In line with increasing global competition and changes in consumer needs, market orientation is highly significant to insurance firms. The purpose of this paper is to examine the impact of market orientation on organizational innovation. This study focuses on three dimensions of market orientation i.e., the customer orientation, competitor orientation and inter-functional coordination and three dimensions of and organizational innovation i.e., product, process and administrative innovation. Using a 24-item questionnaire and data from 215 insurance firms in Iran’s western city of Sanandaj, the authors test a conceptual model containing market-oriented behavior as a predictor of organizational innovation. Results show that market-oriented behavior positively affects insurance firms’ innovation and adoption of market orientation both as a strategy and a behavior can boost effectiveness of the organizational innovation.
