Internal Market Orientation and Customer Orientation: Effects on Service Employees and Customer Experience

This thesis investigates the relationship between internal market orientation (IMO), customer orientation of service employees (COSE), and customer experience (CX) in the context of hospitality industry. Drawing on social exchange theory and equity theory, this research examines how employee-oriented practices, such as support, communication, and work-family balance affect employee behaviour and subsequently the experience of the customer. Combining organisational and customer perspectives, a conceptual framework linking IMO, CX, and COSE was developed, addressing gaps in existing research.

This thesis, guided by the pragmatic approach, employs fuzzy-set Qualitative Comparative Analysis (fsQCA) to empirically examine the links between IMO and COSE, as well as COSE and CX in the context of independent cafes. The findings show that no single dimension of IMO is sufficient for achieving customer-oriented behaviours in service employees, highlighting that an integrative approach is needed to enhance COSE. The results show that achieving the desired customer-oriented behaviours is impossible without establishing a high level of internal communication. Using fsQCA, this research provides two pathways of how COSE can be achieved through IMO dimensions. The same quantitative method was applied to examine the causal links between COSE and CX. The results show the need for holistic approach when aiming to enhance CX, as no single COSE factor alone was enough for providing great experience. Social skills were found to be the crucial element for enabling high levels of CX in the context of this study. The fsQCA results offer two distinct pathways of achieving high levels of CX through COSE. The use of fsQCA, a relatively novel methodological approach is this field, offers nuanced and actionable insights into the causal combinations between internal practices, employee behaviours and experience of the customer.

By combining internal organisational practices and customer perspectives, this thesis deepens the understanding of the consequences of employee-oriented management approach, providing valuable theoretical and practical implications.