1. ¹School of Business, The University of Hong Kong, Pokfulam, Hong Kong
2. ²College of Business and Economics, West Virginia University, Morgantown, WV, USA
3. ³School of Hotel Administration, Cornell University, Ithaca, NY, USA
4. ⁴College of Business, Iowa State University, Ames, IA, USA

Correspondence: KZ Zhou, Faculty of Business and Economics, School of Business, The University of Hong Kong, Meng Wah Complex, Pokfulam Road, Pokfulam, Hong Kong. Tel: +852 2859 1011; Fax: +852 2858 5614; E-mail: kevinzhou@business.hku.hk

Received 16 June 2004; Revised 1 November 2005; Accepted 25 July 2006.

Abstract

Should companies adjust their orientations toward customers or toward competitors in global markets? To answer this question, we use contingency theory and examine how the effects of customer and competitor orientations on performance are moderated by different environmental conditions. Our results from the global hotel industry indicate that a customer orientation works better in economically developed markets, as well as in markets with good local business conditions, greater resource availability, and demanding customers. In contrast, a competitor orientation is more effective in markets that are economically developing, have poor local business conditions, and face resource scarcity.