Local Culture, Internal Marketing and Employee Satisfaction in Improving Financial Performance : A Case Study of Microfinance Institutions in Bali

Objective – Local culture acts as a bridge in empowering the resources owned by a firm so they can operate harmoniously. This research tests the theory of local culture, internal marketing, and employee satisfaction in an effort to improve financial performance.Methodology/Technique – The research is supported by the existing phenomenon of increasing credit issues. The data is obtained from 1,364 questionnaires and is quantitatively analyzed through Structural Equation Modelling. A qualitative analysis is used to deepen the anomaly relationship through a phenomenological approach.Findings – The result show that local culture becomes the organizational culture, but has no direct influence on the improvement of performance. Indicators related to the environment have a very low contribution to the development of organizational culture. Internal marketing indicators, such as recruitment processes and internal communication, have a significant contribution on the achievement of financial performance. Further, employee satisfaction has a significant impact on the achievement of financial performance.Novelty – This study develops a new model that can be used to enhance financial performance. The integration of local culture into internal marketing and employee satisfaction is a relatively novel invention.Type of Paper: Empirical