Abstract:
This study evaluates “Market orientation and Business Performances of
Small and Medium Scale Enterprises (SMEs) in Sri Lanka. According to
previous studies market orientation is the prerequisite for a successful
business operation; however there is no published study has attempted to
validate the Market Orientation and its impact on Business Performance in
Sri Lankan context especially in Small and Medium scale enterprises. The
overall objective of this research is to determine whether the Market
Orientation of the Small and Medium Scale Enterprises in Sri Lanka has
relationship with their Business Performance. To achieve it three specific
objectives, three major research questions and five hypotheses were
developed and tested. A survey was conducted to gather primary data by
selecting 100 small and medium enterprises from Homagama, Greater
Colombo and Moratuwa in Colombo district and that data was analyzed
using Mean, Standard Deviation, One Sample T-test, Independent Sample
T-test, multiple linear regression analysis and Pearson’s correlation
analysis. To test this assertion, Narver and Slater’s scale (MKTOR) for
market orientation, Subjective measures for business performance were
used.
The reliability was tested using Chronbatch’s Alfa value method and all the
variables carried equal or above 0.70 which is the standard Alfa value in
reliability tests. The best fit model of the multiple linier regressions includes
only one variable which is Competitor Orientation and excludes the
Customer Orientation and Inter-functional Co-ordination because their
ability to predict the Business Performance is negligible. The evidence given
by the correlation analysis too proved it. Overall, this research suggests that
theories regarding SMEs in particular, derived from researches in developed
countries need to be carefully examined and tested before being used in developing or non-developed country contexts like Sri Lanka. But in special
cases those theories can be applied with slight modifications so that many
benefits can be gained from them. Finally, the implication of the result to
both researchers and practitioners has been discussed; limitations and
suggestions for further research have been proposed.
