The Survival of Market Orientation through Artificial Selection

: Observations of a Japanese automobile dealer company shifting from a selling orientation to a market orientation revealed the following: (1) A market-oriented program with a process and team orientation threatened the self-concept of the sales force and was rejected by most of them; (2) when three out of 54 shops, or only approximately 5%, appeared to be developing a form of market orientation, the top management selected managers of those three shops as well as changed the existing evaluation and reward system, which caused market orientation to take precedence in the organization. It should be noted that what happened at this company was contrary to natural selection or competitive isomorphism. At first, these three shops performed so poorly that they could well have been “selected out.” However, the top management allowed the three shops to survive and, when the time was ripe, deliberately made an effort to spread the form of market orientation within the organization. In essence, it is suggested that the key mechanism of developing a market orientation is institutional isomorphism through artificial selection.

The Survival of Market Orientation through Artificial Selection Ryusuke KOSUGE a) and Nobuo TAKAHASHI b) Abstract: Observations of a Japanese automobile dealer company shifting from a selling orientation to a market orientation revealed the following: (1) A market-oriented program with a process and team orientation threatened the self-concept of the sales force and was rejected by most of them; (2) when three out of 54 shops, or only approximately 5%, appeared to be developing a form of market orientation, the top management selected managers of those three shops as well as changed the existing evaluation and reward system, which caused market orientation to take precedence in the organization. It should be noted that what happened at this company was contrary to natural selection or competitive isomorphism. At first, these three shops performed so poorly that they could well have been "selected out." However, the top management allowed the three shops to survive and, when the time was ripe, deliberately made an effort to spread the form of market orientation within the organization. In essence, it is suggested that the key mechanism of developing a market

Introduction
Market orientation has been conceptualized as an organizational culture and a resulting behavior for creating superior value for customers (Kohli & Jaworski, 1990;Narver & Slater, 1990). Throughout the years of research, it has been shown to have a positive impact on performance (Kirca, Jayachandran, & Bearden, 2005). As the importance of a market orientation in business becomes evident, more attention is being given to the question of "How can it be developed?" Quantitative research has shown that top management focus, inter-departmental coordination, and a market-based reward system act as antecedents to a market orientation (Kirca et al., 2005). However, qualitative studies on the mechanisms of developing a market orientation (Gebhardt, Carpenter, & Sherry, 2006;Kennedy, Goolsby, & Arnould, 2003) have only recently begun to appear. 1 One problem with prior research is that it does not consider organizational path dependencies. In some cases, path dependency may make it almost impossible to develop a market orientation. The most extreme case is when a homogeneous sales organization, which for many years had the opposite of a market orientation, namely a selling orientation, aims to develop a market orientation. According to the theory of evolution in organizational change literature (Van de Ven & Poole, 1995), even when a market orientation is formed locally, 1 See Kosuge (2007aKosuge ( , 2007b for prior research on this aspect. it may be "selected out" by natural selection. In such circumstances, just how can a market orientation be developed? Examining this issue will add new angles to the existing literature on market orientation. This study presents a case of a Japanese automobile dealer that has shifted from a traditional selling orientation to a process-focused market orientation (Kosuge, 2011). What occurred at this company between 2001 and 2009 was not natural selection. Out of 54 shops competing with one another, only three started to develop a form of market orientation. They were performing poorly and, therefore, could have been "selected out," if left to their own devices. However, the top management allowed the three shops to survive and deliberately made an effort to spread the form of market orientation within the organization. In other words, institutional isomorphism occurred in these 54 shops through artificial selection.

Phase 1: Resistance from a Great Majority
Sales staff at this company was given short-term quotas for new car sales. Their primary focus was on achieving those quotas. The sales force disregarded customers' needs and did whatever they could to sell what the company wants to sell. There was a lack of organizational effort to understand market trends and create value for customers. Just as with other companies in this industry, the company had pursued to maximize sales over the past decades. However, the top management started to doubt the long-term sustainability of this business approach and began a program to shift toward a market orientation in 2001. 2 In an organizational culture where "results are everything," the sales staff, who had focused only on their performance, perceived this program to be contradictory to the traditional sales style. Also, when the top management emphasized the importance of processes, it was met with resistance.
"Think about it. Don't you wonder what process there is in a sales company? It's ridiculous! How many have you sold?…So no matter what you try, if your numbers don't improve, it's all the same to the guys upstairs." "You can't do anything if all you're thinking about is short-term goals like having to reach a certain sales target every day." The greater the emphasis on a process orientation, the more the sales force held on to their traditional sales style, noting that "they can't complain as long as we just achieve good results." In addition, a "team orientation" means that salespeople work together to contact customers, share their know-how with each other, and function as an organization. This kind of thinking received the following response.
"The truth is that a company is a collection of individuals, so if everyone does their job properly we won't be blamed. If you don't like the manager yelling at you, then don't give him a reason to do so." Various attempts by the top management to facilitate the new way of doing things were rejected. One example of this was the introduction of the "follow-up cards." The main aim was to contact customers before their vehicle inspection expiration dates "with good quality (right information), without omission, at the right timings." This set-up was originally proposed by the automaker that wanted its dealers to become market-oriented. Based on customer data entered into a computer, a "follow-up card" and a direct mail would be printed out as a set. Of these, a direct mail would then be sent off to the customer 48 days prior to their inspection expiration date. This would be followed by phone calls 45, 30, and 20 days prior to the same date. Sales staff was expected to enter the results of their efforts on the "follow-up card" and hand it in to the shop's manager. The manager would then give feedback to the sales staff.
If the contact attempt succeeds and the customer comes to the service workshop for a car inspection, there will be new sales opportunities. During the 45-minute wait for the inspection, sales staff could take the customer into the show room and recommend a new car as well other products and services. Another important aspect of "follow-up cards" is that they are stored in a large organizing shelf in the office room. In this way, the entire contact process becomes visible, which allows the sales force to share their responsibilities when necessary.
However, this new way of doing things was met with various types of resistance. Because the salespeople felt that the idea was "ridiculous" or thought that their workload would increase, many of them did not bother to send the direct mails or use "follow-up cards." There were some who tried to use "follow-up cards", but in many cases, their cards ended up on or in their desks. Eventually, in most shops, the organizing shelf was shoved in the corner. Max Weber pointed out the existence of a "shell" (Takahashi, 2015). When one's environment or surroundings undergo a major change, people withdraw into their "shells". Calling this "rejection" is too one-sided, so researchers have instead used the terms "self-concept" (Eilam & Shmair, 2005) or "self-identity" (Weick, 1995). The main argument here is that people exhibit negative reactions to changes that threaten their "self-concept" or "self-identity." In this case as well, if our observations end with this phenomenon, we may come to the conclusion that "management policies that threaten people's self-concept or self-identity will fail."

Phase 2: Survival of a Small Minority
Actually, there were three shops where "follow-up cards" came to be accepted. The managers of the three shops began to use "follow-up cards" proactively as a communication That said, these three shops comprised only 5% of all shops, which is within statistical error. In addition, these three shops were performing poorly; one of them was even ranked the lowest. In any case, they were less fit and therefore were prime candidates for being "selected out" (i.e., eliminated through natural selection). Of course, many researchers will conclude that "management policies that threaten people's self-concept or self-identity will fail." However, the reality turned out to be different in this case.
By using "follow-up cards," salespeople at these three shops learned to focus on each customer regardless of their responsibilities. Also, they improved work together through experiments, which gradually became second nature to them. As they experienced more and more success by using the "follow-up cards," these shops began to function as a cohesive organization. This resulted in gradual improvement of the shops' overall numbers. In this way, they shot up to the highest ranked shops, including the one that had been at the bottom. In the end, the top management clearly recognized that these shops were successful in terms of market orientation.
In fact, the real reason these three shops survived despite the force of natural selection was due to the artificial selection done by the top management. In 2007, the top management promoted the managers of the three shops to general manager positions at the headquarters and put them in charge of training other shops to diffuse the experience of the three shops. In addition, the top management revised the evaluation and reward system, the intent of which was to promote teamwork that had developed at these three shops: Bonuses had previously been awarded to individuals based on their personal sales performance. Instead, team bonuses were distributed equally among everyone working at the shop based on the shop's performance.

Competitive Isomorphism vs. Institutional Isomorphism
The natural selection that researchers like to use is, in a certain sense, a convenient rationalization. In contrast, the real business world is harsh, and to say "95% of the shops failed, so mine failed too" is not acceptable if there is a visible example of success, even if it accounts for only 5%. That example should be imitated, although 5% can be ignored statistically. Imitating a successful practice is easy in contrast with the difficulties faced by the minority of managers.
"The iron cage revisited" (DiMaggio & Powell, 1983) 3 asks "why there is such startling homogeneity of organizational forms and practices (DiMaggio & Powell, 1983, p. 148)." With this question, the article calls the process of homogenization of organizations in the same organizational field "isomorphism." Isomorphism can be broadly divided in the following two categories.
(1) Competitive isomorphism, which corresponds to a functional fit with an environment (2) Institutional isomorphism, which corresponds to such cultural and social fits as coercive isomorphism, mimetic isomorphism, and normative isomorphism.
With respect to (1)  it is crucial to diffuse them throughout the organization. In natural selection, superior forms do not necessarily spread within an organization and "shells" tend to remain intact. It is humans who break "shells."