MARKET ORIENTATION AND ORGANIZATIONAL MEMORY MODEL FOR FAMILY BUSINESSES Author Karen L. Orengo Serra, Ph.D. Professor of International Business Graduate School of Business Administration Faculty of Business Administration University of Puerto Rico, Rio Piedras Campus e-mail: [email protected] Tel. 787-764-0000, Ext. 87124 Cell Phone: 787-810-2379 Through a case studies approach, this exploratory study seeks to model the combined strategies of market orientation (MO) and organizational memory (OM) and their relationship to growth strategies in the family-owned SME. To develop our research, we present an OM-MO Model for Family Businesses as main research framework. The main form of data collection was personal interviews with managing directors, and owners. The triangulation of data technique was used to obtain diversified and reliable information. We also applied cross-case analysis of our data alongside the study variables and theories, and conducted pattern matching to reveal differences and commonalities between firms, utilizing the organizational components that support the MO and OM constructs. According to our model, the organization must have in place certain organizational components to support the MO and OM constructs, such as supplier/customer internal networks, performance/ management & rewards system, open communication system, and artifacts. Keywords: market orientation, organizational memory, family businesses, adaptation and diversification, and risk taking.

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Introduction

The small and medium enterprise (SME) has become increasingly the focus of analysis in the entrepreneurship literature. Different from traditional non-family firms, family businesses present long-term commitment with its stakeholders, strong family values and the need to maintain the family business running across generations (Salvato, Chirico, and Sharma, 2010). Arregle, Hitt, Sirmon, and Very (2007) states that: ‘a business firm may be considered a family business to the extent that its ownership and management are concentrated within a family unit, to the extent its members strive to achieve and/or maintain intra-organizational family-based relatedness, and to the extent to which the family unit has strong family social capital’. The small family-owned business, with its limited resources, employee multitasking, and concentration of authority in the founder, who also controls key management positions and who almost always keeps strategic plans in his or her unwritten mental repository, has motivated the Academy and public policymakers to analyze how this type of business sustains market position, expands to new markets, fosters innovation, retains employees, and maintains financial credit-worthiness.

Most of these family businesses, while applying a number of strategies, naturally focus on the customer to ensure their products and/or services meet customer expectations. Unlike a larger enterprise, if a product/service is unavailable the SME can develop it to satisfy client specifications. This facility is part of what is known in the management literature as a market orientation strategy (MO). It implies a capability that is both well developed and broadly disseminated across the organization, thus creating a unique, indispensable knowledge base or organizational memory (OM) capable of responding proactively to special demands.

This exploratory study seeks to model the combined strategies of MO and OM and their relationship to growth strategies in the family-owned SME. We present an OM-MO Model for Family Businesses developed from prior research on the subject. We include in our report a literature review, an analysis of the proposed model, methodology, case study discussion, findings and some concluding remarks.

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Literature Review

Market Orientation (OM)

The first research studies to assess the impact of an MO strategy on firm performance appeared in the marketing science literature in the 1990s (Kohli and Jaworski, 1990; Narver and Slater, 1990). These gave rise to two different perspectives or focus areas: the cultural perspective and the behavioral perspective. The cultural perspective considers MO to be an integral part of the organizational culture, with the firm continually focused on creating and providing ongoing superior value to its customers (Narver et al., 1990). The behavioral perspective treats MO as the set of activities or actions of the firm in response to trends in the external environment (Kohli et al., 1990) based on collected market 'intelligence' that is disseminated across the firm's business units, enabling the firm to respond proactively and create a sustainable competitive advantage. These two perspectives are complementary, defining MO as the development of an organizational culture that leverages internal capabilities via continuous learning, enabling the firm to create a competitive advantage and superior market performance (Armario, Ruiz, and Armario, 2008; Martin, Martin, and Minnillo, 2009). A market-oriented enterprise develops both characteristics; it maintains customer focus, understanding customer needs and providing a high level of customer satisfaction, and it develops internal competency, monitoring the operating environment and its strengths and weaknesses, while working to overcome its weaknesses and leverage its strengths to its own benefit (Tokarczyk, Hansen, Green, and Down, 2007).

MO strategy enables the enterprise to create a sustainable competitive advantage, via appropriate use of resources and development of enterprise capability, thus enabling them to achieve a differentiating and profitable level of customer satisfaction (Saini and Mokolobate, 2011). According to (Saini et al., 2011), this sustainable advantage is possible when MO is applied in an environment of complex organizational knowledge not easily replicated by the competition. This unique knowledge is part of the MO strategy.

Recent studies consider MO not only as it relates to SME performance (Kara, Spillan, and Deshields, 2005; Alpkan, Yilmaz, and Kaya, 2007) but also in relation to the firm's

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internationalization processes (Armario et al., 2008) and level of innovation (Renko, Carsrud, and Brannback, 2009), as well as in combination with other strategic constructs. For example, MO and Enterpreneurial Orientation (EO) both reflect the strategic direction of the firm in terms of innovation, market performance, and global competitiveness (Runyand, Drogue, and Swinney, 2008; Armario et al., 2008; Renko et al., 2009; Kara et al., 2005; Keskin, 2006). Other studies have used MO and customer orientation (CO) synonymously (Deshpande, Farley, and Webster, 1993; Nwankwo, 1995; Noble, Sinha, and Kumar, 2002). However, it is important to note that CO is a component of MO, in which all marketing efforts are directed at the customer (McEachern and Warnaby, 2005). Narver et al., like Lafferty and Hunt (2001), consider CO to be the fifth element of an MO strategy.

Some have analyzed MO as an strategic element in family-owned SMEs, complemented by the 'familiness' concept together with the resource-based view theory to drive successful performance (Tokarczyk et al., 2007; Reijonen and Komppula, 2010; Gopalakrishna and Subramanian, 2009; Frank et al., 2010). In a case study, (Tokarczyk et al., 2007) analyzed the contribution of 'familiness' to an effective MO strategy for achieving a competitive advantage. The authors examined MO in the context of the resource-based view theory and the role of 'familiness' in successful MO implementation. The study was composed of 21 interviews with owners and managers of eight family businesses, including four in forestry products and four in food products. The authors found a positive relationship between identified qualities of 'familiness' and successful execution of MO to achieve a competitive advantage. They also found that a focused strategy, customer orientation, family relationships, and operational efficiency likewise contributed to effective MO implementation.

With a questionnaire administered to 490 SMEs in northern Finland, (Reijonen et al., 2010) found that CO and market intelligence are the two key capability components for effective MO application. In two empirical-quantitative studies, (Gopalakrishna et al., 2009) and (Saini and Mokolobate, 2011) applied (Narver et al., 1990) MKTOR scale to analyze the impact of MO on firm performance. They confirmed that there is a significant positive relationship between MO as marketing strategy on firm performance.

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In their study of MO impact in the life insurance industry in South Africa, (Saini et al., 2011) found a close relationship between firm performance/success and use of MO as a marketing strategy. As in the empirical study of (Gopalakrishna et al., 2009), these findings are consistent with the existing literature relating MO and firm performance, and are also consistent with the MO construct proposed by (Narver et al., 1990).

Organizational Memory (OM) and Knowledge Acquisition

Other studies on enterprise performance link MO with technology orientation (TO), entrepreneurial orientation (EO), learning orientation (LO), and knowledge acquisition, as key constructs that contribute to business performance and innovation outcomes (Keskin, 2006; Runyand et al, 2008; Verhees and Meulenberg, 2004; Renko, Carsrud et al., 2009). Specifically, organizational learning and knowledge acquisition are linked to the market intelligence acquisition process within MO. The generation of market intelligence is a dimension of the gathering information process, wherein learning and knowledge acquisition occur in two ways: learning from other members of the firm and integrating new firm members via the knowledge acquisition process (Simon, 1991). In this way, a firm develops organizational memory (OM) enabling it to retain those unique characteristics that distinguish it from other organizations (Simon, 1991).

OM is an archive, or database, which stores collective ideas contained in firm policies, procedures, rules and routines, structured for ease of retention and access, which enables the firm to apply the knowledge as needed (Walsh and Ungson, 1991). OM is the storage of knowledge related to how a firm carries out its value-added activities, such as improving production processes or support activities (Ebbers and Wijnberg, 2009). OM becomes the collection of beliefs, routine behaviors, and physical tools that may vary in content, level, distribution, and access across the members of the organization (Moorman and Miner, 1997). Organizations add value by effectively and efficiently applying existing knowledge within the firm, while also generating new knowledge or creating new knowledge combinations to develop innovative products.

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Three types of knowledge emerge in the OM literature: procedural memory, declarative memory and expectation memory. Procedural memory relates to basic task execution skills, where tacit or implicit knowledge is the basis for good firm performance and competitive advantage (Moorman et al., 1997; Ebbers et al., 2009). Declarative memory includes concepts, facts and events, for example technical knowledge of a product line or knowledge about market preference (Moorman et al., 1997). Expectation memory refers to the storage of explicit and implicit expectations of reward by members of the organization in relation to their peers or to the organization as a whole (Ebbers et al., 2009). The expected rewards are not only of a monetary nature, but also recognition, incentives, or benefits that employees receive for exceptional performance of a task or process, when higher expertise or implicit knowledge enable them to do a better job and contribute to the growth of collective knowledge and resources (Ebbers et al., 2009). With OM, the development and enrichment of this knowledge base enables the firm to perform its market activity as well as to sustain and strengthen its competitive advantage.

Within OM, expectation memory is an important tool of collective knowledge enrichment, enabling the firm to better differentiate itself from competitors and effectively compete in the marketplace. In a study of OM and knowledge creation in the construction industry, (Ozorthon Ozorhon, B., Dikmen, I. and Birgonul, T., 2005, state that this collective enrichment is part of organizational learning, and thus OM is used as a knowledge management tool that enables organizational learning. The authors explored the role of OM in improving managers' decisionmaking skills in eight construction companies in Turkey. They found that the firms were strong in knowledge collection and storage, but had weaknesses in leveraging and optimizing OM in decision-making. According to the managers interviewed, this was due to heavy subcontracting of most construction projects in Turkey. But the authors disagreed with this assessment, given that knowledge acquisition and management can be evaluated, performance can be measured, and management activities can be effectively coordinated (Ozorthon et al., 2005).

Using a sample of 200 supply chain and logistics professionals, (Hanvanich, Sivakumar, and Hult, 2006) conducted an empirical study that examined how market turbulence affects the role of learning orientation and organizational memory in a firm's organizational performance and innovation. They found that, under low market turbulence, learning orientation and OM are

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closely tied to performance and innovation, whereas under high market turbulence, only learning orientation appears to have an immediate effect. (Moormann et al., 1997) studied the effect of OM level and distribution on two key variables, short-term financial performance for new products and degree of new product innovation. While less than half of their hypotheses were confirmed, they did find that OM levels promote higher new product performance and that OM distribution affects both performance and innovation.

Market orientation and Organizational Model for Family Businesses

Overall, OM is an important tool for a firm's effective adoption of a strategic orientation. For the family SMEs that we studied, we observed that MO strategy is closely linked to a firms' OM and to their ability to create a competitive advantage for growth. As indicated in our MO-OM model, and confirmed in the literature confirms, MO and OM are rooted in the organizational culture established by the firm. Both constructs come into play as they interact with internal (employees) and external (customers, suppliers) stakeholders. Continuous learning and knowledge acquisition enrich the firm, knowledge becomes institutionalized, and the firm can effectively pursue a focused strategy, as long as each individual member integrates the knowledge and transfers it to the collective organization.

As shown in the model, the organization must have in place certain organizational components to support the MO and OM constructs, such as supplier/customer internal networks, performance/ management & rewards system, open communication system, and artifacts (adapted from studies by Martin et al., 2009; and Ebbers et al., 2008). These are key components in our proposed model, such that both constructs are linked to market growth strategy, which is illustrated by the following variables: 1) adaptation and diversification, 2) risk tolerance and 3) proactiveness. Adaptation and diversification refer to the firm's ability to quickly and reliably provide a product or service to meet customer needs and expectations (Kotler and Keller, 2005). Risk tolerance refers to management's ability to take calculated risks to shift success probability in the firm's favor; this ability requires that employees and owners share inherent business and financial risks in a deliberate, calculated way (Kuratko et al., 2004). Proactiveness refers to the firm's ability to

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foresee new market needs and opportunities and position itself as a leader (Antoncic and Hisrich, 2003).

Figure 1 Market Orientation and Organizational Memory Model for Family Businesses

Organizational Culture

Growth Strategy Market Orientation (MO) Internal customer/supplier networks • Performance/management rewards system • Open communication system • Artifacts •

Organizationa l Memory (OM)

• Knowledge acquisition

• Adaptation and diversification

• Learning

• Risk tolerance • Proactiveness

Methodology

The subject of MO has been widely studied quantitatively, particularly applying the MARKOR measurements proposed by (Kohli et al., 1993). This has not been the case with OM. The few available studies only analyzed OM to measure its role in SME performance. Our study is original in that it looks to explore, for the first time, both the role of MO strategy and the idea of a repository known as organizational memory (OM) in the market growth strategies of the firms under analysis.

We chose family businesses not well known in the market due to low advertising and promotion budgets, selecting firms that did 90% of their marketing via referrals and word-of-mouth. We used 18 family businesses in three municipalities in Puerto Rico, namely San Juan, Ponce, and Mayaguez. We contacted them by telephone and sent email invitations to participate; 11 of the 18 firms contacted responded and received questionnaires, also via email. The questionnaires

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contained questions to determine whether the firms were using MO strategy or had any kind of OM. Upon receiving the completed questionnaires, we ran correlations on the data and determined that only 6 firms consistently applied the MO strategy and also had an OM repository. We selected each family firm for practical and theoretical replication reasons rather than seeking a representative sample size, thus our findings can be used for theoretical generalization but not for statistical purposes. In follow-up telephone calls, we scheduled personal interviews with managers or owners of all 6 firms that consistently applied MO. We held 6 interviews, each of which was 1 hr and 35 min in duration, on company property. We organized the interviews in three parts: 1) general profile of the firm and its owners; 2) organizational structure and design; and 3) business development.

The triangulation of data technique was used to obtain diversified and reliable information and to better understand the subject under analysis. That is, we validated the interview data against information from other documents before proceeding with our analysis. We improved the information with additional company reports, internet research, and external periodicals. Our drafts were reviewed and revised by the interview subjects. Also, transcripts of interviews and documentary evidence provided by the companies were combined to produce detailed case histories of each firm.

Our data analysis included a review of prior studies and existing theories. We applied cross-case analysis of our data against the study variables and theories, and conducted pattern matching to reveal differences and commonalities between firms, utilizing the organizational components that support the MO and OM constructs. We were thus able to show a relationship between MO and OM and market growth strategies adopted by the family businesses under study.

Analysis

Two of the firms have been operating for slightly more than 10 years and three have been established for more than 30 years. In order of longevity, the study group included: an information technology (IT)/web hosting firm (Case A), which was the youngest firm in the group, with 11 years of operation; a dry-cleaning and tailoring firm (Case F) that has operated at

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its current location in Mayaguez for 14 years (since 1997) but had started in the late 1980s in San Juan; an air-conditioning sales and distribution firm (Case B) that has been in operation for 13 years; a firm that produces and sells asphalt and cement aggregates for construction (Case C) that has been in operation for 32 years; and a cargo transportation firm that is 43 years old (Case D); and a consumer goods and hardware distributor (Case E) that, as the oldest firm in the group, has been operated by the same family for 151 years.

All the firms studied had prior knowledge of their industry before starting operation. All the managers interviewed acknowledged that in starting their businesses they recognized an opportunity as it presented itself, and that customers and their expectations were the primary focus of this opportunity.

For Case A, the confidence of a customer looking for customized IT services motivated the founders, twin brothers, to pursue the opportunity. In Case B, the owner went into the business of motorized water sports equipment (jet skis) on the advice of friends based on contemporary sports trends, and the owner enjoyed immediate success. The strategy for Case B was linked to innovation, always looking for specialized, innovative products to make customers' lives more comfortable. Case C recognized market demand for specialized work that was difficult and lowmargin (niche market), but no other firm was willing to absorb the complexity, risk, and rigorous planning required. For Case D, the opportunity arose to acquire a bankrupt firm that offered standard services, and with an expanded capability, the owner was able to adapt his services to a changing market. For Case E, the wave of European migration into Puerto Rico created the need for European consumer imports to satisfy the new demand. In Case F, prior business experience and knowledge of special customer needs in the specific segment provided the opportunity for customer-focused market development strategies.

Internal Customer/Supplier Networks

The interviewees acknowledged having developed a collaboration and knowledge exchange structure (formal or informal) between employees, suppliers, and customers, while keeping in mind management's expectations of employees regarding their internal and external customers

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and colleagues. The dynamic exchange of knowledge about needs and expectations of internal customers enable a firm to create strategies and mechanisms to satisfy them. In most cases, the structure is 100% participatory, with the president/owner/founder being personally involved, creating flexibility and multiple skill capability in the organization. In Cases A, B, and C, projects are developed under constant scrutiny of the owners in all project phases (idea, development, implementation, monitoring). In Cases A and C, the interviewees emphasized that they create work groups for each project, and these continually form internal networks for exchanging inputs and completing the work. Thus, they are able to recognize exactly what customer needs and find the tools to satisfy those needs. This system of internal networks is linked to the outside customer (the ultimate customer) by different management methods used by the firm. In Case C, this system is activated when the owners/founders designate a field project manager to be on site, secure the needed resources, and ensure the project is completed in accordance with customer expectations. The on-site visits range from one day to several days or months, depending on the project. “For each project, we make a preliminary visit to the site, no matter the distance. This gives us an idea of the security risks, the advantages or deficiencies of the location, such as terrain conditions, weather, traffic, distance to raw materials, required permits, and other elements that help us forecast final costs and duration of the project, as well as manpower requirements. The project manager disseminates this information to the project team, including laborers, surveyors, engineers etc., as well as to the employees responsible for supplying materials, permits, and consultants required by the project.”

In Case D, an employee is made responsible for satisfy the needs of assigned customers. The employee makes an initial visit to the cargo pickup and delivery sites to verify on site entry and exit facilities, and to learn security and access control procedures beforehand. “Since our clients have different needs, from the time my father started the business in the 1950s, he always made a client visit to get specific information about the cargo pickup and delivery process. This helped my father prepare service terms and conditions as well as final costs. We continue this practice today, and this differentiates us from competitors. For example, the pickup

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and delivery requirements of our customer Wal-mart differs widely from what our customer Destilerías Serrallés demands from us in terms of schedule, type of vehicle, cargo system, packing, security, and of course costs. Each customer is unique, and that's why we make the prior visit, which we call the simulation visit. This involves working 7 days a week outside normal hours, and requires that we have an integrated system to coordinate between administrative and technical employees, such as operators, drivers, security, etc.”

Performance Management and Rewards Systems

This component has been implemented in different ways by the firms under analysis. In Case A, there is monetary compensation for presenting a winning service proposal; employees who are primarily webmasters and software developers have the opportunity to act as sales executives and obtain contracts. They are also rewarded with sponsored training and industry certification programs, such as those offered by Microsoft. In Case B, the incentive is job retention and the assignment of preferred territories. The employee can be assigned to a more convenient or desirable distribution zone where he can serve two functions, sales and technical equipment repair representative. In Case C, the employees receive bonuses when they acquire customers for projects, and there is a system of annual recognition, such as 'employee of the year' (employee who avoided resource redundancy and brought the project in under budget), 'most profitable project', and 'best customer' (customer who complied with project stipulations and paid the budgeted costs).

In Cases D and E, there are similar systems: the employees are publicly recognized for achieving objectives and are guaranteed retention even when the firm experiences financial problems. This policy is demonstrated by the number of employees who have been with the firm since its inception and the number of retirees. Case E illustrates this dynamic for one principal reason: the greatest challenge in developing the local market is, according to the owner, improving the organizational and operational structure of the company, where “it was necessary to place our human resources where we needed them to be, in order to operate effectively and efficiently, in addition, obviously, to adding and removing certain product lines.”

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“When my wife and I formally acquired the company (1988) with our stock actions, the first thing we decided was not to fire any employees until we analyzed the performance of each of them. We were surprised to learn that the majority of them (78%) were willing to accept changes in their functions without a guaranteed salary increase. We resolved to give new positions to those who wanted them and had the required talent, and to give those with poor performance the opportunity to improve by giving them new tools to do the job. Still, some could not change. Our objective was to respond to the demands of the market, that is, evolve with the market, but some could not understand this concept; they were used to doing things one way from the beginning and found it hard to accept changes. However, most stayed with us and have been slowly retiring. The others have been gradually placed in higher positions.”

All the interviewed owners/founders use human resource management systems for multi-skilled employees, giving compensatory days off to employees who, in addition to completing assigned tasks, are also flexible enough to complete different or additional tasks or vary their work hours. This reward system creates an environment of trust and empowerment for employees, making them feel an integral part of the company, and therefore contributes to an effective MO strategy. The empowerment results from management's vision of employees as a family collective, not a simple resource that performs a given task for pay.

Open Communication System

In all cases, the organizational culture, shared values, and beliefs that define the organization's identity (Kinicki and Kreitner, 2008) and the empowerment values transmitted to employees foster an open communication system in which employees continually share relevant information on internal problems and deficiencies, or the external market environment (competition), which they acquire from customers or the marketplace. This is part of the market intelligence that is vital to the MO-OM strategy for these firms. In some cases, this is shared formally, via weekly or monthly meetings, or informally, via internal email or discussions about common customers and projects. This system of open communication is related to two factors: size of the firm and level of trust. Small family businesses tend towards informality (horizontal structure) without traditional hierarchical channels, making the chain of command more flexible. Communication

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and decision-making flow rapidly. Trust develops because employees are considered integral to operations and company success and the knowledge they contribute is an asset to the company's MO strategy as well as its OM. Multitasking of employees avoids resource redundancy and implies holistic knowledge by employees, while trust ensures commitment to the objectives and values of the firm. For Case A, this situation is vital to firm survival: “The suggestions from clients that our technical staff bring to us in computer and information systems enable us to innovate and provide quality services, which in many cases can be replicated across projects to add value. We have achieved this by fostering dynamic communication that includes employees as well as clients, who, after all, are the ones that promote our company via referrals.”

Artifacts

Artifacts are the values and policies of the each firm. They include knowledge in the minds of each employee who contributes both to the individual and collective repository that comprises the firm's OM, which contains the positive and negative market experiences (histories) that enable management to visualize, by analogy, the effects of their MO strategic options. Artifacts also include information in posters and bulletin boards, newsletters summarizing company conditions, and reports that permit discussion of key issues and opportunities from the customer's perspective. All these reinforce internal and external communication. Three of our cases, while not having integrated e-commerce, do have an internet presence and a company website that is not only a marketing tool, but also incorporates and reinforces organizational values and commitment to stakeholders. The firms include in their electronic web pages anecdotes of events that have contributed to company growth.

To demonstrate to employees the importance of creativity when facing problems related to inadequate resources, managers in the Case D firm remind their employees that when they started the business they sometimes constructed rudimentary, makeshift objects to take the place of needed equipment to carry out parts of a project:

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“We were always accepting all kinds of difficult low-paying projects, and we had to be creative in executing them. To lay the asphalt we used a plastic 10-gallon container (empty paint bucket) in which we made several holes with common nails. We attached a piece of wood as a makeshift handle and this is how we poured sand and other necessary materials on the road to be paved. ”

Findings and Concluding Remarks

The components of OM enable the learning and knowledge acquisition necessary to execute the MO strategy. The cases we analyzed illustrated this relationship, which is also the basis for the growth of these family firms, as shown in the proposed model.

We observed that establishing a formal or informal structure for collaboration and knowledge exchange between primary stakeholders (Lawrence and Weber, 2008) helps to emphasize the importance of the customer to the firm and strengthens the organizational values and objectives, enabling better management of the MO strategy. This structure comprises internal networks together with an open communication system that enables 1) knowledge exchange, 2) organizational learning, 3) creativity in developing innovations, and 4) group cohesion. It is the starting point for a promotional strategy of referrals and word-of-mouth used by the companies we analyzed. In our cases, we can see that trust and group cohesion developed in project (task) assignments is linked to the performance and reward system used by management. This reward system is a powerful agent in creating a high level of individual and group performance, with appropriate use of bonuses, add-on benefits, and stock purchase options (Hellriegel and Slocum, 2004). The degree of trust and cohesion can be quite positive, as observed in our cases, but in large organizations, this effect can become negative, when cohesion is not in tune with the organization's objectives and values (Ivancevich et al., 2008). Including in a firm's collective memory histories of successes and failures also strengthens knowledge acquisition, learning, and dissemination of information—and thus decision-making within the firm.

Market adaptation, risk tolerance, and proactiveness are elements tied to company growth. In the cases we analyzed, adaptation and diversification are evident in each product/service developed to customer specifications, to the point where often these are not repeatable (Case A and Case C)

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since they respond to specific customer needs. There is no standardization and this, to some extent, hurts the firm’s resource efficiency. These cases do illustrate the strong customer orientation (CO) within MO. In Case D, this strategy is evidenced by the flexible (24/7) and personalized service provided (management and cost), whereas in Case C, it is characterized by accepting difficult projects that would not be profitable for competitors. Both cases reflect proactiveness in the sense that they surpass competition by offering services in a particular way (schedule, system, budget, risk). In Case A, from its inception, the firm offered a service not available in the market, consisting of advanced IT, positioning the firm as a leader in its target market (proactiveness). Beyond offering an integrated service, the value added by the firm in Case A is a client-specific design, at a competitive and affordable cost. In Case B, adaptation and proactiveness are not in the product, but rather in the associated after-sales services. The firm strongly applies the 'customer relationship management' component of MO strategy and becomes a pioneer in providing parts and service guarantees as part of a product's sale. In Case E, the continual search for specialized products (gourmet, organic, etc.) for an evolving market differentiates the firm from its competitors. This adaptation and differentiation in Case E is tied to the company's private label strategy, enabling it to distribute high quality products in different forms, packages, and sizes and thus growing their customer portfolio. In Case F, risk tolerance and proactiveness are strongly present in the firm's growth strategy. The owner exerts leadership that favors the investments of his siblings and other family members by starting companies, relocating facilities, and opening franchises (8) to cover the entire country. In all of these environments, MO strategies and OM have an impact on firm performance and on its growth and market expansion strategies.

The context in which this study was performed allows us to shed light about how a combination of particular organizational managerial skills is necessary to meet organizational and market expectations. The MO strategy and the development of a strong OM within the organization are the aforementioned skills needed. Through the cases analysis, we confirmed that selected construct of growth strategy showed that financial performance in family firms are relegated to a second position when managers and owners of these family businesses undertake a new project for a new or traditional client, supporting previous studies about family business. This example of high risk tolerance could be dangerous for a financial wealthy of the firms. However, for

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family firm, entrepreneurial risk taking is one of the elements that foster firm growth (Memili, Eddleston, Zellweger, Kellermanns, and Barnett, 2010) because without risk taking propensity, family businesses have a tendency to take strategic decisions in a conservative manner that can hurt or struggle their business growth. In our cases, risk tolerance, proactiveness and adaptation to market expectations had been the core of firm’s success since their establishment. Policy makers such as creditors, government institutions promoting business, and chambers of commerce should take into consideration these findings when designing incentives and supporting programs. This study reveals new future research directions to follow: it would be useful to replicate the study using quantitative methods in non family business or family business with international operations to see if these findings hold for the same way. References Alpkan, L., Yilmaz, C. and Kaya, N. (2007) “Market Orientation and Planning Flexibility in SMEs”, International Small Business Journal, Vol. 25, No. 2, pp. 152-172. Armario, J.M., Ruiz, D., and Armario, E.M. (2008) “Market Orientation and Internationalization in Small and Medium-Sized Enterprises”, Journal of Small Business Management, Vol. 46, No. 4, pp. 485-511, October. Deshpande, R., Farley, J. and Webster, F. (1993) “Corporate culture, customer orientation, and innovativeness”, Journal of Marketing, Vol. 57, No. 1, pp. 23-31. Ebbers, J. and Wijnberg N. (2009), “Organizational Memory: from Expectation Memory to Procedural Memory”, British Journal of Management, Vol. 20, pp. 478-490. Frank, H., Kessler A. and Korunka, C. (2010) “Market Orientation and its Impact on Performance Dimensions of Family Firms”, pp. 1-17. Gopalakrishna, P. and Subramanian, R. (2009) “The Role of Market Orientation Components on the Performance of Family-Owned Businesses”, Northeast Business & Economics Association, pp. 508-510. Hanvanich, S., Sivakumar, K. and Hult, M. (2006), “The Relationship of Learning and Memory with Organizational Performance: The Moderating Role of Turbulence”, Journal of Academy of Marketing Science, Vol. 34, No. 4, 600-612. Hellriegel and Slocum (2004) Organizational Behavior, 10th edition, Thomson South-Western, Ohio, USA, pp. 460.

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