www.ccsenet.org/ibr International Business Research Vol. 4, No. 1; January 2011 Published by Canadian Center of Science and Education 241 Market Orientation and Business Performance among SMEs in Ghana Mohammed Abdulai Mahmoud Lecturer, Department of Marketing and Customer Management University of Ghana Business School University of Ghana E-mail: amohammed@ug.edu.gh Abstract The effect of market orientation on business performance has been extensively researched over the past two decades with authors generally agreeing on its positive outcome. It appears however that previous studies placed much emphasis on its applications in large scale organizations. Only recently have researchers begun to publish articles on the patterns of market orientation in small and medium scale organizations (SMEs) (Blankson et al., 2006; Keskin, 2006). Even so, it seems that researchers are yet to reach a common ground on the appropriateness of this management toolkit to SMEs. This study argues that it is in this sector that firms need to be more customer focus, monitor competitive trends, and respond appropriately to market intelligence in order to survive given evidence of their financial, technical and other constraints. Following an adoption of two popular scales in the literature, the study investigated the market orientation-performance link among Ghanaian SMEs using a survey to collect data on 191 firms. Results show that the development of market orientation in this sector rests more on the attitude of owners/ managers and, more importantly, the repeatedly reported performance implication of market orientation does not elude Ghanaian SMEs. More specifically, market orientation leads to superior performance under ceaseless competitive conditions. Conclusions are drawn; the limitations and directions for further investigations of the construct are provided. Keywords: Market orientation, Business Performance, SMEs, Ghana 1. Introduction There abound numerous conceptual and empirical studies on the market orientation construct in the extant literature (see for review Kohli & Jaworski, 1990; Narver & Slater, 1990; Rueket, 1992; Jaworski & Kohli, 1993; Greenley, 1995; Pitt et al., 1996; Appiah-Adu & Ranchhod, 1998; Mahmoud et al., 2010). These works span from both developed (Harris, 2000; Esteban et al., 2001; Guo, 2002; Perry & Shao, 2002; Elg, 2003; Green Jr. et al., 2005; Blankson et al., 2006; Keskin, 2006; Sen, 2006; Ozer et al., 2006; Low et al., 2007) and developing (Agarwal et al., 2003; Aggarwal & Singh, 2004; Kuada & Buatsi, 2005; Osuagwu, 2006; Dwairi et al., 2007; Hinson et al., 2008; Mahmoud et al., 2010) economies. The central argument of the developed and developing countries’ studies demonstrates the indispensable role that market orientation plays in an organization’s marketing activities in achieving superior performance in its chosen markets. Moreover, literature on the impact of market orientation on firm performance has revealed mixed discoveries in the developed and developing countries studies (Narver & Slater, 1990; Jaworski & Kohli, 1993; Perry & Shao, 2002 & Dwairi et al., 2007). Studies conducted in the United States have demonstrated the positive effect of market orientation on performance whereas a mixed blessing of market orientation is reported among UK and other developing countries studies (Beamish et al., 1993; Pitt et al, 1996). There are also questions regarding the universal application of the market orientation construct by marketing scholars (Pelham & Wilson, 1996). This stems from the fact that, there are differences in environments, industries and their structures as well as the size of firms (Pelham & Wilson, 1996). Following Blankson et al. (2006) and Keskin (2006), despite the attention devoted to market orientation by academics, research interest in market orientation within small and medium scale enterprises (SMEs) sector has been scanty (see also McLartey, 1998; Lee et al., 1999; Becherer et al., 2003). On the other hand, SMEs are vital in most economies including Ghana in that they contribute a lot in terms of GDP and employment (Abor and Beikpe, 2005 and Keskin, 2006). In the Ghanaian economy in particular, SMEs have been identified as the catalyst for the economic growth of the country as they make major contributions to employment generation and poverty reduction (Mensah, 2004; Abor and Beikpe, 2005). Thus, the SME sector is regarded in certain situations as a valve for absorbing the teeming unemployed youth in the Ghanaian economy (Mensah, 2004). Adopting a market-orientated strategy is posited as a way of successfully managing the impact of changes in the SME domain. However, the application of market-orientation and its research models, which were developed for large-scale firms, may have different meanings in an SME context (Blankson et al., 2006; Keskin, 2006). This position is warranted given the fact that SMEs face peculiar problems including: deficiencies arising from their limited resources and range of technological competencies; influence of their owners/managers on the decision-making; dependence on