Market orientation in the context of the impact of leadership capability on performance

Purpose - The aim of the study is to explore the relationship between organizational leadership capability and organizational performance in the context of market orientation in Estonian financial services organizations. Design/methodology/approach - A total of eight organizations from the Estonian financial services sector participated in this study: the five largest banks (B95 per cent of the market), the largest leasing organization (B50 per cent of the market) and the two largest insurance companies (B50 per cent of the market). The data used includes: aggregated and non-aggregated evaluations by customers, and aggregated financial data. The methodology combines two approaches for testing the hypotheses: a quantitative OLS regression analysis of the evaluations from 555 customers, and ranking mean values of the aggregated assessments from customers and financial data in quartiles for all eight organizations. Findings - The results of the study reveal a relationship between specific organizational leadership capabilities and organizational performance. Research limitation/implications - The study suggests that the positive relationship between leadership and organizational performance at the organizational level explains how an organization manages in the context of its external environment. However, the results of the authors' investigation are only valid in the Estonian financial services context, and the influence of organizational leadership capability on organizational performance in organizations in other service sectors could differ from these results. Originality/value - This paper demonstrates that organizational leadership capability, expressed as the interaction between the main behavioural principles of an organization marked as organizational orientation and adaptation, has a clear relationship with organizational performance.