (1991), “Goals, agenda, and policy recommendations for ecological economies,” In R. Costanza (Ed.) Ecological Economies: The Science and Management of Sustainability (pp. 1-20). New York: Columbia University Press. Hunt, S.D. and Morgan R.M. (1995), “The comparative advantage theory of competition,” Journal of Marketing, 59(2):1-15. Narver, J.C. and Slater, S.F. (1990), “The effects of a market orientation on business profitability,” Journal of Marketing, 54(4): 20-35. Slater, S.F. and Narver, N.C. (1994), “Does competitive environment moderate the market orientation-performance relationship?” Journal of Marketing, 58(Jan): 46-55. 17

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