The Role of Internal Market Orientation in Developing Entrepreneurial Orientation: the Case of Internet Service Providers (ISPs) in Tehran

Employees have important roles in the success of service companies and their satisfaction may be a prerequisite for customer's satisfaction. In addition, considering their needs and wants and the responsiveness to them may lead to the development of entrepreneurial orientation in the company. Furthermore, being customer-oriented can lead to concentrating on innovation and to use opportunities proactively. Accordingly, this paper investigates whether internal market orientation has effect on entrepreneurial orientation with mediating role of market orientation in internet service providers (ISPs) in Tehran. For this purpose, a descriptive method was used and 322 questionnaires were distributed between managers and employees of Tehran ISPs chosen by simple random sampling. To analyze data, structural equation modeling with partial least squares by Smart PLS 3 software was used. The results showed that internal market orientation has positive and significant effects on entrepreneurial orientation and market orientation with 0.529 and 0.796 path coefficient values, respectively. The effect of market orientation on entrepreneurial orientation is also confirmed with 0.337 path coefficient value. The results also showed that market orientation plays a partial mediating role between internal market orientation and entrepreneurial orientation with 0.268 path coefficient value. The result of Sobel test also confirms the mediating role of market orientation between internal market orientation and entrepreneurial orientation. Furthermore, the value of VAF statistic equals to 0.336 which shows that about 34 percent of internal market orientation effect on entrepreneurial orientation can be explained through indirect effect of market orientation on this relationship.