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suggests three major phases in the development of the concept, namely an employee
motivation and satisfaction phase, a customer orientation phase, and a strategy
implementation/change management phase. Proposes a definition and a set of core
criteria that are essential features of an internal marketing program. Also explores the
interrelationship between the proposed criteria and suggests a framework for empirical
investigation of the IM concept in the context of services marketing. Discusses
managerial implications arising from the proposed definition and model of internal
marketing.
Introduction
More than 20 years ago internal marketing (IM) was first proposed as a
solution to the problem of delivering consistently high service quality by
Berry et al. (1976). However, despite the rapidly growing literature on IM
(see for example, Barnes, 1989; Berry, 1981; Cahill, 1996; Collins and
Payne, 1991; Flipo, 1986; George, 1977, 1990; GroÈnroos, 1981, 1985;
Richardson and Robinson, 1986; Piercy and Morgan, 1991; Piercy, 1995;
Pitt and Foreman, 1999; Sasser and Arbeit, 1976; Winter, 1985), very few
organizations actually apply the concept in practice (see for instance, Sargent
and Saadia, 1998). One of the main problems contributing to this is that there
does not exist a single unified concept of what is meant by IM.
A diverse range of activities There is a great deal of confusion in the literature as to exactly what IM is,
what it is supposed to do, how it is supposed to do it, and who is supposed to
do it. The variety of interpretations as to what IM constitutes has led to a
diverse range of activities being grouped under the umbrella of IM. This
situation has been further compounded by a confusion of IM with the
economic concept of internal markets (Baumol, 1967; Fama, 1980;
Williamson, 1964; Williamson et al., 1975). This diversity of interpretations
and definitions in turn has led to difficulties in the implementation and
widespread adoption of the concept. Most importantly, these problems create
contradictions at the conceptual level with respect to defining the precise
domain of IM, and make empirical investigations of the concept more
difficult.
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JOURNAL OF SERVICES MARKETING, VOL. 14 NO. 6 2000, pp. 449-462, # MCB UNIVERSITY PRESS, 0887-6045 449
In order for IM to be effectively operationalized as a paradigm of
organizational change management and implementation of strategies a
clarification at the definitional level is required. What is required is a precise
specification of those activities that can be taken to constitute IM and those
that do not, since definition and classification are fundamental prerequisites
to marketing analysis (Hunt, 1976; Lovelock, 1983). The purpose of this
paper is to critically examine the IM concept and delineate its scope by
tracing the major developments in the concept to date. It proposes a
definition and a set of core criteria that are essential features of an internal
marketing program. The paper also explores the interrelationship between
the proposed criteria and suggests a framework for empirical investigation of
the IM concept in the context of services marketing. Managerial implications
arising from the proposed definition and a model of internal marketing are
also discussed.
of market orientation (see also Kohli and Jaworski, 1990; Jaworski and
Kohli, 1993).
The inclusion of the empowerment variable is essential for the
operationalisation of GroÈnroos' interactive marketing concept. In order for
interactive marketing to occur, front-line employees need to be empowered,
that is they require a degree of latitude over the service task performance in
order to be responsive to customer needs and be able to perform service
recovery. Berry and Parasuraman (1991) also regard empowerment as an
essential aspect of IM. However, the degree of empowerment is contingent
on the complexity/variability of customer needs and the degree of task
complexity (see Rafiq and Ahmed, 1998). Empowerment in our model
impacts on job satisfaction, customer orientation and service quality.
Job satisfaction and The empirical evidence on the relationships in the model is fairly limited and
customer orientation somewhat mixed. For instance, Hoffman and Ingram (1991) found that there
was a weak correlation between job satisfaction and customer orientation
(r = 0.28) and that role ambiguity, conflict and job satisfaction explained
only 9 per cent of customer orientation. Kelley's (1990) study of bank
employees also found a weak correlation of customer orientation with job
satisfaction (r = 0.18) and motivation (r = 0.24). However, when the effects
of role clarity and motivation were held constant, job satisfaction was found
not to be a significant predictor of customer orientation. Furthermore,
although the study found that there was no significant difference in customer
orientation among four groups of contact employees (managers, officers,
customer service representatives, and tellers), the tellers were significantly
more dissatisfied with their jobs and significantly less motivated than the
other groups of employees. What this suggests is that employees are quite
capable of separating their feelings about their jobs (job satisfaction) from
the actual performance of the job. Siguaw et al. (1994) found that customer
orientation was not related to job satisfaction (this is the inverse of the
Berry and Parasuraman (1991), and Berry et al. (1991). Their IM scale had
three underlying factors which they term development (items relating to the
development of employees), reward (items relating to rewarding of
employees) and vision (items relating to goals and objectives of the
organization). Carruna and Calleya (1998) use this scale to assess its impact on
organizational commitment, an important objective behind IM efforts to have
satisfied employees. Carruna and Calleya found that in their sample of
managers from a retail bank that there was a significant but weak (R2 = 0.185)
positive relationship between IM and organizational commitment. However,
their research showed that IM had a significant effect only on the affective
dimension of organizational commitment (that is, the strength of identification
and involvement with an organization) but not continuance and normative
dimensions (see Allen and Meyer, 1990). Carruna and Calleya concluded that
the IM construct requires further development and elaboration to distinguish it
from similar HRM constructs. These conclusions are not surprising given the
underlying factors in the Money and Foreman IM scale.
Research directions
Market orientation scales The outlined model includes constructs that are already well developed in the
marketing and services literature and suggest ways of developing IM
measures. For instance, the inter-functional co-ordination, customer
orientation and marketing like approach constructs could be measured by
items adapted from market orientation scales of Kohli et al. (1993). A
number of scales are available for job satisfaction and employee motivation
(for example, Wood et al., 1986). Employee motivation, and the antecedents
of job satisfaction have been operationalised and researched using the role
conflict and ambiguity constructs by a number of researchers (e.g. Rizzo et
al., 1970; Chonko et al., 1986). At present there has been little research into
the development of a scale to measure employee empowerment. However,
Hartline and Ferrell (1996) present a usable scale which measures the degree
to which mangers encourage initiative, give employees freedom and trust
employees to exercise their judgement. For the measurement of service
quality either the SERVQUAL (Parasuraman et al., 1988) or SERVPERF
(Cronin and Taylor, 1992) scales could be utilized.
Given that valid measures of the constructs in the model already exist, it
should be possible to develop a reliable measure of IM scale. This would be
Managerial implications
A number of managerial The definition of IM and the model outlined in this paper suggests a number of
implications managerial implications for motivating employees, customer orientation and
role of internal marketing in the implementation of strategies in general. First,
managers need to pay significantly more attention to the communication of
marketing (and other organizational) strategies and objectives to employees so
that they understand their role and importance in the implementation of the
strategies and achievement of marketing and organizational objectives
(GroÈnroos, 1981). Research evidence suggests that the frequency, quality and
accuracy of downward communication moderates employee role ambiguity
(Zeithaml et al., 1988) and hence increases job satisfaction. Managers need to
find appropriate communication mechanisms for their particular organizations
and the task in hand. Supportive senior management is fundamental to the
success of IM as it indicates to all employees the importance of IM initiatives
and thereby facilitates inter-functional co-ordination.
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Jobs as products Second, managers can increase employee job satisfaction by treating ``jobs
as products'', that is, designing jobs with features that prospective employees
value (Berry, 1981) rather than just concentrating on task requirements of the
job. Treating jobs as products forces managers to devote the same care to
jobs as they devote to products that they sell to the external customers
(Sasser and Arbeit, 1976). This is the only way of attracting and retaining the
best staff (Berry and Parasuraman, 1991). This means that marketing
managers and human resource managers need to get more involved in job
specifications (particularly where contact with customers is involved).
Third, ensuring that employees are highly motivated, customer oriented and
sales minded, requires recruitment practices that attract and select employees
with the requisite attitudes (Berry, 1981; Berry and Parasuraman, 1991).
Changing employee attitudes and behaviours is more difficult and costly
once they have been recruited. For instance, empowerment does not suit all
employees because of the extra responsibility that it inevitably entails.
Providing employees with the right type and level of training to perform their
jobs is also very important. Research evidence indicates that role ambiguity
can also be reduced (and job satisfaction increased) by training employees
appropriately against the criteria used in their selection (Walker et al., 1975).
Appropriate training also means that employees can meet the needs of
customers more effectively.
Fourth, in services marketing in particular, the importance is noted of
explicitly managing the interactions of customer-contact employees and
customers or ``the moments of truth'' by training employees for customer
orientation and ``sales mindedness'' (GroÈnroos, 1981). Managers also need
to adopt a participative management style, and allow a degree of discretion
(contingent on the service strategy of the organization) to frontline
employees so that they can meet customers' expectations and take advantage
of interactive marketing opportunities. The challenge for managers is to find
a mechanism for controlling the behaviours of employees in these situations
without stifling the flexibility the contact-employees need to meet the needs
of customers effectively.
Fifth, in the marketing field, it is taken as axiomatic that customer
orientation needs to be inculcated all through the organization and
particularly in the case of customer-contact employees. Customer contact
are going to adapt them for their organization as not all marketing techniques
can be applied without adaptation to the internal ``market'' (Rafiq and
Ahmed, 1993).
Summary
Three distinct phases This paper has traced the development of the IM concept over the last 20 years
and shown that there is still much discussion in the literature over its definition
and scope. The paper has also highlighted the fact that the IM
conceptualization appears to have evolved through three distinct phases. From
the synthesis of the ideas in each of the three phases the paper develops a list
of criteria that underpin the concept of IM. On the basis of these criteria the
paper synthesizes a more rigorous definition of IM. The paper also proposes a
model of IM by linking the developed criteria and using constructs already
extant in the marketing literature. However, the relationships proposed in the
model need to be tested empirically and the paper provides some possible
research directions. Overall it is hoped that the clarification of the scope of IM
will allow a much more focused conceptual and empirical work on IM to be
undertaken, and also aid the process for a more rapid development and
acceptance of the concept among practitioners and academics.
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&
Definition of IM
Rafiq and Ahmed identify the main elements of IM as:
. employee motivation and satisfaction;
. customer orientation and customer satisfaction;
. inter-functional co-ordination and integration;
. marketing-like approach to the above; and
. implementation of specific corporate or functional strategies.
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