The effect of market orientation on operational effectiveness : the case of pharmaceutical logistics and supply chain management in the Government Pharmaceutical Organization (GPO)
Abstract:
The purposes of the study were 1) to provide an overview of market orientation, logistics, supply chain management and operational effectiveness and 2) develop a model that can more accurately identify the relationships among market orientation, logistics, supply chain management and operational effectiveness. The research applied quantitative and qualitative methodologies. In terms of the quantitative method, a total of 300 questionnaires were sent to people who worked in the marketing cluster of the Government Pharmaceutical Organization (GPO) of which 280 (93 percent) were returned. The statistical tools used were percentage, mean, standard deviation, skewness and kurtosis. In addition, a structural equation model (SEM) using a LISREL software program was employed to examine the association among the variables. In terms of the qualitative method, in-depth interviews were used to collect
information from five people at the level of supervisor and manager in the marketing cluster of the GPO. The interview data were analyzed by content analysis. The results from the analysis indicated that market orientation had a statistically significant influence in a positive direction towards logistics, supply chain management and operational effectiveness. Logistics had a positive direct effect towards supply chain management and operational effectiveness. Furthermore, supply chain management had a positive direct effect towards operational effectiveness. The theoretical model was fitted with empirical data. Moreover, in-depth interviews also supported the results of the quantitative study about how all factors were linked to each other. It was concluded in this study that market orientation, logistics and supply chain management focus would influence the operational effectiveness of the GPO, which would ultimately result in improved organizational performance and more importantly, help in identifying the key areas for improvements within the organization. Hence, executives should pay more heed to this issue than they have hitherto because it would be advantageous to the organization and bolster competitiveness. Finally, a base is provided for future research to examine any aspects of market orientation, logistics and supply chain management in other firms in the pharmaceutical industry.