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Establishing the Linkage between Internal Market Orientation and Service Innovation
Abstract
This chapter proposes that internal intelligence generation and dissemination are significantly correlated and have substantial impact on responsiveness. In addition, responsiveness determines the success of internal market orientation and its effect on various employee-related outcomes. The study examines the extent of internal market orientation in Indian banking and its consequences as perceived by the employees of a highly successful private bank that has a wide network of branches in a northern city of India. Structural model was proposed and structural equation modelling was used to test the research hypotheses. The findings reveal that internal intelligence generation and dissemination are correlated to the extent of 0.89 and have significant impact on a bank’s responsiveness to employees’ needs and wants. Results of the study reveal that internal market orientation ought to be considered as an important strategy for retaining internal customers. Internal market orientation has an indirect significant impact on service innovations in terms of new product/service development, technology advancement, and process innovation through greater staff compliance, strong team work, and greater moral responsibility.
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