Abstract:
This paper aims to find out whether superior autonomy at boundary spanning levels in service organizations results in better market orientation and performance and whether autonomy and decentralization, though conceptually different, have similar practical implications. Researchers developed a theoretical model and tested it in the post-liberalized Indian retail banking context to address these concerns. Bank branches constituted the unit of analysis. Further to getting initial insights on market orientation in retail banking through interviews researchers conducted a survey among branch managers. A total of 305 branch managers were contacted of which 122 cooperated. Regression results suggest that superior personnel related and goal setting autonomy at boundary spanning levels have positive market orientation as well as performance implications. Marketing autonomy did not have significant impact on market orientation. Autonomy and decentralization though conceptually different displayed similar implications on market orientation and performance. Formalization while negatively impacting market orientation did not directly impact performance. As firm performance is dependent on subunit performance, managers should naturally be interested in factors that enhance performance at subunit level. Current research finds evidence for superior personnel and goal setting autonomy as well as less rigid rules facilitating market orientation and performance at the subunit level. This is the first effort to study market orientation at the boundary spanning levels in service organizations. Besides providing evidences from the Indian retail banking context about the impact of autonomy on market orientation and performance the paper also presents primary evidence for clarifying the similarities and differences between autonomy and decentralization.
