This article examines two major factors that affect the performance of an organization, that is, quality context and market orientation. Quality context comprises the practices and procedures within an organization that enhance the quality of the product and/or service. Market orientation is the process of effectively collecting, disseminating, and responding to information that will enhance the marketing function within the organization. The authors examine the relationships of these constructs with organizational performance within the hospital industry using structural equations modeling. The results confirm the multidimensional nature of all three constructs and show that both market orientation and quality context significantly affect organizational performance. However, whereas market orientation has a direct effect on organizational performance, quality context is only indirectly linked with organizational performance through its effect on market orientation. Implications of these results for the hospital industry and for future research in the area are offered.
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