Internal marketing issues in service organizations in malaysia assignment

Rafiq & Ahmed (2000) expands the idea of internal marketing and define them as, “…a planned effort using a marketing-like approach to overcome organizational resistance to change and to align, motivate and interfunctionally coordinate and integrate employees towards the effective implementation of corporate and functional strategies in order to deliver customer satisfaction through a process of creating motivated and customer oriented employees”. From various literature reviews, 12 constructs that make up the core structure of the research are derived.

The constructs are inter-functional, coordination & integration, customer orientation, marketing-like approach, job satisfaction, empowerment, employee motivation, quality of service, employee development, vision of the firm, strategic rewards, internal communication and senior leadership. The theoretical framework as follows : Theoretical Framework Inter-functional Coordination & Integration Customer Orientation Marketing-like approach Job Satisfaction Empowerment Service Quality Employee Motivation Development Vision Strategic Reward Senior Leadership Internal Communication

Marketing-like Approach Internal marketing holds that employees are “ best motivated for service-mindedness and customer oriented behavior by an active marketing-like approach, where marketing-like techniques are used internally” (George, 1990). Marketing-like approach is defined as a business management philosophy based on the need for customer orientation, profit orientation, and recognition of the role of marketing to communicate the needs of the market to all major corporate departments (McNamara, 1972). Thus, the adaptation of marketing behavior lies at the heart of internal marketing, as eluded by early adopters like Berry and Gronroos.

This leads to the formulation of the third proposition : P3 : There is a positive relationship between marketing-like approach and business performance of service organizations in Malaysia 3 Job Satisfaction Job satisfaction is defined a show content an individual is with his or her job. The underlying view of internal marketing is based on the concept that in order for a service organization to have satisfied customers, it must first have satisfied employees (George, 1977). Job satisfaction is important as internal marketing will also serve as a tool for organization to attract, retain and motivate its employees.

Berry & Parasuraman (1993) add that service quality is an important element in internal marketing because high quality will make it easier for employees to identify themselves with the service they are selling to the customers. The fact is, quality 4 of service might be more crucial to employees than external customers because unlike external customers, they do not have a choice in selecting their product (the service to be performed by them). The study utilizes a scale developed by Cronin & Taylor (1992).

Thus, the study has derived another proposition : P7 : There is a positive relationship between quality of service and business performance of service organizations in Malaysia. Employee Development Foreman & Money (1995) defines employee development as a strategic investment by an organization in training its members. If employees are required to perform their tasks well, they must be armed with the necessary skill and knowledge that is required of them.

When employees are well-informed about the expectations of its customers as well as the condition and health of the organizations, they are more willing to dispense their duties diligently which in turn improves the business performance. They believe that internal communication is an important element of internal marketing as it is the key factor in creating understanding among employees. Further, it was noted that consistency of internal and external communication program is important.

The study will employ a scale by Ahmed et al (2003). The eleventh proposition is then established : P11 : There is a positive relationship between internal communication and business performance of service organizations in Malaysia. Senior Leadership Ahmed et al (2003) defines senior leadership as the moral and intellectual ability of the upper-echelon management to move the organization and its employees towards the right direction. Thus, leadership style is important in determining employees’ attitudes and behaviors.

Only one questionnaire is send to each organization chosen to participate in the study. Answering the questionnaires are those ranked from executives and above, and are involved in either executing or designing the internal strategies of the organization. The questionnaire is divided into 3 parts. Part A is on the 12 internal marketing dimensions. For each dimension, items are measured on a seven-point Likert-scale, with 1 for “ Strongly Disagree” and 7 for “ Strongly Agree”. Part B is meant to test on the business performance and the items concerned both financial and non-financial performance.

Part C is on the organization’s profile. Factor analysis is used to identify which of the 12 internal marketing dimensions are being applied in Malaysia. It is done by summarizing the patterns of correlation where the items will be grouped together based on its relation with each other. According to Tabachink & Fidell (1996), the minimum value for a good factor loading analysis is 0. 5. This is followed by multiple regression analysis is used to test the propositions. Aiken & West (1991) asserted that relationship exists when r value is more than 0. (r> 0. 3). 7 4. Findings Profile Based on the data collected, the largest respondents comes from the information communication technology support service (22. 6%) followed by the retail sector (20. 3%). Most of the organizations are established for 10 years (41. 8%), have more than 150 employees (67. 4%), and RM 15. 1 million and above of paid-up capital (40. 6%). Majority are also government-linked organizations (32. 2%) and sales of RM 100 million in 2005 (39. 5%). Out of the 261 organizations that respond to the study, 176 have more than 150 employees.