An Empirical Investigation into the Mediating Role of Internal Service Quality on the Linkage between Internal Organizational Factors and Organizational Performance

Abstract

The study seeks to evaluate the mediating role of ISQ on the relationship between different internal organizational factors and organization performance, furthermore the study also ascertains the influence of internal organizational factors on ISQ and organizational performance. Additionally the study also evaluates the impact of ISQ on organizational performance. The internal organizational factors include; organizational learning, collaborative culture, organizational commitment, perceived organizational support, role stress & internal marketing. The study is a descriptive cum correlational, focusing on the performance and ISQ of different banks operating in Peshawar. The sample included 80 bank branches, the data was collected from the employees working in different bank branches located within the city of Peshawar. Banks selected as part of the population required to have more than five branches. Stratified random sampling technique was utilized to collect the data from different banks operating in the city of Peshawar. A total of 564 questionnaires were distributed in 80 different branches of medium and large sized banks. In the present study 404 questionnaires were returned, constituting the response rate of 71.63%. A total of 63 questionnaires were rejected. The total number of questionnaires usable for the study was 341. Evaluating the impact of different internal organizational factors on ISQ revealed tha three out of six internal organizational factors namely; organizational commitment, role stress, and internal marketing have a significant influence on the internal service quality. While three factors namely; organizational learning, collaborative culture and perceived organizational support did not have a significant influence on the internal service quality. The results revealed that four out of six internal organizational factors namely; organizational learning, organizational commitment, role stress, and internal marketing have a significant influence on the perceived organizational performance. While two factors namely; collaborative culture and perceived organizational support did not have a significant influence on the perceived organizational performance. Mediation analysis proved partial mediation between all internal organizational factors and perceived organizational performance. The objective measure for bank performance used in the present study included Return on Equity (ROE), Earnings per Share (EPS) and Return on Assets (ROA). Mediation