The Interaction Effect of Market Sensing and Internal Market Orientation on Organizational Capabilities and Marketing Performance

Abstract

The success of every business depends on adapting itself to the environment within which it functions. Therefore, the organization’s ability to sense environmental change and respond willingly is a significant determination of success. However, literature search reveals that the interaction of firm capabilities couched within the complementarity perspective has not been empirically examined extensively. Moreover, the processes through which particular resources contribute to firm marketing performance remain largely a black box. Through using descriptive analytical approach this study contends that realizing the marketing performance impact of market sensing depends on know-how deployment processes and their complementarities in functional areas such as internal market orientation and organizational capabilities that co-align with market sensing. Drawing upon the resource-based view and dynamic capabilities theory of the firm, a model is developed to investigate the moderating role of internal market orientation in the relationship between market sensing and organizational capabilities, and how organizational capabilities mediate the relationship between market sensing and marketing performance. As a result of responses from (250) firms operating in Sudan, the path analysis through using AMOS in Structural Equation Modeling demonstrates some empirical supports to the model of this study. The results reveal that there is a positive relationship between some components of market sensing and customer performance; also the results predict that the two components of market sensing to some extend play an important role in influencing the organizational capabilities. Furthermore, the results indicate that organizational capabilities remained without effect on customer performance; while, the mediating effect shows that market sensing significantly contributes to customer performance via collaboration capability. In addition to that the result demonstrates that the two components of internal market orientation moderate the relationship between market sensing and organizational capabilities but in different ways. Based on study’s results, the discussion of the findings, the theoretical and practical implications as well as the limitations in this study are provided.