Effective managerial interventions to develop market- orientation in an organization

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Effective managerial interventions to develop

market-orientation in an organization

By Marcel Poel

University of Groningen

Faculty of Economics and Business

M.Sc. Business Administration: Change Management

February 20, 2014 Supervisor/university: B. Emans Supervisor/field of study: H. Schaap Verlengde Visserstraat 9 9718 JA Groningen (06) 51647377 m.poel@student.rug.nl Student number: 1702173

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Abstract

In this paper the outcomes of an interview based study about the impact of managerial interventions on the development of market-orientation in an organization are presented. The interventions were based upon the culture embedding mechanisms of Schein (2010). 18 interviews were conducted at a building products company in the Netherlands with employees of various hierarchical levels. The interviews were structured around the interventions found in the literature, based on which the theory could be extended.

Results suggest that managerial interventions stimulate and concretize market-orientation to create the climate to develop market-orientation, and structure and establish the organization towards market-orientation.

Findings are consistent with theory-based predictions that possessing a distinctive vision, providing concrete market-oriented examples, coaching to concretize market-orientation and formal communication to concretize market-orientation create the climate to develop market-orientation in an organization. Furthermore findings supplement theory with: informal communication to concretize market-orientation and displaying Management Team (MT) group cohesiveness to create the climate to develop market-orientation.

Findings furthermore are consistent with theory-based predictions that reducing hierarchical levels and centralizing customer information structure and establish market-orientation in an organization. Furthermore findings supplement the theory with the creation of marketing as an executive role, the creation of customer information sharing, organizing face-to-face contact and reduction of formality structures market-orientation.

Key words: market orientation, development, organizational culture, managerial interventions,

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1. Introduction

Contemporary organizations operate in a continuous state of change. Changes occur in the external environment as well as the internal environment of the company. Many organizations struggle to align their organizational focus with the demands of the customer. In this, market orientation as a business organization’s orientation towards its customers and competitors has been emphasized as a central key to company success by academics and managers (Becker & Homburg, 1999).

The market-oriented culture can be seen as the most effective culture to align the organization with customer demands. For example Narver & Slater (1990) deﬁne market orientation as ‘an

organization culture (…) that most effectively and efﬁciently creates the necessary behaviours for the creation of superior value for buyers.’ Furthermore they stated that a management team will be able

to provide the business with a strong competitor understanding, allowing it to proactively adjust strategies to maintain its market position and build barriers to restrict others from entering the market. Deshpande & Webster (1989) define the market-oriented type of culture as a fundamental shared set of beliefs and values that put the customer in the centre of the ﬁrm’s thinking about strategy and operations. Pearson (1993) defined the market-oriented culture as a culture that is driven to meet the needs of the customer more effectively than the competitor. Gebhart et. al (2006) developed a framework that presented the values and norms of a market-oriented organization (Table 1).

TABLE 1

Values, Assumptions, and Norms of Market-Oriented Firms

Value Assumption Behavioural Norms

Market as the reason for existence

We come together as an organization to serve the market

and make a living.

Every decision and action must consider how it affects the market.

Collaboration Working together, we can achieve more, faster and better,

than apart.

Work is done collaboratively by teams. Teams are jointly responsible

for outcomes. Respect/empathy/pers

pective taking

People are basically good and have reasons for their actions.

Consider the perspectives, needs, training, expertise, and experiences of

others when reacting to or interpreting their actions. Keep promises To succeed, everyone must do his

or her part.

Each employee is responsible for following through on commitments to

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TABLE 1 (Continued)

Values, Assumptions, and Norms of Market-Oriented Firms

Openness Honestly sharing information, assumptions, and motives allows

others to understand and effectively collaborate with us.

Proactively and honestly share information, assumptions, and

motives with others.

Trust Everyone is committed to the same goal. Therefore, we can have positive expectations about

their intentions and behaviours.

Trust that your fellow employees are telling the truth and will follow

through on commitments.

Although the market-orientated culture has received substantial academic interest over the years (Narver & Slater, 1990; Harris & Ogbonna, 2001; Hooley et. al, 2008), research on the influence a manager or leader has on the implementation of a market-oriented organization is limited (Gotteland et. al, 2007; Gebhardt et. al, 2006). In this paper, research aims to fill that gap by identifying what interventions management can utilize to influence the development of market-orientation/market-orientation in an organization.

To characterize organizational culture, Buono (1985) stated that organizations have both subjective and objective cultures. Subjective organizational culture refers to the shared pattern of beliefs, assumptions, and expectations held by organizational members, and the group’s characteristic way of perceiving the organization’s environment and its norms, roles, and values as they exist outside the individual (Schwartz & Davis, 1981; Triandis et. al, 1972).

Subjective culture encompasses what may be termed a managerial culture, the leadership styles and orientations, mental frameworks, and ways of behaving and solving problems that are influenced by the values supported by the organization (Litterer, 1978; Peters, 1980). While some aspects of managerial culture such as leadership style are, of course, shared across organizations, crucial but subtle factors are indigenous to particular organizations (Buono, 1985).

Objective organizational culture refers to the artefacts created by an organization. Materials can

be seen as reflections of the objective organizational culture of an organization. Examples can be: a coffee room, what kind of car an employee receives or office locations (Buono, 1985).

This research will focus on the subjective culture in an organization in order to identify interventions that a leader can utilize in the organization to influence and stabilize organizational beliefs, assumptions and ways of behaving and solving problems to develop market-orientation.

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6 the active engagement of the CEO and executive team. Schein (2010) stated that: ‘Only through leadership can one truly develop and nurture culture that is adaptive to change’.

Schein (2010) observed that culture and leadership are inextricably interconnected. He illustrated this inter-connection by researching the relationship between leadership and culture in the context of the organizational life cycle. During the process of organizational formation, the founder of a company creates an organization which reflects his/her values and beliefs. In this sense, the founder creates and shapes the cultural traits of his organization. However as the organization develops and time passes, the created culture of the organization exerts an influence on the leader and shapes the actions and style of the leader. Ogbonna & Harris (2000) supported this by stating that through this dynamic and on-going process, the leader creates and, in turn, is shaped by the organizational culture.

In this inter-connection of leadership and culture Schein (2010) identified two different types of culture-embedding mechanisms that occur as leader assumptions are taught to the organization, and by which a leader develops a culture. Starting with the primary embedding mechanisms that create the “climate” of the organization (Schneider, 1990) at this stage the climate is a set of properties of the work environment, perceived directly or indirectly by the employees, that is assumed to be a major force in influencing employee behaviour (Ivansevich & Matteson, 2007). At a later stage in the development of a culture, the climate will be a reflection and manifestation of new cultural assumptions, but in the early life of an organization it reflects only the assumptions of leaders (Schein, 2010).

This research aims to identify interventions that a leader can utilize to create the climate for the development of market-orientation in the organization by changing organizational beliefs and assumptions. Through what leaders pay attention to and reward, through the manner in which they deal with critical incidents, and through the criteria they use for recruitment and selection, they communicate both explicitly and implicitly the assumptions they hold and create the organizational climate (Schein, 2010).

Schein (2010) stated that, if in line with the primary mechanisms, the secondary articulation and reinforcement mechanisms implement and structure the new cultural assumptions in the organization and can build organizational ideologies and formalize/structure what is learned.

After the interventions to create the climate, this research aims to identify interventions a leader can utilize to structure the market-orientation into an organization. Schein (2010) stated that by the organization’s structure, its procedures and routines, its rituals, its stories and legends, and its formal statements about itself, the organizational culture can be structured and stabilized.

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7 cultural change towards a market-oriented culture. This will be described in line with the separation of culture-embedding mechanisms that Schein (2010) identified.

First the interventions of a leader that create the climate will be described, followed by the interventions of a leader to structure market-orientation. The chosen interventions were based on the framework of culture-embedding mechanisms identified by Schein (2010:231). The interventions encompass the ability for a leader to utilize them in an organization that wants to change the organizational culture towards a market-oriented culture.

1.1 Interventions to create the climate for market-orientation

Market-oriented role modelling, teaching and coaching

The actions of organizational leaders can be beneficial to cultural change (Gordon, 1991). Schein (2010) stated that leaders of organizations generally seem to know that their own visible behaviour has great value for communicating assumptions and values to other members, especially to newcomers.

Deal & Kennedy (1982:82) also stated that behavioural changes will not occur until chief executives and other senior management lead by example. The behaviour and actions of a leader or leaders can effectively change the assumptions of an employee to a more customer based way of thinking. This is supported by Trice & Beyer (1993), they stated: ‘Managerial practices are probably the most potent carriers of cultural meaning or as the proverb says, actions speak louder than words.’ Lastly Becker & Homburg (1999) found that an organization wide implementation of the marketing concept can only be successful if the management itself acts and leads towards the demands of the customer.

Teaching and coaching furthermore is a vital way of changing cultural assumptions amongst employees (Senge, 1990). It consists of teaching individuals the nature and importance of a market orientation, and coaches them to adapt to the basic processes, approaches, and skills of creating superior value for customers (Narver et. al, 1998).

Recruitment & selection towards a market-oriented staffing

Schein (2010) stated that the process of selecting new members is one of the most potent ways to embed and perpetuate new assumptions. Changes in an organization always affect the current way of working in an organization, the embedded working rituals and coalitions. These patterns can be broken through by the intervention of a leader to change players in the game (Boonstra, 2011).

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8 the employees, the MT can decide to dismiss employees that resist to the change or are unwilling to cooperate. Furthermore the MT of an organization can also choose to recruit new members that influence present members in style, assumptions, values and beliefs (Schein, 2010).

Rewarding market-oriented initiatives

Kerr & Slocum (2005) found that reward systems express and reinforce the values and norms that comprise corporate culture. A careful consideration of reward system design can help decision makers successfully modify the organization's culture.

Rewards can be either intrinsic or extrinsic (Cummings & Worley, 2008), extrinsic rewards are given by the organization, such as pay, promotion, praise, tenure, and status symbols. Intrinsic rewards must originate and be felt within the person. Intrinsic rewards include feelings of accomplishment, achievement, and self-esteem. Rewards systems are believed to motivate the individual to accomplish better performance for the company (Gebhart et. al, 2006).

This research will investigate if the use of intrinsic and extrinsic rewards contributes to collaboration of the individual employee to the new market-oriented organizational values and thereby follow the needs of the organization. Gottschalg & Zollo (2007) found that the use of rewards can align the interest of the individual with that of the organization by setting individual/group-level bonuses to motivate the employee to take responsibility. By motivating employees, the development of the new market-oriented culture, in which responsibility taking and an active attitude take an important place, might be positively influenced.

Communication about the change towards a market-oriented culture

Communication is an essential element to gain people’s involvement; it can significantly reduce people’s level of uncertainty (Burnes, 2009). Lack of effective communication heightens cultural differences and creates tension between the employees (Lodorfos & Boateng, 2006). Therefore, if the employees feel that they miss communication about the market orientation and what it means for them, this could lead to resistance towards the organization and potentially influence the corporate cultural change negatively. Employees who resist to the cultural change act in a way that creates frustration and controversy can lower the atmosphere in an organization, and influence the commitment and mind-set of an individual (Schein, 2010). Furthermore Boonstra (2011) stated that communication in cultural change is essential to visualize the essence and the future of the change.

1.2 Interventions to structure market-orientation

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9 theory written about interventions a manager can utilize in their organization to establish the market-oriented culture in an organization.

Development of organizational market-oriented structure and design

Shapiro (1988) identifies the adequate design of organizational structures and processes as a core management task in the context of market orientation. According to his view, functions or divisions of a company inevitably have conflicting objectives which impede the development of a true market orientation. Management has to find certain mechanisms (e.g. cross-functional teams) which allow for a well-coordinated interfunctional effort (Becker &Homburg, 1999).

Boonstra (2011) found that the structure of the organization reflects implicit concepts about organizing. A tight, hierarchical structure emphasizes the leader who takes decisions and carries the responsibility. Whereas, as expected in a market oriented organization, a decentralized structure represents that individual initiatives and shared responsibility are important. Schein (2010) found that in any case, the organization’s structure and design can be used to reinforce market-oriented leader assumptions. Furthermore, Becker & Homburg (1999) stated that reducing the number of hierarchy levels within a ﬁrm might be viewed as a measure to enhance market orientation. Development of organizational structures and design could therefore be an adequate manner to establish the market orientation into the organization.

Development of organizational market-oriented systems and procedures

Schein (2010) describes, that the most visible parts of life in any organization are the daily, weekly, monthly, quarterly, and annual cycles of routines, procedures, reports, forms, and other recurrent tasks that have to be performed. The origins of such routines are often not known to participants or, sometimes, even to senior management. But their existence lends structure and predictability to an otherwise vague and ambiguous organizational world.

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10 weakens the overall market orientation of a business organization since employees will focus on optimizing those ﬁgures which are used to evaluate their performance.

Development of systems and procedures designed to collect accurate and actual customer information and the targets like customer satisfaction could establish the market-orientation into the organization.

Development of rites & rituals to stimulate market-orientation

Geertz (1971) identified that rites and rituals may not be a "master key" that unlocks all of the meanings of a culture, but they are events in which much of a culture surfaces. Rites and rituals are the systematic and programmed routines of day-to-day life in the company (Deal & Kennedy, 1982). Trice (1984) defined rites as: relatively elaborated, dramatic, planned sets of activities that consolidate various forms of cultural expressions into one event, which is carried out through social interactions, usually for the benefit of an audience. Furthermore he defined rituals as: a standardized, detailed set of techniques and behaviours that manage anxieties, but seldom produce intended, technical consequences of practical importance.

The major manifest consequence of rites of integration is that potentially divergent subsystems increase their interaction with each other during common participation in the rite, and thus revive shared feelings that bind them together and commit them to the larger system (Trice & Beyer, 1984) These rites could be annual informal meetings between different departments of the merged companies or a day of team building in order to commit the individual employee to the larger market oriented system and establish market orientation into the organization.

Rites and rituals therefore could influence the interaction between employees and make them more customer focused by integrating subsystems or influence the anxieties of the employees towards the environment, and thereby stimulate and establish market-orientation in the organization.

1.3 Research question

In summary, the focus of this research will be on the different managerial interventions found in the literature:

Interventions to create the climate for market-orientation:

1. Market-oriented role modelling, teaching and coaching:

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2. Recruitment & selection towards a market-oriented staffing:

The recruitment and selection of the persons who suit the market-oriented culture the best, including old and new members.

3. Rewarding market-oriented initiatives:

The intrinsic and extrinsic rewarding of market-oriented initiatives that aligns the interest of the individual/group with that of the organization.

4. Communication about the change towards a market-oriented culture

The communication from the management to the organization about the development of market-orientation.

Interventions to structure market-orientation:

5. Development of organizational market-oriented structure and design

Organizing the organizational structure and design in a market-oriented manner by decreasing hierarchical levels, and stimulates individual initiatives and shared responsibility.

6. Development of organizational market-oriented systems and procedures

Developing organizational systems and procedures in a market-oriented manner by collecting all the relevant client information and setting organizational targets on customer satisfaction.

7. Development of rites & rituals to stimulate market-orientation

Development of work routines that stimulate interaction between employees, and commit them to the larger system to stimulate market-orientation in their daily work.

The central research question of this research will be:

To what degree and in what way do the managerial interventions influence the change of an organization’s culture towards market-orientation?

2. Methodology

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12 assumptions” underpinning the organizational culture may not be adequately captured in quantitative analysis and therefore no in-depth analysis can result from this approach (Schein, 2010).

2.1 Data collection

Information on the manifestations of the managerial interventions that influence the cultural change was collected in 18 interviews. These interviews were conducted at an organization that was formed after a merger of three carcass builders that provide construction material for contractors. In order to deal with the recession that hit the construction market in the Netherlands significantly, the three different companies decided to combine their skills and knowledge in order to cut in costs and provide the customer a whole package of products instead of three different products.

This merger of the companies into one covering organ initiated in July 2012 and was launched in the organization in January 2013 and is still going on. One of the goals of this merger was to change the organizational culture from an internal focused hierarchy culture towards a market-oriented culture (Cameron & Quinn, 2006). Approximately 700 people are employed at this organization.

The 18 interviewees (overview in Appendix A), that were chosen in cooperation with the marketing director of the company, for this research interviewees were equally selected from the three different organizations. The selection was based on three different criteria: first of all a selection and equal distribution was made based on number of working years of the interviewee in the organization, in order to interview old as well as new members in the organization. And an equal selection was made based upon the level of management; a distinction was made between Management Team, B-level managers and employees to create a representative base of the entire organization (Schein, 2010).

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TABLE 2 Keywords interviews

Managerial Intervention Keywords Market-oriented role

modelling, teaching and coaching

Lead by example, teaching and coaching of handling customer demands

Recruitment and selection towards a market-oriented staff

Changing players, select new players, recruitment procedures

Rewarding market-oriented initiatives

Bonus alignment with market- oriented goals like selling quota or customer satisfaction, recognition of individual

accomplishments

Communication about the change towards a market-oriented culture

Memo’s, informal communication, meetings, formal communication

Development of organizational market-oriented structure and design

Hierarchical vs. decentralized, openness between hierarchical levels

Development of organizational market-oriented systems and procedures

Routines and procedures, information system, planning and controlling system

Development of rites and rituals to stimulate market-orientation

Team building, social interaction, meeting between firms

2.2 Data analysis

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14 statement of an account manager: ‘The marketing director displayed to me at a client how he wanted

me to deal with a customer. In this example he managed to sell 2 different products of 2 different factories were the client started with the demand for only one product. This showed me the focus of the new organization in which I am able to sell different complementary products in order to better serve the client, and how I have to bring this into practice.’ This experience was labelled E07 – lead by

example of market-orientation, were E stands for experience of the interviewee and 07 for the seventh conducted interview, lastly lead by example stands for the category were the experience stands for.

To illustrate the differences in the codes another label that is part of the role modelling of a leader is named E09- coaching for concretization of market-orientation. This code was based upon the citation of another account manager: ‘At one client I struggled to sell two products at the same

time because I thought our organization was not ready to provide them both at the correct time. In a conversation with my marketing director he told me that the customer doesn’t has to know that we are a merging company and provided me some leads to make sure that our internal process could handle what the customer wanted, and he sent me back to the client to fulfil what the client wanted.’

In these examples, which encompass the same customer oriented question, the role modelling of the marketing director towards an account manager came forward, but in two different ways, in the first example he told what he wanted to see, in the second example he provided tools to deal with the demands of a customer. This led to different categories that helped developing market-orientation in the organization.

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3. Results

3.1 Interventions to create the climate for market-orientation

Two distinctive manifestations of role modelling, teaching and coaching, each of them contributing to the development of the market-orientation in the organization, were mentioned by the interviewees. They were labelled leading by examples of market-orientation and coaching for concretizing market-orientation.

The first one, leading by examples of market-orientation, encompasses the concretization of the new direction, or way of working, by the examples set by the management team. Three respondents stated that by looking at behaviour of executives and head of departments they changed their way of perceiving the change towards a more customer focused way of working. For example one of the account managers stated: ‘Our marketing director for example showed me by contact with a client

about 2 different products that, although the back office is not totally ready to deal with this, the products will be delivered at the same time. It showed me that the new way of working is more focused on serving the customer, but that it can lead to more work for us. This is something that the customer doesn’t have to know, we provide a window for several products that is the key message to the client.’ This was underpinned with another example by the marketing director: ‘By demonstrating at a customer how I want account managers to deal with clients, these employees came to me and asked me how they can use the same way of working and achieve the same output. For example at a customer I managed to sell two different products, were at the start of the meeting he wanted to buy one product.’

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16 Rewarding market-oriented initiatives

One distinctive manifestation of rewarding market-oriented initiatives, contributing to the development of the market-orientation in the organization, was mentioned by the interviewees. It was labelled engagement in developing market-orientation.

Engagement in developing market-orientation encompasses the active engagement of employees in developing market-oriented initiatives. As the head of office sales stated: ‘Our

marketing director for example, he really wanted me to cooperate and brainstorm about how to create more customer orientation in the organization. This really makes me feel that together we are building the future of our company.’ The engagement of employees in the decision-making made that

they felt that they were part of the new direction of the organization. Three employees mentioned that with the cooperation with decision makers, although not every suggestion they made was implemented, they at least felt taken seriously. This contributed to the positive perception to the market-orientation in the organization.

Two distinctive manifestations of communication about the cultural change, each of them contributing to the development of the market-orientation in the organization, were mentioned by the interviewees. They were labelled formal concretization of market-orientation and informal concretization of marketing-orientation.

The first one, formal concretization of market-orientation, encompasses the formal meetings and communication about the change. Three employees indicated that the formal meetings and presentation contributed to their knowledge and understanding of the change towards a new market-oriented culture. By the presentations and writings about the market-orientation employees stated that the new way of working became clear than before. Although not every detail was revealed, the employees indicated that their way of working changed more towards the demand of the client. This was accomplished by the concretization that was provided in different presentations and meeting.

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17 Three of the interviewed employees at lower levels of the organization indicated that informal communication helped to understand what the market-orientation of the company meant for their day-to-day work. For example a head of office sales force indicated that: ‘By talking to my people and

answer their question I try to direct towards a more direct way of communication to improve the project cycle throughout the organization. In the few past months you see that colleagues choose more and more to use the telephone instead of e-mail to get information of another department, this fastens the cycle and prevents communicational errors and contributes to focus on the client wishes.’

Group cohesion to develop market-orientation

The interviews revealed a manifestation of a new identified intervention, contributing to the development of the market-orientation in the organization. It was labelled displaying management-team cohesiveness.

Group cohesion encompasses the cohesion amongst the management team in carrying out the market-orientation and their communication towards the employees. The cohesion amongst the team towards the employees was perceived as contributing to the change in the way of working of the individual employee. Although every member of the team had his own style of working in the cultural change the overall vision of the team was perceived as a shared one. Respondents indicated that the cohesion helped to embrace the new market-orientation of the company, because it was a clear, deliberated direction, carried out by every member of the team, with a shared belief.

3.2 Interventions to structure market-orientation

Development of organizational market-oriented structure and design

Two distinctive manifestations of organizational structure and design, contributing to the development of the market-orientation in the organization, were mentioned by the interviewees. They were labelled decreasing hierarchical layers and creation of a marketing executive position.

The first one, decrease of hierarchical layers, helped to focus more on customer demands. For example, by letting account managers report directly to the marketing director, instead of a rayon manager, the steps in the organization to solve a problem with a customer is way shorter. This helps by providing the customer with a better offer that exceeds the authorization of an account manager or fastens the project cycle through fewer steps in the decision process.

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18 board, and that this made them more committed to the change, because it represented a clear and deliberate choice for the future of the company.

Development of organizational market-oriented systems and procedures

Two distinctive manifestations of organizational systems and procedures about the cultural change, each of them contributing to the development of the market-orientation in the organization, were mentioned by the interviewees. They were labelled centralizing customer information and customer information sharing.

The first one, centralizing customer information, encompasses the collecting and publishing of relevant customer information. One of the account managers stated: ‘By using a Customer

Relationship Management (CRM) we are able to map the right products and needs of a customer throughout the company’. This quote represented the general tendency in the interviews. There

were 5 of the interviewees who indicated that the accessibility and completeness of client information to all actors in the project cycle is of significant value to serve the customer.

The value of a customer data system was illustrated by another account manager who realized a project at a customer he did not knew before, but due to the information provided in the CRM system he was able to contact him, through another account manager who dealt with that customer, and make him an offer.

One respondent also mentioned the previous situation in one of the three companies, where they did not possess a client data system. To illustrate the disadvantages an employee of the office sales force provided an example in which the project was accepted in the first system, and then passed on to the planning and finally send back to the first system. In the end the customer found an error in the planning, due to which he could not finish his project on time. This error was made due to the interpretation of the information by the planning system provided by the first system. The error would not have occurred if every step in the project cycle worked on the same terms.

The second manifestation, customer information sharing, indicates that the sharing of all knowledge and information of a customer is of significant value to support and serve the customer. Two interviewees indicated that the information sharing throughout the company and within a team contributed to the fulfilment of the clients wishes. By placing different employees of different districts into one team several opportunities were found at customers that were served in one district but unknown in the other.

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19 The account manager stated: ‘If I had known about the argument before I visited the client it would

have been easier for me to anticipate on this. Eventually I managed to clear the air, but it could have led to the loss of a customer. In the new situation I hear directly from my colleague if something like this happens at a customer.’

Development of rites and rituals to stimulate market-orientation

Two distinctive manifestations of communication about the cultural change, each of them contributing to the development of the market-orientation in the organization, were mentioned by the interviewees. They were labelled organizing face-to-face contact and reduction of formality.

The first one, organizing face-to-face contact, indicated to be of significant importance to meet up with client’s demands. This is characterized by interviewees who identified that after the disposal of a physical canteen the interaction between different departments in the project cycle declined. One of the respondents stated: ‘The canteen used to be the place to discuss matters with other

departments, now you see that colleagues send an email which delays the project cycle significantly because people can easily ignore this.’

Due to the merger of the company many people of different departments are working with employees that they had never seen before. Respondents indicated that the communication and relation between colleagues and departments improved after meeting someone in person. An account manager stated: ‘Meetings between the different marketing departments really stimulated

the communication between us as account managers. Before the first meeting we had never seen each other, so I didn’t know who I was contacting, but after the meeting it was easier for me to grab the telephone and share information about a customer or discuss other matters.’

The head of the office sales force provided the following example: ‘Previously two different

departments used to complain about each other and made notes of every mistake made by the other department. But after introducing members of the departments to each other complains reduced and at this moment the collaboration improved significantly.’

The second manifestation, reduction of formality, improved the service for the customer. The overall tendency in the organization was that there is a more open culture in comparison to previous years. The director of the company confirmed that he tries to dismantle the barriers that occur between the organizational layers: ‘I started to wear more informal clothing, when it is possible, to

decrease the distance to lower hierarchical levels. Partly because of this you see that an employee who first felt a barrier, say that they feel more comfortable to talk to me. I believe that this improves and fastens the service towards a customer.’

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20 organization. He stated that the culture became more open and free and this contributed to communication between the different hierarchical layers and that it helped to answer a question of a client faster, because the hierarchical cycle is shortened.

The reduction of informality also came forward by an employee of the technical office: ‘Our

marketing director for example, he walks by and tries to make a conversation with us at the working floor, this makes us feel like he is one of us. It lowers the bar for me to attend him when I need something from him relating a project. Lastly two employees stated that a more open and less

hierarchical organization led to better and faster communication and better contact with a client than before.

4. Discussion

The main research objective of this paper was to identify how and to what degree the managerial interventions contribute to the cultural change towards a market-oriented culture. This section will elaborate on this, based on the manifestations of interventions found in the interviews. First an overview of the relations of the managerial interventions to create the climate (figure 1) will be presented, after that the intervention to structure market-orientation is presented (figure 2.

FIGURE 1

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FIGURE 2

Managerial interventions to structure market-orientation

Legend: Supports the existing literature

* Contributions of this research to the theory

4.1 Interventions to create the climate for market-orientation

Role modelling, teaching and coaching is another intervention that contributes to the development of market-orientation. Several authors already found that behavioural changes will not occur until chief executives and other senior management lead by example (Deal & Kennedy, 1982; Trice & Beyer, 1993). However, although the theory already suggested that role modelling, teaching and coaching is significant to change the organizational culture, this research revealed that role modelling contributes to concretize market-orientation in the organization. It helps the employees to adapt their way of working in a more customer focused manner by concretizing what the change means for an individual employee and his/her daily work. Thereby new market-oriented cultural assumptions and beliefs are spread throughout the organization.

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22 Teaching and coaching for orientation also contributes to the concretization of market-orientation in the work of an employee. This research found that by learning and training the employee to develop market-orientation in his/her daily work helped to concretize what it meant for them. It helped employees to adapt to the basic processes and approaches of creating value for the customer (Narver et. al, 1998). Thereby teaching and coaching develops and stimulates market-orientation in an organization through changing the cultural assumptions amongst employees, as was also found by Senge (1990) for cultural change in general.

Recruitment and selection towards a market-oriented staffing

It was hard to identify manifestations of this intervention that contributed to the development of market-orientation in the organization. In the theory it was found that a management could chose to recruit and select employees most suited to a given culture (Wiener, 1988). Schein (2010) also found that the most subtle way of reinforcing cultural assumptions is to recruit and select people that encompass the favourable cultural assumptions. Based on the theory changing players in the game (Boonstra, 2011) can create the climate to make the change towards market-orientation in an organization. However, due to the early stage and nature of the change (downsizing) in the organization, at the moment of the interviews, no relevant manifestations were found.

Rewarding market-oriented initiatives

The interviews revealed that the extrinsic rewarding of market-oriented initiatives was limited at the time of the interviews within the organization. Although the theory suggests that rewarding could stimulate the cultural change towards a market-oriented culture, no evidence was found in this case. Some intentions were mentioned in the interviews, but no manifestation of this intervention was found in the transcriptions.

Theory, suggests that extrinsic rewarding could stimulate the market-orientation, for example Gebhardt et. al (2006) found that extrinsic pay for performance aligns the individual to the market-orientation in the organization. Kerr & Slocum (2005) stated that reward systems can express and reinforce cultural values and norms. In practice, although no evidence was found in this case, a manager can use an extrinsic reward system to change the values of the employee to a more market focused way of working. For example in the case of the investigated company, one could think of goals set at customer satisfaction, where, before the merger the focus was on filling the production of the company.

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23 This is supported by the data, employees who felt that they were involved in decision-making felt more committed to the market-orientation in the organization. Active engagement in the cultural change therefore can develop market-orientation and a manager should choose people to engage in the change to create public support. Harris (1996) also found that the gaining of the hearts and minds in the organization is of significant importance to create market-orientation within the organization.

Boonstra (2011) already found that communication in cultural change is essential to visualize the essence and the future of the change. Kavanagh & Ashkanasy (2006) that in cultural change nothing is more important than transparent communication to gain support amongst the employees. Data found in the interviews underpins the significance of formal communication to concretize the market-orientation in an organization.

Next to the formal communication about the development of market-orientation in an organization, this research revealed that leaders have to use informal communication to create support and engagement for the development of market-orientation. Schein (2010) already suggests that informal communication is used by leaders to create cultural acceptance and the change of cultural assumptions. In this case it was found that lobbying amongst employees contributed to the positive perception of the market-oriented way of working. People indicated that by informal conversations with executives the concrete interpretation of market-orientation became clearer and this concretized their daily work and their perception of customer orientation. Therefore, if an organization wants to develop market-orientation, executives have to be attentive to informal conversations with employees which give them the opportunity to point out the significance of the change and explain the focus on the customer satisfaction to stimulate market-orientation.

Group cohesion to develop market-orientation

Several management articles indicated the importance of a collective and cohesive vision in a management team because of the positive influence on the organizational performance (Ensley et al, 2002; Ensley & Hmielesky, 2005). However this research indicates that there is another positive effect of communicating and possessing a collective and cohesive vision. This is to gain sympathy and support of the employee to develop market-orientation within the organization.

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24 significant importance for the followers in order to embrace the more market-oriented focus. It creates support to the market-orientation by illustrating an unambiguous and deliberated direction of the organization.

4.2 Interventions to structure market-orientation

In developing market-orientation, after creating a climate that supports the change towards a market-oriented culture, the next step is to structure the new organizational culture into the daily work of every employee.

Development of market-oriented organizational structure and design

Reducing the number of hierarchy levels within a ﬁrm might be viewed as a measure to enhance market orientation (Shapiro, 1988; Becker & Homburg, 1999). This was supported by the data from the interviews, if an organization is striving for a more market-oriented culture, the hierarchical levels have to be reduced and hierarchical barriers need to be broken down. This will lead to a more customer focused way of working, because of shortened lines in the project cycle, it fastens the project cycle and thereby creates superior value for the individual client.

This research supplements the theory with the creation of marketing as an executive role to develop market-orientation in the organization by demonstrating the importance of marketing in the organization. It illustrates that marketing becomes a vital part of the organization, and demonstrates this to the rest of the organization. Marketing as an executive role also ensures that how, as mentioned before Desphande & Webster (1989) define market-orientation, the customer orientation is put in the centre of the firm’s thinking.

Development of market-oriented organizational systems and procedures

Collecting accurate and actual information on customers and competitors is regarded as an important prerequisite for acting in a market-oriented manner (Sinkula et. al, 1997). This contributes to the clarification of the clients demand, because throughout the organization every actor works with, and has access to the same customer information. This also means that the procedures need to be designed in such a manner that all the relevant client information is registered (Kohli & Jaworski, 1990). This way error can be prevented and a customer is served in the best possible way which can create a competitive advantage towards competitors.

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25 The significance of evaluation and sharing of client information amongst employees is to find new market opportunities, which Pearson (1993) names on of the cores of a market-oriented organization. In for example a team with different actors who deal with different customers throughout the regions, new opportunities can be identified by discussing the market. If an account manager has no contact with a client in his rayon, were another account manager in his own rayon does, than they can help each other out and provide an opening at that particular client.

This contributes to focus of an employee on finding new opportunities and trying to expand the market share of the organization. The information sharing will lead to the employee having a greater understanding of its customer’s needs and wants: this ensures that it can continually update its value proposition, keeping it as the market leader and most respected brand (Kotler & Armstrong, 2005).

Overall systems and procedures have to be designed in such a manner that relevant client information is stored and discussed so the sharing of customer information becomes part of the daily work of an employee, in order to develop market-orientation in the organization.

Development of rites and rituals to stimulate market-orientation

Lastly, next to the designing and structuring of an organization, and the implementing of systems and procedures, the third intervention to structure a market-oriented culture encompasses the rites and rituals within an organization.

The research found that the most significant aspect of rites and rituals for developing market-oriented is the facilitation of face-to-face contact between employees. For example in this case several workers identified the absence of a canteen. At first sight this might seem unimportant, however a canteen creates a place for different departments to meet and discuss work related matters. This fastens customer related matters and could prevent misinterpretation, and create awareness of customer needs in the organization which is the core of a market-oriented organization (Narver & Slater, 1990).

The facilitation of meetings between different establishments and departments furthermore can improve the communication in the project cycle. Trice and Beyer (1984) found that the participation in a rite could lead to the interaction between different subsystems and eventually increase the feeling of belonging to the larger system. Therefore this research found that, in order to implement a oriented culture, the arrangement of face-to-face contact is significant to develop market-orientation within the organization.

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26 communication between the different hierarchical layers and it helps to answer a client’s question faster because the hierarchical cycle is shortened. Reducing informality is therefore an intervention that contributes to the development of market-orientation in an organization.

4.3 Conclusion

The purpose of this research was to identify how and to what degree the managerial interventions can contribute to the development of market-orientation in an organization. How do leaders create a market-oriented culture?

Four of the interventions that were discussed in this research are powerful interventions for a leader to create the climate to develop market-orientation. Through how they display and teach their vision to their organization, how they engage people in the change, how they formally and informally communicate about the change, and how cohesive they carry out the vision as a MT, leaders can create the climate in an organization in which employees are motivated to embrace, and engage in, the new direction of the organization.

In order to structure the market-orientation in the organization, its hierarchical structure & design, its customer focused systems & procedures, and its informality and employees contact in rites & rituals stabilizes and structures the market-oriented culture.

4.4 Limitations and further research

One of the first limitations that need to be addressed is the early stage of the cultural change within the organization. At the time of the interviews the unfolding of the change started 7-8 months earlier. Although many manifestations of the interventions were found in the interviews, there were also parts of the cultural change that could not be discussed or reflected at the time of the data gathering. Especially the effect of the recruitment and selection, and the extrinsic rewarding of employees ascertained in a too early stage to be able to suspend practical grounded conclusions to the interventions. Although extrinsic rewarding took place, no connection was made towards the new market-oriented focus. This made that the theoretically proposed positive effect of extrinsic rewarding is not proven in this case. Furthermore the recruitment and selection, due to a large reorganization in the organization, did not take a significant place in the cultural change at the moment. These limitations provide an opening for further research that could focus on these interventions and whether or not these interventions have a positive effect in a later stage of the cultural change.

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6. Appendices

Appendix A: Overview respondents Nr. Gender Number of working

years

Position Company

01 Female 2 Marketing manager Company Z

02 Male 25 BIM-manager Company X

03 Female 7 Communication advisor Company X

04 Female 5 HR-advisor Company Z

05 Male 8 Managing director Company Y

06 Male 20 Head of office sales Company X

07 Male 8 Marketing director Company X

08 Male 15 Account manager Company Y

09 Male 13 Account manager Company Z

10 Female 4 Employee office sales Company Z

11 Male 1 Supply chain director New to the company

12 Male 16 Account manager Company Y

13 Male 24 Head of office sales Company Y

14 Male 19 Account manager Company X

15 Female 9 HR director Company Y

16 Male 26 Employee drawing department Company Y

17 Female 7 HR advisor Company X

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33 Appendix B: Codebook Respondents code Role modelling, teaching and coaching Quote

E07 Lead by example of market-orientation

‘By demonstrating at a customer how I want account managers to deal with clients, these employees came to me and asked me how they can use the same way of working and achieve the same output. For example at a customer I managed to sell two different products, were at the start of the meeting he wanted to buy one product.’

‘Our marketing director for example showed me by contact with a client about 2 different products that, although the back office is not totally ready to deal with this, the products will be

delivered at the same time. It showed me that the new way of working is more focused on serving the customer, but that it can lead to more work for us. This is something that the customer doesn’t have to know, we provide a window for several products that is the key message to the client.’

‘Our managing director really wants to know who his customer is and what he/she needs. This stimulates me to do the same and find out what we can do to better serve the customer.’

E09 Coaching for concretizing market-orientation

‘At one client I struggled to sell two products at the same time

because I thought our organization was not ready to provide them both at the correct time. In a conversation with my marketing director he told me that the customer doesn’t has to know that we are a merging company and provided me some leads to make sure that our internal process could handle what the customer wanted, and he sent me back to the client to fulfil what the client wanted.’

E11 Coaching for concretizing market-orientation

‘By giving instructions to make a simple agenda for every

meeting in which everyone brings in their ideas for the meeting, you now see that we are able to answer way more customer questions because efficiency has improved.’

Rewarding of market-oriented initiatives E02 Engagement in developing market-orientation

‘Together we form one collective, everyone has the space to communicate his opinion, and for me it feels like that my suggesting’s taken seriously.’

E13 Engagement in developing market-orientation

‘Our marketing director for example, he really wanted me to

cooperate and brainstorm about how to create more customer orientation in the organization. This really makes me feel that together we are building the future of our company.’

E17 Engagement in developing market-orientation

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34 Communication

about the change towards a market-oriented culture E03 Formal concretization of market-orientation

‘For example at the latest presentation or in our organisation

book I really see that we focus more on the customer and what he wants and needs. This helped me to identify what this organizational change meant for me.’

E04 Formal

concretization of

market-orientation

‘At the formal presentations I noticed that, instead of focussing

on what can we produce, the focus is changing on what the customer wants.’

E12 Formal

concretization of

market-orientation

‘We now see that rumours and gossip is declined by sending

memo’s or mails to clarify that customer orientation is not just something for the salesmen in the field.’

E02 Informal

concretization of

market-orientation

‘In conversation with MT-members I notice that they trick me to identify what the customer wants instead of what we can produce.’

E06 Informal

concretization of

market-orientation

‘By talking to my people and answer their question I try to direct towards a more direct way of communication to improve the project cycle throughout the organization. In the few past months you see that colleagues choose more and more to use the telephone instead of e-mail to get information of another department, this fastens the cycle and prevents

communicational errors and contributes to focus on the client wishes.’

E07 Informal

concretization of

market-orientation

‘Through informal contact I notice that people are more understandable and support the change because they have a better view on the change.’

Group cohesion to develop market-orientation E08 Displaying management-cohesiveness

‘MT has a clear vision on what they want to carry out to the organization and that shows me that at least it is a deliberated choice and not another reorganization.’

E12 Displaying management-cohesiveness

Effective managerial interventions to develop market- orientation in an organization