- Email: [email protected]
Market orientation processes – Looking forward
Australasian Marketing Journal 19 (2011) 157–160
Contents lists available at ScienceDirect
Australasian Marketing Journal journal homepage: www.elsevier.com/locate/amj
Market orientation processes – Looking forward Louise Young School of Marketing, University of Western Sydney, Locked Bag 1797, Penrith South, NSW 1797, Australia
a r t i c l e
i n f o
Article history: Available online 25 May 2011
a b s t r a c t This paper focuses on Rong and Wilkinson’s (2011) recognition of market orientation as process related and considers the implications for research into these processes. Considered are the nature and role of processes and mechanisms by which firms ‘‘orient’’ to the markets in which they operate. Research into processes and their mechanisms represent an important but neglected area of research into firms’ market activities. Methods that can be used to study processes are considered with agent-based simulation highlighted as a particularly fruitful way of doing so. Ó 2011 Australian and New Zealand Marketing Academy. Published by Elsevier Ltd. All rights reserved.
1. Introduction The Rong and Wilkinson (2011) paper makes a number of substantial points about researching market orientation, however equally important is the insight provided into the fundamental nature of market orientation as processes which occur within a larger, connected system. This in turn further highlights the need for methods that allow meaningful investigation of processes.
2. Market ‘‘orienting’’ as process Rong and Wilkinson (2011) consider market orientation in terms of what it is, what is being measured (i.e. how it has been measured) and the implications of the way research into it has been undertaken. This discussion highlights that market orientation is a process. This emerges from the authors’ highlighting of the presence of managers’ perceptual and sense-making processes (Weick, 2000), i.e. that managers process information and make sense of their organisation, its environment and its performance and use this to form decisions about further activity, which they then implement. This is in line with the original conceptualisation of market orientation which presented it as the implementation of the marketing concept (Kolhi and Jaworski, 1990). Therefore, market orientation reflects the nature of process; it is a coalition of activities taking place. However despite a very large body of research, insights into the nature of this process are limited; the nature, role and drivers of market orientation are studied primarily via cross sectional survey data with the analysis guided by normative theories of management behaviour that focus on how to improve manager and firm performance.
E-mail address: [email protected]
The cross sectional designs that characterise the bulk of research into market orientation breed static thinking, where variables rather than events dominate, single actions rather than interactions over time is the focus, feedback is ignored and interpretation of correlations is seen as an acceptable method of determining causation. However, processes are characterised by renewal and growth, with action and movement integral (Pettigrew, 1992) and this is not captured via cross sectional surveys. The common thread that guides the variance-based thinking represented in surveys is that explanation is seen in terms of independent variables ‘‘causing’’ changes in a dependent variable. This is in contrast to a process-based explanation that is concerned with how a sequence of events unfolds to produce a given outcome (Van de Ven and Poole, 2005). Theories that guide process explanations go beyond a surface description to that which drives the observed sequences of events and seek to identify the mechanisms that cause events (Harre and Madden, 1975; Tsoukas, 1989; Van de Ven and Poole, 2005). 3. Mechanisms in business relations The study of mechanisms is concerned with how something has an effect, i.e. the focus is on the physical, mechanical, psychological, economic, sociological, etc. processes that are involved in one thing leading to another (Bunge, 1997; Hedström, 2005). Mechanisms encompass entities and their properties and operate such the activities that these entities engage in alone and in conjunction with other entities are organised so that they regularly bring about particular types of outcomes (Hedström, 2005). By way of an illustration, Held et al. (2010a,b) present a comprehensive crossdisciplinary review of previous research that identifies five broad types of business network mechanisms and processes. The mechanisms are distinguished in terms of the type of phenomena they seek to explain but there is recognition that the same kind of
1441-3582/$ - see front matter Ó 2011 Australian and New Zealand Marketing Academy. Published by Elsevier Ltd. All rights reserved. doi:10.1016/j.ausmj.2011.04.005
158
L. Young / Australasian Marketing Journal 19 (2011) 157–160
underlying mechanism may be relevant to more than one type of phenomena, such as is the case with various psychological mechanisms. The mechanisms of market orientation processes no doubt differ to some degree from those guiding business networks but are likely to have similarities to this set, particularly as the market orienting processes occur within networks of firms seeking competitive advantage. Identified mechanisms include specialisation and division of labour, business mating, business dancing, business connecting and environmental impacts (Held et al., 2010a,b). Specialisation includes activities associated with firms undertaking assortments of activities that match their capabilities, skills, resources and capacity and offer value to others. This includes making decisions on what activities to undertake and what to outsource, which includes decision-making and evaluation mechanisms, whereby firms compare the perceived costs and benefits of alternatives. This is a continuing process as the costs and benefits for firms in a given network change over time with better alternatives possibly emerging, firms’ awareness of alternatives evolving and firms’ scale and scope changing as a result of their performance over time and as a result of changes in market conditions. This alters the patterns of specialisation in the network and who interacts with whom. The mechanisms of business mating have to do with how firms encounter each other and how they choose and refuse and get chosen as potential relationship partners. While random processes are possible, so are ones that are influenced by past interactions, predispositions and communication networks. Changes in business partnerships flow on as they enable and constrain access to markets and the offers that can be made to them (Anderson and Narus, 2003). Once a relation is initiated, ‘‘dancing’’ mechanisms come into play (Wilkinson and Young, 1994). This includes the processes of interaction, including exchange mechanisms and social interactions through which people and firms learn about each other, adapt to each other and gain and lose resources and benefits. Firms may use various types of strategies in deciding how to interact and adapt them over time based on the experience and outcomes occurring. Relationship termination and decline processes are also possible, as well as development. This will partly depend on what is happening in other connected relations and the more general environment. Connecting mechanisms have been indirectly studied by a substantial number of IMP researchers (www. impgroup.org) who consider the different types of impacts and functions of connected relations (e.g. Anderson et al., 1994; Blankenburg-Holm et al., 1996; Wiley et al., 2009). But less well addressed are the results of various kinds of underlying mechanisms, including the way exchange in one relation depends on exchange taking place, or not, in another relation at the same time or in advance of the focal exchange (Easton et al., 1997, 1999, 2008), as well as communication, innovation and learning processes and technological processes. Systems of connected relationships, i.e. networks, operate in conjunction with other networks operating in other industries, markets and the general macro environment. The environment contains many mechanisms that impact upon firms to a greater or lesser degree. Particular aspects of the environment and how it changes over time are critical including the speed and variability of change and any feedback effects that may arise from actions taking place in a focal network. Mechanisms such as those described above guide market orientation. Market orientation requires that firms organise their activities in ways that allow them to implement the marketing concept (Kolhi and Jaworski, 1990). As already indicated this involves the combining and recombining of interacting activities as participants evolve in response to an evolving market. Effective participation in market orienting also involves participation in complex adaptive business networks which allows access to the resources needed
for competitive implementation of market-oriented strategies (Wilkinson and Young, 2005).
4. The methodological implications of marketing’s study of process Rong and Wilkinson (2011) recognise the need to consider the processes and the mechanisms that underpin firms’ market-orienting activities. These are already embedded in market orientation research that considers managers’ actions and responses. But this research is limited in its scope. Research to date focuses on attributes of managers, firms, and environment and the presence, absence or level of mechanisms that cause, mediate or moderate performance, e.g. learning. But there are causal sequences, underpinned by well-established theories that are not being explored. Examples are theories of self-efficacy (managers’ belief in their own influence upon events that affect them (Bandura, 1977)) and attributions, such as managers’ attribution of outcomes to self when the outcomes are positive or to the environment when they are not (Heider, 1958). These are examples of managers’ sensemaking, highlighting that market orienting involves more than simple assessments followed by behavioural responses. Instead, managers interpret their world, often in ways that are self-serving, and form beliefs based on their interpretations. In other words, their firm’s performance is going to affect the way managers make sense of their world and the way they make decisions, which in turn affects firm performance. As Rong and Wilkinson (2011) note, these processes of sensemaking and attribution are reflected in the answers that managers provide to surveys. What is therefore studied in market orientation research is managers’ assessments of their decision-making. This means that additional methods of research are needed to explore the process of market orientation. Cross sectional data requires more robust analysis that includes consideration of the way findings reflect different theories. More fundamentally, there is a need to go beyond one-shot surveys of managers to consider the mechanisms which determine performance and its relationship to market orientation and the way these act and interact over time. Alternatives such as case studies using historical/process methods, such as narrative event sequence analysis, and use of simulation methods are recommended by authors who study complex adaptive systems and their processes (e.g. Abbott, 2001; Van de Ven and Poole, 2005; Wilkinson and Young, 2005; Wilkinson et al., 2007). Simulation in particular offers exciting possibilities as it allows different mechanisms and their interactions to be systematically explored. In simulation the focus is on the underlying mechanisms and processes driving change. These work together over time, in ways that are not yet well understood, leading to the emergence of macro outcomes, structure and processes. Simulation methods, in particular agent based models (ABM), represent a revolution in the way scientists can build models to replicate, analyse, test and predict the behaviour of complex adaptive systems such as firms, relations and networks. ABM are able to go beyond the simplifications and assumptions required to solve traditional models. They are models comprising systems of mathematical rules transforming clearly defined inputs into outputs formalised in computer code (Deissenberg et al., 2008; Følgesvold and Prenkert, 2009). Agents are created, given attributes and contingencies which drive the way they behave. Their individual actions interact, resulting in bottom up, self-organising systems. Through systematic computation and analysis of the space of possible input values, a mapping of the respective outcomes can be calculated. These methods can be applied to the study of market orientation processes and outcomes and used to model the observed behaviour of actual firms and their market orientating processes and
L. Young / Australasian Marketing Journal 19 (2011) 157–160
mechanisms. They can also be used to explore ‘‘what if’’ questions, about alternative kinds of orienting processes and their outcomes under varying conditions. Simulation methods and ABM complement and extend variable based research. In particular, the results of variable-based research can be used to help validate ABM models and ABM can be used to understand the results of variable based research. Considerable empirical research has estimated many kinds of models of the relations among variables measuring different dimensions of market orientation, performance and the characteristics of the environment, as well as many other dimensions of firms and managers. Similar measures of the same variables can be made in an ABM under different conditions. Relevant environmental characteristics can also be systematically varied allowing various ‘‘what if’’ scenarios to be explored. In effect one conducts a survey of the agents (people, managers, firms) in an ABM at a particular time or over simulated time. (Such ‘‘surveys’’ of agents will, of course, have guaranteed 100% response rates and be perfectly honest.) The results can be compared to previous empirical results to assess the validity of various ABMs. If simulated and actual data match, the underlying mechanisms driving the validated ABM provide a possible set of generating mechanisms that produce the observed covariance matrix. This would allow us to better understand why and how the covariance patterns come to be generated. The findings also can guide subsequent qualitative research on real-world marketing systems to detect the presence of relevant mechanisms and how they operate. More realistic survey results from ABM could also be generated by applying response mechanisms observed in management surveys to the agents’ responses, e.g. limited and biased memories, sense-making and self-serving biases, and comparisons made.
5. Conclusions A concern is that the trend is away rather than towards encompassing more approaches to doing research in marketing. There is ever-increasing use of co-variance analysis, such as structural equation modelling, and it is often argued by its proponents that this is sufficient to infer explanations of causality. However these approaches preclude meaningful exploration of processes and mechanisms (Denize and Young, 2007). Also concerning is that the use of these analytical tools is leading to ‘‘the tail wagging the dog’’. Researchers are now likely to reject consideration of views of the world that cannot be tested with these methods and are coming to believe that these models provide comprehensive depictions of business process reality, whereas they provide only very limited and often inaccurate views. The scale of the work and the need for self-validation by researchers leads to self-perpetuation and research agendas and dangerous paradigms that impede our understanding of business processes (Denize and Young, 2007). One challenge for researchers is to develop methods of survey research design and data analysis that are more sympathetic to a complex adaptive system stance, including awareness of business processes such as market orienting. The way forward does not forbid the use of traditional management analysis and planning techniques because firms are still required to act and respond in intentionally rational ways if the self-organising process is to work effectively over time (Wilkinson and Young, 2002). However future researchers would do well to recognise the important watershed that the Rong and Wilkinson (2011) paper represents. The need for the broadening of our thinking about and researching of market orientation reflects a broader issue – the need to broaden the way we think about our discipline generally and to broaden the methods we use in research.
159
A growing research perspective should include ABM and simulation, which represent a fundamentally different way of doing research. This research is concerned with synthesis, i.e. where explanation comes from being able to grow or generate the phenomena of interest (Epstein, 2006). While not yet in the portfolio of marketing science, such methods are being increasingly recognised and used in other social sciences and the techniques are becoming more accessible (e.g. Epstein, 2006; Hedström, 2005; Sterman, 2000; Sydow et al., 2009). They represent an important opportunity for the development of research in marketing. New methods, combined with more rigorous thinking about alternative explanations, as reflected in the Rong and Wilkinson (2011) paper, will progress the discipline as a whole.
References Abbott, A., 2001. Time Matters: On Theory and Method. University of Chicago Press, Chicago. Anderson, C., Hakansson, H., Johanson, J., 1994. Dyadic business relationships within a business network context. Journal of Marketing 58 (3), 1–15. Anderson, J., Narus, J., 2003. Business Market Management: Understanding, Creating, and Delivering Value, second ed. Pearson, New York. Bandura, A., 1977. Self-efficacy: towards a unifying theory of behavioural change. Psychological Review 84, 191–215. Bunge, M., 1997. Mechanism and explanation. Philosophy of the Social Sciences 27 (4), 410–465. Blankenburg-Holm, D., Eriksson, K., Johanson, J., 1996. Business networks and cooperation in international business relationships. Journal of International Business Studies 27 (5), 1033–1053. Denize, S., Young, L., 2007. Concerning trust and information. Industrial Marketing Management 36 (7), 968–982. Deissenberg, C., van der Hoog, S., Dawid, H., 2008. Eurace: a massively parallel agent-based model of the European economy. Applied Mathematical Computing 204 (2), 541–552. Easton, G., Wiley, J., Wilkinson, I., 1999. Simulating industrial relationships with evolutionary models. In: 28th European Marketing Academy Annual Conference. Easton, G., Georgieva, K., Wilkinson, I., 1997. On the edge of chaos: towards evolutionary models of industrial networks in Hans Georg. In: Gemunden, Thomas Ritter (Eds.), Relationships and Networks in International Markets. Elsevier, pp. 273–294. Easton, G., Georgieva, K., Wilkinson, I., Brooks, R., 2008. Understanding the dynamics of industrial networks using Kauffman boolean networks. Advances in Complex Systems 11 (1), 139–164. Epstein, J.M., 2006. Generative Social Science. Princeton University Press, Princeton. Følgesvold, A., Prenkert, F., 2009. Magic Pelagic – an agent-based simulation of 20 years of emergent value accumulation in the North Atlantic herring exchange system. Industrial Marketing Management 38 (5), 529–540. Harre, R., Madden, E., 1975. Causal Powers. Littlefield Adams, Totowa, NJ. Held, F., Marks, R., Wilkinson, I., Young, L., 2010a. Exploring the dynamics of economic networks: First steps of a research project. In: World Congress of Social Simulation. Kassell, Germany. Held, F., Marks, R., Wilkinson, I., Young, L., 2010b. Towards simulation models of the dynamics of business relations and networks. In: Industrial Marketing and Purchasing Conference. Budapest, Hungary. Hedström, P., 2005. Dissecting the Social: On the Principles of Analytical Sociology. Cambridge University Press, Cambridge, UK. Heider, F., 1958. The Psychology of Interpersonal Relations. Wiley, New York. Kolhi, A., Jaworski, B., 1990. Market orientation: the construct, research propositions and managerial implications. Journal of Marketing 54 (2), 1–16. Pettigrew, A., 1992. The character and significance of strategy process research. Strategic Management Journal 13, 5–16. Rong, B., Wilkinson, I.F., 2011. What do managers’ survey responses mean and what affects them? The case of market orientation and firm performance. Australasian Marketing Journal 19 (3), 137–147. Sterman, J., 2000. Business Dynamics: Systems Thinking and Modeling for a Complex World. McGraw-Hill, New York, NY. Sydow, J., Schreyögg, G., Koch, J., 2009. Organizational path dependence. Opening the black box. Academy of Management Review 34 (4), 689–709. Tsoukas, H., 1989. The validity of idiographic research explanations. Academy of Management Review 14, 551–561. Van de Ven, A., Poole, M., 2005. Alternative approaches for studying organizational change. Organisation Studies 26 (9), 1377–1404. Weick, K., 2000. Making Sense of the Organization. Blackwell Publishers, Malden, MA. Wiley, J., Wilkinson, I., Young, L., 2009. A comparison of European and Chinese supplier and customer functions and the impact of connected relations. Journal of Business and Industrial Marketing 24 (1), 35–45. Wilkinson, I., Young, L., 1994. Business dancing: an alternative paradigm for relationship marketing. Asia-Australia Marketing Journal 2 (1), 26–41.
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Wilkinson, I., Young, L., 2002. On cooperating: firms, relationships and networks. Journal of Business Research 55 (2), 123–133. Wilkinson, I., Young, L., 2005. Towards a normative theory of normative marketing theory. Journal of Marketing Theory 5 (4), 363–396.
Wilkinson, I., Young, L., Ladley, D., 2007. Group selection versus individual selection and the evolution of cooperation in business networks. In: Industrial Marketing and Purchasing Conference. Manchester, UK.
Contents lists available at ScienceDirect
Australasian Marketing Journal journal homepage: www.elsevier.com/locate/amj
Market orientation processes – Looking forward Louise Young School of Marketing, University of Western Sydney, Locked Bag 1797, Penrith South, NSW 1797, Australia
a r t i c l e
i n f o
Article history: Available online 25 May 2011
a b s t r a c t This paper focuses on Rong and Wilkinson’s (2011) recognition of market orientation as process related and considers the implications for research into these processes. Considered are the nature and role of processes and mechanisms by which firms ‘‘orient’’ to the markets in which they operate. Research into processes and their mechanisms represent an important but neglected area of research into firms’ market activities. Methods that can be used to study processes are considered with agent-based simulation highlighted as a particularly fruitful way of doing so. Ó 2011 Australian and New Zealand Marketing Academy. Published by Elsevier Ltd. All rights reserved.
1. Introduction The Rong and Wilkinson (2011) paper makes a number of substantial points about researching market orientation, however equally important is the insight provided into the fundamental nature of market orientation as processes which occur within a larger, connected system. This in turn further highlights the need for methods that allow meaningful investigation of processes.
2. Market ‘‘orienting’’ as process Rong and Wilkinson (2011) consider market orientation in terms of what it is, what is being measured (i.e. how it has been measured) and the implications of the way research into it has been undertaken. This discussion highlights that market orientation is a process. This emerges from the authors’ highlighting of the presence of managers’ perceptual and sense-making processes (Weick, 2000), i.e. that managers process information and make sense of their organisation, its environment and its performance and use this to form decisions about further activity, which they then implement. This is in line with the original conceptualisation of market orientation which presented it as the implementation of the marketing concept (Kolhi and Jaworski, 1990). Therefore, market orientation reflects the nature of process; it is a coalition of activities taking place. However despite a very large body of research, insights into the nature of this process are limited; the nature, role and drivers of market orientation are studied primarily via cross sectional survey data with the analysis guided by normative theories of management behaviour that focus on how to improve manager and firm performance.
E-mail address: [email protected]
The cross sectional designs that characterise the bulk of research into market orientation breed static thinking, where variables rather than events dominate, single actions rather than interactions over time is the focus, feedback is ignored and interpretation of correlations is seen as an acceptable method of determining causation. However, processes are characterised by renewal and growth, with action and movement integral (Pettigrew, 1992) and this is not captured via cross sectional surveys. The common thread that guides the variance-based thinking represented in surveys is that explanation is seen in terms of independent variables ‘‘causing’’ changes in a dependent variable. This is in contrast to a process-based explanation that is concerned with how a sequence of events unfolds to produce a given outcome (Van de Ven and Poole, 2005). Theories that guide process explanations go beyond a surface description to that which drives the observed sequences of events and seek to identify the mechanisms that cause events (Harre and Madden, 1975; Tsoukas, 1989; Van de Ven and Poole, 2005). 3. Mechanisms in business relations The study of mechanisms is concerned with how something has an effect, i.e. the focus is on the physical, mechanical, psychological, economic, sociological, etc. processes that are involved in one thing leading to another (Bunge, 1997; Hedström, 2005). Mechanisms encompass entities and their properties and operate such the activities that these entities engage in alone and in conjunction with other entities are organised so that they regularly bring about particular types of outcomes (Hedström, 2005). By way of an illustration, Held et al. (2010a,b) present a comprehensive crossdisciplinary review of previous research that identifies five broad types of business network mechanisms and processes. The mechanisms are distinguished in terms of the type of phenomena they seek to explain but there is recognition that the same kind of
1441-3582/$ - see front matter Ó 2011 Australian and New Zealand Marketing Academy. Published by Elsevier Ltd. All rights reserved. doi:10.1016/j.ausmj.2011.04.005
158
L. Young / Australasian Marketing Journal 19 (2011) 157–160
underlying mechanism may be relevant to more than one type of phenomena, such as is the case with various psychological mechanisms. The mechanisms of market orientation processes no doubt differ to some degree from those guiding business networks but are likely to have similarities to this set, particularly as the market orienting processes occur within networks of firms seeking competitive advantage. Identified mechanisms include specialisation and division of labour, business mating, business dancing, business connecting and environmental impacts (Held et al., 2010a,b). Specialisation includes activities associated with firms undertaking assortments of activities that match their capabilities, skills, resources and capacity and offer value to others. This includes making decisions on what activities to undertake and what to outsource, which includes decision-making and evaluation mechanisms, whereby firms compare the perceived costs and benefits of alternatives. This is a continuing process as the costs and benefits for firms in a given network change over time with better alternatives possibly emerging, firms’ awareness of alternatives evolving and firms’ scale and scope changing as a result of their performance over time and as a result of changes in market conditions. This alters the patterns of specialisation in the network and who interacts with whom. The mechanisms of business mating have to do with how firms encounter each other and how they choose and refuse and get chosen as potential relationship partners. While random processes are possible, so are ones that are influenced by past interactions, predispositions and communication networks. Changes in business partnerships flow on as they enable and constrain access to markets and the offers that can be made to them (Anderson and Narus, 2003). Once a relation is initiated, ‘‘dancing’’ mechanisms come into play (Wilkinson and Young, 1994). This includes the processes of interaction, including exchange mechanisms and social interactions through which people and firms learn about each other, adapt to each other and gain and lose resources and benefits. Firms may use various types of strategies in deciding how to interact and adapt them over time based on the experience and outcomes occurring. Relationship termination and decline processes are also possible, as well as development. This will partly depend on what is happening in other connected relations and the more general environment. Connecting mechanisms have been indirectly studied by a substantial number of IMP researchers (www. impgroup.org) who consider the different types of impacts and functions of connected relations (e.g. Anderson et al., 1994; Blankenburg-Holm et al., 1996; Wiley et al., 2009). But less well addressed are the results of various kinds of underlying mechanisms, including the way exchange in one relation depends on exchange taking place, or not, in another relation at the same time or in advance of the focal exchange (Easton et al., 1997, 1999, 2008), as well as communication, innovation and learning processes and technological processes. Systems of connected relationships, i.e. networks, operate in conjunction with other networks operating in other industries, markets and the general macro environment. The environment contains many mechanisms that impact upon firms to a greater or lesser degree. Particular aspects of the environment and how it changes over time are critical including the speed and variability of change and any feedback effects that may arise from actions taking place in a focal network. Mechanisms such as those described above guide market orientation. Market orientation requires that firms organise their activities in ways that allow them to implement the marketing concept (Kolhi and Jaworski, 1990). As already indicated this involves the combining and recombining of interacting activities as participants evolve in response to an evolving market. Effective participation in market orienting also involves participation in complex adaptive business networks which allows access to the resources needed
for competitive implementation of market-oriented strategies (Wilkinson and Young, 2005).
4. The methodological implications of marketing’s study of process Rong and Wilkinson (2011) recognise the need to consider the processes and the mechanisms that underpin firms’ market-orienting activities. These are already embedded in market orientation research that considers managers’ actions and responses. But this research is limited in its scope. Research to date focuses on attributes of managers, firms, and environment and the presence, absence or level of mechanisms that cause, mediate or moderate performance, e.g. learning. But there are causal sequences, underpinned by well-established theories that are not being explored. Examples are theories of self-efficacy (managers’ belief in their own influence upon events that affect them (Bandura, 1977)) and attributions, such as managers’ attribution of outcomes to self when the outcomes are positive or to the environment when they are not (Heider, 1958). These are examples of managers’ sensemaking, highlighting that market orienting involves more than simple assessments followed by behavioural responses. Instead, managers interpret their world, often in ways that are self-serving, and form beliefs based on their interpretations. In other words, their firm’s performance is going to affect the way managers make sense of their world and the way they make decisions, which in turn affects firm performance. As Rong and Wilkinson (2011) note, these processes of sensemaking and attribution are reflected in the answers that managers provide to surveys. What is therefore studied in market orientation research is managers’ assessments of their decision-making. This means that additional methods of research are needed to explore the process of market orientation. Cross sectional data requires more robust analysis that includes consideration of the way findings reflect different theories. More fundamentally, there is a need to go beyond one-shot surveys of managers to consider the mechanisms which determine performance and its relationship to market orientation and the way these act and interact over time. Alternatives such as case studies using historical/process methods, such as narrative event sequence analysis, and use of simulation methods are recommended by authors who study complex adaptive systems and their processes (e.g. Abbott, 2001; Van de Ven and Poole, 2005; Wilkinson and Young, 2005; Wilkinson et al., 2007). Simulation in particular offers exciting possibilities as it allows different mechanisms and their interactions to be systematically explored. In simulation the focus is on the underlying mechanisms and processes driving change. These work together over time, in ways that are not yet well understood, leading to the emergence of macro outcomes, structure and processes. Simulation methods, in particular agent based models (ABM), represent a revolution in the way scientists can build models to replicate, analyse, test and predict the behaviour of complex adaptive systems such as firms, relations and networks. ABM are able to go beyond the simplifications and assumptions required to solve traditional models. They are models comprising systems of mathematical rules transforming clearly defined inputs into outputs formalised in computer code (Deissenberg et al., 2008; Følgesvold and Prenkert, 2009). Agents are created, given attributes and contingencies which drive the way they behave. Their individual actions interact, resulting in bottom up, self-organising systems. Through systematic computation and analysis of the space of possible input values, a mapping of the respective outcomes can be calculated. These methods can be applied to the study of market orientation processes and outcomes and used to model the observed behaviour of actual firms and their market orientating processes and
L. Young / Australasian Marketing Journal 19 (2011) 157–160
mechanisms. They can also be used to explore ‘‘what if’’ questions, about alternative kinds of orienting processes and their outcomes under varying conditions. Simulation methods and ABM complement and extend variable based research. In particular, the results of variable-based research can be used to help validate ABM models and ABM can be used to understand the results of variable based research. Considerable empirical research has estimated many kinds of models of the relations among variables measuring different dimensions of market orientation, performance and the characteristics of the environment, as well as many other dimensions of firms and managers. Similar measures of the same variables can be made in an ABM under different conditions. Relevant environmental characteristics can also be systematically varied allowing various ‘‘what if’’ scenarios to be explored. In effect one conducts a survey of the agents (people, managers, firms) in an ABM at a particular time or over simulated time. (Such ‘‘surveys’’ of agents will, of course, have guaranteed 100% response rates and be perfectly honest.) The results can be compared to previous empirical results to assess the validity of various ABMs. If simulated and actual data match, the underlying mechanisms driving the validated ABM provide a possible set of generating mechanisms that produce the observed covariance matrix. This would allow us to better understand why and how the covariance patterns come to be generated. The findings also can guide subsequent qualitative research on real-world marketing systems to detect the presence of relevant mechanisms and how they operate. More realistic survey results from ABM could also be generated by applying response mechanisms observed in management surveys to the agents’ responses, e.g. limited and biased memories, sense-making and self-serving biases, and comparisons made.
5. Conclusions A concern is that the trend is away rather than towards encompassing more approaches to doing research in marketing. There is ever-increasing use of co-variance analysis, such as structural equation modelling, and it is often argued by its proponents that this is sufficient to infer explanations of causality. However these approaches preclude meaningful exploration of processes and mechanisms (Denize and Young, 2007). Also concerning is that the use of these analytical tools is leading to ‘‘the tail wagging the dog’’. Researchers are now likely to reject consideration of views of the world that cannot be tested with these methods and are coming to believe that these models provide comprehensive depictions of business process reality, whereas they provide only very limited and often inaccurate views. The scale of the work and the need for self-validation by researchers leads to self-perpetuation and research agendas and dangerous paradigms that impede our understanding of business processes (Denize and Young, 2007). One challenge for researchers is to develop methods of survey research design and data analysis that are more sympathetic to a complex adaptive system stance, including awareness of business processes such as market orienting. The way forward does not forbid the use of traditional management analysis and planning techniques because firms are still required to act and respond in intentionally rational ways if the self-organising process is to work effectively over time (Wilkinson and Young, 2002). However future researchers would do well to recognise the important watershed that the Rong and Wilkinson (2011) paper represents. The need for the broadening of our thinking about and researching of market orientation reflects a broader issue – the need to broaden the way we think about our discipline generally and to broaden the methods we use in research.
159
A growing research perspective should include ABM and simulation, which represent a fundamentally different way of doing research. This research is concerned with synthesis, i.e. where explanation comes from being able to grow or generate the phenomena of interest (Epstein, 2006). While not yet in the portfolio of marketing science, such methods are being increasingly recognised and used in other social sciences and the techniques are becoming more accessible (e.g. Epstein, 2006; Hedström, 2005; Sterman, 2000; Sydow et al., 2009). They represent an important opportunity for the development of research in marketing. New methods, combined with more rigorous thinking about alternative explanations, as reflected in the Rong and Wilkinson (2011) paper, will progress the discipline as a whole.
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