What is the Paper About?
This paper examines how different aspects of market orientation and servitization influence the performance of family owned horticultural small and medium sized enterprises in Germany. Specifically, it investigates how three dimensions of market orientation customer orientation, competitor orientation and interfunctional coordination affect business performance, and whether the addition of services to traditional product offerings improves these relationships. Using survey data from 222 German family owned horticultural firms and structural equation modelling, the study finds that customer orientation and internal coordination positively influence performance, while competitor orientation can have a negative effect. Servitization is shown to improve business performance directly, but its role in strengthening the effects of market orientation is limited and can even reduce performance under certain conditions.
Why is it Important?
Family businesses form the backbone of many economies, particularly in sectors such as horticulture where firms are often small, locally embedded and passed across generations. However, these businesses face growing pressure to adapt to changing markets, customer expectations and service based business models. This study provides new insights into how strategic orientations affect performance in family owned small and medium sized enterprises, challenging the assumption that all aspects of market orientation are universally beneficial. The findings also highlight a servitization paradox, showing that while moderate service diversification can improve performance, excessive expansion into services may strain resources and undermine results. By offering a more nuanced understanding of how market orientation and servitization operate in family businesses, the paper contributes to both family business and servitization research while providing practical guidance for managers seeking sustainable growth.
Robin Bell 