Toward a Greater Understanding of the Market Orientation and Internal Market Orientation Relationship

Market orientation’s (MO) positive impacts on customer, employee, and performance related outcomes are well documented. However, the mechanism through which MO works to improve employee outcomes (EO) needs further understanding. We argue that MO acts through internal market orientation (IMO) to improve EO, which in turn contributes to performance outcomes. This is contrary to some previous studies, which view IMo as the antecedent of MO. Using data from 370 non-profit organizations, we empirically validate our model and rule out alternative arguments. Our findings show that organizations develop IMO to institutionalize and maximize the benefits of MO. The study reports the complementarity of MO and IMO and discusses important theoretical and practical implications arising from the study.