Investigating the mediating role of market orientation between internal marketing and the development of entrepreneurial orientation within private sports clubs

Hossein Mansouri (University of Kurdistan, Sanandaj, Iran)
Saeed Sadeghi Boroujerdi (University of Kurdistan, Sanandaj, Iran)
Michael Polonsky (Deakin University, Victoria, Australia)
Maizaitulaidawati Md Husin (Universiti Teknologi Malaysia, Kuala Lumpur, Malaysia) (Universiti of Business and Technology, Jeddah, Saudi Arabia)
Mehdi Seydi (University of Kurdistan, Sanandaj, Iran)

New England Journal of Entrepreneurship

ISSN: 2574-8904

Article publication date: 8 July 2021

Issue publication date: 31 October 2022

1935

Abstract

Purpose

This study examines the role of market orientation in the relationship between internal marketing and entrepreneurial orientation within private sports clubs.

Design/methodology/approach

The research is a descriptive-correlational study based on private sports clubs employees within Iran (Sanandaj). A theoretical model was developed based on the literature and tested using SPSS and PLS-SEM software.

Findings

The findings indicate a positive relationship between internal marketing and employees' entrepreneurial orientation. Market orientation has also played a positive mediating role in the relationship between internal marketing and entrepreneurial orientation.

Originality/value

The results suggest a higher level of market orientation in the organization can increase teamwork and, consequently, entrepreneurship development among employees. This is important in sports clubs as employees have a significant role in the success of the sports club. Club employees' satisfaction, generated through internal marketing, provides is a prerequisite for customer satisfaction. This therefore creates an environment supportive of entrepreneurial orientation in the club.

Keywords

Citation

Mansouri, H., Sadeghi Boroujerdi, S., Polonsky, M., Husin, M.M. and Seydi, M. (2022), "Investigating the mediating role of market orientation between internal marketing and the development of entrepreneurial orientation within private sports clubs", New England Journal of Entrepreneurship, Vol. 25 No. 2, pp. 103-120. https://doi.org/10.1108/NEJE-12-2020-0055

Publisher

:

Emerald Publishing Limited

Copyright © 2021, Hossein Mansouri, Saeed Sadeghi Boroujerdi, Michael Polonsky, Maizaitulaidawati Md Husin and Mehdi Seydi

License

Published in New England Journal of Entrepreneurship. Published by Emerald Publishing Limited. This article is published under the Creative Commons Attribution (CC BY 4.0) license. Anyone may reproduce, distribute, translate and create derivative works of this article (for both commercial and non-commercial purposes), subject to full attribution to the original publication and authors. The full terms of this license may be seen at http://creativecommons.org/licences/by/4.0/legalcode


Introduction

Having an entrepreneurial orientation in the field of sports is very important because there are many opportunities for economic value creation and the opportunity to increase economic performance, especially in Iran where two-thirds of the population are young adults (18–35 [1]), with many not actively participating in sport (Mohamadkazemi et al., 2014). Additionally, the number of physical education graduates is enormous, suggesting that these new graduates can help grow the sports field. Entrepreneurial orientation is one of the most well-known theories in entrepreneurial and managerial research (Pittino et al., 2017). It includes decision-making styles, processes and methods that shape a company's entrepreneurial activities (Lumpkin and Dess, 1996). Entrepreneurial orientation is a set of distinct but interrelated behaviors that contain aspects of innovation, leadership, aggressive competition, risk-taking and independence (Pearce et al., 2010) and is essential for a wide range of for-profit and non-profit organizational settings, including the sports domain (Seyed Javadin et al., 2014).

Small and medium-sized businesses have more flexibility and can adapt to rapid environmental changes and react faster than large firms Jakubiak and Chrapowicki (2018) and, as such, are often more entrepreneurial. Kao (1993) defined entrepreneurship as “a process of making changes; doing something different, thus creating wealth for the individual and adding value to society.” In this changing business environments with evolving customer needs, adaption is vital in small organizations. This means that small organizations, such as sports clubs, have to perform and adapt to these dynamic changing environments. Succeeding in such a challenging market requires responding consciously and quickly to both the market and customers. Therefore, the business has to have a thorough understanding of the competitive environment in which they work in and being market-orientated is critical in such dynamic times.

Marketing theory has evolved from the production orientation where firms increased efficiency, assuming consumers would purchase goods there were well made and reasonably priced (Kushwaha and Dubey, 2018), ultimately to firms' having a market orientation where they focus was on producing goods and services that most effectively met customers wants and needs. Thus, the market orientation approach focuses on gathering information about customers' needs and requests and competitors' capabilities, which leads to creating more value for customers by using the organizations' resources (Awwad and Agti, 2011) and is essential for sports organizations who need to be highly responsive to members (Zheng-lun, 2008). Market orientation is essential for entrepreneurial companies as it leads to learning, environmental adaptation, rapid response to environmental opportunities and threats (Ma et al., 2012). Market orientation is also one of the most effective and efficient types of organizational culture, creating superior value for customers enabling business success (Herman et al., 2018).

Market orientation includes a set of beliefs that put customers in the spotlight to ensure the company's long-term profitability. It also emphasizes creating an effective and efficient business to produce the highest value for the customer and competitive advantage (Tsai and Tang, 2008). In market orientation, customers are prioritized so that market orientation is the cornerstone of marketing. (Ericsson, 2015). Lam et al. (2010) suggest that market orientation is considered a social learning process through which market orientation can be acquired and transmitted at the individual employee level. A market-oriented organization can better identify the needs and demands of the target market. As a result, it can achieve customer satisfaction more efficiently and effectively than other competitors can. Thus, a market-oriented organization can achieve the organization’s goals, such as market share and higher profits, compared with an organization that engages in less market-oriented activities (Tsiotsou, 2010). Market orientation also has a special place in sports-related organizations today (Fadda, 2020; Zheng-lun, 2008). Farrelly et al. (2008) state that sports organizations need to understand better customer needs and competitors' performance due to changing customer requirements and increasing competitors. Thus being market orientation contributes to sports organization's success.

Sports clubs are private associations whose objectives include promoting and developing interest in a particular sport or physical activity, their members' participation in these activities and organizations, and participation in competitions. Sports clubs are also commonly associated with health club. Ng (2009) states that companies, organizations and sports clubs should increase the quality of goods and services provided to customers, with a customer-focused set of actions and beliefs. Thus, sports clubs are service organizations, as their core offering is intangible, even though they may require equipment and infrastructure to deliver these services. For service organizations, managing internal, external, and interactive marketing is essential. While internal marketing focus to meeting the needs of customers. Internal marketing promotes a company's objectives to employees within the organization. On the other hand, interactive marketing is a marketing strategy that uses two-way communication channels to allow customers to connect with a company directly (Eric, 2017).

As with any service setting, the employees play a central role in attracting, building and maintaining customer relationships. Research suggests that internal marketing is essential for ensuring that employees deliver or organizational promises and are the interface between customers and organizations (Tansuhaj et al., 1988; Huang, 2020). Internal marketing was initially proposed as a single dimension to encourage employees to deliver on customer-focused goals, where the audience is the firms' employees (Welch and Jackson, 2007). Today, internal marketing studies have a common theme and internal marketing has been expanded to comprise several dimensions (Huang and Rundle-Thiele, 2015; Tsai and Tang, 2008), including Production of internal information, Dissemination of internal information, Responding to the domestic market. One of the most comprehensive definitions of internal marketing was provided by Rafiq and Ahmed (2000), in which internal marketing has been introduced as a planned effort using an approach such as marketing to overcome organizational resistance to change and balance, motivating and coordinating between tasks as well as integrating employees to implement effective corporate strategies as well as a task to create customer satisfaction through the process of forming motivated and customer-oriented employees (e.g. Ahmed and Rafiq, 2003; Grönroos and Helle, 2010; Yusuf et al., 2016).

The research context

Today, sport has a wide influence on society. It plays a role in people's health, creating healthy leisure time, physical activity, pleasure, healthy relationships, especially in the younger generation (Seyed Javadin et al., 2014). Most of the early research on market orientation has been in domains other than sports (e.g. Agti and Louafi, 2019; Huang and Rundle-Thiele, 2015; Ismail et al., 2018; Tsiotsou, 2010), even though work is the sports domain exists (e.g. Zheng-lun, 2008), yet sports organizations are highly market-oriented (Mondalizadeh, 2019).

A sports club is a collection of individuals that provides entertainment, competition and training in sports-related activities. Therefore, sports clubs can have various goals for different segments, including training, developing individual potential, improving fitness, physical and mental capabilities, creating space for social interactions and communication, and competition between people. A sports club is an institution that is run to educate and enhance individuals' physical and spiritual strength. In other words, sports clubs operate to maintain health and members' physical and mental activity, where athletes of varying abilities get together to exercise for health and wellness (Ghorbani and Safari, 2017). There was no agreed definition of a sports club (Vamplew, 2013). However, Vamplew (2013) mentioned that all sports clubs include activities involving playing and/or watching sport at a recreational and/or competitive level. Sports clubs have individuals responsible for administrative and offers a formal membership that gives its members playing facilities (Vamplew, 2013).

According to the Iranian Statistics Centre's latest report, in 2019, more than 51% of Iranians play sports, which is up from 44% in 2015. Private sports clubs are therefore essential. These clubs create jobs and lead to entrepreneurial activities within the sector by club managers and coaches seeking to identify new ways to address the market's needs. Thus, this study explores how internal marketing and market orientation enhance sports clubs' entrepreneurial orientation within private sports clubs. Besides, it examines how internal marketing can increase the organization's employees' entrepreneurial spirit and lead these clubs to more entrepreneurial activities and the mediating role of market orientation in these relationships. No previous research has been conducted on these issues within a sports context, and indeed, none has been undertaken in Iran. As will be discussed below, these issues have been examined in a range of non-sports contexts.

Literature review

Internal marketing and entrepreneurial orientation

With advancements in innovation, organizations must be familiar with how to compete in these dynamic environments (Zhang et al., 2020). Internal marketing highlights marketing activities to employees in the organization. According to marketing theories, internal marketing emphasizes the importance of the employees' satisfaction and views their jobs as internal products. The goal of internal marketing is the development and motivation of staff. Internal marketing's function is based on the supposition that motivated employees comply with organizational policies and decision-making. This benefits the organization as employees understand organizational goals, empowering employees to act, fulfil their roles and implement changes. Therefore, these engaged employees can advance innovation and organizational changes (Jalilvand et al., 2019). Internal marketing recognized employees' value, empowering personnel, leading to innovation and entrepreneurship within the organization (De Bruin et al., 2021). Internal marketing enhances the staff's motivation and helps to enhance their human and social capital. As the staff's motivation increase, the company will better achieve strategic renewal and change, transforming the business and innovating, which is essential for having an entrepreneurial orientation. Thus, it can be suggested that there is a positive relationship between internal marketing and entrepreneurial orientation (Subramony et al., 2018). Entrepreneurial orientation is one of the most well-known factors in entrepreneurial and managerial studies (Pittino et al., 2017). This orientation includes decision-making styles, processes, and methods, forming a company's entrepreneurial activities (Lumpkin and Dess, 1996). Entrepreneurship and sports management has more recently received increased attention (González-Benito et al., 2009). For example, Fadda (2020) explore entrepreneurial orientation with a focus on surf sports schools and found that through cooperating and sharing ideas these schools could be more innovative. Keating and Olivare (2007) found that the most crucial factor in entrepreneurship in new-established organizations is addressing the firm's human resources needs. Twomey and Harris (2000) also explained that supporting human resources and their needs encourages employees' career development and entrepreneurial behaviors. Yadav and Bansal (2020), identified that many studies in developing countries had examined entrepreneurship, making it important in both developed and developing country contexts. It is suggested that enhancing entrepreneurship requires internal marketing. For example, Jalilvand et al. (2019) found that internal marketing and entrepreneurship are two drivers of innovation in family careers. Internal marketing was also shown to be the primary determiner of entrepreneurial orientation in family businesses) Jalilvand et al. (2019). Jin et al. (2018) suggested that both entrepreneurship and competing in their internal market require companies to augment technological and marketing abilities. These factors also result in a rise in organizational performance (Jin and Cho, 2018). Furthermore, the integration of technology and marketing capabilities has been confirmed to influence entrepreneurial eagerness and export operation Ultimately, past works' results identify that aspects of entrepreneurial keenness impact firms' and sports organizations’ marketing ability. They also supported the fact that marketing ability affects performance, and it has an impact on entrepreneurial orientation.

Therefore, it is posited that:

H1.

Internal marketing has a positive effect on the development of entrepreneurial orientation in private sports clubs.

Internal marketing and market orientation

Market orientation includes a set of beliefs that put customers in the spotlight to achieve long-term profitability. Market orientation also emphasizes having an effective and efficient business to create the highest value for the customer and gain a competitive advantage (Tsai and Tang, 2008). A host of definitions have been offered for market orientation in the literature. Narver and Slater (1990) presented an initial measure of market orientation that included three behavioral factors (customer orientation, competitor orientation and performance coordination) and two decision criteria (sustainability and long-term profitability). Kohli and Jaworski (1990) introduced a measure of market orientation from a behavioral and process perspective, suggesting it incorporated; data collection, information transfer, and compilation and conduction of responsive actions. Zhang et al. (2020) found that these two scales of market orientation were reliable in a developing country context. They assessed customer orientation, data collection, coordination, and information implementation rationality and application of the scale. All definitions for market orientation identify that customer satisfaction is the central pillar of the approach, and hence, all organizational activities should focus on being marketing oriented (Herrero et al., 2018). Researches have shown that market orientation is one of the most effective and efficient organizational culture types that shape organizational behaviors, creating superior value for customers (Herman et al., 2018). In addition to that, numerous researchers have suggested that market orientation is a tool for implementing the definition of marketing in the organization (Lado et al., 2013). Thus, it is important for service organizations, including in the sports club domain, to be customer-focused. The sports club needs to be adaptive to the consumers' personalized needs and objectives.

In the service marketing domain, while clients are the ultimate goal, the firm's employees are also essential (Chiu et al., 2019; Cooper and Cronin, 2000). Thus, while market orientation is important for external customers, internal marketing focuses on attracting, developing and motivating the firm's employees, critical for market orientation. In service organizations, employees are at the forefront of customer interfacing activities and play a key role in communicating with customers (Al-Hawary et al., 2013; Tang et al., 2020). It is also believed that internal marketing's success is enhanced when firms are market orientation because market orientation encourages employees to perform better. Employees also feel that the organization is important to them (Gellatly et al., 2020).

Numerous studies have confirmed a relationship between internal marketing and market orientation (Pitt et al., 1996; Swartz, 1990). The results of Gellatly et al. (2020) showed that internal market orientation affects internal marketing. Market orientation and marketing also affect public service motivation. Chuang (2018) proved that market orientation is vital for e-marketing systems and facilitates value creation for vendors and customers. Also, the research results by Jin et al. (2018) found that market orientation influences marketing ability and pursuant to it. The firms' marketing ability modulates the relationship between market orientation and performance. According to Kamboj and Rahman (2017), market orientation positively affects all four marketing capabilities. Also, marketing capabilities have a positive effect on innovation, with innovation, in turn, having a positive effect on competitive advantage and company performance. Finally, it has been suggested that internal marketing has a positive effect on market orientation (Kyriazopoulos et al., 2007; Salehzadeh et al., 2017). Much of the literature suggests that internal marketing activities are the primary tools to ensure employee retention, market orientation, customer satisfaction and profitability.

Therefore, it is suggested:

H2.

Internal marketing has a positive effect on market orientation in private sports clubs.

Market orientation and the development of entrepreneurial orientation

Sports clubs are an essential component of sports systems. In sport, a sports club should make sports more accessible, and therefore clubs should have a broad social mission. Thus, sports clubs are described as potentially desirable environments for sports entrepreneurship. These organizations need to be entrepreneurial, as they need to link themselves with other organizations, associations, governmental policy participants and potential participants. Ensuring organizations and their employees are professional and entrepreneurial is necessary to facilitate the achievement of organizational goals. There are generally few rules regulating the various services and offerings available to consumers within the sports industry, and there are very few barriers to entry and exit to the sector. This means that organizations are continually seeking out new opportunities, and thus they need to have an entrepreneurial orientation, where they are willing to undertake new activities. Thus, entrepreneurship and having an entrepreneurial orientation is applicable in the sports and sports club domain (Fadda, 2020; González-Benito et al., 2009). However, an organization with a high level of entrepreneurial orientation undertakes unique investments in distinctive products or services, with such risky investments potentially jeopardizing the organization's resources (Escamilla-Fajardo et al., 2020). Various authors such as Spilling (1996), Ball (2005) and Fadda (2020) have found that entrepreneurship is important in sport and sports organizations. Hardy and Pope (1996) showed that entrepreneurship provides a unique way to view sport and suggests that further research should explore sport from an entrepreneurial perspective. In addition, Hemme et al. (2017) stated that sport is a rich base for entrepreneurial activities. Sports entrepreneurship has been considered a promising conceptual link between entrepreneurship and sports management research (Frisby, 2005).

Today, market orientation has been the focus of many studies and review articles (Kirca et al., 2005; Kuratko et al., 2005; Liao et al., 2011). Market orientation involves the pursuit of current opportunities, while entrepreneurial orientation is more focused on future opportunities. Many studies have confirmed that these two concepts affect each other (Chen and Hsu, 2013). A majority of research at the organizational level focuses on market orientation leading to dynamic and continuous strategic planning by effectively measuring market orientation (Zhang et al., 2020). On the other hand, the growth of entrepreneurial companies requires that they be focused on market demands. Entrepreneurial orientation improves a company's ability to understand and recognize market opportunities before its competitors, thus gaining a competitive advantage (Acosta et al., 2018). According to the concept of market orientation, a company intends to provide services or products that can meet customers' needs, guaranteeing these services are delivered more effectively and efficiently than competitors. (Ali et al., 2020). Entrepreneurship and have an entrepreneurial orientation are significantly related to market knowledge and adaptation of products and services for consumers' varying needs (Faroque et al., 2021).

Faroque et al. (2021) showed that the impact of entrepreneurial ability on information dissemination and positive response is significant. Likewise, the effect of entrepreneurial ability on customer orientation, intelligence production, dissemination and positive response is crucial. The results also depicted that export market orientation mediates the relationship between entrepreneurial ability and firm performance (Monteiro et al., 2017; Octavia et al., 2020; Montiel-Campos, 2018), and also explains that entrepreneurship and market orientation have a significant relationship. The results of Morgan and Anokhin (2020) found that larger firms may be more proficient in managing entrepreneurial orientation and market orientation. In contrast, smaller firms, such as sports clubs, maybe less efficient in developing these abilities. Firms focusing on services instead of goods also benefit from the combined impact of market orientation and entrepreneurship. The international performance of these types of job is affected by their network capability and their international entrepreneurial orientation, and the positive effect of international entrepreneurial orientation on network capability and market orientation (Acosta et al., 2018). González-Benito et al. (2009) showed that there is a strong relationship between entrepreneurship and market orientation. Although these tendencies may be implemented separately, companies care about entrepreneurship when they are market-oriented (see Figure 1).

Consequently, the relationship between market orientation and development of entrepreneurial orientation is proposed:

H3.

Market orientation has a positive effect on the development of entrepreneurial orientation in private sports clubs.

H4.

Market orientation mediates the relationship between internal marketing and the development of entrepreneurial orientation.

Methodology

The purpose of this study is to identify whether market orientation has a mediating role in the relationship between internal marketing and entrepreneurial orientation within Iranian sports clubs. The research is descriptive-correlational, using PLS-SEM3 to test the proposed relationships, as PLS is often preferred, especially with slightly smaller sample sizes (Hair et al., 2019).

Data were collected from 120 sports club employees, including clubs' manager, employees and coaches located in Sanandaj, Iran. We surveyed employees at 45 clubs using a purposive technique. Data were collected using a paper-based survey distributed in January 2020. Out of the 140 questionnaires distributed, 120 were returned completed, giving a response rate of 85.71%.

The sample size has a power prediction of 0.9 based on SPSS Sample Power. The sample size recommendations in PLS-SEM are based on OLS regression properties. With a sample size of 120, we would have a significance level of 0.05 and a statistical strength of 0.90, indicating the equilibrium risk of type II error trading (false-negative results) and resource needs.

The independent variable assessing internal marketing was measured using the X item scale developed by Lings and Greenley (2009, 2010). The mediation variable, market orientation, was measured using the X item scale developed by Jaworski and Kohli (1993). The dependent variable was the Entrepreneurial Orientation Questionnaire, measured using the X item scale developed by Hughes and Morgan (2007). All questions were designed using a 5-point Likert scale from very low to very high, and this form of measurement has been used in the previous literature (Lings and Greenley, 2009, 2010; Jaworski and Kohli, 1993; Hughes and Morgan, 2007). Table 1 lists all the items used.

Sample characteristics

We surveyed 45 clubs and asked each club manager to complete this and other employees and coaches. We distributed 140 surveys, and 120 of these were completed and returned. The demographic characteristics of subjects in Table 2 indicate that 77 respondents (64.2%) are male, and 43 (35.8%) are female. All respondents were educated beyond high school, which is reflective of the government requirements for people working in this sector. There were eight who had a diploma (6.66%), 20 had Associate Degree (16.7%), 74 respondents had a bachelor degree (61.64%), and 18 had either masters or PhDs (15.0%). The respondents also had extensive work experience, with 61% (i.e. 74) having more than 10 years' experience, 28.3% (i.e. 34) having between 6–10 years' experience, and only 10.0% having five years or less experience.

Results

Data were manually entered into a data file and then screened using SPSS25 before it was converted to CSV format and transferred to Smart PLS3 (Hair et al., 2019). PLS-SEM3 was used to determine the validity of the three constructs in the model (Hair et al., 2019). The factor loadings Cronbach’s alpha (α), composite reliability (CR), and average variance extracted (AVE) were all assessed. Cronbach’s alpha and CR assessed the degree to which the construct indicators indicate the latent construct, and thus the constructs are valid. The AVE represents the overall amount of variance in the indicators accounted for by the latent construct. According to (Hair et al., 2019), a Cronbach's alpha and CR value of 0.70 or more is considered acceptable for internal consistency measures and the three measures Cronbach's alpha values were from 0.74 to 0.88, with CR values range The AVE for the three constructs varied from 0.40 to 0.54, convergence validity is also established (Fornell and Larcer, 1981) (see Table 1).

The discriminant validity was assessed using the HTMT Henseler et al. (2015). As is reported in a lower diagonal in Table 3, these are all below the criterion value of 0.85. Thus, the divergent validity of the three constructs is acceptable. The correlation coefficients are presented in the upper diagonal of Table 3.

The coefficient of determination (R2) shows the effect of an independent variable on a dependent variable. R2 values of 0.25, 0.75 and 0.50 (see Table 4) are considered substantial, moderate and weak, based on classifications within the methodological literature (Hair et al., 2019). The Stone-Geisser's Q2 value was examined to ensure the predictive relevance of the structural model (Hair et al., 2019), the values of Q2 must be greater than zero, which is the case for the variables in this study.

We next examined the effect size (f2) of all independent variables towards the dependent variable's R2 values (see Table 5). In structural models, the value of f2 suggests variations in R2 values caused by independent variables (Hair et al., 2017). Based on Hair et al. (2017), the effect size for the various relationships can be classified as small (0.02), medium (0.15) and large (0.35).

The SRMR is a model fit measure defined as the root mean square discrepancy between the observed correlations and the model-implied correlations. In CB-SEM, an SRMR value below 0.08 indicates a good fit, but no threshold value has been introduced in a PLS-SEM context (Hair et al., 2017). Henseler et al. (2015) identified this is a suitable criterion for PLS-SEM, which is used to assess whether the model appropriately fits the data. According to Hair et al. (2017), SRMR can examine the model fit for testing the hypotheses and according to Hu and Bentler (1998), in the conservative mode, values less than 0.1 are suitable for model fit. The calculated value for this study was 0.1, which confirmed the suitability of the model.

Measuring the intensity of the mediating effect

We use the VAF statistic to determine the mediation effect's intensity (Iacobucci and Duhachek, 2003). The measurement of this statistic is a value between 0 and 1. A value less than 0.2 indicates there is no mediating effect; a value of 0.2–0.8 has a partial mediation effect, and a value above 0.8 and above has a full mediation effect (Hair et al., 2014). To measure this statistic, we use the following formula.

VAF=a × b(a × b)+c=0.578  0.433(0.578  0.433)+0.283=0.469

Table 6 shows the direct impact of internal marketing on market orientation and entrepreneurship development and the indirect effect (see Figure 2).

Discussions

In this study, we examined the role of internal marketing in market orientation and entrepreneurship development in sports clubs in Sanandaj, Iran. The hypothesis assesses the effect of internal marketing on the development of entrepreneurial orientation (H1). The coefficient has a t-value of 8.83 and has a statistically significant positive relationship. Based on the beta coefficient β, the internal marketing variable predicts 0.54% of the changes in entrepreneurial orientation. The result identify that internal marketing plays a significant role in the market orientation of organizations. The result is consistent with the work of (Modi and Sahi, 2017) and (Lings and Greenley, 2010). Sports clubs' internal marketing improves the organization’s competitiveness and enhances competencies by influencing and motivating employees to be more entrepreneurial. Thus, higher internal marketing levels result in more entrepreneurial orientation, as employees are motivated to make the organizations successful. Therefore, organizations should pay attention to the importance of internal marketing to encourage new ideas generation, enhance performance and innovation, recognize opportunities, and ensure sufficient independence in the clubs' training and operation.

This hypothesis's results are consistent with past researchers' findings (Basirat et al., 2015; Jalilvand et al., 2019; Jin and Cho, 2018; Yadav and Bansal, 2020). As Basirat et al. (2015) have stated, internal marketing effectively affects the organization’s employees' entrepreneurial tendencies and tendencies.

The second hypothesis is that internal marketing positively impacts market orientation. This is supported as the t-value is 8.98. Based on the β-beta coefficient, the internal marketing variable predicts 0.59% of the changes in the market orientation variable. This is consistent with the work of Bouranta et al. (2005) and Kyriazopoulos et al. (2007), who also found that internal marketing positively affects market orientation. The result indicated that more internal marking results in more market orientation. This may arise because more internal marketing makes employees more satisfied, and therefore they become more market-orientated. In private sports clubs, employees are in direct contact with customers. Thus, adapting and responding to employees' needs and demands is critical to customers' satisfaction. Lings and Greenley (2009) also found a strong relationship between internal marketing, employee motivation, and external marketing success (market orientation, financial performance, and customer satisfaction). The result is also in line with Grönroos and Helle (2010), who suggests that while market orientation and internal marketing are distinct, they are interrelated and potentially reflect a broad view of marketing philosophy. The results of this hypothesis are also consistent with the findings of Gellatly et al. (2020), Jin et al. (2018) and Salehzadeh et al. (2017).

The third hypothesis examined the effect of market orientation on the development of entrepreneurial orientation. It was significant with a t-value of 8.4 and a beta β indicating that the market orientation variable predicts 0.62% of the changes in the entrepreneurial orientation. Thus the more market-oriented the clubs, the more entrepreneurial oriented they are. This positive relationship has been found by Faroque et al. (2021), Montiel-Campos (2018), Morgan and Anokhin (2020) and Octavia et al. (2020). Additionally, companies that combine market orientation with entrepreneurial development perform better than those did not (Atuahene-Gima and Ko, 2001). Understanding customers' behavior and needs in the future is an important prerequisite for a successful organization's strategic direction in a competitive environment in which market-oriented organizations can gain their share of competition between competitors. In addition, due to the high level of complexity in customer behavior and paying attention to external customers, internal customers who are employees of the organization should not be neglected. Employees are also required to have the enthusiasm to follow this approach, and only then can the organization create value for customers while engaging in entrepreneurial oriented behaviors. Thus sports clubs are more entrepreneurially when they are market focused.

The fourth hypothesis suggested that market orientation mediates the relationship between internal marketing and entrepreneurial orientation. The mediation analysis indicates an indirect path coefficient of 0.25 and a t-value of 3.71. This suggests that there is a statistically significant mediation effect. Internal marketing predicted 0.28% of changes in entrepreneurial orientation development. Internal marketing also predicted changes in market orientation by 0.57%. Significance coefficients above 1.96 confirm the statistical significance of these relationships. The results showed that market orientation positively mediates the relationship between internal marketing and entrepreneurial orientation, with an indirect path coefficient of 0.25. In addition, the Q2 value of the structure in the market orientation and entrepreneurial tendency was calculated to be 0.11 and 0.19, which demonstrated the strong predictive power of the model regarding these structures and the proper fit of the structural research model. Sports clubs can combine their internal marketing with market orientation, increasing the development of entrepreneurial orientation. Focusing on customers and competitors, market orientation obtains and disseminates the information obtained from them within the organization, thus promoting its entrepreneurial level. Market orientation focuses on the outside of the organization and has an outside-in approach. One of the essential ways to achieve entrepreneurial orientation is achieved through market orientation, using internal marketing. Market orientation in the organization will lead to entrepreneurial orientation by creating appropriate behaviors and market opportunities. Thus, sports organizations should adopt the necessary mechanisms to improve their market orientation. This includes appropriate strategies to discover and apply knowledge, maintain and enhance their position in existing markets, and identify opportunities to reach new markets (Ekhlassi et al., 2018). Focusing on internal marketing improves customer relationships by emphasizing training and motivating employees. Market orientation also has a positive and significant effect on entrepreneurial development. Therefore, clubs should pay attention to the market and use the market's information in formulating their strategies. The results of this finding are consistent with the results of Faroque et al. (2021), González-Benito et al. (2009), Grönroos and Helle (2010), Montiel-Campos (2018), Octavia et al. (2020).

Conclusion

Internal marketing is one strategy that can be used to enhance market orientation in private sports clubs. Related studies show that internal marketing activities rewards employees and improves their motivation. In general, it can be said that the implementation of internal marketing in sports clubs enhances these clubs capabilities ensuring they satisfy the internal staff, which leads to customer satisfaction and improved entrepreneurial orientation. Market orientation can lead to product and process innovation by responding to customers' expressed needs, which is an essential entrepreneurial orientation component. The research results show that internal marketing positively and significantly affects market orientation and entrepreneurial orientation in sports clubs. According to this research, by valuing the employees within the organization and satisfying their needs (i.e. using internal marketing), firms can increase market orientation to be motivated. Internal marketing cause's employees to be motivated and successful in entrepreneurship.

This research contributes to the extant literature in several ways. First, it provides evidence facilitating a better understanding of the relationship between internal marketing on entrepreneurial and market orientation in a sporting club context. Second, it provides evidence that facilitates a better understanding of the relationship between market orientation and entrepreneurial orientation. Third, considering the empirical context in which the analysis was conducted, at the intersection between market orientation as a mediator of internal marketing and the development of entrepreneurial orientation, this paper provides empirical evidence of the relationship and in-depth information on entrepreneurs in the sports field. Further, we have validated that these relationships apply in the sporting club context within the collectivist country. This highlights the generalizability of the results, both globally and across business contexts. As such, it makes a significant contribution to the current debate on lifestyle entrepreneurs and how they can enhance entrepreneurial activities by motivating internal staff.

Suggestions for future research

According to the present research results, future research seems necessary to identify intervening or moderating variables. The role of organizational performance and employee commitment could be integrated into future models. It is suggested that examining the size of the club might impact its market orientation. The role of club size in entrepreneurial orientation development might be necessary. As club size increases, it may be harder to communicate with all staff effectively. This research was undertaken in a developing country and may not be generalizable to other developing or developed countries, although the fact that relationships have been found in other countries suggests some generalizability. One might also examine whether these relationships apply in other high touch services. One might anticipate this to be the case, as such services require a better understanding of customer's and frequently have highlight specialized offerings. In addition, future research should also consider other variables that might influence entrepreneurial orientation. This provides a better understanding of the specific factors that affect an entrepreneurial orientation, which benefits both future researchers and practitioners in structuring the theory and recognizing the most influential factors of a sports club's entrepreneurial orientation. This research supported a more integrated and comprehensive theory of sports cub entrepreneurial orientation and thus advances the research in this domain.

Limitations of the study

This research is cross-sectional, and this makes it difficult to conclude the relationships between models. Another limitation of the sample size. Nonetheless, the researchers used a variance-based approach to assess the model, which overcomes these limitations. Lastly, the present research results can be generalized to private sports clubs in Sanandaj, and if necessary and generalized to other organizations in other countries should be done cautiously.

Figures

Conceptual framework

Figure 1

Conceptual framework

Results of structural equation modeling for H1 to H4

Figure 2

Results of structural equation modeling for H1 to H4

Measurement models and measure

Factors and itemsλαCRAVESource
IM 0.8800.9030.511
This club notices the personnel's requirements thoroughly0.749 Lings and Greenley (2009, 2010)
In this club, new programs are conducted well in the sports fields0.696
In this club, the most important part of attracting customers is their features in accordance with their needs0.723
In this club, the manager spends adequate time thinking about career problems in the club and the performance of the coaches0.657
In this club, the coaches constantly speak to one another about carrying the plans out0.620
In this club, I have entire knowledge about my responsibilities0.658
In this club, the coaches are encouraged owing to the conduction and durability of the customer0.775
In this club, the management efficiently lends us the required support0.720
In this club, new training methods in doing activities are carried out0.815
MO 0.7400.8170.401
In this club, we have some appointments with customers to introduce the club more effectively0.461 Jaworski and Kohli (1993)
In this club, we engage in analyzing the competitors with the same condition as us0.518
In this club, the level of customers' satisfaction is annually reported to fellow workers0.798
In this club, short-term meetings are held in relation to customer needs0.424
In this club, a number of discussions and negotiations are conducted with coaches and initiators concerning customers' future needs0.731
The club annually attempts to present a new program0.670
In this club, amendatory actions are uninterruptedly performed toward customer's behavior and speech0.725
EO 0.7880.8550.541
In this club, we usually analyze new ideas and deal with them operationally0.728 Hughes and Morgan (2007)
In this club, we search for creative methods for performance and innovation0.785
In this club, we properly recognize opportunities in order to attract customers0.730
In this club, we perform well against our other competitors0.706
In this club, our coaches have sufficient independence in training and operation0.728

Note(s): λ = Outer Loading. α = Cronbach's Alpha. CR = Composite Reliability. AVE = Average Variance Extracted

Demographic characteristics of subjects

Correlation (top diagonal) and HTMT (lower diagonal)

LVEOIMMO
EO0.7350.5330.596
IM0.6210.7160.578
MO0.7460.6910.633

Note(s): The square root diameter of the mean variance is extracted

R square and Q2 Stone-Geisser's

LVR squareR square adjustedThresholdLVQ2ThresholdSource
EO0.4090.3990.25; 0.5; 0.75EO0.1960.02; 0.15; 0.35Hair et al. (2019)
MO0.3340.329MO0.113

F2 Cohen

LVF-squareThresholdSource
IM → EO0.090.02; 0.15; 0.35Hair et al. (2019)
MO → EO0.211
IM → MO0.502

Path coefficients model

Direct effectsβSDt-valuep-valuesDecision
H1IM → EO0.2830.0773.6810.000Supported
H2IM → MO0.5780.0797.3400.000Supported
H3MO → .O0.4330.0964.5270.000Supported
Indirect Effects Mediation
H4I.M → M.O → E.O0.2500.0723.4690.001Supported

Note

1.

Deputy Minister of Youth Affairs of the Ministry Sports Iran.

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Further reading

Frisk, V. (2017), Sales-Oriented Mindset in A Service-Oriented Environment:-Organizing Customer Service Operations for Higher Quality and Efficiency, (Unpublished thesis), UMEA University.

Corresponding author

Hossein Mansouri can be contacted at: hoseinmansouri66@gmail.com

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