I.

EXTERNAL MARKET ORIENTATION

1. Definition

The external market is the investing market offered outside potential opportunities
of gaining profits and the jurisdiction of a specific country. Typically, these
investments in the external market composed of putting up for sale in multiple
countries and allowing internationally individual investors to pick and choose from a
range of investment options. In detail, goods traded in the external market include
stocks, mutual funds, futures and bonds. The forms of the investment in the external
market have both benefits and risks which can, nevertheless, be avoided by strong
concerns in evaluating carefully the information about the origin of goods in
transaction before people and institutions make any investment decision. Obviously,
more highly prestigious company in issuing securities in the external market will
attract more investors. The external market is also called Euro market

2. The impact of external market orientations on firm performance.
The external market orientation focuses on the behavior of social market as
financial performance and customer satisfaction. Hence, the objects that EMO
researched in not only consumers, competitors and external stakeholders, but also the
external environment covering the operation of firms.
a. Highly concerns in efficient performance of firms and adequate demand of
customers:
The mechanism by which market orientation leads to the ameliorate operation of a
company is relatively suggested to operate via increased customer satisfaction with new
product success, thus, resulting to boost sales growth and profitability.
b. Competitors:
The entrepreneur in the external market have ability as sensing and responding to
business rivals in high levels of competition in the external orientation result in that
highly external market oriented firms knowing clearly what their customers want and
what the market offers through the instruments of researching market, thus, providing
with the best quality of service or product that satisfies the demands of target
customers better than competing offerings.

c. The external environment covering the business activities of firm:

It is irrefutable that the external environment of the firm is also key determinant in
the external market orientation. The information collected from the environment will be
designed to meet the needs of these customers and oppose competitors. It is defined as
the factor affecting on the behaviors of customers and competitors such as scarce and
potentially sustainable resource which are useful for developing comparative advantage
in the market place.

3. Comments:

To dealing with risks in external investments, people who invest in the external
market are usually experienced individuals and institutions with diverse portfolios. As
an incentive to invest, people offering these investments also usually offer higher rates
of return than they do on the internal market, hence, trading securities on the external
market can be a way to generate steady returns in the careful concerns in all
information covering the activities of companies. People can access this information
through financial publications or financial professionals who keep up with new
investment opportunities as part of their work. Individuals who would rather not deal
with the external market directly can opt to invest instead in funds which may hold
some investments in the offshore market.
External market orientation as being synonymous with customer orientation, being
distinguishable from competitor orientation. The success of the external market-
oriented strategy can be in terms of the customer satisfaction that it generates the
loyalty to the business from customers, contrary to competitor orientation which might
be antithetical to customer orientation when the focus is more on the strengths of the
competitor than on the unmet needs of the customer. The essential way based on
building customerss loyalty the external market orientation will strengthen the
operation of firms better than the internal one via the explicit information among
participants in the market.

II. INTERNAL MARKET ORIENTATION

1. Definition:

- Internal Marketing: a behavior of focusing on the importance of offering
services which meet the internal customers requirement of internal standards.
- Market Orientation: a business philosophy or a series of behaviors which
represent the practicing of the marketing concept.
- Internal Market Orientation: a series of managerial behaviors whose first basic
manifestation is exchange between employees and employers in the internal
market.
IMO targets to balance employees awareness of what they have to conduct in their
job and their awareness of what are the final achievements of their job.
Simply put, IMO is a companys orientation. In this term, we try to connect
employers work and managers requirement, activities and goals in order to meet
companys objectives. It emphasizes on the need of planing and building an effective
cooperation between employees and managers so that the plan of action designed to
satisfy the needs of internal market would become a more efficient and effective one.

1. Determinants of IMO:

a. Age:
It is assumed that younger generations are more critical because they still have
stronger ideals, which they transfer onto their expectations about how
organisations should operate.

b. Gender
Female respondents are usually found to be more critical than men.

c. Level of education
Increasing education influences peoples reference points, and attaining higher
academic standards will be reflected in more critical judgments.

d. Location
The different locations will view the companys level of IMO differently

e. Tenure
There is a positive correlation between the length of time that individuals spend
as members of an organisation, and their attitudes towards that organization.

f. Function
Career field influences employee perceptions, with employees being more
sensitive in their areas of responsibility.

2. Effects of IMO on the firm:

IMO has positive impacts on financial performance of the company
IMO inspires employers with customer orientation, organizaional commitment,
role stress and job satisfaction, which reduce their pessimistic behaviors and leaving
intentions
IMO enhances the competency of the whole organisation, which brings
competitive advantages, more satisfied, loyal customers and a bigger market share to
the firm.
IMO develops a working environment with in person, flexible and efficient
organisational interaction.

3. How to develop companys IMO:

- Prepare and develop a fundamental understanding of IMO
- Actively discover the needs of employees and supervise the development of
labor market
- Make sure that internal communication channels play well its role of
disseminating companys goal and managers requirements among employers
- Establish the companys culture

III. HOW DOES INTERNAL MARKET ORIENTATION
AFFECT EMPLOYEE JOB SATISFACTION
The relation between internal marketing and job satisfaction had been the concern
of many researchers. If an organization implements internal marketing then the
organization is upgrading job satisfaction for employees which will lead definitely to
enhancing the performance of the organization. This is the result of a lot of researches
(Tansuhaj et al. 1991; Rafiq & Ahmed, 2000; Conduit and Mavondo, 2001). An
empirical study conducted on the impact of internal marketing factors on job
motivation and job satisfaction in the retail stores revealed that the working conditions
and hours, hygiene &sanitation, rest rooms, support from superior, and attitude of
colleagues have highest influence on job satisfaction and motivation.
There are some methods that the organization can do to raise job satisfaction
among their employees, namely: Empowerment, participation and communication
mode.
1. Empowerment

With regard to empowerment, it refers to a situation in which the manager gives
employees the discretion to make decisions about routine job-related activities
By doing so, the manager passes on control over many aspects of the service delivery
process. Empowered employees feel better about their jobs and serving customers
because they have the flexibility to make on-the-spot decisions to completely satisfy
customers request. Allowing contact employees to make such decisions has many
positive influences on their responses and the service encounter.

Participation is a process by which influence is shared among individuals who are
otherwise hierarchical unequal. Participatory management practices balance the
involvement of managers and their subordinates in information-processing, decision-
making, or problem-solving endeavors

2. Participation

In line with the research on participative management, participative decision
making has been emphasized in relation to job satisfaction .Empirical studies have
demonstrated that participative decision making can be beneficial to workers mental
health and job satisfaction. As a result, many practitioners and scholars share the belief
that participative management practices have substantial positive effects on
performance and satisfaction at work.

A recent research regarding public-service employee motivation has demonstrated
that considering employees in the decision making processes results in higher levels of
job satisfaction has also revealed a strong linear relationship between job satisfaction
and practices of participative management. Such findings appear to be particularly
relevant for service companies since employees, particularly those with direct
customer contact, may cause uncertainty in the organization as they attempt to pursue
their own objectives. By increasing participation, employees become more motivated
and understanding of the nature of the firms business and problems. In addition,
increasing employees participation allows managers to significantly reduce service
failures since service operations and policies align better with customers needs and
their behavior during the encounter. As a result, conflicts with customers decrease and,
also, the friction between contact and back-office personnel scales down. Reducing the
frequency of conflicts with customers and the intensity of friction with both customers
and co-workers are resulted in higher levels of job-satisfaction, both for front-desk and
back-office personnel. Thus, despite the concerns that have been raised that the
relation between job satisfaction and participative management is unclear and non-
line, there are compelling empirical evidence to the contrary.

3. Communication

Finally, a third antecedent of job satisfaction that is examined in this study is the
mode of communication and, particularly, the degree of formalization pertaining to the
communication style between employee and supervisor. Mode is the channel used to
transmit information from the sender to the receiver. Communication mode can be
described as being either formal or informal. The former pertains to communication
means such as written messages and group meetings whereas the latter comprises
personal, spontaneous, verbal face-to-face communication. Tushman and Nadler noted
that verbal (i.e. informal) communication between supervisors and employees is more
effective because it facilitates timely exchange of information, feedback and
evaluation and, overall, improve employees perception of communication quality
which, eventually leads to increased job satisfaction. Moreover, Johlke and Duhan
report that bidirectional communication has positive outcomes for front-line personnel
and, as Lings (1999) notes. This is an important aspect of work place conditions that
affect job satisfaction. Similarly, Nathan reported that job satisfaction is related to the
communication between subordinates and supervisors while Graham et al. (1993),
found that employees who communicate with their superiors for pleasure and not just
to bide time (escape) report high satisfaction with those superiors. These findings are
consistent with those of Infante et al. (1993) and Infante and Gorden(1991) who report
that an informal communication climate leads to job satisfaction. On these grounds,
adoption of an informal mode of communication between employees and supervisor
relates positively with employees job satisfaction.

The companys degree of IMO adoption is positively related to employees job
satisfaction, after controlling for empowerment, participation in decision-
making and mode of communication.
. IMO moderates the relationship between job satisfaction and empowerment,
participative management and mode of communication

IV. HOW IMO AFFECTS ORGANIZATIONAL
COMMITMENT

1. Definition of organizational commitment
According to Miller (2003, p.73), organizational commitment a state in which an
employee identifies with a particular organisation and its goals, and wishes to maintain
membership in the organisation. Organisational commitment is therefore, the degree
in which an employee is willing to maintain membership due to interest and
association with the organisations goals and values.
Meyer and Allen (1997, p 106) use the tri-dimensional model to conceptualise
organisational commitment in three dimensions namely, affective, continuance and
normative commitments. These dimensions describe the different ways of
organisational commitment development and the implications for employees
behavior. There are three dimensions of organisational commitment:
a. Affective commitment dimension:

Commitment is the employees emotional attachment to, identification with,
and involvement in the organisation.

b. Continuance commitment dimension:

Continuance commitment dimension is awareness of the costs associated with
leaving the organization. It is calculative in nature because of the individuals
perception or weighing of costs and risks associated with leaving the current
organisation (Meyer & Allen, 1997).

c. Normative commitment dimension:

Normative commitment dimension is a feeling of obligation to continue
employment. This implies that individuals often feel an obligation to repay the
organisation for investing in them, for example through training and
development.
In other words if the employee receives a benefit, it places him or her, or the
organisation under the moral obligation to respond in kindness.

2. How IMO affects organizational commitment:
An internal market orientation company would refer to the companys orientation
regarding the employees market and would demonstrate the managements
commitment towards them. A commitment to understand what employees value and
become responsive to their individual needs, which will directly affect the first
dimension of organizational commitment, affective commitment, in a positive
way. Organisational members who are committed to an organisation on an affective
basis, continue working for the organisation because they want to (Meyer & Allen,
1991). The strength of affective organisational commitment is influenced by the extent
to which the individual's needs and expectations about the organisation are matched by
their actual experience or by factors such as job challenge, role clarity, goal clarity,
and goal difficulty, receptiveness by management, peer cohesion, equity, personal
importance, feedback, participation, and dependability.

For example: workers Microsoft have to work 8 hours a day in front of the
computer screens, which will harm their eyes and also their health because they have
to sit a lot. If Microsoft was an IMO company, they would listen to the feelings of
their employees and they might carry out health check up every 2 months or something
like that to make sure their employees are healthy and happy to go to work. Notice that
the company was caring for them, the employees would continue working not because
they have to but because they want to since they're cared about when they're in this
organization.

Furthermore, IMO companies will also affect the second and third dimension of
organizational commitment. Employees might face some risks or costs if they left the
current organization, which is based on an assessment of economic benefits gained
(Beck & Wilson, 2000). Organisational members develop commitment to an
organisation because of the positive extrinsic rewards obtained through the effort-
bargain without identifying with the organisation's goals and values. For example: a
building company in Japan pay the sum of $1000 insurance for its employees, if they
leave, they 'll lose the insurance, so they will have to think clearly before leaving for
anywhere else. In the case of the third dimension, normative commitment dimension.
The normative committed employee considers it morally right to stay in the
organisation, regardless of how much status enhancement or satisfaction the
organisation gives him or her over the years. This implies that individuals often feel an
obligation to repay the organisation for investing in them, for example through training
and development.

However, the affect of IMO on the last two dimensions of organizational
commitment, continuance and normative commitment, is not firm because when given
better alternatives, employees may leave the organisation.

Therefore, in order to retain employees, the organisation needs to give more
attention and recognition to those elements that boost the employees morale to be
affectively committed.

V. IMPACT INTERNAL MARKET ORIENTATION ON
CUSTOMER ORIENTED BEHAVIOR
IMO involves implementation of appropriate responses to meet these wants and
needs. Customer-oriented behavior involves assessing and satisfying customer needs,
aiming to increase long-term customer satisfaction, depicting product offerings
accurately, low pressure sales tactics, and avoiding customer dissatisfaction
Customer-oriented behavior (COBEH) which we define as the extent to which
employees engage in continuous improvement and exert effort on the job on behalf of
customers
Customer-oriented behavior is the key outcome variable in the analysis and is
hypothesized to be affected by two main sets of antecedents relating to the level of job
satisfaction experienced by supervisors on the job, and to be perceived from internal
market orientation what is management practices in the organization, measure by
COBEH
The supervisors' situation is necessary. Managerial activities are thus
operationalized as an internal market orientation is focused on. Supervisors' situation
has a great influence on front-line staff's job satisfaction.
Proposition 1: The greater the internal market orientation of the firm, the higher
the job satisfaction.
Employees who are satisfied with their jobs are more likely to suit to their jobs as
well. In fact, job satisfaction has often been established as an antecedent of customer-
oriented behavior.
Proposition 2: The greater the job satisfaction, the higher Customer-oriented
behavior within the firm.
We have proved the intermediate relations from job satisfaction to internal market
orientation and Customer-oriented behavior. So we can find out that between internal
market orientation and Customer-oriented behavior exist positive correlation. And
next, a separate measure of the relationship between them will be undertaken.
Proposition 3: The greater the internal market orientation of the firm, the higher
Customer-oriented behavior