Reward Systems and Market Orientation of Service Firms in Tanzania

Abstract

Research on market orientation has produced empirical evidence of the positiveinfluence of market orientation on various performance measures of business firms.Despite this evidence, firms have been observed to implement market orientation invaried degrees. Literature on factors influencing implementation of market orientationis scanty, which could arguably explain the lethargy in the implementation of thisstrategic orientation. This article examines the influence of market-based rewardsystem on market orientation of service firms in Tanzania. Using data from 178 servicefirms in Tanzania, the article concludes that reward systems positively influencemarket orientation of service firms in Tanzania. It recommends that organizations touse market-based reward systems to evaluate and compensate employees so as tostimulate market orientation culture and improve firm performance.