internal marketing - a review on a broadened concept and its operationalisation

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Internal marketing: review on a broadened concept and its operationalisation Sebastian Theopold Marc Schacherer DBA Anglia Business School Research Paper 2 2002 Abstract Over 20 years ago internal marketing was first proposed and has been in a controversy discussion since. However, as yet, few empirical research has been undertaken since organisations have not actually implemented the concept in practice as there does not exist a single unified concept of what is meant by internal marketing. Although most recent research rather concentrates on practical implementation than on definition. The literature review describes three major pillars of the concept, namely employee relationship, market orientation, and strategy implementation. Proposes a synthesis of the different definitions with the aim to illustrate a broader definition of IM.. Introduces relationship marketing and the learning organisation for operationalising IM as part of the most recent influences on the discussion. Summarises suggestions for some themes for possible fruitful research in internal marketing. ABSTRACT...............................................................................................................................1 1.INTRODUCTION.......................................................................................... ........................2 2.INTERNAL MARKETING...... ............................................................................................ 2 2.1.I  NTERNAL MARKETING AND SERVICE QUALITY...............................................................2 2.2.BALANCED APPROACH......................................................................................................3 2.3.IDENTIFYING THE EVOLUTIONARY  PILLARS OF IM............................................................3 3.A BROADER CONCEPT OF INTERNAL MARKETING.................... .......................... 4 3.1.EMPLOYEE R ELATIONS......................................................................................................5 3.2.MARKET ORIENTATION .....................................................................................................6 3.3.STRATEGY IMPLEMENTATION............................................................................................7 4.LIMITATI ONS OF THE IM CONCEPT...........................................................................9 4.1.SYNTHESISING THE FINDINGS AND PROPOSING A DEFINITION FOR IM..............................9 5.INFLUENCES ON THE CURRENT DISCUS SION OF INTERNAL MARKETING 10 5.1.R ELATIONSHIP MARKETING............................................................................................12 5.2.LEARNING ORGANISATION ..............................................................................................15 6.IMPLICAT IONS FOR FURTHER RESEARCH................... ......................................... 18 REFERENCES........................................................................................................................18 1

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7/28/2019 Internal Marketing - A Review on a Broadened Concept and Its Operationalisation

http://slidepdf.com/reader/full/internal-marketing-a-review-on-a-broadened-concept-and-its-operationalisation 1/21

Internal marketing: review on a broadened concept

and its operationalisation

Sebastian Theopold

Marc Schacherer

DBA Anglia Business School

Research Paper 2

2002

Abstract

Over 20 years ago internal marketing was first proposed and has been in a controversy discussion since.

However, as yet, few empirical research has been undertaken since organisations have not actually implementedthe concept in practice as there does not exist a single unified concept of what is meant by internal marketing.Although most recent research rather concentrates on practical implementation than on definition. The literaturereview describes three major pillars of the concept, namely employee relationship, market orientation, andstrategy implementation. Proposes a synthesis of the different definitions with the aim to illustrate a broaderdefinition of IM.. Introduces relationship marketing and the learning organisation for operationalising IM as part ofthe most recent influences on the discussion. Summarises suggestions for some themes for possible fruitfulresearch in internal marketing.

ABSTRACT...............................................................................................................................1

1.INTRODUCTION..................................................................................................................2

2.INTERNAL MARKETING..................................................................................................2

2.1.I NTERNAL MARKETING AND SERVICE QUALITY...............................................................2

2.2.BALANCED APPROACH......................................................................................................3

2.3.IDENTIFYING THE EVOLUTIONARY PILLARS OF IM............................................................3

3.A BROADER CONCEPT OF INTERNAL MARKETING..............................................4

3.1.EMPLOYEE R ELATIONS......................................................................................................5

3.2.MARKET ORIENTATION.....................................................................................................63.3.STRATEGY IMPLEMENTATION............................................................................................7

4.LIMITATIONS OF THE IM CONCEPT...........................................................................9

4.1.SYNTHESISING THE FINDINGS AND PROPOSING A DEFINITION FOR IM..............................9

5.INFLUENCES ON THE CURRENT DISCUSSION OF INTERNAL MARKETING10

5.1.R ELATIONSHIP MARKETING............................................................................................12

5.2.LEARNING ORGANISATION..............................................................................................15

6.IMPLICATIONS FOR FURTHER RESEARCH............................................................18

REFERENCES........................................................................................................................18

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1. Introduction

During times where the economy decreases and where

former predictions about growth, prosperity and

development especially in the area of Information

Technology (e-Business) no longer matches the

reality, enterprises are forced to identify strategies and

options that properly adapt to the new circumstances.

As about 5 years ago a new wave of companies and

entrepreneurs were brought to the market space

mainly feed by the utopians of the Internet we find out

that during times of consolidation and disillusion only

a limited number of this generation still competes

within the respected segment.

Looking back a few years we recognized fashionable

organisations with low hierarchies, flexible working

hours, wages above average, trendy products and

unlimited growth perspectives. As reality turned back 

and the economic principals still build the fundament

of the economy the entrepreneurial newcomers are

turning back to proven concepts with the aim to

embed their enterprises in the traditional economic

framework.

But as unique as the raising of the new companies was

the same still holds for the uniqueness of the current

situation. More precisely it is to say that especially in

the area of business software and software services a

significant number of companies are still fighting to

overcome the childhood phase with the goal to enter a

more mature state. In the first step of the research path

two different companies (Virtual Identity, Impress

Software), competing within the segment of e-

Business have been analysed in terms of history,current perspective, market forces and strategy. The

results have shown that due to the fast development

organizational homework has not been done

sufficiently. In detail it is to say that internal

operations and external intersections (customers,

 partners and employees) are not clearly defined and do

not support the main purpose which is to satisfy the

customers needs and wants on a long-term basis

through a high service quality.

In this paper the model of internal marketing is

highlighted with the purpose to clarify its scope and

its strategic role in the implementation of change

strategies.

2. Internal Marketing

Since more than 25 years the concept of internal

marketing (IM) has been discussed in a wide range of 

the academic literature, (see for example Sasser and

Arbeit, 1976; Berry et al ,1976; George 1977, 1990;

Grönroos 1981, 1989; Winter 1985; Flipo, 1986;

Richardson and Robinson, 1986; Gummesson, 1987;

Piercy and Morgan, 1991; Rafiq and Ahmed, 1993;

Piercy, 1995; Cahill, 1995 ; Pitt and Foreman, 1999;

Lings, 1999). Despite the increasing interest of several

researchers and practitioners there exists a great

confusion about the exact definition of IM, its primary

domain and the value it delivers to managers and

organizations. The variety of approaches and

interpretations has brought up a number of relevant

 perspectives under the meta headline of IM.

The confusion has been further increased with the

great deal of discussion about the economic concept of 

internal markets (Fama, 1980; Williamson et al.,

1975). As much of the work on IM is embryonic and

descriptive or prescriptive this review will attempt to

 provide a helpful overview about the terms evolution

within the economic literature, its current discussion

and implications for practical research.

The first part of the paper focuses on analysing three

major pillars of IM and their purpose for the

conceptualisation of the program. The findings are

critically examined and the limitations of the concept

are discussed before an attempt is started to synthesisthe different definitions with the aim to illustrate a

 broader definition of IM. While the second part

examines the current discussion in the field of IM and

 provides fruitful implications for future research

activities.

2.1. Internal Marketing and Service

Quality

In consideration of the named differences and the

difficulties to define the concept of IM (Piercy and

Morgan, 1991, Rafiq and Ahmed, 1993) most writers

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seem to accept that IM should create quantitative and

qualitative improvements in terms of service quality

through the observation and control of service output

that is executed by employees (George, 1990;

Gummersson, 1987, Berry and Parasuraman, 1991;

Grönroos, 1985; Piercy, 1995). The need for 

sustainable improvement in the organizational

capability to deliver high service quality that fits with

customers needs and wants, as a basis of competitive

advantage has drawn the attention within the academic

and professional management literature (Christopher 

et al., 1991; Wilson et al., 1992).

This focus has directed the observation mainly in the

field of service providers like health care, financial

service, logistics and professional services (George,1986; Grönroos, 1983; Gummesson, 1991). More

general researches have also emphasized that actually

all suppliers are service providers and that their 

service competence is an important factor in creating

customer loyalty and distinct competitive advantages

(Vandermerwe and Rada, 1988; Reichelt, 1997). This

service-centred business philosophy finds its most

accurate wording from Vandermerwe and Rand

(1988) who call it “servitization”.

2.2. Balanced Approach

The tendency towards a service culture in

organizations raises questions about the rigour 

external view of marketing. As the attention and

 performance to customers is lived and pursued by

employees a pressing need can be identified in the

literature to harmonise the balance between internaland external factors (Grönroos, 1985; Gummersson,

1987; Harrell and Fors, 1992; Piercy, 1995;). As

mentioned before, the limited focus on customers and

competitors only seems not to satisfy an

organizations’ goal to determine a long-term market

share and profitability. Gummesson (1991) argues that

the management of service quality has to take into

account external influences form the market space and

internal factors from the organisation. Other authors

have pointed out the unapologetic approach of 

marketing strategy that can adequately satisfy the idea

that both internal and external factors have to be

considered on an equal footing (Greenley 1995; Foss,

1997). This is in contrast to the conventional

understanding of marketing strategies which are

executed by executives and mangers who primarily

focus on the external environment: customers,

competitors, suppliers and markets. The balanced

approach brings to the discussion the internal

marketing program that considers the internal

marketplace and internal customers to carry out

essentially the same process for the internal

marketplace (e.g. Grönross, 1982; Piercy and Morgan,

1991; Harrell and Fors, 1992; Foreman and Money,

1995; Varey and Lewis, 1999).

2.3. Identifying the evolutionary pillars of IM

The thinking of a balanced orientation in the field of 

marketing poses the critical question which elements

have to be taken into account when tackling the issue

and what differences / commonness between the

internal and external program can be identified (Piercy

and Morgan, 1991). In order to determine the role of 

an internally executed marketing approach and its

 balanced input for the overall marketing strategy we

will examine and define three different but closely

related pillars from the evolutionary context of IM and

finally synthesize the findings with the aim to provide

a comprehensive definition of IM and adumbrate its

scope as boundaries and classification are fundamental

 prerequisites to marketing analysis (Lovelock, 1983).

The pillars to be analysed in the context are:

- employee relationship

- market orientation perspective

- strategy implementation

All of the named perspectives have interrelationships

and overlapping moments with business domains

outside marketing. For example Human Resource

Management, Total Quality Management, Strategic

Management and others. This interdisciplinary

dimension underlines the opening paragraph where the

exact domain of IM is questioned and this in turn

should encourage managers and practitioners to

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approach the issue as a company-wide management

 philosophy (Grönroos, 1985; George, 1990; Keegan et

al., 1992).

In the ongoing process of this review the different

 perspectives are analysed and finally concluded with

the idea to come forward with a definition that has

 been synthesised from the findings of reviewed

literature. The core difficulty that occurs when

defining the relatively independent but relevant

 perspectives is their limited practical use for the

overall conceptual framework, particularly if we

aspire to precisely name the domain and value of IM

in order to legitimise organisations to make use of 

strategies that go beyond the external marketing

 program. In order to tackle the difficulty a synthesis of the definitions form the three pillars is undertaken

with the aim to take into consideration the requisite

components that are necessary to propose a set of 

criteria for a general use and understanding of IM.

3. A broader concept of Internal

Marketing

Before the named pillars are discussed in detail a

 broader concept of IM is delineated perusing the goalto determine its scope and definable boundaries which

are necessary for a thorough discussion of the

subject . As mentioned in the chapter above the

concept of IM is descended from the discipline of 

service marketing (Berry, 1981; George, 1990; Varey

and Lewis, 1999). Whereas in contrast to product

marketing or the product-centric view of an

organisation the service and its output are physically

intangible. More precisely, a product can be produced

in a constant quality while the service quality of a

supplier has an inseparable relation with the person

who is executing the service.

Focus on contact and non-contact

employees

Reviewing the literature we find publications and

researchers mainly focusing on customer contact

 personnel in service intensive businesses (Sasser and

Arbeit, 1976; Berry 1984 ; Bowen and Schneider,

1985; Tansuhaj et al. 1988; Woodside et al. 1989;

Philips et al., 1990; Berry and Parasuraman, 1991;

Ostroff, 1993) but there is also a respective number of 

academics who consider the service quality and its

delivery process as a task for the whole organization

(George and Grönross, 1989; George, 1990; Heskett,

1992; Rafiq and Ahmed, 1993).

With the first group giving the assumption that

motivated and satisfied contact-employees are a

crucial precondition for the delivery of good service,

the second group more or less considers the overall

 process within the organization as a successive

composition of the service output. Richardson and

Robinson (1986) for example have highlighted theinternal customer-supplier chain as an important factor 

of good service to external customers.

With simultaneous consideration of both perspectives

it becomes obvious that by means of this the selection,

motivation, competence and performance of 

employees can significantly influence the service

quality and also tangents the customer satisfaction.

The aspect of an internal customer orientation is based

on the notion that quality of internal operations is a

 progressive function and therefore will influence the

quality output with the external market and satisfy the

external customer (Pfau et al., 1991). On the basis of 

these assumptions and experiences the traditional

marketing concept has been extended by a further 

category – the internal customers or the employees.

The Organization as a marketplaceThis leads us to the underlying idea of IM which is to

view an organization as an internal marketplace. With

this idea all departments of an organization have

customers that need to be served with performance – 

either those customers are internally or externally

(Grönroos, 1981; Gummersson, 1987; Heskett, 1992;

Rafiq and Ahmed, 1993). The idea of internal

customers and the ongoing relations between them in

terms of service quality, service delivery processes

and common goals and values has been carried out

form different points of views such as TQM; HRM,

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Strategic Management (Piercy and Morgan, 1990 and

1991; Johnson and Scholes, 1989, 1993; Berry and

Parasuraman, 1991; Varey, 1995; Piercy 1995). Those

chameleonic disciplines where IM finds its purpose

also inherits one of the most challenging tasks, namely

the exact definition of its domain and responsibilities.

Reichelt (1997) for instance brought up the loyalty

effect. He found out the strong correlation of loyalty

 between organizations to its employees and the

 positive outcomes that is has on the overall customer 

loyalty. He further argues that through the high loyalty

of its employees and customers the organization can

increase its total customer retention rate which brings

significantly positive effects on long-term market

share, turnover and overall margins.

3.1. Employee Relations

The first dimension of IM to be analysed in this

section is the management of employee relations. As

service quality depends on the human resources who

fulfil the service perceptions of the external

customers, George (1977) outlined that satisfied

customers require satisfied employees within the

organization. His idea was primarily tested in the

sectors where retail marketing had a strong influence

and provided some argument and little evidence. Later 

 publications extended the idea of a link between

customer satisfaction and employee motivation but

also intended to extend and define the boundaries of 

IM (Hoffman and Ingram, 1991; Rafiq and Ahmed,

1993; Piercy, 1995). This brings us to the basic

approach that has been aligned by Berry (1981, p.34)where he defines IM as “viewing employees as

internal customers, viewing jobs as internal products

that satisfy the needs and wants of these internal 

customers while addressing the objectives of the

organization.” 

Considering the fact that each employee is an

individual with different attitudes and perceptions and

therefore the problem of fluctuation in output and

commitment triggers the need for a convergence of 

HRM activities and Marketing practices (Collins and

Payne, 1991; Glassmann and McAfee, 1992). The co-

operation and inter-functional integration with the aim

to establish a common understanding for success

factors as well as organizational culture are treated by

Mastenbroek (1991). Barnes (1989) identifies the

importance for a marketing-like approach of HRM, in

which marketing techniques have a strong impact on

recruitment and training. He describes IM as “a

 philosophy for managing the organization’s human

resources as a holistic management process to

integrate the multiple functions of the organization” .

Grönross (1981) accentuates that IM strives for the

integration of business functions and the creation of a

customer conscious employee environment. This

integrative approach finds further attendance fromStauss and Schulze (1999). They propose a human

resource oriented IM approach, which should secure,

continue and achieve the external marketing strategy

through the fellow employee.

Keeping in mind the employee-customer and job-

 product perspective mentioned above the important

thing is to satisfy and motivate the needs and wants of 

internal customers with a marketing like technique.

This seems to form a critical element of IM (Tansuhaj

et al., 1991). Assuming that customers in service

intensive businesses are buying a non insubstantial

 portion of labour, the performance and with it the

motivation and satisfaction of the person who

generates it are inseparable (Berry, 1984).

The perspective of an internal market place in which

employees are treated as customers who buy products,

namely jobs from the employers is the basic notion of 

the first pillar of IM described in this section. This

approach mainly is based on the assumption that the

level of service quality served to external customers

depends on the motivation and satisfaction of the

internal customers (Sasser and Arbeit, 1976; Grönross,

1981; Berry and Parasuraman, 1991) and therefore

requires an inversed use of marketing techniques

(Grönroos, 1981; Gummesson, 1987; Piercy and

Morgan, 1991; Rafiq and Ahmed, 1993). Perusing the

initial marketing goal to know what needs and wants

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the internal customer has is one part of the challenge

(Sasser and Arbeit, 1976; Varey, 1995). The second

 part requires an inter-functional alliance between

HRM and Marketing with the aim to optimise the

synergetic potentials in employing motivated and

satisfied internal customers by offering internal

 products (jobs) that are more attractive in comparison

to competitors (Grönross, 1981, Stauss and Schulz,

1999). Having identified the initial definition of IM

and the perspective of inter-functional collaboration

with HR finally leads us to an extended definition

from Berry and Parasuraman (1991, p.151) where they

state: “ Internal Marketing is attracting, motivating 

and retaining qualified employees through job-

 products that satisfy their needs. Internal marketing isthe philosophy of treating employees as customers…

and it is the strategy of shaping job-products to fit 

their human needs:”

3.2. Market Orientation

The second pillar to be identified in the evolutionary

context of IM is the dimension of market orientation

within the organisation. Taking into account the basic

notion of George (1977) that satisfied customers

require motivated employees some writers especially

in the area of the service marketing literature have

analysed the need and methods to make personnel

aware of customer-consciousness and sales-

mindedness in order to maintain and improve the

service quality for the sake of the overall performance

(for expamle Berry, 1981; Bonoma, 1984; Crainer,

1990; Dyson and Foster, 1982; Flipo, 1986; Grönroos,

1985, Gummesson, 199; Piercy and Morgan, 1991a;

Wilson et al.,1992).

In an attempt to define market orientation Narver and

Slater (1990) suggests that market orientation is a

 philosophy of doing business and defines it as: “The

organisational culture…that most effectively and 

efficiently creates the necessary behaviours for the

creation of superior value for buyers and, thus,continuous superior performance for the business.”

His definition of a guiding philosophy finds a wide

acceptance in the academic literature and expresses

that organisational attitudes, values and beliefs do

influence the behaviour of the firm and its overall

 performance. Slater (1990) any longer suggests that

market orientation consists of two dimensions:

customers and competitors (Slater, 1990, Day, 1990).

An example of customer orientation would be the

attempt to monitor employee commitment to

customers based on the notion that they understand the

customers needs and wants. An example of 

competitive understanding would be the behaviour of 

salespeople when sharing competitive information

with other functions and using them to take advantage

of competitor weaknesses (Grönroos, 1981 p.237).

Generally speaken the management of a marketoriented business approach and with it the market

oriented response represents the ability to understand

and satisfy customers and competitors through a

defined contribution of all employees and all

departments to collect and disseminate data and

design response modes (Day, 1990; Day and

 Nedungadi, 1994; Slater and Narver, 1994; Kohli and

Jaworski, 1990).

The consequences of market oriented behaviour are

treated for instance by Kohli and Jaworski (1990).

They have asserted that it internally impacts on

employees and externally on customers. The internal

influence is further on supported by Lichtenthal and

Wilson (1992) who see significant consequences for 

organisational and individual behaviour. Most

common internal benefits that occur through market

oriented approaches are employee commitment

(Jaworski and Kohli, 1993; Siguaw et. al, 1994), esprit

de corps (Jaworski and Kohli, 1993) and job

satisfaction (Siguaw et. al, 1994). Explicit influences

of market orientation on sales people have been

asserted by Mengüc (1996). He found out that sales

 people show more customer focus, less role ambiguity

and less role conflict. A popular tool to measure and

educate an organisation in terms of market orientation

are reward systems. Jaworski and Kohli (1993) report

that organisational reward systems have the strongest

impact on market orientation and that intelligently

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chosen reward systems can help to support the three

main elements of market orientation: collecting

information, dissemination of data and design of 

responsive actions.

Grönroos (1981) focused in his research on customer-

contact people and brought to the discussion the point

that buyer-seller interactions not only provide

important interaction for re-purchasing opportunities

 but that buyer-seller interactions also provide a

marketing opportunity for the organisation. Extending

the original view of George (1977) that employees

have to be motivated in order to deliver best

 performance for their customers Grönroos (1981) and

collaborators stressed that employees also have to bemarket orientated or sales-minded (Grönroos, 1981,

George 1990, Day and Wensley 1988; Narver and

Slater 1990; Kohli and Jaworski 1990). Parasuraman

et. al (1988) expresses that failures in customer 

satisfaction are reduced by a company wide exchange

of information on customers perceptions and that it

might improve the integration of work activities

 between all members of the organisation. In order to

reach this goal Ballantyne (1991a) treats the

importance for an organisation to educate their 

employees on customer service skills. He further 

names techniques like quality improvement that can

 be reached through a market-oriented business

 philosophy and further on identifies it as a source for 

competitive advantage and differentiation. But in

order to take advantage of this source of 

differentiation the will of the employees to co-operate

and commit is required and it is considered to be an

important task of IM to make the employees “buy-in”

the basic belief of a customer-focused quality

management philosophy (Barnes, 1989; Ballantyne,

1991b).

Influencing and educating the internal market of 

employees to a customer oriented and sales driven

attitude is extensively treated by George (1990) and

Grönross (1985). They propose the implementation

and use of active marketing-like techniques for the

internal customers with the aim to educate employees

towards customer-consciousness and sales-

mindedness. Drummond (1992) expands this point of 

view and demands that employees have to be

motivated and educated to identify the external

customer by “thinking backwards” from the

customer’s needs and wants to the necessary actions to

 be undertaken. The importance to make service

 providers aware of service skills and marketing

approaches is addressed by Green et al (1994) who

states that “…the quality of the service is inseparable

from the quality of the service provider.”

Customer orientation as a further facet of IM is

dealing with service providers and their delivered

quality output through the mechanism of a market

orientated business philosophy. The desiredconsequences on the overall performance, return on

assets, employee motivation and retention of 

customers in consideration of IM aspects and

strategies we recommend the definition of Grönroos

(1985, p.42) where he states: “The internal marketing 

concept holds that an organisation’s internal market 

of employees can be identified most effectively and 

hence motivated to customer consciousness, market 

orientation and sales mindedness by a marketing-like

internal approach and by applying marketing-like

activities internally.”

3.3. Strategy Implementation

The 3rd pillar of IM has recently gained a major 

attention in the general management literature and

more specifically in the marketing literature (Berry,

1981, Bonoma, 1984; Crainer, 1990; Flipo, 1986;Grönroos, 1985; Gummersson, 1991, Stainsby, 1992;

Webb and Morgan, 1992; Wilson et. al.1992; Winter,

1985; Rafiq and Ahmed, 1993).

The discussion starts form a point where researchers

and practitioners have identified a number of 

difficulties that occur when new strategies and plans

have to be implemented within an organisation

(Crainer, 1990; Piercy and Morgan, 1991; Wilson et.

al. 1992). Supposing that changes to be undertaken

effect the organisational culture and therefore provoke

strong resistance in terms of cross-functional adoption

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in enterprises has been observed. This is due to the

fact that changes in terms of strategy often are decided

out of context and without consideration of the

organisation’s existing culture (Burke, 1987). Flipo

(1986) outlined that the effective implementation of 

new strategies requires a planned effort to overcome

inter-functional conflict and the need to improve

internal communication. Other authors have

mentioned the failure of managers to integrate the

respected employees who are actively influenced by

the changes and to communicate the content of their 

 plans (McKenna, 1992; Motyle, 1992; Smythe et. al.,

1992). A further problem for the effective planning

and implementation of change strategies seems to be

the lack of ownership resulting in undefinedcommitment form different managers (Pettigrew and

Whipp, 1991). More specifically Pettigrew and Whipp

(1991) observed that differences between senior 

management in terms of responsibility and distinctions

in interest are not treated actively and therefore can

have negative influence on the overall process of 

change. At this point Ballantyne (1991a) argues that

IM should provide a vital application enabling

decision takers and organizations to close the gap

 between the formulation and implementation of 

corporate strategies. His approach finds further 

support from other writers who extend his view with

the necessity to generate knowledge, understanding,

involvement and consensus for marketing strategies

within the organisation (Christopher et. al. 1991;

Gummesson, 1991; Payne; 1988; Piercy and Morgan,

1990, 1991; Piercy and Peattie, 1988). Hence, IM is

considered as a mechanism for implementation and a

vehicle to integrate cross-functional departments and

interests (Rafiq and Ahmed, 2000). The integrative

 potential of IM is more explicitly clarified by

Glassman and Mc Affee (1992). They identify the role

of IM in integrating marketing and personnel

 perspective plus viewing personnel as a potential

resource for the marketing function. Especially

Ballantyne (1991a) stresses the necessity for 

marketers to identify the single employee in order to

actively influence and motivate them to commonly

anticipate the change process. He further highlighted

the importance to implement internal processes to

effectively convert marketing plans. At this viewpoint

IM appears to be an implementation tool that has a

general use for any type of marketing strategy (Piercy

and Morgan 1989). Other authors have identified IM

as a central program to reduce departmental isolation,

inter-functional friction and the opportunity to

overcome resistance to change (Martin, 1992; Darling

and Taylor, 1989). Addressing the latter findings

above Piercy and Morgan (198) expressed that IM can

not only be seen within the context of service

marketing it further has to be generalized to a broader 

range of use. Applying the concept for manufacturing

firms for example was proposed by Harrell and Fors(1992) . Ahmed and Rafiq (1995) propose IM as a

management implementation methodology that is

suitable for a diverse range of contexts.

Recapitulating the involvement of IM in the field of 

strategy implementation this section ones again

expands the broader scope if IM. Having dealt with

employee relations first and secondly with market

orientation the 3rd pillar explicitly does also focus on

non-contact employees who influence the customer 

service capabilities through back-office excellence.

The wider approach in terms of employees and

functions and the suitable link towards strategic

changes requires a more generalist approach from

managers and enterprises. Considering the integrative

approach between changes and functions IM can reach

success factors like market orientation, performance,

service quality and collaborative support for new

strategies. Referring to Wilson and Fook (1990) the

sustainable implementation of IM tools that facilitate

the change process leading to competitive advantages

requires “to market the marketing concept” and

function. Mercer (1992) even concludes that the

marketer’s role is equivalent to those of a change

agent.

Taking these issues into account and striving for the

need to define IM and classify its boundaries we

 propose the definition of Ahmed and Rafiq (1993,

 p.222) where they define IM as a “ planned effort to

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overcome organizational resistance to change and to

align, motivate and integrate employees towards the

effective implementation of corporate and functional 

 strategies”. Their definition clarifies that all kind of 

changes in strategy require an IM effort to bypass

organisational obstacles and to motivate employees.

As most of strategic changes affect several

departments or functions they emphasize the

importance of cross-functional integration.

4. Limitations of the IM concept

The outlined model of IM which as been developed

from the traditional environment of marketing

includes a number of limitations. Applying the

concept for the “inner” market of an enterprise some

authors have highlighted considerable aspects in the

theoretical dimension as well as in the managerial

context.

The most fundamental problems occur due to the

missing definition of IM. The problem of a missing

definition not only leads to confusion in the practical

use and implementation, but also create contradictions

at the conceptual level with respect to the defined

 boundaries and precise domain. Despite the variety of 

definitions the missing of a unified concept prevents

to name the purpose and value of IM, what is it

supposed to do, how it is supposed to be done and

who is supposed to do it.

Ahmed and Rafiq (1993) have identified a number of 

 potential limitations in the current set of definitions

and approaches. For example unlikely the external

marketing dimension the “product” that employeescan buy may in fact be unwanted by them. Secondly

they put forward that the employees will not have a

choice in the “products” they select. Considering the

contractual nature of employment they argument that

employees in the final stage might accept “products”

they do not want. Further they point out the financial

aspects of having satisfied employees. And finally the

question is raised whether the internal customer or the

external customer has primacy when dealing with the

notion of the “employee as customer”.

The discussion of the primacy of customers finds a

wide attention among academics form different

schools (Grönroos, 1981; Sasser and Arbeit, 1976,

Ahmed and Rafiq, 1993). With a rigour focus on the

traditional marketing program the only customer that

exists is the external customer. Bringing together the

ideas of internal customers with external customers

raises the question as to weather the needs and wants

of which customers have primacy. Tom Farmer,

founder and chief executive of U.K. Kwik-Fit plc.

said:” in any business there are two types of customers

 – internal customers and external customers.” The

academic literature doesn’t give a clear answer to the

question. Sasser and Arbeit (1976) for instance

 propose that human resources are the most influentialmarketplace for a service driven organization and

therefore impart the internal customer primacy over 

the external customer. Rosenblunth and Peters (1992)

argue that the needs and wants of external customers

only can satisfactorily be met after those of employees

have been successfully met. This point of view indeed

would reverse one of the most constitutional

 presupposition of marketing – that the external

customer has primacy. On the basis of the

argumentation, it is proposed that a common

definition of IM avoiding the contradictions cited

above, should drop the phrase of “employee as a

customer”

4.1. Synthesising the findings and

proposing a definition for IM

The detailed review of the academic literature has

shown that there exist a number of different but

closely related areas where the broader concept of IM

can be used. Having analysed and identified three

independent pillars where IM finds appropriation

(employee relationship, market orientation

perspective and strategy implementation) the

following section attempts to combine the points of 

views and definitions with the aim to provide a set of 

criteria to conceptualise the main elements of IM.

Summarizing the findings in the evolutional

development of IM from the chapters above the

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following key criteria of what IM consists can be

mentioned:

- motivating and satisfying employees

- customer orientation and sales mindedness

- use of marketing-like approaches internally

- cross-functional collaboration and integration- change strategy and implementation

Considering the criteria above it is to say that the three

main pillars do not include all the headlines

simultaneously. In the first pillar for example Berry

and Parasuraman (1991, p.151) focus on the

motivation and satisfaction of employees that can be

reached through job-products that satisfy the human

needs. Whereas Grönross (1985, p.42) addresses in the

second pillar the importance of a market orientated

and sales minded employee who can be educated with

a marketing-like technique internally. Finally Ahmed

and Rafiq (1993) bring to discussion in the 3 rd pillar 

the strategic dimension of IM. They point out the need

for an effective implementation of corporate and

functional strategies in order to overcome

organisational resistance.

Bearing in mind that the lowest common

determination of IM is the aim to improve the overall

service quality within enterprises (George, 1990;

Gummersson, 1987, Berry and Parasuraman, 1991;

Grönroos, 1985; Piercy, 1995) it is inescapable to

 precise the current definitions to expand the area of 

application. However it is being realized that the

domain of IM includes far more than the traditional

implementation of marketing programs it is necessary

to name a set of boundaries which include the

different perspectives. One definition that gives a very

clear and comprehensible picture of IM is proposed by

Grönross (1985, p.41). He says that:”…an

organisation’s internal market of employees can be

influenced most effectively and hence motivated to

customer consciousness, market orientation and sales

mindedness by applying a marketing-like internal 

approach and by applying marketing-like activities

internally.” Meeting the criteria of market-orientation

and marketing-like techniques on the other hand it

lacks an emphasise on the change management

dimensions and the cross-functional integration.

Whereas Ahmed and Rafiq for instance (1993, p.222)

suggest that IM involves the following aspects: “…a

 planned effort to overcome organizational resistance

to change and to align, motivate and integrate

employees towards the effective implementation of 

corporate and functional strategies.” Their 

definition respects the strategic importance and the

need to motivate staff but they do not allude the use of 

marketing like techniques to accomplish.

Expanding both definitions and merging with the

criteria listed above the following definition of IM is

 proposed:

 IM is a planned effort using marketing-liketechniques internally to overcome cross-

 functional resistance to change and to align,

motivate and cross-functionally integrate

employees towards the effective

implementation of change strategies in order 

to deliver customer satisfaction through a

 philosophy of creating motivated and customer conscious employees.

5. Influences on the current discussion of 

Internal Marketing

The review of a wide body of literature of the last two

decades has revealed that the academic discourse on

internal marketing has shifted its emphasis from

defining the nature of internal marketing to finding

 practical ways of implementing IM strategies or using

IM as a practical way of strategy implementation.

Varey (1999) has identified a number of themes

offering a contribution to the development of a more

sophisticated and valuable conception of internal

marketing:

• marketing-oriented service employee

management;

•the scope, nature and purpose of marketing;

• marketing as exchange;

• the political economy paradigm;

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which for them is to channel staff commitment and

team-work into market-orientated problem solving

and opportunity seeking. They conceptualise IM as:

“ Internal marketing is any form of marketing within

an organisation which focuses staff attention on the

internal activities that need to be changed in order to

enhance external marketplace performance

(Ballyntyne, 1995, p. 15).” Ballantyne concludes that

the common denominator in all internal marketing

 perspectives is knowledge renewal. He defines

knowledge renewal as generating and circulating new

knowledge.

Also Lings (1999) identifies three phases of 

approaches on IM. His classification for the third phase is the aiming at marketing and the marketing

concept and creating common values amongst all

employees. He finds the common denominator of IM

conceptualisations is the need of collecting

information about the internal market.

The next part of this review will concentrate on

relationship marketing and the learning organisation

which has been brought into the most recent

discussion in operationalising internal marketing in

the literature reviewed.

5.1. Relationship Marketing

Varey (1999) states that the relationship between

marketing and quality at a strategic level, i.e. how to

gain sustainable competitive advantage through a

customer orientation, becomes clearer. Still theimplementation of a practicable marketing approach

remains a recurring problem. In the literature, this is

often centred on the question of attaining and

maintaining effective communicative relationships

 between organisation members and between work 

groups and the development of a super-ordinate goal

for co-operative working.

One leading new approach for relationship building

and management has been labelled relationship

marketing which eventually has entered the marketing

literature (Grönroos, 1989, 1992; Jackson, 1985;

Gummesson, 1987,1990,1993; et al.).

Grönroos sees relationship marketing as a paradigm

shift from the “traditional” 4P marketing mix.

Relationship marketing is suggested as one new

marketing paradigm. Internal marketing is seen as a

 process to be integrated with the total marketing

function. External marketing, both the traditional parts

of it and interactive marketing performance, starts

from within the organisation. As compared to

transaction marketing situations, a thorough and on-

going internal marketing process is required to make

relationship marketing successful. If internal

marketing is neglected, external marketing suffers or 

fails.

He argues that the four Ps of the marketing mix are

not well able to fulfil the requirements of the

marketing concept. As Dixon and Blois (1983) put it,

“...indeed it would not be unfair to suggest that far 

from being concerned with a customer’s interests the

views implicit in the four P approach is that the

customer is somebody to whom something is done”

To use a marketing metaphor, the marketing mix and

its four Ps constitute a production-oriented definition

of marketing, and not a market-oriented or customer-

oriented one. Moreover, although McCarthy (1960)

recognises the interactive nature of the Ps, the model

itself does not explicitly include any interactive

elements. Furthermore, it does not indicate the nature

and scope of such interactions. Especially since these

interactions occur between customers and “part-time

marketers” – employees who are not considered

marketing people.

Service providers tend to build long-lasting

relationships with their customers. Grönroos

developed the “customer relationship life-cycle”

model to describe the long-term nature of the

establishment and evolution of the relationship

 between a firm and its customers. He identified that

managing this life-cycle is a relationship marketing

task due to the fact that “full-time marketers” with the

traditional four P approach only partly determine the

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success of a company with an individual customer 

whereas the “part-time marketers” of a service

 provider may often have a much more important

impact on the future purchasing decisions of the

customer. Therefore an interactive marketing

 performance requires that all parts of the firm that are

involved in taking care of customers can collaborate

and support each other in order to provide customers

with a good total perceived quality and make them

satisfied. Thus, for a firm pursuing a relationship

marketing strategy the internal interface between

marketing, operations, personnel and other functions

is of strategic importance to success.

Grönroos (1990) defines relationship marketing in thefollowing way: “Marketing is to establish, maintain,

and enhance relationships with customers and other 

 partners, at a profit, so that the objectives of the

 parties involved are met. This is achieved by a mutual

exchange and fulfilment of promises”.

Berry (1983) views relationship marketing as a

strategy to attract, maintain and enhance customer 

relationships.

Rapp and Collins (1990) say that the goals of 

relationship marketing are to create and maintain

lasting relationships between the firm and its

customers that are rewarding for both sides.

Christopher (1991) et al   consider relationship

marketing an approach that aligns marketing,customer service and quality, with a focus on

customer retention, an orientation on product benefit,

a long time-scale, a high customer service orientation,

a high customer commitment and a high customer 

contact as well as on the notion that quality is the

concern of all.

Blomqvist (1993) et al. offer the following key

characteristics of relationship marketing: every

customer is considered as individual, activities of the

firm are predominantly directed towards existing

customers, it is based on interactions and dialogues

and the firm is trying to achieve profitability through

the decrease of customer turnover and the

strengthening of customer relationships.

Piercy (1996) refers to relationship marketing as the

attention being focused on making relationships and

 partnerships the dominant model of how we manage

the interface between an organisation and the outside

world of the marketplace (e.g. Christopher  et al.,

1992; McKenna, 1991), where the most important

relationship is with the customer, and the goal is a

satisfied customer and a productive, enduring

relationship (e.g. Gummesson, 1994).

Varey (following Drucker, 1973) defines

communication as the mode of the organisation, rather 

than the means. The achievement of goals is seen as

occurring within relationships rather than in discrete

transactions of discrete individuals or groups. Internal

marketing seen as internal relationship management is

an integrative process within a system for fostering

 positive working relationships in a developmental way

in a climate of co-operation and achievement. Such an

internal customer relationship management system has

a number of key features (adapted from Howe et al.,

1992):

• The “voice” of the customer is incorporated into

 product/service decisions.

• Customer commitment is earned in a “social”

contract.

• There is open exchange of ideas for mutual gain.

• Employees develop a greater identification with

the corporation (just as the supplying corporationmust become more customer-oriented).

• Customers are involved in product design,

 production and service.

• There is close partnership between suppliers and

customers.

• Customers are viewed as individual people and so

are “value” providers.

• There is continuous interaction and dialogue

 between suppliers and customers.

• There is a focus on discovering, creating,

arousing and responding to customer needs.

•Relationships are viewed as enterprise assets.

• There is systematic collection and dissemination

of customer information (detailing and

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negotiating requirements, expectations, needs,attitudes and satisfaction).

• Communications in the internal market are

targeted through segmentation analysis

Also Sargeant (1998) identifies the integrative element

of communication and relationship management as

key since it shifts the emphasis in internal marketing

away from the organisation’s relationship with its

employees to the relationships that employees have

with each other. Enhancing the quality of integrated

customer-supplier relationships is thus seen as a key

role for marketing to perform.

Ballantyne (2000) concludes that internal marketing is

a strategy in action for developing relationships

 between employees across internal organisational

 boundaries challenging any internal activities that

need to be changed. The intention is to enhance the

quality of external marketing relationships. Further he

states (following Gummesson) that all marketing is

grounded in interactions within networks of 

relationships, regardless of defining industry groups

and regardless of legal-rational company borders. On

this basis, all internal marketing is potentially

relationship marketing turned inward.

The strength of internal marketing is its intent coupled

with trusting employees and being trustworthy.

Interpersonal relationship development within internal

marketing, based on these fluxing behavioural

intentions, is interpreted as the evolution of a series of 

cognitive re-appraisals along a personal path to

“customer consciousness”.

Lings (1999) links the applicability of internal

marketing approaches to the management of external

relationships. He examines the relation between

internal marketing, supply chain relationships and

service quality.

His arguments are based upon the view that the

internal market consists of groups communicating to

other groups within the organisation and internalmarketing is considered to be the process of creating

market conditions within the organisation to ensure

that internal customers’ wants and needs are met (e.g.

Bekkers and Van Haastrecht, 1993). He sees this

relationship between internal customers and their 

internal suppliers as the focus of the internal

marketing effort.

By identifying internal customers and suppliers as part

of the internal marketing campaign, interactions

 between internal suppliers and customers can be

identified and the communications associated with

these interactions can be examined to identify

 possibilities for improvement. The value chain (Porter,

1985) is used to develop an internal customer structure

of the firm, which differentiates between different

types of internal customers. Morgan and Hunt (1994)

identify the need to manage relationships betweeninternal customers and their internal suppliers

simultaneously with the management of supply chain

relationships.

It appears that the management of supply chain

relationships may have important similarities to the

management of internal value chain relationships and

that the tools for the identification and management of 

internal suppliers and their internal customers may

also be useful in the management of suppliers and

customer in the supply chain relationship. As each

department identifies its internal and external

customers and suppliers a relationship network is

identified. Lings concludes that such networks can be

expected to be complex and as such the responsibility

for the management of these interactions should be

that of the departmental manager rather than the

marketing function. In this way the whole organisation

 becomes responsible for the creation and maintenance

of marketing relationships in which individuals in

different departments can physically relate to their 

customers. This provides all individuals in the firm

with easily identifiable customers, both internal and

external, and a clear responsibility to maintain the

quality of the service, which is provided to those

customers.

Handfield and Nichols (1999) identify several

elements of trust between the firm and the supply

chain partner, which include reliability, competence,

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openness and the importance of the primary interface.

These factors in the development of trust between

supply chain partners are similar in nature to those

identified by Parasuraman (1988) et al . as important

components of service quality.

Grönroos (1994) calls the promise concept an integral

element of the relationship marketing approach. It

includes giving promises and thus persuading

customers as passive counterparts on the marketplace

to act in a given way in order to attract new customers

and initially build relationships. Fulfilling these

 promises is equally important as means of achieving

customer satisfaction, retention of the customer base,

and long-term profitability. Like others Grönroosidentifies trust as another key element. “The resources

of the seller – personnel, technology and systems – 

have to be used in such a manner that the customer’s

trust in the resources involved and, thus, in the firm

itself is maintained and strengthened”( Grönroos,

1990, p. 5).

Concluding from the literature reviewed it can be said

that in the current discussion of internal marketing

relationship marketing holds a dominant role in

operationalising the internal marketing concept. In

order to achieve customer orientation the traditional

concept of transactional marketing is no longer seen as

appropriate to fulfil this task. The multi-dimensional

interactions between internal and external customers

and suppliers can only be maintained and enhanced

through two-way communication on a personal level

rather than by a single marketing department. In this

sense internal marketing becomes a strategy for 

relationship development in order to serve another 

 purpose: creating and circulating new knowledge

within networks of relationships.

5.2. Learning Organisation

Cahill (1995) focusses in his discussion on internal

marketing on another recently introduced concept.

This concept is called the “learning organisation”. The

introduction of the learning organisation concept to

internal marketing is to provide a recommended

method of organising, the better to provide services to

firm’s customers.

In identifying that a general definition of the learning

organisation its still missing he follows Watkins and

Marsick (1993) giving five statements about what a

learning organisation is:

1. The learning organisation is more than just a

collection of individuals who are learning.

2. The learning organisation demonstrates

organisational capacity for change.

3. The learning organisation accelerates

individual learning capacity but also

redefines organisational structure, culture, job design, and assumptions about the way

things are.

4. The learning organisation involves

widespread participation of employees – and

often customers – in decision making and

information sharing.

5. The learning organisation promotes systemic

thinking and building of organisational

memory.

Cahill (1995) develops the concept of the learning

organisation as starting from the point of 

organisational learning and going forward in terms of 

systems theory to create a new kind of organisation.

The difference between organisational learning and

the learning organisation is that only a learning

organisation consciously learns and that it understandsits culture as well as the impact that being a learning

organisation has on the firm’s culture and the

reciprocal impact that the culture has on the firm’s

ability to learn.

Thompson and Lutherans (1990) further state several

 properties that emerge when relating behavioural and

learning principles to organisational culture:

• Culture is a generic term.

• Culture is learned.

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• Culture is transmitted through a pattern of 

 behavioural interactions.

• In an organisational setting, there are

multiple reinforcements and reinforcing

agents.

• Each individual carries predispositions that

shape his or her interpretation of the

organisational culture.

• A symbiotic relationship exists between the

reinforcing agent and target.

• Changing an established culture is difficult.

Cahill believes that the metamorphosis into a learning

organisation is a necessary step in the correct

 performance of internal marketing as a tool helping to

implement internal marketing to get the organisation

to provide its services to its customers better, with

more competence and understanding of who the

customers are and what they want. In his opinion it is

“the culmination of all the empowerment and human

 factors design or organisations, the jump from theory

 X to theory Y to learning organisations”(Cahill, 1995

 p.32).

Dixon (1992) states that organisational learning may

have become the critical competence of the 1990s.

Halal (1996) suggests that organisational learning may

merely be the rebirth of organisation development, in

using team learning to encourage change from the

 bottom of the hierarchy of authority. This is needed to

 build effective teams, but does not recognise the

growing need to transform organisations into

entrepreneurial, democratic systems (Halal et al.,

1993; Halal, 1996) which are able to learn about the

current world by unlearning outmoded assumptions

 based on past experience. The parallel learning

structure allows people to work in a completely

different way from that of the formal organisation. It

is specifically designed to solve problems, and allows

change and innovation to be managed without

disrupting the formal structures and mechanisms

required for routine and repetitive tasks. Managers and

workers are assigned to tasks within a different

context. This provides workers with a chance to affect

the formal organisation, and evidence shows that this

leads to increased work satisfaction and task 

effectiveness (Zand, 1981).

Varey (1999) contributes that a broader concept of 

internal marketing requires that a process, or meta-

structure, perspective is taken for organisational

development through learning in a consciously created

interactive communication system, i.e. a social system

which is not solely concerned with economic

transactions.

Ballantyne (2000) defines the common denominator inall internal marketing perspectives as knowledge

renewal differentiating it in two forms. The first is

knowledge generation, meaning the creation or 

discovery of new knowledge for use within the

organisation, with external market intelligence as

inputs. The second is knowledge circulation,

representing the diffusion of knowledge to all that can

 benefit, through the chain of internal customers to

external customers.

He develops his model of knowledge renewal in three

steps. First he depicts the main modes of learning

activity. Second, he reconstructs these as a continuing

 process for knowledge renewal. Third, he matches

 both of these with the intentions that permit an insight

into the participants’ behaviour. Thus he sets a general

framework for internal marketing that might be tested

in any organisational setting.

Four distinct modes for learning activity are revealed

(following Ballantyne):

•  Energising: learning how to work together on

useful marketplace goals that are broader than

the bounds of any individual job description.Following Katz and Kahn (1966) Ballantyne

understands energy renewal as coming directlyfrom the organisational activity itself.

• Code breaking: learning how to apply personal 

resources of “know-how” in working together to solve customer problems, create new

opportunities and change internal procedures.

Organisations “learn” through individual staff 

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members. The first steps are often intuitive; whatwill work cannot really be known until tested in

action. However, testing personal know-how in agroup setting is a necessary part of checking out

the wider application of personal experience and,

in doing so, gaining confidence to challengeentrenched internal policies and procedures.

Clearly, working to discover and uncover 

operational solutions to customer problems iscustomer consciousness in action.

•  Authorising: learning to make choices between

options on a cost-benefit basis and gaining 

approvals from the appropriate line authority.Re-designing processes that cross over 

departmental borders also means learning anorganisation-specific set of skills in representing a

case for change. A well-documented argument for changing the particular process or policy is

necessary, as is an understanding of the broader 

context in which it operates. This also requiresadvocacy and listening skills and, to some degree,

the support of powerful others.•  Diffusing: learning how to circulate and share

new knowledge across managerial domains in

new ways. The diffusion of new knowledge ismore than one-way message making. Many new

ways of working can be tested and negotiatedthrough dialogue. A trustworthy management

would seem to be the secret of gaining staff commitment. However, any large organisation

have hierarchical and specialist divisions thatconstrain interaction across internal borders. The

effect is that these become barriers to trust and

commitment if left unattended.

To connect the four learning activity modes to the

concept of knowledge renewal Ballantyne draws

 particularly on the insights of Nonaka and Takeuchi

(1995). He discusses each phase once more linking

them to Nonaka and Takeuchi’s four-phase theory of 

knowledge creation:

•  Energising: developing common knowledge: This

 phase is “energised” by the sharing of tacitknowledge, a tacit to tacit process, thusamplifying common knowledge under conditions

where trust is present.

• Code breaking: discovering new knowledge: This

 phase is characterised by interaction in the

discovery of new knowledge, a tacit to explicit process, necessarily supported by trust between

the participants at the start, and a developingmutual obligation to see the task through.

•  Authorising: obtaining cost-benefit knowledge:

This phase is characterised by bringing together 

explicit knowledge on costs and benefits, an

explicit to explicit process, where rationalitynonetheless is informed by a sense of obligationand trust.

•  Diffusing: integrating knowledge: This phase is

characterised by the integration of new

knowledge into the working ways of theorganisation, an explicit to tacit process, in which

the store of organisational knowledge is renewed,at the explicit level, enhanced by personal

knowledge and commitment.

Ballantyne introduces the third connection as key to

the sustainability of the other two. This is the

spontaneous community of participants, shaped within

and by a supportive network of relationships. He sees

the strength of internal marketing as its intent coupled

with trusting employees and being trustworthy.

Organisational knowledge is renewed through

interaction and dialogue. “Energising” and “diffusing”

involve new learning behaviours and thus require the

co-operation of HRM, and “code breaking” and

“authorising” need support from operational

departments.

Senge et al (1994) define learning in organisations as

the continuous testing of experience, and the

transformation of that experience into knowledge – 

accessible to the whole organisation, and relevant to

its core purpose. Senge (1993) identifies four groups

of concepts which need attending to in order to build

an organisational foundation for the learning

organisation: philosophy; attitudes and beliefs; skills

and capabilities; and tools. He beliefs that developing

this foundation and the new organisational skills and

capabilities which need to flow from them may be the

“highest-leverage area for creating lasting change”

( Senge, 1993, p. 21).

Senge further focusses tightly on the necessity of 

having a shared vision throughout the organisation.

 providing the focus and energy for learning.

The literature reviewed provided so far for the

development of the academic discourse on IM, its

main pillars and the current influences on the

discussion. The last chapter is concerned with the

implications for further research on IM identified inthe literature reviewed.

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6. Implications for further research

Suitable research should assist the development of 

terminology for a single clear understanding of the

underlying principles of internal marketing among

managers and academics alike. The extent of 

acceptance of “internal marketing” as a management

 philosophy by managers should be evaluated and if 

they recognise their own role in providing excellent

service to their employees?

Varey (1995) suggest to conduct research in

organisations which do not have a strong marketing

orientation to test the applicability of IM in “non-

marketing” companies. Further he points at a number 

of implementation options being defined for strategic

 plans ( Nutt, 1989) and raises the question to what

extent internal marketing can enable the various

tactics to succeed and if there are other tactics

available to the strategic manager as part of a strategic

approach?

Rafiq et al (2000) prefer the development of a scale to

measure employee empowerment in order to have acomplete set of scales for developing a reliable

measure of IM scale. In their opinion this would be a

considerable step forward in IM research. This

measure can then be used to assess the claims made

for IM, for instance regarding service quality,

customer satisfaction, customer loyalty, and

 profitability.

Lings (2000) focuses on developing a full

understanding of the internal customer structure of the

supply chain partners and identifying the inter and

intra-firm supplier customer interactions which occur 

within this structure.

Following on from the modelling of the supply chain

firms the propositions developed can be tested.

Service expectations can be measured using similar 

methodology to that used by Parasuraman et al. (1985)

in their identification of the elements of service

quality.

However the ten dimensions of service quality which

are important to the external customer (Parasuraman

et al., 1985) cannot be assumed to be the same as

those which are important to the supply chain or 

internal customer. Once the important service quality

dimensions for each internal and supply chain

customer have been identified it will be possible to

examine these and explore the propositions that they

differ according to the nature of the supplier-customer 

interaction.

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