Introduction
Many scholars have conducted researches about the consequences of Market Orientation
Research indicates a positive correlation between Market Orientation (MO) and Entrepreneurial Proclivity (EP) and business performance, supported by studies from Jaworski & Kohli (1993), Kirca et al (2005), Narver & Slater (1990), and others However, the impact of environmental dynamism on these relationships remains unclear, highlighting the need for additional investigation, as noted by Grinstein (2008) and Rauch et al (2009).
In today's fast-paced business environment, product and business model life cycles are shortening, leading to uncertainty in profits and a pressing need for businesses, including those in agriculture, to explore new opportunities (Hamel, 2000) Agricultural industries are transitioning from protected and subsidized frameworks to more self-sufficient and open systems, facing ongoing challenges like evolving agricultural policies, fierce competition, and fluctuating consumer demand (Ondersteijn et al., 2006; Clark, 2009) For instance, dairy farmers have experienced significant income reductions due to reforms in the European Union’s Common Agricultural Policy (CAP) Additionally, growing public concerns regarding food safety, animal welfare, and health-promoting products are placing additional pressures on farmers (Bergevoet, 2005; De Lauwere, 2005) Consequently, modern agriculture must adapt to these changing requirements to thrive.
In response to the evolving agricultural landscape, the Policy Commission on the Future of Farming and Food (2002) emphasizes the urgent need for reform in agricultural business practices Farmers, traditionally guided by personal experience and inherited knowledge, must swiftly adapt to these changes to maintain profitability and remain competitive To thrive in a liberalized market, it is essential for farmers to enhance their entrepreneurial and management skills, focusing on developing a business-oriented mindset and effective marketing strategies while actively seeking out new market opportunities.
2002, p16, p20) Farms should be considered as firms to face these situations while farmers are encouraged to obtain a more entrepreneurial business model and perceive themselves as entrepreneurs (Phillipson et al., 2004)
Research indicates that Entrepreneurial Orientation (EP) and Market Orientation (MO) are gradually being adopted by farmers and horticultural growers (Bergevoet et al., 2004; Knudson et al., 2004; Verhees et al., 2011b) While EP and MO have been shown to enhance agricultural business performance (Verhees et al., 2011b), the impact of the environment on these orientations among Dutch farmers remains unclear This study aims to examine how various environmental factors influence the MO and EP of Dutch farmers and horticultural growers, utilizing empirical data analyses to uncover these relationships.
Understanding the relationship between the environment and entrepreneurial performance (EP) and market orientation (MO) provides valuable insights into how environmental instabilities impact farmers and horticultural growers It raises questions about the extent of their influence from the business environment and the necessary actions to take in response Drawing from evolutionary theory, organizations are selected for survival based on their alignment with environmental characteristics Consequently, farmers must adjust their behaviors and mindsets to effectively adapt to these changes; the greater their adaptability, the higher their chances of survival in a dynamic market.
Literature review
Entrepreneurship and entrepreneur
Entrepreneurship is the study and practice of identifying, evaluating, and seizing opportunities to introduce innovative goods, services, or processes It encompasses individuals who actively discover and exploit these opportunities, which may not necessarily involve creating new organizations, as entrepreneurship can also thrive within existing businesses Additionally, opportunities can be transferred or sold to other individuals or organizations, highlighting the dynamic nature of the entrepreneurial landscape.
An entrepreneur is an individual who creates new value through innovation or by establishing a new organization Entrepreneurship involves the ongoing process of connecting individuals with value creation in a dynamic environment Entrepreneurs play a vital role in driving economic growth and fostering innovation.
“individuals who manage a business with the intention of expanding that business with the leadership and managerial capabilities for achieving their goals” (Wolf & Schoorlemmer,
2007) This definition is considered as the most suitable and relevant to farm sector (McElwee, 2005).
Firm owner’s Entrepreneurial Proclivity
In the intersection of management strategy and entrepreneurship literature, terms like Entrepreneurial Proclivity (EP), Entrepreneurial Orientation (EO), and Entrepreneurial Management (EM) are often used interchangeably to denote similar concepts (Matsuno et al., 2002) This research primarily focuses on the term Entrepreneurial Management.
Entrepreneurial Proclivity (EP) However, in some parts of this literature review, EO or EM is used as an interchangeable replacement of EP
Entrepreneurial orientation (EO) refers to an organization's inclination to embrace entrepreneurial processes, characterized by a focus on innovativeness, risk-taking, and proactiveness (Matsuno et al., 2002) These three dimensions—innovativness, risk-taking, and proactiveness—are consistently highlighted in literature and stem from Miller's (1983) assertion that entrepreneurial firms pursue product market innovation and engage in risky ventures to outpace competitors Consequently, these dimensions have been widely adopted by researchers to define the essence of entrepreneurship (Lumpkin & Dess, 1996).
Here is a rewritten paragraph that captures the essence of the original text, optimized for SEO:"Innovativeness is the first dimension of a firm's entrepreneurial orientation, reflecting its propensity to embrace and support novel ideas, experimentation, and creative processes This forward-thinking approach can lead to the development of new products, services, or technological processes, driving business growth and competitiveness."
Innovativeness is the fundamental willingness to adopt new technologies and practices A prime example is 3M Company, which empowers its 9,000 technical employees across 34 countries to engage directly with customers to identify their challenges To foster creativity, these employees are permitted to dedicate 15% of their work time to developing new innovations for the company.
Risk taking, as defined by Miller and Friesen (1978), reflects managers' willingness to commit significant resources to uncertain ventures This concept encompasses adventurous actions that involve exposure to the unknown, heavy borrowing, and substantial investments in unpredictable environments (Rauch et al., 2009) Within strategic contexts, risk manifests in three forms: exploring uncharted territories, allocating a large portion of assets, and engaging in heavy borrowing (Baird & Thomas, 1985) In financial terms, risk represents a trade-off between risk and return, highlighting the likelihood of losses Companies exhibiting entrepreneurial propensity (EP) are often characterized by their risk-taking behaviors, such as investing in high-risk projects (Lumpkin & Dess, 1996) A notable example is Jeroen van der Veer, CEO of Royal Dutch Shell PLC, who made a bold investment in Russia’s Far East for natural gas and crude oil reserves, despite the uncertain political climate that could have jeopardized the venture and led to significant losses (Certo et al.).
The third dimension - proactiveness refers to a forward looking perspective Proactive firms initially anticipate and pursue new opportunities in the market (Lumpkin and Dess
Proactiveness involves actively seeking new opportunities that may not directly align with current operations, allowing firms to introduce innovative products and services ahead of competitors Such proactive companies often phase out operations that are in the mature or declining stages of their lifecycle, positioning themselves as market leaders rather than followers by anticipating market demand A notable example of this is Proactive Communications (PC), a small firm based in Killeen, Texas, which has been successfully implementing these strategies since its inception in 2001.
PC has excelled in providing communication solutions in challenging environments, including Iraq and areas affected by Hurricane Katrina, by embracing proactive measures like integrating communication devices into military helmets and operating in outdoor conditions This willingness sets PC apart from other telecommunications companies, resulting in the rapid delivery of information to Iraqi government offices, which previously took days With an impressive annual growth rate of 18%, PC has also made significant strides in regions such as Africa, South America, and Eastern Europe, where inadequate infrastructure has led governments to adopt satellite and wireless communication technologies By being a first mover in these markets, PC has established a sustainable niche in an ever-evolving technological landscape.
The three dimensions of entrepreneurial orientation—innovativeness, risk-taking, and proactiveness—play a crucial role in renewing organizations and delivering exceptional value to customers (Matsuno et al., 2002) Every firm possesses some degree of entrepreneurial orientation, as they exhibit varying levels of these dimensions, even if minimal (Schindehutte et al., 2008).
Farmer and horticultural growers' entrepreneurial performance (EP) encompasses their routines, decision-making, and practices characterized by innovation, risk-taking, and proactiveness This entrepreneurial approach encourages farmers and horticulturists to revitalize their businesses by providing alternative and potentially superior value propositions to customers.
Classification of entrepreneurial activities
Entrepreneurship scholars have established various typologies to illustrate different perspectives on entrepreneurship, highlighting how individual, organizational, and environmental factors interact (Lumpkin & Dess, 1996) The dimensions of entrepreneurship can fluctuate independently, influenced by external environmental conditions.
Companies operating in diverse environments prioritize distinct connections between corporate entrepreneurship activities and their financial performance Additionally, the variations among firms suggest that the dimensions of entrepreneurship performance can be uniquely integrated, differing from one organization to another.
According to Baumol (1986), entrepreneurial activities can be divided into two main categories: initiating and imitative entrepreneurship Initiating entrepreneurship involves the introduction of novel products, productive techniques, and procedures that have not been previously available In contrast, imitative entrepreneurship focuses on the dissemination of these innovations once their benefits have been established by the original creators.
Firm owner’s Market Orientation
Market orientation (MO) signifies the application of the marketing concept, where firms align their actions with this principle (Kohli & Jaworski, 1990) There are three key perspectives of MO that are gaining traction: cultural, behavioral, and resource capabilities (Schindehutte et al., 2008).
Narver & Slater (1990) emphasize the importance of organizational values and norms in defining Market Orientation (MO) as a culture that fosters behaviors leading to superior value for customers and enhanced business performance They identify three key components of MO: customer orientation, competitor orientation, and inter-functional coordination Customer orientation involves a deep understanding of target customers and consistently delivering superior value, reflecting a belief system that prioritizes customer interests (Deshpandé et al., 1993) Competitor orientation focuses on comprehending both the short-term strengths and weaknesses and the long-term strategies of current and potential competitors Lastly, inter-functional coordination highlights the need for collaboration across various departments, as marketing is not limited to a single department Together, customer and competitor orientations facilitate the gathering of critical information, while inter-functional coordination utilizes this data to create exceptional value for customers (Narver & Slater, 1990).
From the behavioral perspective, Kohli and Jaworski (1990) emphasized organizational activities as the generation, dissemination and responsiveness to market intelligence (Kohli & Jaworski, 1990) It reflects organization‘s market intelligence to
Market-oriented companies consistently gather information about target customer needs and competitor capabilities to understand both current and future demands This ongoing process enables them to create lasting superior customer value.
Market orientation (MO) represents a firm's capability to connect with its external environment, enabling it to anticipate market demands before competitors do This strategic approach fosters the development of lasting relationships with customers, channel partners, and suppliers, ultimately enhancing the firm's competitive edge.
Market orientation (MO) drives organizations to achieve inspired performance and competitive advantage by consistently delivering superior value to consumers This involves a continuous assessment of customer needs and encompasses a range of activities and cross-functional processes aimed at creating and satisfying those needs (Deshpandé & Farley, 1998) As a result, market-oriented firms strive to enhance their offerings for customers, ensuring they stand out against competitors.
MO may be especially important for small firms because these firms can leverage their potential advantages (flexibly, and close to their customer) to provide individualized service (Pelham, 1999).
The difference between Entrepreneurial Proclivity and Market Orientation
Although MO and EP are closely connected, they are different constructs Table 1 shows the differences between them
Table 1 Difference between MO and EP
Management literature (Atuahene- Gima & Ko, 2001)
Put a lot of efforts on market intelligence (Kohli & Jaworski, 1990)
Engage in a wider level of information scanning activities to seek out new opportunities (Barringer & Bluedorn, 1999)
Response to market dynamics by concentrating on marketing concept, customer and competitor (Verhees et al., 2011b)
Response to a wider range of environmental forces, including new technology, legislation and societal concerns (Verhees et al., 2011b) Innovation and new products
Enrich and adapt current innovations to meet current needs rather than the development of new products (Atuahene-Gima & Ko, 2001)
Foster initiation of product innovation with high levels of financial uncertainty and risk (Atuahene-Gima & Ko, 2001)
Firm environment
The environment plays a crucial role in organizational theory and strategic management, characterized by three key dimensions: dynamism, complexity, and munificence Dynamism encompasses the stability or turbulence an organization experiences, while complexity refers to the degree of homogeneity or heterogeneity within the environment Munificence, on the other hand, highlights a firm's reliance on its environment for resources Together, dynamism and complexity represent the uncertainty organizations face, and munificence indicates their dependence on external resources (Lumpkin & Dess, 2001) These dimensions are informed by two primary approaches to understanding the environment: as a source of information and as a reservoir of resources (Dess & Beard, 1984; Lumpkin).
The dimensions of dynamism, munificence, and complexity are further divided into specific subdivisions Dynamism encompasses market and technical turbulence, while munificence includes factors such as market growth, profitability, and competitive intensity Additionally, complexity is characterized by product and customer differentiation (Pelham, 1999).
This research emphasizes the Dynamism dimension due to two key reasons: firstly, existing studies indicate that entrepreneurial orientation (EO) enhances performance in dynamic environments (Casillas et al., 2011; Lumpkin & Dess, 2001; Zahra, 1993) Secondly, while agricultural produce markets have historically been stable, they are increasingly experiencing dynamic changes (Verhees et al., 2011a).
In a dynamic business environment, companies are compelled to innovate, leading to new opportunities within their markets By adapting products and processes, firms can discover new niches in existing markets or expand into attractive areas beyond their traditional scope through new ventures This drive for dynamism encourages businesses to capitalize on opportunities in both current and emerging markets (Zahra, 1993).
Dynamic environments are characterized by unpredictable customer demand and competitor behavior, along with rapid changes and significant uncertainty in market trends and technological innovations This research focuses on examining customer dynamics, competition, and technological dynamics as key components of a dynamic business environment.
Characteristics of farms and horticulture (SMEs)
Entrepreneurship concept has been mentioned mostly in small and medium sized businesses (SME) research (Bergevoet, 2005) In farm and horticulture business, the role of
Owners and entrepreneurs in agriculture can be likened to small and medium-sized enterprises (SMEs), as many farms operate as micro-firms, typically employing fewer than 10 individuals or none at all (European Commission, 2000) Consequently, the management and entrepreneurial practices of farmers and horticultural growers exhibit notable similarities to those of SMEs.
SMEs have some limitations and advantages dominated by competence of the entrepreneurs/firm owners to overcome those limitations
Small businesses face several limitations, including a lack of economies of scale and severe resource constraints They often operate within a limited geographic marketplace and struggle with market image, resulting in minimal brand loyalty and market share Additionally, these businesses typically have little specialized management and must make decisions with imperfect information Time constraints per major management task are common, and professional managers are rarely present Furthermore, small businesses often have a mix of business and personal goals, which can complicate their operations (Verhees et al., 2011b).
Companies that excel in understanding customer needs and market trends can create value-added differences, exploit turbulent markets, and adapt to opportunities that enhance customer value They pursue innovation in products, processes, or strategies, intuitively identifying opportunities while maintaining highly integrated decision-making processes.
In the agricultural industry, farmer entrepreneurs can be categorized into five distinct groups: (1) economical entrepreneurs, who prioritize effective monetary cost management; (2) socially responsible entrepreneurs, who focus on social impact; (3) traditional growers, who aim to achieve the highest yield at the lowest cost; (4) new growers, aspiring to establish large companies with sustainable practices; and (5) doubting entrepreneurs, who grapple with uncertain strategies (McElwee, 2005).
Conceptual model and hypotheses
Research model
Our model applies to farmers and horticultural growers It specifies causal (effect) relationships among three building blocks They are: Environmental dynamism, EO and MO
In this model, I hypothesize that environmental dynamism affects farmers’ EO and MO In addition EP simultaneously influences farmers’ MO Finally, I demonstrate the hypothetical relationships in the model below
Figure 1 The conceptual model and hypothesized relationships
Hypotheses
a) Environmental dynamism and Entrepreneurial proclivity (EP)
Environmental dynamism fosters new opportunities, compelling firms to innovate and adapt Consequently, entrepreneurial proactivity (EP) is positively linked to this dynamic environment, as it emphasizes the proactive pursuit of emerging business opportunities (Rauch & Frese, 2009).
Adopting and learning entrepreneurial practices (EP) enables businesses to effectively navigate uncertainties in their environment, allowing them to swiftly capitalize on new market opportunities while fostering self-renewal Firms with high EP are more likely to thrive in dynamic environments, as these conditions inherently promote a more entrepreneurial orientation For instance, proactive and competitively aggressive firms tend to achieve superior results in such environments, and family businesses that prioritize innovation and risk-taking also perform better under dynamic conditions (Lumpkin & Dess, 2001).
The agricultural market is rapidly evolving from supplier-driven to customer-oriented, transitioning from national and international markets to a global scale (Verhees et al., 2011a) As a result, farmers must adapt to these changes by diversifying their business activities, such as incorporating tourism or establishing farm shops, to capitalize on opportunities beyond traditional agriculture (Clark, 2009; Pyysiọinen et al., 2006).
Environmental dynamism also enhances farmers’ innovation to offer premium value for customers (Casillas et al., 2011; Verhees et al., 2011a)
Therefore, I expect positive relationships between the dimensions of dynamic environment and EP of farmers and horticultural growers
H 1 : Customer dynamics have a positive influence on the entrepreneurial proclivity of farmers and horticultural growers
H 2 : Competition has a positive influence on the entrepreneurial proclivity of farmers and horticultural growers
H 3 : Technological dynamics have a positive influence on the entrepreneurial proclivity of farmers and horticultural growers b) Environmental dynamism and market orientation (MO)
In a stable environment where customer preferences are consistent, firms exhibit a lower level of market orientation since minimal adjustments to the marketing mix are required Conversely, a dynamic environment leads to significant changes in consumer needs and preferences, necessitating a strong customer orientation for firms to thrive in uncertain and evolving markets.
The evolving dynamics of the market significantly impact small businesses, prompting managers to prioritize activities that focus on understanding and meeting customer needs while also keeping a close watch on competitors.
In a competitive market, firms must adopt a market-oriented approach to meet customer demands, as consumers have numerous alternatives available By leveraging technological innovations to develop new solutions, companies can gain a competitive edge (Jaworski & Kohli, 1993; McElwee, 2005) Research indicates that large firms' market orientation is positively influenced by perceived environmental dynamism, as it helps them mitigate uncertainty (Davis et al., 1991).
This research operationalizes market orientation (MO) with a focus on customer orientation in small and medium-sized enterprises (SMEs) for two key reasons Firstly, to thrive in a dynamic environment, SMEs must adopt a customer-oriented marketing approach (O'Dwyer et al., 2009) Secondly, MO in SMEs is closely tied to the actions of firm owners and managers, making customer orientation an effective strategy for understanding target customers and adequately addressing their needs by enhancing various marketing programs (Verhees et al., 2011b).
The dynamic nature of the farmers' business environment can significantly enhance their market orientation (MO) Based on this understanding, I propose several hypotheses that focus on three key conceptual dimensions of a dynamic environment.
H 4 : Customer dynamics have a positive influence on the market orientation of farmers and horticultural growers
H 5 : Competition has a positive influence on the market orientation of farmers and horticultural growers
H 6 : Technological dynamics have a positive influence on the market orientation of farmers and horticultural growers c) Entrepreneurial proclivity (EP) and market orientation (MO)
Market orientation (MO) is closely linked to entrepreneurial performance (EP), as highlighted by Grinstein (2008) Research by Matsuno et al (2002) indicates that a higher level of EP results in a stronger MO for firms Furthermore, Deshpandé et al (1993) emphasize that business innovation plays a crucial role in enhancing a firm's customer orientation.
Farmers and horticultural growers with elevated environmental practices (EP) are likely to provide alternative and potentially superior value to customers, resulting in an increased level of market orientation (MO) This suggests a positive relationship between higher EP and enhanced MO.
H 7 : The entrepreneurial proclivity of farmers and horticultural growers has a positive influence on their market orientation
Methodology
Sample and data collection
A study was conducted using a sample of 1,359 firms from the Dutch Farm Accountancy Data Network (FADN), representing the diverse population of Dutch farmers and horticultural growers across various sectors, including greenhouse horticulture, arable farming, dairy farming, and intensive livestock farming.
In April 2010, respondents were sent questionnaires accompanied by an introductory letter and a prepaid return envelope through regular mail, with the option to complete an online version By the end of May, 391 completed questionnaires had been returned, prompting a reminder in June 2010 to encourage further responses After three months, the data collection process continued to yield results.
621 questionnaires were returned and 575 questionnaires did not have any missing values These questionnaires are used for the data analyses
Eighteen agricultural experts, including economists, bankers, government officials, farmers' representatives, and management consultants, were interviewed to assess the market dynamics, competition, and technological trends across six agricultural industries Each expert provided ratings for all industries, ensuring a comprehensive evaluation was completed.
Variables and measurements
The model's concepts were assessed using questionnaires, primarily developed in English and subsequently translated by a native Dutch speaker To ensure clarity for farmers and horticultural growers across various sectors, two rounds of personal interviews were conducted, leading to adjustments in the questions based on respondent feedback and preliminary quantitative analyses that evaluated dimensionality and reliability Measurement statements are detailed in Appendix A, with respondents rating each statement on a 7-point Likert scale to indicate their levels of agreement or disagreement.
Measurement properties are assessed by Principal Component Analysis (PCA) and reliability analysis (Cronbach’s Alpha) All scales were checked for normal distribution by Q-Q plot beforehand
Table 2 outlines the measurement scale properties, emphasizing that the Principal Component Analysis (PCA) should reveal a one-component solution, with the first component's eigenvalue exceeding 1.0 while subsequent eigenvalues remain lower A scree plot will illustrate this one-component solution by displaying a sharp drop in eigenvalue from the first to the second component, followed by a gradual decline thereafter Additionally, the first component must explain at least 50% of the variance in the items (Hair, 2010), and all items should exhibit a loading greater than 0.6 on the first component prior to rotation To ensure the scale's reliability, Cronbach’s Alpha scores must be above 0.6.
Scale # of items Eigen value second component
All measures met the criteria stated above except risk taking and one item in the competition scale One item in the competition scale loaded very low (0.37) so it was
15 rejected Risk taking had a second component’s Eigen value that was slightly larger than 1 However, it met all other criteria so all items were maintained for further analysis.
Regression analysis and hierarchical linear modeling (HLM)
Regression analysis is a way of predicting an outcome variable from one (simple regression) or several predictor variables (multiple regressions) Normally, regression is useful to test causal-effect relationships
Hierarchical linear modeling (HLM) is an advanced statistical technique that extends simple and multiple regression by enabling the analysis of outcome variables at various hierarchical levels This method allows for the variation of intercepts or slopes across different contexts, making it particularly suitable for nested data structures.
In my data, farmers are nested in agricultural industries For HLM method, 2-step (level) regression is implemented
This hierarchical linear modeling is represented in table 3 below
Table 3 Hierarchical linear model regression
EP, MO and environmental dynamism across industry
EP and environmental dynamism across industry
MOij = b0jindustryj + b1jEPij + εij EPij = b2jindustryj + εij
MOij = (γ00 + γ01MDj + γ02CDj + γ03TDj + u0j)*industryj +(γ10 + γ11MDj + γ12CDj
The first step of the analysis examines the relationship between farmers and horticultural growers' market orientation (MO) and environmental performance (EP) at the farm level The second step shifts focus to the agricultural industry level, where the impact of environmental dynamism on EP and industry coefficients is assessed At this level, the influence of industry characteristics and EP on farmers and horticultural growers' MO may differ due to varying degrees of environmental dynamism across industries While the relationship between environmental dynamism and EP is analyzed concurrently, it is important to note that only the coefficients related to the industry vary in this context.
In this study, regression analysis and hierarchical linear modeling are applied simultaneously to check each other’s results
Results
Table 4 presents the average scores for various components of environmental dynamism—market dynamics, competition, and technological dynamics—across different agricultural sectors, including arable farming, dairy farming, intensive livestock, greenhouse horticulture, and fruit orchards, as evaluated by 18 agricultural experts Additionally, it includes the average scores of farmers and horticultural growers' entrepreneurial performance (EP) and market orientation (MO) across these industries.
Table 4 Environmental dynamics, EP and MO’s average scores across agriculture industries
Greenhouse horticulture (flowers and plants)
Running ANOVA analysis, it is showed that average scores between industries are significantly different for market dynamics (F = 17.9, p < 0.05), competition (F = 4.18, p < 0.05), technological dynamics (F = 4.2, p < 0.05) and market orientation (F = 6.6, p < 0.05)
The analysis reveals that Environmental Performance (EP) shows no significant differences across industries (F = 1.6, p > 0.1), with average scores consistently ranging from 3.89 to 4.2 Consequently, the hierarchical regression analysis at level 2 will not be pursued further.
Horticultural industries, particularly greenhouse and fruit horticulture, experience greater market dynamics and competition compared to farming sectors like arable and dairy farming Technological advancements are most significant in greenhouse horticulture, while dairy farming lags behind Additionally, dairy farming receives the lowest scores in market orientation (MO) at 3.61, whereas horticultural growers score higher, ranging from 4.29 to 4.43 Overall, horticultural growers outperform dairy farmers across all environmental components, market orientation, and environmental performance (EP).
To test hypotheses H4, H5, H6, and H7, two regression models were analyzed The first model incorporated entrepreneurial proclivity (EP) as the sole independent variable, while the second model expanded the analysis by including market dynamics (MD), competition (CD), and technological dynamics (TD) as additional independent variables The results of the ordinary least squares (OLS) regression, as presented in Table 5, illustrate the relationship between market orientation (MO) and the various independent variables.
The initial model successfully predicts market orientation (MO), but the enhanced model, which includes additional variables such as market dynamics (MD), competitive dynamics (CD), and technological dynamics (TD), demonstrates even greater predictive power, with a significant F-change of 11.05 (p = 0.00) Competition positively influences the market orientation of farmers and horticultural growers (b = 0.944, p = 0.000), supporting hypothesis 5 Additionally, there is a direct and positive relationship between entrepreneurial proclivity and the level of market orientation (b = 0.554, p = 0.000), confirming hypothesis 7.
Table 5 Relationship between Environmental dynamism/EP and MO
Market dynamics (MD) do not impact market orientation (MO), leading to the rejection of hypothesis 4 Additionally, hypothesis 6 is also rejected, as technological dynamics (TD) are related to market orientation but negatively affect the MO of farmers and horticultural growers.
= - 0.987, p = 0.095), which contradicts hypothesis 6 Moreover, examining VIF values in multicollinearity diagnostics shows that there is no multicollinearity among CD (VIF = 3.17),
EP (VIF = 1.01), and TD (VIF = 3.16) Based on standardized coefficients, Competition
(bstandardized = 0.314, p = 0.000) has less influence on MO compared to EP (bstandardized = 0.554, p = 0.000)
Before accepting these results, hierarchical linear model is done simultaneously through 2-level regression
In level 1 analysis, two models were evaluated using block regression, with the dependent variable being MO The first model incorporated the independent variable EP, while the second model expanded the analysis by including six agricultural industry variables as additional independent variables, with dairy farming serving as the baseline category.
The OLS regression analysis presented in Table 6 indicates a significant relationship between Market Outlook (MO) and Environmental Practices (EP) within agricultural industries Both models demonstrate statistical significance, with Model 2 outperforming Model 1 due to the significant F-change value of 6.89 (p = 0.00) Furthermore, the coefficient for EP is notably positive (b = 0.551, p < 0.01), reinforcing its importance in the model.
= 0.00) has significantly positive relationship with MO, which confirms hypothesis H7
Four out of five industries, excluding fruit orchards, exhibit significant t-test results, indicating a stronger market orientation compared to the dairy industry Consequently, at level 2, the coefficients of these industries may differ and require further testing through regression analysis.
Table 6 Level 1 – Effect of EP and different agricultural industries on MO
Greenhouse horticulture (flowers and plants) - 0.599**
The interaction between environmental policy (EP) and the agricultural industries remains ambiguous, leading to the creation of five interaction variables (EP-industry) These variables were incorporated into additional regression models Following the previous block regression approach, two models were evaluated with market outcomes (MO) as the dependent variable Model 1 utilized EP and industry dummy variables as independent variables.
20 model 2 added 5 interaction variables Again, dairy farming was decided as baseline category
Table 7 presents the results of ordinary least squares (OLS) regression analysis, examining the relationship between market orientation (MO) and entrepreneurial proclivity (EP), as well as the interactions between agricultural industries and EP While both models effectively predict the outcome variable, the first model demonstrates superior predictive capability.
Fchange (Fchange = 1.29, p=0.27 > 0.1) is not significant Therefore, the influence of EP on MO does not vary across different agricultural industries and regression [2] is not tested in level 2
Table 7 Interaction between EP and agricultural industries
Greenhouse horticulture (flowers and plants) 0.599** - 0.237, p=0.72 n.s
EP x Greenhouse horticulture (flowers and plants) 0.208, p=0.17 n.s
Next, regression [1] of level 2 is conducted In this level, industry’s coefficients are predicted by three environmental dynamism’s components
Table 8 Level 2 - Effect of different environmental dynamism on MO across industries
Table 8 presents the ordinary least squares (OLS) regression analysis of agricultural industries, focusing on the coefficients related to market dynamics (MD), competition dynamics (CD), and technological dynamics (TD) The findings reveal that only competition dynamics (CD) shows a significant positive relationship with market outcomes (MO), with a coefficient of b = 0.815 and a p-value of 0.05 This outcome aligns with earlier multiple regression analyses, thereby supporting the hypothesis.
Conclusion
This chapter summarizes the results It also gives conclusion to the research problem and research hypotheses
This study tests seven hypotheses regarding the impact of environmental dynamism on Dutch farmers Hypotheses 1 to 6 (H1-H6) posit that three dimensions of environmental dynamism positively influence the market orientation (MO) and entrepreneurial performance (EP) of Dutch farmers Additionally, the final hypothesis suggests that Dutch farmers' entrepreneurial performance has a positive effect on their market orientation.
Data analysis reveals that customer dynamics, competition, and technological dynamics do not influence the entrepreneurial performance (EP) of farmers and horticultural growers Additionally, customer dynamics show no impact on market orientation (MO) Consequently, hypotheses H1 through H4 are rejected.
The study confirms Hypothesis H5, indicating that competition positively influences the market orientation (MO) of farmers and horticultural growers, suggesting that increased competition in a dynamic environment leads to an enhanced MO Additionally, Hypothesis H7 is validated, revealing that changes in the entrepreneurial performance (EP) of Dutch farmers and horticultural growers are directly linked to corresponding shifts in their MO.
Despite the rejection of Hypothesis H6, it highlights an important aspect of the relationship between technological dynamics and market orientation (MO) Specifically, technological dynamics exert a negative influence on MO, indicating that shifts in technological dynamics result in an inverse effect on market orientation.
This empirical study investigates the relationships between three components of environmental dynamism—market dynamics, competition, and technological dynamics—on the entrepreneurial performance (EP) and market orientation (MO) of Dutch farmers and horticultural growers Out of seven tested hypotheses, two were confirmed, indicating that EP and competition positively influence MO Interestingly, one hypothesis revealed a contrary finding, showing that technological dynamics negatively impact MO.
Dutch farmers' entrepreneurial performance (EP) is not influenced by environmental dynamism, whereas their market orientation (MO) is affected by competition and technological dynamics in distinct ways Increased market competition enhances the market orientation of Dutch farmers and horticultural growers, while advancements in technology also play a significant role in shaping their approach.
A dynamic environment reduces the level of market orientation among firms, while entrepreneurial practices (EP) significantly enhance it As Dutch farmers adopt more entrepreneurial approaches, their market orientation increases EP fosters proactivity, risk-taking, and innovation, enabling firms to create superior value that aligns with customer needs, ultimately leading to greater market orientation.
Figure 2 below summarizes the study results
Discussion
Limitation
This study categorizes Dutch farms into five primary types: arable farming, dairy farming, intensive livestock, greenhouse horticulture, and fruit orchards However, a more detailed classification within these main types is essential, as each agricultural subtype operates under distinct environmental conditions, influencing the management objectives (MO) and environmental practices (EP) of farmers and horticultural growers By examining these subtypes, we can gain a deeper understanding of the interplay between environmental dynamics and agricultural practices, while also gathering more data to analyze specific differences across industries Additionally, a more nuanced classification enhances the power of statistical analysis, as the limited number of six industries restricts the degrees of freedom in hierarchical regression methods.
Implication for the literature
This study aligns with the findings of Matsuno et al (2002), which examined 364 U.S manufacturing companies Despite differences in sample sizes and research contexts, both studies demonstrate that entrepreneurial orientation (EO) positively influences performance outcomes.
MO In particular, this research contributes to entrepreneurial and market oriented knowledge for Dutch agricultural study
The findings indicate a direct link between the business environment and market orientation (MO) As international competition intensifies in the free market, companies must prioritize customer satisfaction to maintain a competitive edge In a highly competitive landscape, businesses encounter greater challenges in retaining their existing customers and attracting those from rivals (Jaworski & Kohli, 1993).
Across 6 agricultural industries, dairy farming has lowest score of MO and environmental dynamism A possible explanation is that dairy farming always gets most subsidies from CAP many years 1 Switching to free market products is really a new phenomenon for dairy farmers due to long time working under market protection, while horticultural and intensive livestock farmers get used to running a non-subsidized farm
1 http://www.farmsubsidy.org/NL/scheme/?page=1
Dairy farmers often lack familiarity with market orientation and marketing strategies, as they tend to outsource these activities to large cooperatives like Friesland Campina This reliance diminishes their motivation to adopt a customer-focused approach In contrast, farmers outside of protected industries must independently respond to competition by actively engaging with customers, identifying their needs, and striving to meet those demands.
The relationship between technological dynamics and market orientation yields unexpected results that contradict the initial hypothesis In the context of Dutch agriculture, farms are typically small, family-owned operations with a limited workforce Notably, the number of farmers actively working on these farms has been declining over the years (Wolf & Schoorlemmer).
Farmers face the dual challenge of managing various tasks on their farms, including growing, harvesting, feeding cattle, and selling products, all while having limited time and labor to invest in technological innovation and market orientation This situation forces them to prioritize one of two strategic business options Demographically, only 12.9% of farmers are under 40, while 66.7% are between 40 and 64 years old, and 20.4% are over 64 Although older farmers possess more experience, they tend to be more conservative and resistant to new practices, often adhering closely to traditional methods As a result, the increasing pace of technological change in the agricultural sector can negatively impact the market orientation of farmers and horticultural growers.
Implication for practice
The longstanding triangular relationship in the Netherlands among the government, agricultural universities like Food Valley 2 in Wageningen, and the farming community has been vital for the country's agricultural success, rooted in the Dutch OVO system (Research, Extension, and Education) This system has established a robust agricultural knowledge infrastructure over the years However, it is increasingly challenged by emerging ecological and environmental priorities, leading to a trend of privatization in research and extension institutions As a result, major agricultural corporations, such as Nestlé, are now developing their own research centers to adapt to these new demands.
2 http://www.foodvalley.nl/English/default.aspx
Unilever, Heinz, and Heineken have partnered with independent R&D centers to enhance their research capabilities, while small farmers and horticultural growers often lack the resources for their own research initiatives To support these small farms in adopting innovative technologies and improving their market orientation (MO), it is essential to establish a robust agricultural socio-economic-technical network that includes decision-makers, farmers, scientists, and public organizations Additionally, the government should implement effective policies to connect farms with research laboratories, fostering collaboration and knowledge transfer.
Innovations emerging from laboratories must be practical and applicable to enable farmers to produce cutting-edge products for their agribusiness Strong collaboration between researchers in R&D centers and farmers is essential to meet market demands A notable example is the introduction of transgenic potato breeding in the Netherlands, which offers farmers reduced pesticide costs but entails higher initial material expenses The success of this innovation largely hinges on public acceptance, influenced by environmental organizations concerned about long-term ecological impacts and consumer groups focused on safety for human consumption.
Entrepreneurial skill training courses can significantly enhance the positive impact of entrepreneurship on market opportunities for farmers Beyond professional and management skills, education should focus on essential entrepreneurial abilities such as opportunity recognition, strategic development, cooperation, and networking These skills are crucial for farmers to identify both existing and emerging market opportunities, as well as to develop and improve their business profitability (Wolf & Schoorlemmer, 2007).
Farmers’ market orientation is positively influenced by the evolving competitive landscape, making it crucial for farmers to recognize timely changes Implementing appropriate vocational education programs and consultative services can help enterprises establish the right goals at the right time To effectively respond to competitive shifts, farmers and horticultural growers need enhanced business knowledge, skills, and marketing tools Additionally, entrepreneurship training programs can empower farmers to capitalize on opportunities arising from environmental changes, enabling them to compete more effectively.
3 http://www.accessexcellence.org/RC/AB/BA/Potatos_in_Netherlands.php
E-learning is a very good way of distance learning to support farmer in their study Internet also provides up-to-date competitor information for them (Ban, 2002)
To achieve independence from cooperatives, dairy farmers must enhance their market orientation (MO) by adopting a differentiation strategy, such as organic farming or direct-to-consumer sales A key approach to improving MO is to focus on developing entrepreneurial competencies, which can be effectively fostered through study groups as a training program (Bergevoet & Woerkum, 2006).
Suggestions for further research
To enhance industry classification, it is essential to identify and analyze specific agricultural subtypes in detail This thorough classification reveals insights into farmers' behaviors and their interactions with the environment For instance, intensive livestock farming can be categorized into pigs, veal, chickens, and eggs, while arable farming can be segmented based on various crop rotations Additionally, dairy farming can be differentiated between organic and conventional milk production.
This study employs a cross-sectional methodology, which is inadequate for assessing causal-effect relationships within the conceptual model To more effectively evaluate these causal relationships, an experimental or time series research design would be more appropriate.
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Measurement statement used in the questionnaire for each element
1 If I see opportunities, I am willing to start activities that are new to me
2 I look for opportunities to work on something new
3 If I see opportunities, I am good at starting activities that are new to me
4 I see opportunities to work on something new
5 If I see opportunities, I start activities that are new to me
6 I am always working on something new
1 If I see opportunities, I am willing to take great risks (with chances for very high profits)
2 I want to have the courage to seize opportunities
3 If I see opportunities, I am good at taking great risks (with chances for very high profits)
4 I belief I have to take great financial risks to seize opportunities
5 I can have the courage to seize opportunities
6 I know how to take great financial risks to seize opportunities
7 If I see opportunities, I am starting to take great risks (with chances for very high profits)
8 I have the courage to seize opportunities
9 I take great financial risks to seize opportunities
1 I am willing to start activities that other firms do not do, yet
2 If I see opportunities, I like to respond before other firms do
3 If there are opportunities, I belief I have to be one of the first firms to use them
4 I am good at starting activities that other firms do not do, yet
5 If I see opportunities, I can respond before other firms do
6 If there are opportunities, I know how I can be one of the first firms to use them
7 I start activities that other firms do not do, yet
8 If I see opportunities, I respond before other firms do
9 If there are opportunities, I am one of the first firms to use them
1 I regularly ask my customers whether they are satisfied
2 I regularly check whether my products correspond with what my customers want