Market Focus in AACSB Member Schools: An Empirical Examination of Market Orientation Balance and Business School Performance

ABSTRACT This manuscript reports the results of a national survey examining the magnitude and balance of market orientation toward students, parents, and employers of graduates exhibited in AACSB member schools. We reword Narver and Slater's (1990) "market orientation" scale and Jaworski and Kohli's (1993) "overall performance" scale for use within the higher education context. We group respondents into clusters based on their market orientation component scores. Each cluster thus represents a unique combination of market focus (or lack of focus) on students, parents, and employers of graduates typically employed by AACSB member schools. We examine and report magnitude and balance of market orientation toward the three markets, balance of emphasis between the market orientation components, relative emphasis of customer orientation and competitor orientation, and overall business school performance for each cluster. Additionally, we employ t-tests to identify significant differences in overall business school performance exhibited by the clusters. We outline the objectives of the study in terms of research questions, complete the analysis that addresses the questions, and present results and implications. Study limitations and future research directions are provided. INTRODUCTION The Baldrige National Quality Program (BNQP) has established the Baldrige Education Criteria for Performance Excellence for universities and other educational organizations, and includes a "student, stakeholder, and market focus category" (BNQP 2005) among the criteria leading to performance excellence. This particular category of criteria suggests that organizations identify potential market segments and determine which ones to pursue, then take steps to learn "key requirements and changing expectations," build relationships, increase loyalty, and determine satisfaction/dissatisfaction of those student/stakeholder markets. The focus category also emphasizes the importance of strategic decisions regarding the extent that university business schools may choose to focus on particular markets, and the balance of focus between chosen markets. These decisions may obviously contribute to the culture of the school, encouraging or discouraging attentiveness to students and potential students, parents of students, future employers of graduates, and other student/stakeholder markets. Market selection and other applications of marketing theory by practitioners within higher education are appropriate and should certainly be beneficial; Kotier and Levy (1969a, 1969b) argued successfully for broadening the scope of marketing (and the marketing concept) to include higher education as well as other nonbusiness organizations. This manuscript reports the results of an empirical study examining magnitude of focus and balance of focus on three markets (students, parents of students, and employers of graduates) within AACSB-affiliated schools of business. We empirically identify groups (clusters) of schools that exhibit similar focus on market orientation components for the three markets. We report final cluster centers and other information regarding the cluster analysis, then calculate and report mean levels of overall market orientation and performance for each cluster. We also provide percentages reflecting the balance among the components (Narver and Slater 1990), and relative emphasis (between customer and competitor) measures, as described by Slater and Narver (1994). Finally, we examine any differences that may exist in overall business school performance between the clusters. DISCUSSION AND LITERATURE REVIEW BNQP (2005) incorporates behaviors and actions indicative of high levels of market orientation as described in the marketing literature (Jaworski and Kohli 1993; Kohli and Jaworski 1990; Narver and Slater 1990; Slater and Narver 1994) throughout the education criteria for performance excellence. Further, the marketing literature (Barksdale and Darden 1971; Houston 1986; Jaworski and Kohli 1993; Kohli and Jaworski 1990; Narver and Slater 1990; Siguaw, Brown, and Widing 1994) supports assertions by practitioner-oriented publications such as the Baldrige Education Criteria for Performance Excellence (BNQP 2005) that these behaviors and actions result in a greater ability of the organization to achieve its objectives and attain higher levels of performance. …