finding in the strategic management literature is that myopically focusing on current cusWRPHUV¶
wishes contributes to several problems that ultimately can lead firms to poorer performance and
reduced competitiveness (Bodlaj, 2011; Christensen, 1997; Theoharakis & Hooley, 2008). Hamel and
Prahalad (1991) GLVFXVVHGVLPLODUSUREOHPVUHVXOWLQJIURPWKH³W\UDQQ\RIWKHVHUYHGPDUNHW ́ (p.83).
This challenge is covered in the next section.
5.4.2 ENVIRONMENT - EXPLORATION = BUSINESS DEVELOPMENT
Several strategic management researchers have suggested that being customer-oriented locks a firm to
miss out on the wave of new technologies and emerging customer needs (Christensen & Bower, 1996;
Hamel & Prahalad, 1991). Christensen and Bower (1996) concluded from their analysis of the hard
GLVN GULYH LQGXVWU\ WKDW ³ILUPV ORVH WKHLU SRVLWLRQ RI LnGXVWU\ OHDGHUVKLS«EHFDXVH WKHy listen too
FDUHIXOO\WRWKHLUFXVWRPHUV ́(p.198) or may lead managers to interpret the world only through current
FOLHQWV¶H\H(Hamel & Prahalad, 1996). Slater and Narver (1998) warned that being client-led is but a
short-term strategy. Day (1999) ZDUQHGDJDLQVWILUPVEHFRPLQJ³FXVWRPHUFRPSHOOHG ́DQGVWDWHGWKDW
WKH³FRQFHUQDERXWEHFRPLQJPRUHPDUNHW-driven is the fear that it might focus inordinate attention on
current markets so that WKHFRPSDQ\ZLOOIDLOWRVHHHPHUJLQJPDUNHWV ́3UREDEO\WKHPRVWH[WUHPH
assertion was made in a Fortune DUWLFOHHQWLWOHG³,JQRUH<RXU&XVWRPHU ́(Martin, 1995). Researchers
have divided the market orientation construct into two complementary apSURDFKHVWKH³UHVSRQVLYH ́
DQG WKH ³SURDFWLYH ́ PDUNHW DSSURDFK(Narver et al., 2004). In the case of responsive market
orientation, the company puts its effort into understanding and serving the current and expressed
needs of its customers. In contrast, the focus of proactive market orientation is on poWHQWLDOFXVWRPHUV¶
needs (Narver et al., 2004). The same suggestion is also embedded in the works of Jaworski et al.
(2000), Hills and Sarin (2003) and Kumar et al. (2000), used the concepts of market ± driven (current
needs) and market-driving (future needs) activity. The latter may be labeled Business development.
Business development, is similar to Client centricity focused on the environment, but with a focus on
exploration. Business development is based on the gathering and interpretation of information about
the unknown environment (Yukl, 1999a). A number of empirical studies have found support for the
notion that the capacity to recognize, value, assimilate, and apply new external knowledge is a
significant predictor of successful organizational functioning (Arora & Gambardella, 1994; Helfat,
1997; Kaplan et al., 2003). Grinyer, Mayes and McKiernan (1990) found that the leaders of high-
performing companies did more external monitoring (e.g. environmental scanning) than leaders of
low-performing companies and were quicker to recognize and exploit opportunities revealed by it.
Effective scanning remains a prerequisite to successful organizational adaptation. The bulk of research