LAUSR

The perceived level of public service quality and customer satisfaction may be improved by the customer-oriented behaviour of the service provider. The desired external orientation of public service provision requires marketing based modelling. In order to measure the market orientation of the municipal service provision companies and to test the casual relationships proposed by the research model the survey method is employed. The sample is analysed by confirmatory principal component analysis and relationships are tested by linear regression analysis as well as correlation analyses. According to the results of this study market orientation plays a significant role in public sector by positively influencing customer satisfaction and service quality. There is evidence that intelligence gathering by front line employees and response action elaboration play crucial roles in the service provision, which points on the importance of staff. Findings also suggest that in the municipal service provision of Hungary the market orientation is highly supported by the commitment of staff and team spirit, while market turbulence, political influence and organizational conflict have reverse impacts. The findings also show that the salient internal antecedent factor of market orientation is interdepartmental connectedness rather than top managements’ emphasis. Based on the study it is to conclude that the focus on political initiatives by the management of the public service providers generates performance loss in customers’ dimensions.