MEDIATING ROLE OF INNOVATION IN THE RELATIONSHIP BETWEEN MARKET ORIENTATION AND FIRM PERFORMANCE IN ABUJA TELECOMMUNICATION INDUSTRY

Abstract

ABSTRACT The relationship between market orientation and firm performance and mediating influence of many factors has been researched extensively across various contexts. However, little focus has been on mediating role of innovation which could potentially channel the effects of market orientation on performance. The study was aimed at determining the mediating role of innovation in the relationship between market orientation and performance of telecommunication firms in Abuja, while the specific objective is to examine the effect of market orientation on telecommunication performance. This study adopted the survey design, with simple random sampling technique used for data collection. A sample size of 300 respondents was determined from the population of 13,145 employees of the four major telecommunication operators in Abuja using Taro Yamane (1967) statistical formula. The study also adopted the market orientation scale developed by Narver and Slater to investigate the mediating role of innovation in the market orientation and performance relationship of telecommunication firms in Abuja, while adopting the resource based theory (RBT) as the analytical framework. Structured questionnaires on a 5-point Likert scale were used for primary data collection. The validity of the instrument was ascertained using content validity. The instrument was checked for reliability using test re-test method through composite reliability test with a value of ≥ 0.70. The study made use of Structured Equation Model (SEM) using Smart PLS to estimate and analyze the objectives. Probability level of significance was given at 5%. The study found out that there is a significant relationship between competitor orientation and business performance (t=9.796; p=0.000). Innovation was found to partially mediate the relationship between market orientation and business performance. It was recommended that management of telecommunication firms consider and review their level of innovation and also give attention to what their subscribers want as a way of improving business performance. In deed in a highly competitive market the key drivers of success is the speed with which market intelligence is shared across department and built into all processes and offerings to the target market.