the relationships among internal marketing, job satisfaction, relationship marketing, customer...

The Relationships among Internal Marketing, JobSatisfaction, Relationship Marketing, CustomerOrientation, and Organizational Performance:An Empirical Study of TFT-LCD Companies in TaiwanWann-Yih Wu, 1 Chia-Chun Tsai,2 and Chen-Su Fu3

1 Chinese Culture University, Department of Business Administration, National Cheng Kung University, Tainan City, Taiwan2 Graduate Institute of International Business, National Cheng Kung University, Tainan City, Taiwan3 Department of Business Administration, National Cheng Kung University, Tainan City, Taiwan

Abstract

The thin film technology liquid-crystal displays (TFT-LCD) industry has become one of the mainindustries in Taiwan. In this research, we take Taiwanese TFT-LCD industrial companies as the researchobjects and try to identify the interrelationships among internal marketing, job satisfaction, relationshipmarketing, customer orientation, and organizational performance. Although these companies areclassified as part of the manufacturing industry, it is suggested that their service components couldbe the focus of greater attention to enhance the success of their business operations. Analytical resultsindicate that internal marketing, job satisfaction, and customer orientation have significant influenceson relationship marketing as well as the organizational performance of TFT-LCD manufacturingcompanies. Therefore, Taiwan TFT-LCD manufacturing companies need to implement relationshipmarketing continuously, increase employee job satisfaction, and inspire employees to become morecustomer oriented in order to increase productivity. C© 2012 Wiley Periodicals, Inc.

Keywords: Internal marketing; Job satisfaction; Relationship marketing; Customer orientation;TFT-LCD

1. INTRODUCTIONThe electronics industry in Taiwan is highly exportoriented and thus operates in an extremely competi-tive environment in a worldwide free market (Yeung,Cheng & Chan, 2004). The thin film technology liquid-crystal displays (TFT-LCD) industry has become one of

Correspondence to: Author. Department of BusinessAdministration, National Cheng Kung University, Tainan City,Taiwan, No. 1, University Road, Tainan City 701, Taiwan.Phone: 886-6-2757575 ext. 53340;e-mail: [email protected]

Received: 16 March 2011; revised 25 March 2011; accepted 25March 2011

View this article online at wileyonlinelibrary.com/journal/hfm

DOI: 10.1002/hfm.20329

the main industries in Taiwan. TFT-LCD is now widelyused in daily life in devices such as cell phones, personalcomputers, and LCD TV. According to a Marketing In-telligence Center report (2010), the global market shareof Taiwanese TFT-LCD products is approximately 45%.Today, Taiwan, Japan and Korea become the majorTFT-LCD manufacturing countries in the world.

The TFT-LCD industry requires high capital in-vestment and is a fast-changing and very competitiveenvironment. Therefore, a more service-oriented ap-proach may be very helpful for firms in the TFT-LCDmanufacturing industry. In addition, such companiesshould view their employees as their most valuable as-sets and treat them like customers. To this end, Ahmedand Rafiq (2003) indicated that the main concept ofinternal marketing is to see employees as customersand to sell the organization’s main ideas to staff as

Human Factors and Ergonomics in Manufacturing & Service Industries 00 (0) 1–14 (2012) c© 2012 Wiley Periodicals, Inc. 1

An Empirical Study of TFT-LCD Companies in Taiwan Wu, Tsai, and Fu

a management tool. Several studies have proved thatinternal marketing can improve employee job satisfac-tion, job retention, and commitment to their employ-ers (Hwang, 2005; Hwang & Chi, 2005; Keller, Lynch,Ellinger, Ozment & Calantone, 2006; Kor et al., 2007;Papasolomou & Vrontis, 2006). The ultimate purposeof internal marketing is to motivate employees’ serviceconcepts and to make employees more customer con-scious (Armstrong & Kolter, 2009), and well-designedinternal marketing can achieve this (Cahill, 1996).

Furthermore, an employee with high job satisfactionis willing to provide better service to customers thanthose who are not content with their work. Donovan,Brown, and Mowen (2004) think that customer orien-tation and job satisfaction have a positive relationshipand suggest that service workers with customer orien-tation plays a significant role in the success of serviceorganizations and can positively affect organizationalperformance. Since most of the previous studies re-garding this issue are mainly focused on the serviceindustry, this study focuses on whether these conceptscan be applied in a manufacturing organization, suchas a TFT-LCD company.

According to the literature, managing relationshipswith customers is at the core of marketing. No servicefirm or business-to-business company can do businesssuccessfully without having a long-term relationshipwith its customers. The transaction modes of TFT-LCDindustrial companies in Taiwan are mainly business-to-business, and this is usually typified by a small num-ber of customers, each of which contributes significantvalue to the overall business (Jayawardhena, Souchon,Farrell & Glanville, 2007).

If companies intend to reinforce their interactionswith customers or to increase their organizational per-formance, traditional marketing approaches are insuf-ficient. This means the product is not the only influen-tial criteria in customer decisions and organizationalperformance, and instead how employees add value tothe organization, how they represent their organiza-tion, and how staff can be trained to have a greatercustomer orientation are all critical issues in this con-text. According to Hildebrand (2005, p. 50), “the directbuyers will normally be influenced or determined bythe preferences of the final (end) consumers . . . As thebuyers on a market are usually professional buyers.”Chang (2007, p. 1) further indicated that “employeeswith highly customer-oriented behaviors increase thesatisfaction of their customers and lead to the develop-ment of long-term relationships between the organi-

zation and its customers . . . customer-oriented behav-iors can increase organization performance.” There-fore, this study focuses on the importance of internalmarketing to organizational performance via relation-ship marketing. As well as job satisfaction and customerorientation, this study also examines how internal mar-keting affects employee job satisfaction and customerorientation and discusses how service concepts can beapplied to the operations of TFT-LED firms.

Based on previous research background and moti-vation, the research objectives of this study are fivefold:1) to identify the role of internal marketing in manu-facturing companies, 2) to verify how the implementa-tion of internal marketing can influence employee jobsatisfaction and the concept of customer orientation,3) to identify how employee job satisfaction can influ-ence customer orientation, 4) to explore the linkagebetween internal marketing and relationship market-ing, and 5) to discuss how employee job satisfaction,customer orientation, and relationship marketing canaffect organizational performance.

2. THEORETICAL BACKGROUNDAND HYPOTHESES DEVELOPMENT2.1. Internal Marketing and JobSatisfaction

Employees are the objects of internal marketing. Ac-cording to Berry (1981), internal marketing meanstreating employees as customers and offering train-ing programs to them so that companies can increasejob satisfaction and thus retain staff. One purpose ofimplementing internal marketing is to motivate andsatisfy employees (Bouranta, Chitiris, & Paravantis,2009; Rafiq & Pervaiz, 2000), who would feel satis-fied at receiving internal marketing campaigns, as wellas greater opportunities for self-actualization and self-development (Rafiq & Pervaiz, 2000).

According to Conduit and Mavondo (2001), man-agement support is an element of implementing inter-nal marketing. Employees who have managers’ supportwith regard to new proposals or ideas can increase theirmotivation and satisfaction at work. Good communi-cation between supervisors and staff can make bothparties understand what they expect from each other.Gronroos (1990) stated that employees are the best as-set of a company, and so it is critical to retain themby implementing satisfactory human resource policies.In addition, rewarding employees when they achieve

2 Human Factors and Ergonomics in Manufacturing & Service Industries DOI: 10.1002/hfm

Wu, Tsai, and Fu An Empirical Study of TFT-LCD Companies in Taiwan

targets can also raise employee job satisfaction(Conduit & Mavondo, 2001). Wang’s (2004) empiri-cal research on Taiwanese hi-tech companies includedTFT-LCD, semiconductor, and IC design firms, andthe results showed that welfare, promotion, and careerdevelopment all have positive relationships with jobsatisfaction.

According to Hwang and Chi’s (2005) empirical re-sults on a survey of 359 employees working in interna-tional hotels in Taiwan, internal marketing has a posi-tive impact on employee job satisfaction, and both jobsatisfaction and internal marketing both have positiveimpacts on organization performances. Keller et al.(2006) also indicated that internal marketing plays acritical role in creating employee job satisfaction. Basedon findings in the previous literature of a relationshipbetween internal marketing and job satisfaction, thisstudy hypothesizes that a better internal marketing planwould increase employee job satisfaction. Therefore,we hypothesize that

H1: Internal marketing has a positive effect on jobsatisfaction.

2.2. Internal Marketing and CustomerOrientation

Gronroos (1981) argued that the overall objective of in-ternal marketing is to make personnel more motivatedand customer conscious. Companies should promote agreater customer orientation by offering various train-ing programs, which should not just focus on technicalskills. Cahill (1996) indicated that it is the managers’responsibility to establish and encourage climates thatfoster employees to have greater customer orientation,as without this continual reinforcement staff wouldeasily revert to their former attitudes and behaviors.Managers’ every action thus needs to reflect that theysupport the aims of the internal marketing and exter-nal marketing campaigns (Conduit & Mavondo, 2001;Farrell & Oczkowski, 2009).

Effective communication within a company or or-ganization is necessary to develop internal market-ing and customer orientation. Internal communica-tion could help employees to get essential informa-tion and to know a company’s policies or strategieswhile serving customers (Gronroos, 1990). Two-waycommunication between managers and employees notonly enhances management support but also providesemployees with feedback to improve their job perfor-mance. For frontline employees, they can be told how

to improve the skills or attitudes while serving cus-tomers (Conduit & Mavondo, 2001). Finally, Hwang(2005) found that internal marketing has positive im-pacts on employee job satisfaction, commitment, andcustomer orientation. Therefore, we hypothesize that:

H2: Internal marketing has a positive effect on cus-tomer orientation.

2.3. Internal Marketing andRelationship Marketing

According to Rafiq and Pervaiz (2000, p. 454), “inter-nal marketing is a planned effort using a marketing-like approach to overcome organizational resistance tochange and to align, motivate and inter-functionallyco-ordinate and integrate employees towards the ef-fective implementation of corporate and functionalstrategies in order to deliver customer satisfactionthrough a process of creating motivated and customerorientated employees.” Berry (1983) discovered thatinternal marketing is one of the strategies of relation-ship marketing. According to Peck, Payne, Christo-pher, and Clark (1999, p. 4), “relationship marketingfocuses simply on the development and cultivation oflong-term profitable and mutually beneficial relation-ships between an organization and a defined customergroup.” Frontline employees can thus act as a bridgebetween companies and customers, and internal mar-keting can enable service personnel to perform bet-ter. With employees providing consistent service qual-ity, the likelihood of external customers continuing tomake purchases is thus increased, and the relationshipbetween employees and customers is further consoli-dated (Berry, 1981, 1983; Goldsmith, 2010; Gronroos,1981).

Holmlund and Kock (1996) argued that retainingand empowering frontline employees is essential torelationship marketing, and thus the management offrontline employees is one of the main aims of internalmarketing. A company implementing internal mar-keting treats its employees as internal customers ser-viced by internal suppliers. However, the boundariesbetween internal customers and suppliers are blurredand overlap, so good cooperation and communicationbetween these two groups can help frontline employ-ees to improve the service they provide when dealingwith external customers (Lings, 1999). In this regard,good internal communications can eliminate barriersamong departments. Based on the previous discussion,the following hypothesis is proposed:

Human Factors and Ergonomics in Manufacturing & Service Industries DOI: 10.1002/hfm 3


H3: Internal marketing has a positive effect on rela-tionship marketing.

2.4. Job Satisfaction and CustomerOrientation

Employees generate customer-oriented behavior basedon satisfaction with their salary and/or a sense of jobachievement (Hoffman & Ingram, 1992; Liaw, Chi, &Chuang, 2009). Personal sensitivity and kindness ex-pressed by employees, such as listening to customers’needs and caring about then, are connected to howsatisfied employees feel about their job. More specifi-cally, Hartline and Ferrell (1996) argued that the keyrelationship lies in the interaction between frontlineemployees and customers, with satisfied employeesmore likely to engage in behaviors that assist customers.They also find that employee job satisfaction increasescustomer perceptions of service quality. Hartline andFerrell (1996) investigated a hotel industry and foundthat job satisfaction had a positive relationship withcustomers’ perceived service quality, while Pettijohn,Pettijohn, and Taylor (2002) suggested that customer-oriented selling is the outcome of satisfied andcommitted employees. Based on these findings on therelationship between job satisfaction and customer ori-entation, we suppose that employees who have greaterjob satisfaction are more willing to listen to the voiceof customers, fulfill their demands, and take care ofthem, that is, be more customer oriented. Therefore,the following hypothesis is developed:

H4: Job satisfaction has a positive effect on customerorientation.

2.5. Job Satisfaction and RelationshipMarketing

Berry (1983) outlined that one element of bringingabout relationship marketing is to implement inter-nal marketing, which is an attempt to treat employeesas customers, increase their satisfaction, and ensurethat they have a more positive attitude toward work(Robbins & Judge, 2006). Moreover, one consequenceof the higher level of employee satisfaction is a greaterpossibility of generating external satisfaction and loy-alty (Ahmed & Rafiq, 2003). We thus assume that em-ployees who are satisfied with their jobs are more will-ing to follow company policies and to be enthusiasticabout providing good service to customers as well as to

establish good relationships with them. Therefore, thefollowing hypothesis is proposed:

H5: Job satisfaction has a positive effect on relation-ship marketing.

2.6. Job Satisfaction andOrganizational Performance

An employee who has a positive attitude towardhis or her job will have job satisfaction and awillingness to commit to his or her organization,thus increasing organizational performance (Payne &Webber, 2006; Rafiq & Pervaiz, 2000). In addition, amore positive atmosphere in companies with satisfiedand loyal customers makes employees more likely toenjoy their jobs and work harder. Some academics alsoassert that employee attitudes influence customer at-titudes and that employee satisfaction leads to cus-tomer satisfaction, which consequently increases orga-nizational performance (Pugh, Dietz, Wiley, & Brooks,2002).

Kim (2005) indicated that higher levels of job satis-faction, organizational citizenship behavior, and publicservice motivation will lead to higher levels of organi-zational performance. According to Hwang and Chi’s(2005) empirical research on international hotels, jobsatisfaction has a significant positive relationship withorganizational performance, which includes financialperformance, service performance, and internal per-formance. Based on those findings, the following hy-pothesis is developed:

H6: Job satisfaction has a positive effect on organi-zational performance.

2.7. Customer Orientationand Relationship Marketing

Saxe and Weitz (1982) showed that an employee whohas more customer orientation can develop deeperrelationships with customers. Williams and Attaway(1996) suggested that salespeople positively affectthe organization’s performance by using a customer-oriented approach in establishing and maintaining re-lationships with customers. Several other academicstudies have proved that the degree of customer ori-entation has an effect on a company’s relationshipwith its customers (Leverin & Liljander, 2006; Yeunget al., 2004). Thorsten (2004) believed that an employeewith customer orientation tends to develop more sta-ble relationships with customers. For all TFT-LCD



manufacturing companies, a long-term relationshipwith their customers is required, because they jointlydevelop high-tech projects to enter markets together.We thus assume that customer-oriented employees aremore willing to take care of customers, as well as main-tain relationship marketing. That is, companies withcustomer orientation tend to engage in long-term re-lationships with customers. Therefore, the followinghypothesis is proposed:

H7: Customer orientation has a positive effect onrelationship marketing.

2.8. Relationship Marketingand Organizational Performance

Many researchers have stated that relationship market-ing is helpful in improving organizational performance(Sin, Tse, Yau, Chow & Lee, 2005; Tse, Sin, Yau, Lee &Chow, 2004; Zontanos & Anderson, 2004). Sin et al.(2005) found that a firm that adopts relationship mar-keting can improve its business performance and thusbuild, maintain, and enhance long-term and mutu-ally beneficial relationships with key customers. In thisresearch, relationship marketing is regarded as main-taining good long-term relationships with customersbased on trusting each other, cooperating closely, com-municating openly, and sharing the same values. Therelationship level is not just buying and selling but, in-stead, is consolidated to the level of a partnership by apattern of mutual collaborations. Sin et al. (2005) iden-tified five dimensions of relationship marketing: trust,bonding, communication, empathy, and reciprocity.Trust is defined as the level that each party feels theycan believe in the integrity of the promises offered bythe other party. Bonding is defined as customers andcompanies acting in the same manner toward a desiredgoal, with stronger bonding leading to greater commit-ment. Consequently, applying bonding to relationshipmarketing enhances customer loyalty. Communicationmeans exchanging meaningful, timely information be-tween customers and sellers, whether through formalor informal channels. Effective communications cansolve disputes and align perceptions between both par-ties. Empathy is when customers and companies expe-rience the situation from the other party’s perspectiveand seek to understand the other’s desires and goals.Reciprocity is when what a person gives is equivalentto what he or she receives from the recipient in the fu-ture, thus implying mutual benefit over the long term.For TFT-LCD manufacturing companies, productions

are based on customers’ demands, and good relation-ships with customers can enable the related firms tohave more timely information from customers, whichcan be achieved when customers are willing to sharedetails of their future strategies and product portfo-lios. This can reduce a company’s product turn rateand enable them to develop the right products ontime, adopt suitable strategies, and lead to success inthe market. Huang (2005) indicated that TFT-LCDcompanies that implement relationship marketing canobtain more customer satisfaction. Specifically, cus-tomers keep doing business with the same stable sup-pliers, and they gain long-term, extended profits andlower transaction cost based on their good relation-ships. Based on these earlier findings, we suppose thatthe five dimensions in relationship marketing, namely,trust, bonding, communication, empathy, and reci-procity, have a positive connection with organizationalperformance. Therefore, we present the followinghypothesis:

H8: Relationship marketing has a positive effect onorganizational performance.

2.9. Customer Orientationand Organizational Performance

Customer orientation is valuable because it focuses theorganization on continuously collecting informationabout customers’ needs and then using this to creategreater customer value. Customer orientation is criti-cal to business profitability (Favalgi, Whipple, Ghosh,& Young 2005), as companies that care about the cus-tomer and can meet their needs can maximize organi-zational performance (Baker & Sinkula, 1999; Javalgi,Whipple, Ghosh, & Young, 2005). Deshpande, Farley,and Webster (2000) argued that a high degree of cus-tomer orientation leads to greater long-term profitabil-ity. Matear, Osborne, Garrett, and Gray (2002) foundthat, moderated by customer orientation, innovationhas a positive association with organizational perfor-mance. In addition, Agarwal, Erramilli, and Chekitan(2003) reported that high levels of innovation and cus-tomer orientation are expected to affect organizationalperformance positively.

Sin et al. (2005) used an environment-strategy-performance paradigm to show that marketing ori-entation and relationship marketing orientation havepositive associations with business performance. Highmarket orientation level reduces uncertainty in thebusiness, lowering the need to take risks in the



market (Esteban, Millan, Molina, & Martin-Consuegra, 2002). Zyl and Mathur-Helm (2007) foundthat entrepreneurial leadership, marketing orientation,and relationship marketing orientation have positiveassociations with business performance. Based on theprevious discussion, the following hypothesis is devel-oped:

H9: Customer orientation has a positive effect onorganizational performance.

Based on the previous discussion, the research modelof this study is shown in Figure 1.

3. RESEARCH DESIGNAND METHODOLOGY3.1. Questionnaire Designand Data Collection

Based on the above discussion, a 54-item question-naire was designed for use with frontline employees inTaiwanese TFT-LCD manufacturing companies. Thequestionnaire items were revised based on the resultsof a pilot study before being put into the final form.The final questionnaire items of the first five sectionsare measured by 7-point Likert scales (ranging from1 = strongly disagree to 7 = strongly agree). Personalinformation is regarding participant’s gender, marital

status, age, education, company, department, position,and years of working.

Based on the 2007 Flat Panel Display Industry Year-book, published by the Industrial Economics andKnowledge Center, which is part of the Ministry ofEconomic Affairs in Taiwan, 90 key TFT-LCD compo-nent manufacturing companies were selected as the ob-jects of this study, including 9 TFT-LCD manufacturingcompanies, 12 TFT-LCD module manufacturing com-panies, 9 polarizer manufacturing companies, 17 back-light manufacturing companies, 18 equipment compa-nies, and 25 IC design and manufacturing companies.The respondents were employees with the opportunityto contact customers and who were responsible forselling, marketing, customer service, failure recoveryservice, product management, and quality insurance.The questionnaire was posted on a website so the re-spondents could answer it directly online. Six hundredsurvey questionnaires were sent to 90 TFT-LCD-relatedmanufacturing companies by mail and e-mail. Withthree follow-up telephone calls, 270 valid samples werecollected. Males accounted for 68.1% of respondentsand 75.6% were 26–35 years old. University graduatesaccounted for 49.6% of the sample. Engineers were60.4% of the respondents, while marketing, salesper-sons, and R&D (research and development) staffs were22.6%.

Internal Marketing Relationship Marketing

Job Satisfaction

Customer Orientation

Organizational Performance

H1

H2

H9

H6

H4

H3

H7

H5

H8

Figure 1 The research framework.



3.2. Measurement Resultsfor Research Variables

3.2.1. Descriptive Statistic Analysis

Table 1 provides descriptive statistics of the ques-tionnaire items. The results of means and standarddeviations indicate that, except for internal communi-cation and personnel management of internal market-ing and two items of job satisfaction, the respondentstended to give high ratings to the items, with a meanof more than 4.0 on the 7-range scale.

3.2.2. Factor Analysis and Reliability Test

For the reliability test, the criteria are item factor load-ings greater than 0.6, item-to-total correlations greaterthan 0.5, and Cronbach’s coefficient alphas greater than0.7 (Hair, Black, Babin, Anderson, & Tatham, 2006).As shown in Table 2, the analytical results indicatethat the factor loadings, item-to-total correlations andCronbach’s alphas, all met with the above criteria, andthe reliability and internal consistency of these factorsare thus acceptable.

4. RESULTS AND DISCUSSIONSIn this study, factor scores (the mean value of all re-lated research items in one factor) were used insteadof item scores for hypotheses testing. The structuralequation model was employed to test the interrelation-ships among all the research variables in the model.This study used AMOS 5.0 to examine the fitnessof the research model, and the results are shown inTable 3 and Figure 2. The chi-square is 178.115,the ratio of chi-square to the degree of freedom is2.199, GFI (goodness of fit index) is 0.924, AGFI (ad-just goodness of fit index) is 0.887, and RMR (rootmean square residual) is 0.054. Although AGFI isslightly below the criteria of 0.9 and RMR is slightlyhigher than 0.05, they are still in the acceptablerange. The results thus indicate a moderate fit of thismodel.

As the overall goodness of fit is promising, we fur-ther identified the magnitudes and significances of thestructural path coefficients of the model. Figure 2 alsodemonstrates that most of hypothesized relationshipsare supported, with the exception that the influencesof internal marketing on customer orientation is in-significant (λ = 0.118, CR = 1.493). Hence, H2 is not

supported. The influences of job satisfaction on organi-zation performance is also insignificant (λ = 0.006, CR= 0.061). It fails to support H6. Based on the analysesdiscussed previously, the results of hypotheses testingare summarized in Table 4.

5. CONCLUSIONS ANDSUGGESTIONS5.1. Research Conclusions

The major objectives of this study were to investi-gate the interrelationships among internal market-ing (including training, management support, inter-nal communication, and personnel management), jobsatisfaction, customer orientation (pamper, and readneed), relationship marketing (trust, bonding, com-munication, empathy, and reciprocity), and organi-zational performance. Based on the analytical results,several conclusions can be drawn. The first conclu-sion is that internal marketing has a positive influ-ence on job satisfaction. The results are consistentwith prior theoretical results that one of the pur-poses of implementing internal marketing is to mo-tivate and satisfy employees. Employees would feel sat-isfied by receiving internal marketing campaigns, aswell as the related opportunities for self-actualizationand self-development (Berry, 1981; Rafiq & Pervaiz,2000). The SEM results show that there is a signifi-cant relationship between internal marketing and jobsatisfaction.

The second conclusion is that internal market-ing has positive influences on customer orientationand relationship marketing. Although the SEM re-sults show that there is no significant relationship be-tween internal marketing and customer orientation,according to the canonical correlation analysis, theresults show that internal marketing has a signifi-cant impact on customer orientation. This gives ev-idence to support Hwang’s (2005) finding that themore internal marketing that is implemented, thegreater customer orientation that will be found in afirm. Internal marketing, training, internal commu-nication, and personnel management all have stronginfluences on customer orientation and relationshipmarketing.

The third conclusion is that job satisfaction has pos-itive influences on customer orientation, relationshipmarketing, and organizational performance. Accord-ing to the SEM results, job satisfaction has significant



TABLE 1. Questionnaire Items and Descriptive Statistics

Questionnaire Items Mean SD.

Section 1: InternalMarketing

01: My company provides sufficient training programs. 4.31 1.552

02: Attending the training programs improves my ability to do my job. 5.24 1.32203: Training sessions help me to understand current and future customer

needs.4.89 1.367

04: Managers often offer guidance in solving job-related problems. 4.68 1.47705: Two-way information flow across management levels is encouraged. 4.98 1.51106: Management encourages the development of innovative strategies,

accepting that some may fail.4.51 1.547

07: I periodically receive feedback from my superior on my job performance. 3.85 1.54508: I am made aware of the overall policies and goals of my company. 4.34 1.63609: I am adequately informed about my company’s financial position. 3.87 1.67610: This company has suitable policies for job promotion. 3.62 1.55911: This is the best company to work for in the industry. 3.65 1.63312: We get rewarded when a target is achieved. 3.74 1.636

Section 2: JobSatisfaction

01: I can apply my knowledge and judgment to my job. 5.06 1.292

02: My job can help me to develop my future career. 4.70 1.37703: My job is stable. 4.73 1.3404: I feel satisfied with the salary I get compared to the work I do. 3.98 1.58505: I feel satisfied with the promotion chances. 3.67 1.46306: Company welfare is fine. 4.16 1.4407: I get a sense of achievement on my job. 4.18 1.451

Section 3: RelationshipMarketing

01: My company and customers trust each other. 4.52 1.313

02: Customers are trustworthy on important things. 4.43 1.22303: According to our past business relationship, my company thinks

customers are trustworthy.4.47 1.289

04: We both try very hard to establish a long-term relationship. 4.95 1.30805: We work in close cooperation. 4.87 1.23106: We keep in touch constantly. 5.00 1.33707: We communicate and express our opinions to each other frequently. 4.60 1.43808: We can show our discontent toward each other through communication. 4.49 1.40309: We can communicate honestly. 4.90 1.34610: We always see things from each other’s view. 4.91 1.30611: We know how each other feels. 4.96 1.27412: We understand each other’s values and goals. 4.47 1.32913: We keep our promises to each other in any situation. 4.66 1.33114: Customers help us out when we have difficulties. 4.61 1.24715: We help customers out when they have difficulties. 4.67 1.302

Section 4: CustomerOrientation

01: I enjoy nurturing my service customers. 5.48 1.165

02: I take pleasure in making every customer feel like he or she is veryimportant.

5.56 1.102

03: I will do my best to fulfill customers’ request. 5.57 1.13104: I naturally read the customer to identify his or her needs. 5.20 1.18205: I provide service to customers at the right time. 5.41 1.15206: I try to anticipate what customers need. 5.30 1.236

Continued



TABLE 1. Continued

Section 5:OrganizationalPerformance

01: Compared to the competitors, the employees of my company havehigher productivity.

4.90 1.378

02: Compared to the competitors, my company is more attractive to peopleto work for.

4.51 1.498

03: Compared to the competitors, my company has higher customersatisfaction.

4.65 1.346

04: Compared to the competitors, my company has higher profitability. 4.75 1.44105: Compared to the competitors, my company has higher sales growth rate. 4.73 1.42306: Compared to the competitors, my company has higher market share. 4.64 1.536

Section 6: Personal InformationGender; Marital status; Age; Education; Company; Department; Position; Years of working.

TABLE 2. Factor Analysis and Reliability Test

Factor Item-to-TotalDimensions Factors Code Loading Eigenvalue Correlation Cronbach’s α

Internal Marketing Managerial support IM1 0.701–0.902 2.369 0.653–0.761 0.767Internal communication IM2 0.842–0.923 2.319 0.663–0.741 0.838

Job Satisfaction Achievement JS1 0.818–0856 2.048 0.748–0.787 0.872Stability JS2 0.716–0.806 2.274 0.620–0.725 0.829

Relationship Marketing Trust RM1 0.916–0.937 2.581 0.812–0.855 0.918Bonding RM2 0.900–0.955 2.591 0.784–0.891 0.919

Communication RM3 0.856–0.949 2.942 0.702–0.871 0.896Empathy RM4 0.911–0.949 2.597 0.804–0.880 0.921

Reciprocity RM5 0.891–0.932 2.472 0.758–0.873 0.893Customer Orientation Pamper CO1 0.946–0.965 2.725 0.878–0.918 0.949

Read Needs CO2 0.951–0.959 2.739 0.889–0.907 0.952Organizational Performance Productivity OP1 0.892–0.929 2.151 0.844–0.894 0.912

Market performance OP2 0.888–0.936 2.832 0.840–0.904 0.939

paths toward customer orientation and relationshipmarketing. Hartline and Ferrell (1996) claimed thatthe key relationship lies in the interaction betweenfrontline employees and customers, in which satisfiedemployees are more likely to engage in behaviors thatassist customers. In addition, the more employees feelresponsible for the organization, the higher level ofproductivity they will have.

The fourth conclusion indicates that customerorientation has significant influences on relationshipmarketing and organizational performance. This givesevidence to support Williams and Attaway’s (1996)statement that salespeople positively affect the orga-nization’s performance by using a customer-orientedapproach in establishing and maintaining relationshipswith customers.

5.2. Academic and ManagerialImplications

5.2.1. Academic Implications

Today, internal marketing is important to all businessesbecause staff actions significantly influence the qualityof customer service (Varey & Lewis, 2000). The qualityof customer service further affects customer repurchaseintention (Hellier, Geursen, Carr, & Rickard, 2003)and organizational performance (Ali, Talib, & Idris,2009). Simultaneously, good-quality customer servicewill lead to a long relationship between customers andorganizations. According to Shaker and Basem (2010),relationship marketing has a positive impact on or-ganizational performance. Although previous studiesfocus on how these concepts can be applied to service



TABLE 3. The Result of Structural Equation Model

Relations Standardized Coefficients C. R.

Internal Marketing IM1 0.863∗∗∗ 12.673IM2 0.864∗∗∗ A

Job Satisfaction JS1 0.891∗∗∗ AJS2 0.818∗∗∗ 14.114

Customer Orientation CR1 0.914∗∗∗ 27.422CR2 0.964∗∗∗ A

Relationship Marketing RM1 0.834∗∗∗ ARM2 0.827∗∗∗ 16.664RM3 0.905∗∗∗ 19.348RM4 0.886∗∗∗ 18.671RM5 0.785∗∗∗ 15.373

Organizational Performance OP1 0.829∗∗∗ 11.892OP2 0.964∗∗∗ A

Paths

Internal Marketing→ Job Satisfaction 0.586∗∗∗ 8.546Job Satisfaction→ Customer Orientation 0.446∗∗∗ 5.438Internal Marketing→ Customer Orientation 0.118 1.493Internal Marketing→ Relationship Marketing 0.257∗∗∗ 4.332Job Satisfaction→ Relationship Marketing 0.435∗∗∗ 6.302Customer Orientation→ Relationship Marketing 0.320∗∗∗ 6.204Job Satisfaction→ Organizational Performance 0.006 0.061Customer Orientation→ Organizational Performance 0.367∗∗∗ 4.867Relationship Marketing→ Organizational Performance 0.226∗∗∗ 2.105

Fit Index

Chi-Square 178.115Degree of freedom (df) 81Chi-Square/df 2.199GFI (goodness of fit index 0.924AGFI (adjust goodness of fit index) 0.887RMR (root mean square residual) 0.054NFI (normed fit index) 0.946CFI (comparative fit index) 0.969

Note: 1. ∗: CR (critical ratio) >1.96, using a significance level of 0.05; ** using a significance level of 0.1; ∗∗∗ using asignificance level of 0.001. Critical ratios that exceed 1.96 would be called significant.2. A: the parameter compared by others is set as 1; therefore, there is no CR.3. The coefficients are standardized value.

settings, the analytical results of this study indicate thatthese concepts can in fact be applied in a manufacturingsetting. That is, even though the buyers are professionalbuyers instead of end consumers, the concepts of in-ternal marketing and relationship marketing can stillbe very powerful in a business-to-business context.

5.2.2. Managerial Implications

According to the empirical results of this study, ifcompanies can improve the internal communication

among managers and employees, jobs satisfactionof the latter will be increased. Thus, it is impor-tant to let employees understand how they performperiodically, what the overall policies and goals oftheir company are, and what the financial positionof the company is, as the results indicate that man-agement support of internal marketing should be en-hanced to increase employees’ customer orientation.If the frontline employees perceive that their supervi-sors do not provide enough support or clear guide-lines, their job satisfaction decreases. Therefore, it is



Internal Marketing

Customer Orientation

Organizational Performance

JobSatisfaction

Relationship Marketing

OP1

OP2

RM3

RM4

RM2

RM5

RM1

JS1 JS2

IM1

IM2

CO1 CO2

Chi-ssquare=178.115Degree of Freedom=81Chi-Square/DF=2.199P=0.000GFI=0.924AGFI=0.887RMR=0.054

0.863***

0.864***

0.891*** 0.818***

0.586***

0.118

0.257***

0.446***

0.914*** 0.964***

0.320***

0.785***

0.886***

0.226***

0.006

0.367***

0.829***

0.964***

0.905***

0.827***

0.834***

0.435***

Figure 2 Structural equation model of this study.

essential that managers give subordinates more sup-port, especially when employees come up with newideas.

Furthermore, since relationship marketing has sig-nificant impacts on internal marketing, job satisfac-tion, and customer orientation, it is suggested thatTFT-LCD manufacturing companies need to continu-ously implement relationship marketing, increase em-ployee job satisfaction, and infuse the organizationwith the concept of customer orientation to increaseproductivity.

5.3. Limitations and FutureResearch Directions

Although the results of this study are compelling andmay contribute to the existing literature, some lim-itations offer suggestions for future work. First, thisresearch integrates many research constructs and con-tains many questionnaire items, and the length of thequestionnaire may have reduced the willingness of re-spondents to take part in this research. Further studiesmay consider using expert interviews or focus groupsto predetermine the key questions for each research

TABLE 4. Hypotheses and Results of the Empirical Tests

Research Hypotheses Result

H1 Internal marketing has a positive effect on job satisfaction. SupportedH2 Internal marketing has a positive effect on customer orientation. Not supportedH3 Internal marketing has a positive effect on relationship marketing. SupportedH4 Job satisfaction has a positive effect on customer orientation. SupportedH5 Job satisfaction has a positive effect on relationship marketing. SupportedH6 Job satisfaction has a positive effect on organizational performance. Not supportedH7 Customer orientation has a positive effect on relationship marketing. SupportedH8 Relationship marketing has a positive effect on organizational performance SupportedH9 Customer orientation has a positive effect on organizational performance. Supported



construct, to enhance the reliability and validity of thisstudy.

Moreover, previous academic literature and frame-work design mainly focused on the importance of theserelated concepts (internal marketing, relationship mar-keting, and so on) in the service industry, but this studyfound that they can also be applied in the manufactur-ing industry. Future research may apply these conceptsto other industries and then analyze any differencesthat are found.

Finally, this study did not consider the impact of dif-ferent cultures on the behaviors of employees and cus-tomers. Future studies may explore the role of culturewithin the relationships among internal marketing, re-lationship marketing, and organizational performance.

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