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Li, E.Y. Employee’s MOB and Firm’s IMM. Encyclopedia. Available online: https://encyclopedia.pub/entry/11427 (accessed on 15 November 2024).
Li EY. Employee’s MOB and Firm’s IMM. Encyclopedia. Available at: https://encyclopedia.pub/entry/11427. Accessed November 15, 2024.
Li, Eldon Y.. "Employee’s MOB and Firm’s IMM" Encyclopedia, https://encyclopedia.pub/entry/11427 (accessed November 15, 2024).
Li, E.Y. (2021, June 29). Employee’s MOB and Firm’s IMM. In Encyclopedia. https://encyclopedia.pub/entry/11427
Li, Eldon Y.. "Employee’s MOB and Firm’s IMM." Encyclopedia. Web. 29 June, 2021.
Employee’s MOB and Firm’s IMM
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This entry is adapted from the peer-reviewed paper 10.3390/su13126972

A successful organization depends primarily on employees' effort, attitude, behavior, and interaction. All these factors are employee-related and play a critical role in accomplishing the organization’s strategy. Scholars have confirmed that employees’ attitudes and behaviors positively influence a firm’s accounting measures and stock returns. Therefore, it is crucial for a firm to entice employees to engage in market orientation behavior (MOB) to attain sustainable competitive advantages and excel at business performance. In the early 1970s, Kotler introduced internal marketing and suggested that a firm should market to its employees before marketing to its customers. Soon after the emergence of this concept, firms began to view jobs as products and employees as internal customers. To be successful, a business must retain talented and competent employees; internal marketing can help businesses resolve this issue. Internal marketing is regarded as a model component of service marketing management and a measurable scale for empirical research.

internal marketing mechanism market orientation behavior relationship quality organizational citizenship behavior job performance theory knowledge integration

1. Theoretical Background

1.1. Job Performance Theory

In the early 1980s, Blumberg and Pringle [1] introduced an interactive model of job performance (JP). They theorized that the performance of a particular task is a function of capacity (C), willingness (W) and opportunity (O) and that they influence each other reciprocally. The underpinning theory can be expressed as JP = f(C × W × O). Capacity refers to ability, knowledge, skills, intelligence, education level, age, health, endurance, stamina, energy level, and motor skills. Willingness comprises motivation, job satisfaction, job status, anxiety, participation legitimacy, attitude, perceived task characteristics, job involvement, ego, self-image, personality, norms, values, perceived role expectations, and equity feelings. Opportunity includes tools, equipment, materials, supplies, working conditions, co-workers’ actions, leader behavior, mentorship, organizational policies, rules, procedures, information, time, and pay. Other researchers also argued that self-efficacy and adequate instruments, materials, and leaders’ guidance are significant determinants of job performance [2][3]. Based on the high-low strengths of the three elements (capacity, willingness, opportunity), Blumberg and Pringle [1] identified eight categories of potential performance outcomes. Employees with low capacity, low willingness, and less favorable opportunity have very poor performance. In contrast, those with high capacity, high willingness, and more favorable opportunity have very good performance. The other six categories in sequence are (1) poor performance, (2–3) poor to good performance, (4–5) good performance, and (6) better performance. Considering the degree of MOB as an employee’s job performance outcome, we applied these eight categories to MOB in this study.

1.2. The Antecedents of MOB

Nowadays, knowledgeable workers have dramatically increased, and many businesses had to create, manage, and keep up with new information in order to compete and attain vital competitive advantages [4][5]. Recently, research into knowledge management has become very popular. Knowledge is a critical factor in creating business advantages, yet related literature has shown that sharing knowledge among employees remains the most challenging issue for knowledge management in an organization [6]. There are many factors in an organization that hinder knowledge exchange activities. These include inappropriate organizational structure, knowledge-hoarding culture, and political factions [7]. Currently, very few studies have probed into the interaction between internal marketing mechanism and knowledge exchange [8][9]. Perhaps, the exchange itself is unable to maximize the utility of knowledge. Therefore, some scholars suggested that one must exchange and integrate knowledge to improve one’s knowledge and that one’s integration of knowledge relies heavily on one’s capability [10][11]. This study strives to close this gap and better understand the interplay of IMM and knowledge integration (KI) and their impacts on employees’ MOB.

From a relationship marketing perspective, Chaston [12] regards internal marketing as internal customer management. Even though internal and external customers are not identical in some aspects and conditions [13], businesses strive to build a good relationship with external and internal customers. Relationship marketing effectiveness relies heavily on trust and commitment [14]. Externally, the primary purpose is to build a strong bond with customers and maintain an excellent long-lasting relationship. It is also necessary to build a quality relationship and bond with internal employees by promoting IMM. Having internal relationship quality (RQ) and relational bond (RB), an employee may improve his/her MOB. This relation remains to be examined in this study.

Based on annual performance evaluation results, one should reward those employees who provide excellent service to customers. By doing so, employees would be more inclined to show motivation and offer more quality services to customers on all occasions [15]. To achieve high performance, an employee needs both the capacity and the willingness to complete required duties. The formal evaluation of individual performance mandates employees to comply with the job profiles but may not necessarily entice them to meet organizational goals consistently. Complying with job profiles refers to in-role activities while meeting organizational goals requires extra-role effort, known as organizational citizenship behavior (OCB) [16]. Those with high OCB provide, beyond their expectations, excellent service to customers. They demonstrate a high willingness to go the extra mile for the organizations. Hence, giving employees recognition and rewards based on a positive regular job performance evaluation is a great start. In return, they have a higher desire to perform well with their OCBs and more inclined to meet the organization’s market orientation goals [17]. Thus, we regard employee’s MOB as a surrogate of job performance in this study and examine the influence of OCB on MOB.

2. Market Orientation Behavior

Market orientation is a firm’s direction toward creating excellent value for external customers; it plays an essential role in organizational management and strategy [18]. At the individual level, it refers to an organizational member’s practice of integrating customer needs, competitor intelligence, and product knowledge into the process of creating and delivering excellent value to customers [19]. It is the outside-in marketing to identify and satisfy customer needs more effectively than competitors [20]. Specifically, Narver and Slater [18] claim that market orientation encompasses three behaviors (customer orientation, competitor orientation, and inter-functional coordination) and two decision criteria (long-term focus and profitability). It can be conceptualized to involve all employees, customers, competitors, and internal processes [21]. Homburg and Pflesser [22] advocate that market orientation is a critical marketing construct with behavioral and cultural perspectives. The former behavioral perspective contains three relevant dimensions: (1) market intelligence generation about current and future customer needs, (2) market intelligence dissemination across departments, and (3) market intelligence responsiveness [15][20]. The latter is related to the organization’s culture “that most effectively and efficiently create the necessary behaviors for the creation of superior value for buyers and, thus, continuous superior performance for the business” [18] (p. 21). A company can be market-oriented only if it fully understands its markets and consumers [23]. It is a failure-prevention approach in service firms and a success-inducing approach in manufacturing firms [24]; it is more important than an entrepreneurial orientation [25].

Prior studies in the literature exhibit empirical evidence of a significant and positive relationship between market orientation and business performance [18][15][26][24][25]. Kohli and Jaworski [15] interview 62 managers of 42 organizations in four US cities and identify senior management factors, interdepartmental dynamics, and organizational systems as the three antecedents of market orientation, while customer responses, employee responses, and business performance as the consequences. To deliver consistently above-normal market performance, a firm must generate a sustainable value for its customers [18][19]. Specifically, market orientation has strong positive relationships with business performance such as profitability [27][25], customer retention [28], sales growth [19], job satisfaction [21] and employee commitment [29]. Moreover, established market orientation influences green supply chain practices and environmental performance [30]. It also influences salespeople’s selling behaviors and performance [19] that help to create firm performance and generate business success [27][21][28]. Looking beyond market share, profitability as a business goal is increasingly common in firms; a firm’s top management needs to understand how to meet customers’ wishes and needs and support the deployment of market orientation and proper behaviors to engender superior firm performance. This study focuses on the behavioral aspect of market orientation. It measures an individual employee’s MOB using the three behavioral components defined by [18]: customer orientation behaviors, competitor orientation behaviors, and inter-functional coordination.

3. Internal Marketing Machenism

A common view in marketing is that a firm must have satisfied employees before satisfying customers [31]. Internal marketing is a managerial philosophy with activities that tie the firm with employees [32]. It is a direct marketing strategy [33] that views employees as internal customers and job outcomes as internal products. In return, this strategy helps to offer internal products to satisfy their needs and wants while addressing the organization’s objectives [34][35]. IMM is commonly deployed through five practices: education and training, motivation and reward, career development, communications, and organization/management support. It engages employees in knowledge renewal of market and products/services while serving as a unique resource for competitive advantages [9]. It offers an organizational culture and a tool to achieve strategic alignment between front-line employees and the marketing unit. Such an alignment enhances IMM practices and increases employee satisfaction and organization performance [36].

Prior studies have considered internal marketing a superior service for satisfying internal and external customers’ needs [37][29]. It can help obtain better financial results and develop sustainable competitive advantages towards a successful firm [38][39]. Several studies have proven that internal marketing can improve employee job satisfaction [35][33][36], job retention [35], commitment to their firms [35][36], employee job attitudes [35], job behavior [35], work motivation [40][35][12][13][31][36] and organizational capabilities [34]. In summary, we define internal marketing as the philosophy of viewing employees as customers. This philosophy encompasses treating job outcomes as products that satisfy the internal customers and coordinating internal business functions through the five IMM practices.

4. Knowledge Integration

Knowledge is a fluid mix of framed experience, values, contextual information, and expert insights that provides a framework for evaluating and incorporating new experiences and information and fostering a firm’s sustainable competitive advantage [7]. Learning new things within and outside an organization helps generate new and better knowledge and experience, vertically and horizontally across organizational boundaries, and enhance inner and outer growth [41]. Scholars have identified that the greater the sales team’s customer knowledge creation, the higher the customer relationship performance in customer loyalty, customer retention, and customer satisfaction [42]. Some suggested that a firm could be recognized as a social community specializing in the speed and efficiency of generating and transferring knowledge [43]. It enables people to capitalize on the organizations’ existing knowledge bases, enhancing their capacities to develop creative solutions and introduce new products and services to the market [44]. Empirical evidence has shown that knowledge sharing among individuals and groups within an organization can make a firm do better in the markets [45]. Next to knowledge sharing is KI (exchange and combination) among employees. The success of KI depends on the organization’s social climate, trust, cooperation, and shared code and language [46], and the employee’s motivation and ability [10]. It increases a firm’s capability and establishes and sustains its competitive advantage [5]. In sum, knowledge and its associated processes are the critical foundations of organizational advantage [11]. Recent advances in ICT have significantly increased KI in a firm; technological trends and factors are driving a firm’s strategic change towards success [4].

Several studies have mentioned the knowledge within a firm, between customers, and from individuals. They noted how knowledge sharing [11][47], creation [11][42][43][45], transferring [41][43], exchanging [46] and combining [45][46] between employees and amongst organizations increase employee problem-solving capability and creative performance [47], team effectiveness [42], firm performance [42][45][46], innovation capability [45], as well as the competitive advantage [11]. By considering knowledge exchange and combination as one of the main focuses in the organizational annual operational plan, and through effective KI management, a firm can better improve its ability to perform and compete against the competitors and deliver excellent services to the customers.

5. Relationship Quality

RQ is a concept being used in relationship marketing to represent the strength or closeness of a relationship and its ability to persist. It is a critical feature of the group interaction process that reduces structural complexity [48]. It can be viewed as the degree of connectedness in a relationship to fulfill the customer requirements associated with that relationship [49]. Scholars often conceptualize RQ as a multifaceted global evaluation of the overall strength and solidarity of the relationship between exchange partners, the key contact person, and the firm [50]. It contains multiple dimensions, including trust in individuals and organizations [51], satisfaction [52], ethics [53], willingness to invest in the relationship with the expectation of continuity [54] and calculative and emotional commitments [55].

RQ plays a critical role in maintaining customer relationships and providing superior quality services in the service delivery industries. In support of this, previous researchers have identified that better RQ results in a lower level of conflict [54] as well as the greater trust of the salesperson [50][52][53][55], customer satisfaction [50][52][53][55], commitment [50][55], continuity [54], consistency [50], willingness to invest [50], employee performance [52], and organizational performance [48][50]. Therefore, many factors influence RQ (e.g., trust, commitment, and satisfaction) in different areas, such as similarity, expertise, relational selling behavior, ethical salesperson behavior, frequency of interaction, environmental uncertainty, attitudes, information sharing. When building a strong RQ between customer-salesperson, buyer-seller, and employee-leader, we should consider them to endure a long-term and healthy relationship. In summary, RQ is defined as how positively an employee perceives the relationship between the company and its employees. These include the degree of trust in their direct supervisor, their commitment toward the company, and the employee’s job satisfaction towards the company.

6. Relational Bond

Firms often initiate bonds to build relationships with their customers [56] and retain them [36]. Such bonds are created through economic or emotional marketing activities and may improve customers’ utilitarian or hedonic value perceptions [57]. RB can be of three types: social bond [36][58][59][60][61], structural bond [36][58][59][60][61] and financial bond [36][57][60][61]. Social bond refers to how organizational members bond together through individual and social relationships with their peers [59]. It is a personal bonding [62] with a reciprocal individual friendship that produces a positive interpersonal relationship and preference shared between partners (sellers and buyers) through the social exchange process [58][61]. It helps transform customers into patrons developed from personalized service delivery according to their individual preferences [36]. Next, the structural bond is a relationship associated with the structure, control, and institutionalization of a customer and a firm [60][62]. It indicates the extent to which certain connections keep a buyer and a seller together in a relationship due to mutual beneficiaries, technologies, organizational strategies, or objectives [59]. Such bonds are company efforts to stimulate employee’s work satisfaction using value-added programs [61] and enhance customer performance through value-added services provided by organizational systems [36]. Finally, a financial bond is the level of economic beneficiaries obtained from relationship exchange [60] in the forms of short-term purchase incentives (discounts) that entice customer patronage [36] or financial incentives (wages or salaries) that motivate employee financial satisfaction [61].

Long-term business with customers depends on the strength and quality of the relationship between firms and customers. Many pertinent variables influence the success or failure of a relationship. The variables comprise (personal, customer’s, or organizational) commitment [36][59][60][61], trust [36][59][60], value [36][57][59], cooperation [58][59][60], mutual goals [58], quality [60], Interdependence/power imbalance [58], customer loyalty [36][57][60], performance satisfaction [36][59][60], retention [36][61] and investments [60]. To sustain a firm’s success and business advantages, we need to develop and maintain this relationship by understanding customers’ needs and meeting their expectations. Firms need to keep focused, recognize the importance of the relationships between customers, employees, and organizations, provide a work environment of trust and support, and add value to the businesses and services to build a sustainable and long-lasting customer relationship. In summary, an RB is a measure of how close an employee is to his/her company. It is also a measure between an employee and his/her direct supervisor or colleagues associated with social, structural, and financial bonds.

7. Organizational Citizenship Behavior

OCB is discretionary and not directly or explicitly recognized by the formal reward system [16]. It includes helping behavior, civic virtue, and sportsmanship [63] that support the social and psychological environment in which task performance occurs [64]. The OCB is considered a flexible work behavior that improves an organization’s effective functioning [65]. It is a measure of individual extra-role behavior that maintains and enhances work context to support task performances, leading to contextual performance [66]. As time goes by, it may not stay as an optional extra-role if it is to be expected by supervisors and co-workers [17].

Since the OCB concept was introduced over 38 years ago (cf. [67]), relevant papers have grown dramatically, and many researchers have classified its dimensions and constructs into organizational and individual levels. They further identified its direct and indirect influences on organizational performance [68][69], service quality [70], customer satisfaction [69], and job satisfaction [71]. Researchers have examined and identified more than 30 dimensions of OCB [65][72], including helping behavior, sportsmanship, altruism, organizational loyalty, organizational compliance, individual initiative, civic virtue, self-development, courtesy, voice behavior, personal initiative-taking and conscientiousness, among others. This study follows [63] to define OCB as a single latent construct with three dimensions: altruism, civic virtue, and sportsmanship.

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