Internal market orientation, a novel approach to improve firm performance in China

This study extends knowledge of internal market orientation (IMO) as a management tool to facilitate employer-employee relation. Employing a quantitative research in China, a conceptual model is presented and tested on 275 companies with 3 respondents from each. IMO is examined as a predictor of firm performance mediated by employee commitment and retention. The results support all the proposed hypotheses and highlight the moderating effect of internal customer-supplier relationships and interdepartmental communication. Ownership type as the third moderator indicates different influence of IMO on the posited causal chain. This study contributes in practice by providing managers and scholars with empirical support of IMO’s effectiveness in firm performance in China. It provides managers from different firms competing in China with a new angle to boost firm performance by inspecting their internal market situation as well as to improve it via understanding internal customers better.

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