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The paper investigates the role of market orientation as a driver of the development of relational capabilities in Russian firms. The paper tests the role of market orientation not only as a driver of business performance, but mainly as a platform for the creation and enhancement of a firm's embeddedness in relational structures through developing organizational capabilities and adapting internal processes within a dynamically changing environment. The results of the paper demonstrate existing differences in the role of market orientation subcomponents - customer orientation, competitor orientation and interfunctional coordination - in determining the level of relational capabilities and firm performance of the firms in the sample.
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