The present paper attempts to investigate the impact of market orientation indices and environmental variables on production performance. The market orientation indices in this study include: customer orientation, competitor orientation and inter-functional coordination, which concerned with environmental variables some factors such as competitive intensity, market turbulence, technological turbulence and market growth are considered. The current study is applied in terms of objective and it is descriptive-measurable and of a correlative type in terms of data collection. The statistical sample is 265 SMEs. The research hypotheses were tested by Spearman correlative coefficient and the robustness and the model was evaluated by using structural equations modeling. The results indicated that all market orientation indices exert a positive and significant impact on production performance, but among environmental variables the only factor influencing market is market growth. Therefore, it should be noted that a high level of environmental exuberance and complexity requires firms act in a more responsive manner to these variations. Market-oriented firms have a better understanding of external environment and consequently they are more capable of responding to external environment demands.
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