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A Broadened Conception of Internal Marketing

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Abstract

Internal marketing has been of interest to practitioners and academics, in marketing and other disciplines of management, for some years, and published papers focus on definitions, the role of internal marketing in organisations, and various empirical investigations. Discusses the elements of a broadened concept on internal marketing, which emerges from: a systematic review and examination of the existing literature; case study material; “expert” opinion from leading academics; and interviews with managers.
European
Journal of
Marketing
33,9/10
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European Journal of Marketing,
Vol. 33 No. 9/10, 1999, pp. 926-944.
#MCB University Press, 0309-0566
Received August 1997
Revised January 1998
A broadened conception of
internal marketing
Richard J. Varey
BNFL Corporate Communications Unit, University of Salford,
Manchester, UK, and
Barbara R. Lewis
Manchester School of Management, UMIST, Manchester, UK
Keywords Internal marketing, Employee communications, Marketing theory, Case studies,
Literature review
Abstract Internal marketing has been of interest to practitioners and academics, in marketing
and other disciplines of management, for some years, and published papers focus on definitions,
the role of internal marketing in organisations, and various empirical investigations. Discusses
the elements of a broadened concept on internal marketing, which emerges from: a systematic
review and examination of the existing literature; case study material; ``expert'' opinion from
leading academics; and interviews with managers.
Introduction
Explicit discussion of the marketing concept in use in the internal operations of
the organisation entered the marketing and service management literature in
the late 1970s. However, this concept has origins in published discussions of
the organisation of marketing systems from the early years of the twentieth
century. It would seem that the essence of internal marketing is not a
phenomenon of the post-industrial era, since there is some evidence of
associated attitudes and methods in the early marketing management
literature, indicating that programmes to generate commitment amongst
employees to company goals are not new. For example, Frederick Taylor
stressed an internal focus, which bears an obvious resemblance to the attitude
management aspect of internal marketing (GroÈnroos, 1994). It is the active,
market-oriented, approach that is new.
Recent studies of managers' concerns show employee communications,
involvement and development (a new employer-employee ``contract''), the
redesign of business processes, and the perceived relationship between
employee and customer satisfaction, as predominant (for example, in the People
Factor Study, (Watson Wyatt, 1995)). Further, service-orientation and the need
for greater organisational effectiveness have become major features of debate
about sources of competitive advantage and the future form and purpose of
business enterprise organisations. Internal marketing has been offered as a
management technology (see Fisk (1986) and Sweeney (1972), for debate about
whether marketing is a management technology or a social process) for solving
problems of internal service productivity, marketing orientation, successful
implementation of appropriate plans and customer orientation. It has been
promoted to a position of some importance and recognition in much of the
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Broadened
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marketing
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management literature of the 1980s and beyond, appearing now in most
marketing and service management textbooks. Yet, it is clearly still an
evolving subject, with no firm theory or strong base of empirical evidence to
show how and why it is of value to managers. Why has the notion of internal
marketing come to such prominence in the 1990s? Perhaps its apparent
simplicity has immediate appeal for managers. Perhaps another development
of marketing principles into a new application is evident, rather than any
fundamental development in marketing theory (Arndt, 1979). However, the
popular internal marketing theory may be too simplistic to be of real value.
In 1992, the opportunity arose to embark on an in-depth research
investigation of internal marketing. The objectives of the research were: to
study the origins, nature, scope and application of the internal marketing
concept; and to consider how the internal marketing concept might be
developed to take a greater account of the social and other non-economic needs
and interests of people working in an organised enterprise. The intention was
to develop and offer a broadened concept and associated system model for
internal marketing, as a social (communicating) system capable of providing a
means for organisational capability enhancement (e.g. economic performance)
and improved quality of working life for organisational members.
Data were collected from several sources. A systematic search for and
review of the literature in various disciplines pertaining to internal marketing
was undertaken, resulting in a bibliography of over 450 publications. Some 38
case studies were examined for content, and 25 leading academics were
surveyed for their expert opinion on the essential elements of the concept of
internal marketing. Finally, a practitioner view was explored through data
generated from 37 in-depth interviews in which managers were asked to
compare and contrast internal marketing with employee/internal comm-
unications, and to consider its practical impact on business performance.
Some of the major findings from the research are presented in this article
(see Varey, 1996, for further detail and discussion). Initially, the context of the
study is highlighted, and then limitations of the popular concept of internal
marketing are addressed. Consideration is then given to the structural impact
of internal marketing which leads into the presentation of a broader conception
of internal marketing, together with some implications for management.
Context of the study
In considering the merits of adopting a strategic marketing management and
total quality management approach as a response to change in the business
environment, internal marketing may be identified as perhaps having scope to
deal with the philosophy and behaviour necessary for ``mindful'' management
(Langer, 1989), which is committed to managing (Geneen and Moscow, 1986),
and which has a will to manage (Bower, 1966). The relationship between
marketing and quality at a strategic level, i.e. how to gain sustainable
competitive advantage through a customer orientation, becomes clearer, but
the problems encountered in implementation are a recurring theme. This is
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often centred, in the literature, on the question of attaining and maintaining
effective communicative relationships between organisation members and
between work groups and the development of a superordinate goal for co-
operative working.
A number of current management issues which require strategic treatment
(Lambert, 1995), it is thought, can be treated with a broadened concept of
internal marketing:
.the retention of skilled people in the organisation, by counteracting
declining management standards and providing clear corporate and
personal direction;
.relationships with the management team who share the objectives,
experience and skills to build, release, and mobilise individual
motivation for economic recovery;
.the proper understanding and need for quality for competitive service
delivery in a changing economic, social, political, and technological
environment;
.building a corporate brand which appeals to both customers and
organisation members;
.communication management with a clear strategy based on research
and evaluation, and personal skills development and responsibility; and
.productivity through participation requiring leadership, processes and
commitment from all.
The present research was initially motivated by the recognition that whilst
customer orientation was simple to understand in principle, its achievement
was largely problematical, from a marketing management and quality
management perspective, as demonstrated for example by the work of
Christopher et al. (1991):
Internal marketing is ...an important activity in developing a customer-focused organisation
... Fundamental aims of internal marketing are to develop internal and external customer
awareness and remove functional barriers to organisational effectiveness.
A number of attempts to define internal marketing seemed too narrow:
Looking at the employee as a valued customer is the focus of the new discipline of internal
marketing (Thomson, 1991).
Where you are thinking of your own employees as customers with needs to be satisfied so
that they are enthusiastic ± is that marketing's job . . . or is it human resources? (Kotler quoted
in Mazur, 1991).
The same marketing tools used to attract customers can also serve to attract and retain the
best employees, who can be thought of as ``internal customers'' (Berry, 1981).
Systematic study was required because:
Internal marketing is at an embryonic stage of development and one where practitioners lead
academic research. This area is one which should receive considerable attention over the next
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five years and research is needed to identify success factors and barriers ... (Christopher et
al., 1991).
The most recent discussion in the literature has shifted markedly to a
managerial perspective, i.e. on how to perform internal marketing, rather than
what it is and its philosophical basis. Thus, there appeared to be considerable
evidence of the need for a thorough reconsideration of the depth and breadth of
the conceptual basis of internal marketing.
Limitations of the popular conception
A range of criticisms which demonstrate limitations and flaws in the logic of
the popularised formula for an internal marketing theory are now discussed.
It is clear, from the literature examined, that the concept of marketing which
has been appropriated to the internal organisation environment has come from
the field of marketing in its more traditional consumer market form, with its
origins in mass consumer products' manufacture and distribution. The
adoption of the marketing concept for the new context of the ``inner'' and
``internal'' markets of the organisation has been effected, in the minds of most of
the writers and managers who have attempted to do so, based on a number of
assumptions which require challenging. Writers seem, almost universally, to
have adopted the 4Ps ``marketing mix'' perspective. However, Sheth et al. (1988)
show that the marketing mix perspective is but one of a number of schools of
marketing theory, which are summarised in Tables I and II.
A recent paper which is characteristic of the thinking and assumptions
which have been customary in the discussion of internal marketing is that by
Rafiq and Ahmed (1993). For example, they suggest that such marketing
activity will motivate people, thus discounting the possibility that people may
be self-motivated and that internal marketing provides an environment in
which their motivations are valued; and that internal marketing offers
incentives rather than benefits ± which is a rather instrumental view. They do
not indicate that segmentation of the internal market should be from the
employees' perspective ± which can be effected through employee attitude
surveys, upward appraisal of managers ± and suggest that internal marketing
would not necessarily solve problems of inadequate training and staffing levels
and their effects on customer service. They appear to be suggesting that
internal marketing is simply persuasion of staff to a management-determined
situation. Further, they believe that the integrative role of marketing is not
widely practised and this is why internal marketing is needed to develop the
integration based on understanding of the relationship of the organisation's
working practices to the external environment, and that commitment to
internal marketing (as a tool) should be secondary to commitment to the
environmental (customer and competitor) responsiveness (the business
objective).
In criticising the internal marketing discourse, Hales (1994) provides a
demonstration of the pervasive ``managerialist'' perspective on internal
marketing. He is critical of the literature on internal marketing as an approach
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``School'' of marketing
thought Focus of theory Comments
Useful
for IM?
Commodity The objects of market
transactions ± i.e.
distribution
Functional The marketing functions
performed in market
transactions
?
Regional Spatial separations
between buyers and sellers
Institutional Intermediaries and
channels of distribution
Functionalist The function of marketing
systems
Managerial Marketing practice Urges marketers to
analyse consumer/
customer needs ±
emphasises the marketing
concept ± too simplistic,
constraining and artificial
in emphasising the
``marketing mix'' ±
assumes economic values
dominant
?
Buyer behaviour Marketing from the
buyer's perspective
Concentrates on purchase
and brand choice
behaviour ± but from
consumer, packaged goods
field
Activist Ad hoc issues of consumer
interests
Macro-marketing The relationship between
marketing and society
Useful if the organisation's
stakeholders are the
``society''
?
Organisational dynamics Psychological aspects of
behaviour of marketing
channel members
Systems All functions and
institutions of marketing
and marketing as an
institution in society
Social exchange The market as the focal
point of exchanges
Exchange is seen as the
fundamental foundation of
marketing
Source: Sheth et al., 1988
Table I.
The total field of
marketing theory
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to human resource management (HRM). In recognition of a diversity of
meaning and usage, Hales holds that internal marketing to date has had an
ambiguous conceptual status. From his analysis, a number of limitations are
identified which can be used more generally to reconsider the application of
internal marketing:
.Internal marketing as a metaphor: Organisation jobs and employment
conditions are ``products'' to be marketed and the manager is to think
like a marketer when dealing with people. But it is the employer who is
both buyer and consumer in the employment relationship, rather than
the employee.
.Internal marketing as a philosophy: Managers hold a conviction that
HRM requires ``marketing-like'' activities, but this does not address the
divergent employee needs and interests and organisation objectives.
This is especially the case if the ``marketing'' activities are actually
promotional advertising and selling of management requirements.
Further, the employee is relegated to the pliable (manipulable) subject of
managerial programmes.
.Internal marketing as a set of techniques: HRM adopts market research,
segmentation, promotional communications and advertising in order to
inform and persuade employees. But internal marketing as the
manipulation of ``4Ps'' activities imposes a particular, unitarist, point of
view ± that of the prevailing power eÂlite (Rafiq and Ahmed, 1993) and
the single common purpose of the organisation. Therefore, it is
employees who must change their needs or must understand the
Approaches to the
study of marketing Economic
Non-
economic Interactive
Non-
interactive
Commodity ✓ ✓
Functional ✓ ✓
Regional ✓ ✓
Buyer behaviour ✓ ✓
Activist ✓ ✓
Macro-marketing ✓ ✓
Institutional ✓ ✓
Functional ✓ ✓
Managerial ✓ ✓
Organisation dynamics ✓ ✓
Systems ✓ ✓
Social exchange ✓ ✓
Source: Sheth et al., 1988
Table II.
Schools of marketing
theory
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position of the employer as they respond to the market (Maitland, 1990,
p. 255).
.Internal marketing as an approach: There is an explicit symbolic
dimension to HRM practices ± employee involvement and participation
are indirect control ± employment terms and conditions carry implicit
messages about how employees are regarded in the organisation. A
participative management style is required. But there is a preoccupation
with manipulation and persuasion in seeking to exploit the symbolic
character and promotional potential of HRM practices. ``Hired hands'' are
miraculously transformed into valued ``customers'' ± this is
``transparently manipulative'' (Hales, 1994). Internal marketing shares a
key contradiction with normative HRM, between the desire for
commitment and the desire for flexibility. Individualism contradicts
teamworking, a service culture as defined by the management group
which is at odds with employee flexibility and responsibility. The
complexities of managing people and their actions and knowledge
(organisation resources) are reduced to mere ``techniques'' of symbolic
communication.
Whilst Hales' observations are extremely useful in reconsidering the nature
and purpose of internal marketing, it is possible to discern a narrow thinking in
his criticisms. He holds that internal marketing is aimed at the attraction,
retention, and motivation of ``service-minded'', ``customer-conscious'',
employees to aid the perceived service quality and effective external marketing
of the enterprise as a way to competitive advantage. This accords with other
discussions (e.g. Sasser and Arbeit, 1976; Berry, 1981). However, the marketing
theory inherent in this argument is one which constitutes marketing as
promotional and persuasive communication, i.e. selling.
A major review of marketing literature by Sheth et al. (1988) produced a
classification of marketing theory which reveals a range of focuses (see Table
I). Sheth et al. additionally classified these 12 schools of marketing theory into
four dimensions. Table II highlights their perspective on the role and nature of
marketing, to identify the schools of thought which might contribute to a
broader internal marketing concept.
The economic dimension recognises that actions may be driven by economic
values, is normative in nature, and is derived from economic theory. The non-
economic dimension considers the social and psychological factors influencing
the respective behaviours of the buyer and seller, is descriptive, and is derived
from an anthropological perspective. The interactive dimension examines the
balance of power between buyers and sellers in interdependent exchange
relationships, considers relations and effects, recognises that either party may
conduct marketing functions, and adopts an interactionism perspective in
recognising that neither party acts in isolation. The non-interactive dimension
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considers buyers to be passive and to have their behaviour acted upon by the
active producer through persuasion and buying and selling. In considering
these dimensions, two particular dichotomies are of interest:
(1) Interactive/non-interactive: examines the role of marketing and its
objectives.
(2) Economic/non-economic: examines approaches to achieving the
objectives of marketing.
Much of the weakness in prevailing internal marketing theory stems from a
failure to address both of these concerns together, and in considering only how
marketing objectives can be achieved, thus allowing assumptions about the
appropriateness of marketing objectives and the nature and role of marketing
often to remain unrecognised and unchallenged.
Boyer (1990) suggests that the managerial perspective on marketing is too
mechanistic and is reactive. This approach separates the external markets from
the internal markets of the enterprise in an unrealistic manner. His model of
proactive marketing is characterised by four dimensions:
(1) Capricious change ± the existing business paradigm of the enterprise is
impulsively challenged and exceeded to ensure that the organisation of
the business does not become too inflexible and predictable.
(2) Initiative ± this is a requirement of a proactive approach, providing for
innovation and change.
(3) Synergy ± systems thinking which recognises interaction, reciprocal
determinism (Bandura, 1978, p.70) and the value of co-ordinated effort.
(4) Superordinate goals ± co-operation is necessary, and overrides the
differences in interests of the various parties for the sake of
accomplishment.
When applied to traditional internal reactive marketing to create proactive
internal marketing, this model transforms separate internal disciplines into a
proactive whole and develops marketing-oriented competencies in everyone (in
terms of the ability to react, transact and transform). The approach is based on
the analysis of wants, needs and expectations of employees as customers and
their understanding of the (external) customer's perspective. Proactive internal
marketing adopts Kotler and Levy's (1969) recognition that ``an integral
connection exists between an organisation, its entire social world, and the role
of marketing'', and includes:
.consideration of the entire scope of social existence;
.the value of non-monetary exchange;
.the proactive marketer as a ``changemaker'' (a change-oriented
marketing philosophy);
.proactive marketing as the key agency for understanding the customer
and thus providing the capability for optimally setting business priorities;
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.the 4Ps considered as a mechanistic marketing model;
.recognition of Bandura's (1978) ``reciprocal determinism'' in which each
individual is in an interactive triad of person, behaviour and
environment; and
.synergy as defined in General Systems Theory and Organisational
Communication Theory (Boyer, 1990).
Webster (1992) sets out the marketing concept at the level (or dimensions) of
culture, strategy and tactics in a way that is of help in clarifying the strategic
and tactical levels of internal marketing. Marketing as culture is: a basic set of
values and beliefs about the importance of the customer that guides the
manager; primarily the responsibility of senior managers; the assessor of
market attractiveness by analysing customer needs; the promoter of a customer
orientation by strongly advocating the customer's point of view. It is also
developmental of the overall value proposition of the organisation, and the
articulator of the value proposition to the ``marketplace''. Marketing as strategy
is concerned with market segmentation, targeting, positioning; emphasis at the
business unit level; and a definer of how to compete in the chosen business.
Marketing as tactics is the design and implementation of activities, customer
relationships and the concern of functional-level managers.
The major perspectives on marketing can be thought of as paradigms which
provide models for the domain of a science, questions and rules for the
interpretation of scientific research results (Bagozzi, 1976). Carman (1980)
identified six paradigms of marketing which are summarised in Table III.
Table III.
Paradigms of
marketing
Micro-economic Focuses on market equilibrium and resource allocation, emphasising
the managerial concern for the profitable manipulation of the
marketing mix ± normative, single actor perspective
Persuasion/attitude
change
Micro-normative, information processing ± usually restricted to the
marketing communications element of the ``mix'' ± a single actor
perspective
Conflict resolution Emphasises why and how conflicts emerge and are resolved
General systems Deals with inter-relationships, goals, resources and control
mechanisms in human systems
Functionalist Highly abstracted, conceptual treatment of marketing as a system of
interrelated structural and interdependent dynamic relationships
Social exchange Deals with the transactions and interactions among institutions,
groups and individuals
Source: Carman, 1980
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Arndt (1983) claims that there has been too much reliance on the micro-
economic/marketing management paradigm as a foundation for marketing
theory, and this has been largely unchallenged. An alternative paradigm which
allows development of the exchange notion is political economy.
Arndt's (1983) use of the term ``political economy'' views social systems as
``comprising interacting sets of major economic and socio-political forces which
effect collective behaviour and performance''. The emphasis in this view is on
the ``interplay of power, the goals of the power wielders, and the productive
economic exchange systems''.
The political economy paradigm supplements the basis of the micro-
economics paradigm of marketing in economics, learning theory, and cognitive
and social psychology, with organisation theory, political science and
sociology. In the political economy ``world view'', marketing is exchange and
the ``social unit'' is a marketplace for the exchange of scarce resources (Arndt
sees ``organisation'' as a narrower concept included within ``social unit'', along
with groups, families, etc.). The organisation is seen as a coalition of internal
and external stakeholder groups with partly common and partly conflicting
goals. Marketing must achieve acceptable ``exchange ratios'' for the various
interest groups (Arndt, 1979). Political interactions involve attempts to
influence the decision premisses of the parties to the relationship. An ``internal
economy'' is structured through the distribution, mobilisation, utilisation and
limitation of authority in the organisation, to ensure the efficient functioning of
the internal productive processes and internal transfers of resources. The
internal economy co-ordinates behaviour and allocates resources to produce an
output of sufficient interest to external exchange partners. Thus, internal
marketing is identified when marketing organisations are conceived as
dynamic, adapting, internally differentiated social systems. Arndt identifies
three major tasks for internal marketing:
(1) the dissemination of information to and from all internal groups
involved in or affected by the marketing activities, for the efficient
implementation of marketing decisions;
(2) the development of competence, especially important where ``the
organisation is the product'' (i.e. in service businesses);
(3) the development and maintenance of incentive and motivation systems
which reward marketing performance.
Piercy and Morgan (1991) have also highlighted the limitations of the use of the
``marketing technology'' which assumes rationality, a profit-maximisation
motive, the means-end instrumentality of control and a harmonious, no-conflict,
world. Thus, they argue, it is necessary to go beyond the superficial aspects of
how organisations work, to recognise and treat the underlying power and
politics in the pursuit of marketing goals. The internal marketing ``paradigm'' is
proposed by Piercy and Morgan (1991) as ``an easily accessible and ``user-
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friendly'' mechanism for executives to analyse the organisational issues which
need to be addressed in implementing marketing strategies.
The structural impact of internal marketing
Internal marketing has been proposed variously as a structured approach to
strategy implementation, to the diffusion of innovations, to recruiting and
retaining service-minded staff, to creating a service culture, or to increasing
internal service productivity. However, few writers have explained or even
recognised the implications for organisational arrangements.
Should internal marketing be superimposed or supplanted on the
``traditional'' organisation form, that of the formal authority-hierarchy?
Maitland (1990) discusses the relationship between internal marketing and
organisation theory, and suggests that the human relations approach of
McGregor (1960) is most appropriate because it emphasises prerequisites of an
internal marketing culture: mutual trust, holistic supportive relationships,
internal networks and self-direction (egalitarian management style which
implies discretion and autonomy), which enhance commitment, loyalty and
motivation (Ouchi, 1981).
Further issues are:
.the dominant management style must support internal marketing;
.the whole organisation must practise internal marketing;
.internal marketing must be driven top-down, to match external
marketing strategy; and
.internal marketing must fit the organisation's ``life stage'' (discussed by
Greiner, 1972).
A ``new employee relations'' or marketing orientation may well require
managers to rethink their role, and to recognise the processes by which value is
profitably created for internal and external customers, but this has rarely been
addressed in terms of organisation design or development. At best, team-
working has been offered as a means to total quality management and as part
of business process re-engineering, but little has been said about this in the
internal marketing literature. One exception is the teamworking approach
described by Bak et al. (1994), and another articulated in a personal
communication with Professor Laura Cousins in which the implications of
internal marketing for organisational arrangements were discussed.
Halal et al. (1993) have taken a more radical approach in urging managers to
redesign their organisations around the notion of a free enterprise market in
which operating units freely compete with external suppliers for business
within and without the organisation. This approach makes sense in that
internal marketing requires the conception of a market in which the required
competitive customer-supplier relationships can operate.
Halal (1996) suggests that organisational learning may merely be the rebirth
of organisation development, in using team learning to encourage change from
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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 (or collateral) learning structure allows
people to work in a completely different way from that of the formal
organisation (the system of rules and objectives which officially prescribe and
allocate tasks, privileges and responsibilities, thereby specifying how the
activity of a group is to be carried on). 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). Cahill (1995) treats metamorphosis into a learning organisation as
a prerequisite for internal marketing; alternatively, it may be seen as an
outcome by treating internal marketing as a process for organisation
development.
A broader conception of internal marketing
A wide body of literature has been examined from which a number of concerns,
relating to limitations and lack of clarity, have been highlighted with the
currently popular notion of an internal marketing mechanism for intra-
organisational communications and management. From this conceptual
review, a number of themes have been identified as offering a contribution to
the development of a more sophisticated and valuable conception of internal
marketing. These themes (which are discussed in detail in Varey, 1996) are:
.marketing-oriented service employee management;
.the scope, nature and purpose of marketing;
.marketing as exchange;
.the political economy paradigm;
.organisation as a ``domesticated'' (internal) market;
.the internal market paradigm;
.internal marketing as a social process;
.the individual person in an internal market;
.a relational perspective on communication;
.empowerment; and
.internal marketing as a new form of industrial relations.
This broadened theory of internal marketing may be further elaborated on as a
goal-oriented social process, and a conceptual system for continually creating
rapid strategic organisational change in response to the macro-environment
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(society) and the micro-environment (the community which constitutes the
organisation).
The literature search and review revealed a pervasive perspective on
internal marketing which is narrow and observably unhelpful due to its lack of
clarity and poor fit with the realities of organisations and management. The
research investigation started as one of searching for evidence of practice in the
field and became channelled towards the broadening of the concept of internal
marketing, in recognition that conceptual development would be a greater
contribution at this point in the evolution of the field.
With this goal in mind, it no longer makes sense to treat internal marketing
as a specialist functional approach. It really represents the convergence of a
number of previously separate management technologies, such as human
resource development, employee relations, strategic management, quality
management, corporate communications and macro-marketing. It is
increasingly recognised that managing a business effectively requires the close
integration of several functional specialisms, and that management is a
continual and complex process and cannot be seen as a sequence of discrete
steps or a set of discrete functions. Indeed, as far back as Mintzberg (1973), it
was recognised that the work of the manager is not compartmentalised into
different areas but is a portfolio of skills which are not functionally
distinguishable and which cut across the traditional functions ± e.g. the
manager as negotiator, resource allocator, information disseminator.
It is proposed that the basic ideas which have led to the proliferation of
writing on internal marketing are fundamentally sound. However, it is
suggested that in order to take into account the real problems of achieving
customer orientation, be it through marketing orientation, or TQM, or some
other managerial approach, there is a need for managers to develop generalist
skills and competencies based on the application of sound macro-marketing
principles throughout the organisation. A form of internal marketing can
provide the mechanism for the major re-orientation needed in so many
organisations. However, the view that internal marketing is solely the domain
of marketing or human resource specialists applying a micro-marketing
concept and associated tools is too narrow and does not take into account the
needs of all internal stakeholders. In this respect, the current interpretations of
the internal marketing concept are too ``product'' orientated, being based on the
traditional marketing concept, rather than being marketing orientated, and
marketers must put their own house in order on this matter before they can
hope to demonstrate the true worth of the internal marketing concept as a
business management paradigm.
Major change programmes and plans clearly present problems and
Mastenbroek (1991, p. 243) has suggested that continual internal and external
marketing is more effective in bringing about organisational change than any
short-lived programme of attention. This is supported by Johnson and Scholes
(1989, p. 46) who argue that the consolidation of acceptance of significant
change is vital and is achieved through communication:
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... it is the political and cultural barriers to change that may well provide the major
stumbling blocks to the implementation of strategic change.
The role of internal marketing in achieving evolutionary or transformational
change has been suggested as:
One of the best ways to overcome barriers to plan implementation is to involve many levels
and departments in development of the plan. One of the best ways to do this is to conduct
internal research using professionals in order to develop a sense of the current mission and to
gather the insights and dream agenda of your executives and staff (Weylock, 1992).
Thomson (1990) has identified people and organisation issues within the
context of the culture of the organisation. The former are concerned with
maximising relationships within the organisation where individuals, teams,
managers and leaders are seen as internal ``target'' customers with needs which
can be satisfied through the generation of internal ``products and services''. The
latter includes practices, plans, structure, vision, mission and values, and is
concerned with maximising (the effective utilisation of) resources.
The terminology is yet to develop fully to the point where a single, clear
understanding of the underlying principles of internal marketing is widespread
among managers. Some strong resistance to the use of the term ``internal
marketing'' has been experienced amongst academics and practitioners, as it
suggests that the mechanism of change management being described is the
exclusive property of marketers, or there is a narrow perspective on the
purpose and form of ``marketing''. The terms ``internal relationship marketing'',
``internal relationship management'', or ``internal social process management''
are proposed as a development of other terms used by the writers discussed.
These new terms recognise the applicability of the marketing concept through
the identification of (intra-organisational) exchanges in working relationships
and between the organisation and its customers, since ``all employees are
customers of managers who wish to carry out the firm's objectives'' (Harrell
and Fors, 1992). They also recognise differing goals of the parties to these
exchanges, within the overall organisational goal of achieving profitable long-
run customer satisfaction and loyalty through demonstrated customer
orientation. This is pursued in a planned manner by all organisation members,
as a means to achieving differentiation of the organisation for the purposes of
attaining sustainable competitive advantage. Ulrich (1989) has argued that
customer satisfaction is not sufficient and that competitive advantage must be
sought in the conscious development of customer commitment, i.e. loyalty and
devotion which transcends short-term ``feel good'' relationships by building
interdependencies, shared values and mutually beneficial strategies.
As yet, there is little empirical basis for the required theory of internal
marketing as a change management concept, whilst at the same time there are
empirical data to show that internal marketing, in various forms, is being
practised as a viable response by managers to the real problems of achieving
the objectives required by strategic decision making. Internal marketing cannot
be viewed as simply the application of marketing concepts within the
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organisation, nor is it the use of modified human resource management
principles. It is a conceptually separate phenomenon which warrants further
investigation and development. Further, much of the literature disregards the
difficulty of the political processes, i.e. differing ideas, beliefs and values held
by managers, supervisors and front-line service providers (Dawson, 1994). The
literature is too prescriptive and too narrow in trying to apply the marketing
concept as it has developed as a response to (external) market relationships
(Mudie, 1987). It was, thus, a ``reform ambition'' (Strauss and Corbin, 1990)
which motivated this research project to develop a more appropriate theory of
internal marketing, which takes a wider view than that of the traditional
economics-based marketing concept (see for example, a recent popular
textbook (Dibb et al., 1994)).
Implications for managers
The adoption of a broadened concept of internal marketing, as a development
of a model, has a number of implications for the management of an enterprise.
First, a shared set of beliefs about the meaning of customer orientation is
required. This will require the promotion of a particular interpretation of the
marketing concept and the systems and tools to achieve its objective, i.e.
delivering value to customers at a profit. Care must be taken to exclude any
practices which further ``marketing'' as a persuasive exploitation of customers.
The managers of such an approach will focus on the understanding and
acceptance of a ``corporate ideology'', while planning locally for appropriate
activities to operationalise it. Skills and attitudes for communication and
service will be central requisites.
In addition, the role of the manager will be shifted from that of overseer and
controller to that of organiser and supporter. ``Employees'' and ``managers'' will
have to understand and agree on what is in the organisation's long-run best
interest and how they individually gain from this.
Further, communication will be seen as the mode of organisation, rather
than the means (Drucker, 1973). The achievement of goals will be seen as
occurring within relationships rather than in discrete transactions of discrete
individuals or groups. This interactional perspective will balance economic
(monetary) and non-economic values through a co-operative management
system. Above all, there will be a removal of the submissive, subordinate
working relationship, at least at the local (team) level. Collaboration will mean
the self-regulation of relationships and obligations at work. People will no
longer be required to work under the duress of directing, order-bestowing force
and, because the system is ambition-driven, their work will be a free act of
obedience to their own purposes, which will be widely understood and
balanced with the collective purposes (Heilbroner, 1988, p. 103).
Internal marketing seen as internal relationship management is an
integrative process within a system for fostering positive working
Broadened
conception of
marketing
941
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 corporation must 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 negotiating requirements, expectations,
needs, attitudes and satisfaction).
.Communications in the internal market are targeted through
segmentation analysis.
Subscription to the managerial perspective on marketing management allows
the ring-fencing of ``marketing'' as a set of activities to be carried out by a
department ± a number of variables simply have to be selected and
manipulated ± but no commitment to a value creation philosophy is required.
This simplifies the complexity of enterprise organisation and direction and
permits ``tribal empire-building''. The resulting intra-organisation
communication problems are perpetuated through attempts to manage via
such a fragmented approach to organisation and management.
The broader approach discussed here robs the functionalist/specialist of sole
ownership of the territory but the gain to the system, when each individual is
able to contribute to the whole enterprise, is realisable in terms greater than
mere ``market efficiency''. The needs and wants of the individual can be met as
the means to achieving the organisation's success in conducting the business of
the enterprise.
The structure for this is a network of self-managing teams (or mini
businesses (Case, 1995)) who serve each other, develop specialist knowledge,
execute projects and sell to ``outsiders''. Internal marketing is the relationship
and knowledge management required for the ``new organisation''. The internal-
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external boundary becomes blurred as the traditional organisation form is
dissolved. Peters (1992) provides evidence of such a shift towards
``marketisation'' in a flattened organisation with fluid arrangements for
projectised work. People have temporary network membership in individual
units which aim to own a market through better service and symbiosis with
customers. The overall benefit comes from the pursuit of mutually satisfying
employment relationships.
Conclusion
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. Whilst
communication can occur without an economic transaction, any economic
transaction cannot occur without communication. If the democratising
potential of a goal-oriented inner market, which fosters value-creating
enterprise, is to be realised for continuous improvements in business
performance and quality of working life for all, then the concept of internal
marketing must be capable of engendering the application of marketing
principles within the total corporation as a social system which operates like a
``free market''. External marketing focuses primarily on economic transaction
due to its managerial bias. The broader internal marketing focus on social
values provides for a richer range of exchanges premissed on both economic
and non-economic values.
Further research and development of application techniques should focus on
alerting educators and practitioners alike to the richness of a broader
perspective on the marketing process which recognises that when
communication is in a dialogue there need be no zero-sum outcome.
Considerable added-value can be sought in multi-disciplinary work which
raises social, political and technological concerns as well as those of the
economic sphere of life.
The authors have continued with the work of isolating the elements
identified. Their conceptual relationships are explored in a follow-on paper in
order to build a model of internal marketing as an intracompany social
marketing system. A detailed discussion of the themes identified here is
developed into an integrated conception of internal marketing.
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