Vertical Strategic Information Flow And Market Orientation

Market orientation research has accumulated a variety of findingsover the pas t two decades, during which researchers have emphasized the importance of information flow within an organization. However, even though market information isvery important for the organizationʼsadaptation to itsenvironment, the vertical flow of strategic information has not been the main focus of market orientation researchers. In contrast, vertical strategic information flow has been the main theme from the middle management perspective of strategy process and knowledge creation theory. Although these research streams share an interest in information flow within an organization, they have remained separate traditions up until now. This paper tries to bridge the gap between these two research traditions by using a database of Japanese business organizations. The authors contend that the downward information flow of formal strategy and the lateral flow of inter-functional information are much more important in improving market orientation than the upward information flow of emergent strategy. And, contrary to the widely shared belief, informal information flowsdo not contribute to organizational market adaptation.