A Knowledge Reservoir as Time Goes by: The Role of Intrafirm Network in Sustaining Competitive Advantage of Market Orientation

Abstract

Numerous studies confirmed the positive impact of Market Orientation (MO) upon performance. However, MO as a sustainable competitive advantage (SCA) is still questionable and few previous studies investigated this issue. By aggregating a sample of 1175 multi-source informants from 60 firms, we found time spent on MO (MOT) in curvilinear relationship with customer knowledge, which fully mediates the link between MOT and performance. Moreover, we identified intrafirm network density positively moderates MOTcustomer knowledge link: it decreases obviously more slowly with high density than those with lower density. The sustaining effect of intrafirm network clarifies current inconclusive views on the impact of MO upon firm performance over time. We suggest firms to build a strong intrafirm network, metaphorically called knowledge reservoir, to actually turn firm’s MO into sustainable competitive advantage.

Keywords: market orientation, sustainable competitive advantage, intrafirm network, customer knowledge, innovation, customer willingness to stay

JEL Classification: M30, M31