An evaluation of the market orientation of public research institutes in Finland
Ketola, Jarmo (2004)
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95 p. + appendixes 105 p
MBA-dissertation : University of Wales, 2004
Market orientation is frequently discussed in the business texts, but rarely considered in public sector organisations. Whether the aims of such public sector organisations are for-profit or not for-profit they are generally found to be suffering from a lack of funding. Since market orientation is hypothesised to be important as it generally favours customer satisfaction and thus leads to higher sales and profits, its lack of consideration in the former is remarkable. The purpose of this study is to evaluate market orientation in two public research institutes in Finland by ascertaining what the managers in the companies prefer to be and how market orientation will be implemented in their strategy. In addition differences and similarities in the culture of market orientation between the two companies were to be identified. The evaluation included such objectives as assessing the manager's attitudes to the importance of competitive advantage and customer satisfaction in market orientation and examining the current willingness to embrace market orientation. In addition, the extent to which market orientation is incorporated within current strategy was analysed. An evaluation of the advantages and disadvantages of the incorporation of market orientation within strategy of the market orientation of public research institutes in Finland was also sought. The qualitative research method was a case study and the analysis method was Qualitative Data Analysis of Miles and Huberman (1994). The subjects were two Finnish public research institutes, MTT (Agrifood Research Finland) and VTT (Technical Research Centre of Finland) Biotechnology. The research data were collected by means of interviewing the top-level managers at MTT and VTT Biotechnology. The number of transcribed and analysed interviews was 11 at MTT and five at VTT Biotechnology. The role of competitive advantage was seen to be very important in the public research in the two organisations. Knowledge, focusing and differentiation were seen as factors of competitive advantage, however, focusing and differentation should to be more fully embraced in the both organisations in the future. Listening to customers in the wider meaning was assessed to be to the advantage of the incorporation of market orientation within strategy. Although its most important factor was assessed to be towards funding in the future, better resources and better knowledge of the future needs and trends in the both organisations are needed. Short sightedness and the risk of the institute loosing scientific status of were seen as disadvantages if market orientation would be strongly incorporated into the strategy. The results of a study of the managers opinions from both these organisations indicated support for the following hypotheses that Jaworski and Kohli (1996) argue as the benefits of market orientation: (1) financial consequences, which were highly emphasised among the managers due to decreasing level of public funding, (2) customer consequences, which were considered to be essential to gain the market information as well as the customer feedback that are needed when trying to develop busi ness in a sustainable way, (3) employee consequences, for which it was found to only a slight extent that employee esprit d'corps and commitment to the organisation related to market orientation, and (4) innovation consequences, which proved to b e relevant both at VTT and at MTT. Consequently these findings have implications for managers attempting to develop and maintaining market orientation at these and in other public sector service institutes.
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