The implementation and development of market orientation in U.S. hospitals was examined to
identify a set of internal and external market intelligence behaviors to ensure value to customers
and long-term profitability for hospitals. This quantitative study empirically tested a 4-phase
grounded theory model in a hospital setting, and a scale by which implementation can be
assessed and monitored was developed through a cross-sectional survey. The survey was sent by
email to a target population of 18,934 hospital executives at acute care and critical access
hospitals throughout the United States and its territories. Data were collected and analyzed
through correlation and multivariate regression analysis and structural equation modeling. The
findings suggest that market orientation does develop in accordance with the 4 main phases of
market orientation development, and the progression occurs sequentially. There does appear to
be a positive correlation related to the degree of progress through development stages, increasing
market-orientation score and perceived performance; however, meaningful increases in the
positive impact on market orientation and performance do not show until the last stage of
development, and there is a clear chronology in the 4 stages. The study data supports that in the
developmental process, cultural transformation benefits precede behavioral transformation
benefits, interfunctional coordination is a moderating variable positively affecting performance
results, and information generation partially mediates customer and competitor orientations. The
study’s implications relate to future managerial application of a valid reliable scale to measure
and assess market-orientation development phases in hospitals and other industries.
Keywords: market orientation, healthcare, hospital, performance improvement,
development phases, customer orientation
IMPLEMENTATION OF MARKET ORIENTATION
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