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.
2.2.
2.3.

3.

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

3.1.
3.2.
3.3.

4.

INTERNAL MARKETING AND SERVICE QUALITY .......................................................... 2

BALANCED APPROACH ................................................................................................ 3
IDENTIFYING THE EVOLUTIONARY PILLARS OF IM....................................................... 3
EMPLOYEE RELATIONS ................................................................................................ 5
MARKET ORIENTATION ............................................................................................... 6
STRATEGY IMPLEMENTATION...................................................................................... 7

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

MARKETING ........................................................................................................................ 10
5.1.
5.2.
6.

RELATIONSHIP MARKETING ...................................................................................... 12

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

IMPLICATIONS FOR FURTHER RESEARCH ...................................................... 17

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

1. Introduction

its strategic role in the implementation of change

During times where the economy decreases and where

strategies.

former predictions about growth, prosperity and

2. Internal Marketing

development especially in the area of Information

Technology (e-Business) no longer matches the

Since more than 25 years the concept of internal

reality, enterprises are forced to identify strategies and

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

options that properly adapt to the new circumstances.

the academic literature, (see for example Sasser and

As about 5 years ago a new wave of companies and

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

entrepreneurs were brought to the market space

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

mainly feed by the utopians of the Internet we find out

Richardson and Robinson, 1986; Gummesson, 1987;

that during times of consolidation and disillusion only

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

a limited number of this generation still competes

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

within the respected segment.

Lings, 1999). Despite the increasing interest of several

Looking back a few years we recognized fashionable

researchers and practitioners

organisations with low hierarchies, flexible working

confusion about the exact definition of IM, its primary

hours, wages above average, trendy products and

domain and the value it delivers to managers and

unlimited growth perspectives. As reality turned back

organizations.

and the economic principals still build the fundament

interpretations has brought up a number of relevant

of the economy the entrepreneurial newcomers are

perspectives under the meta headline of IM.

turning back to proven concepts with the aim to

The confusion has been further increased with the

embed their enterprises in the traditional economic

great deal of discussion about the economic concept of

framework.

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

But as unique as the raising of the new companies was

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

the same still holds for the uniqueness of the current

descriptive or prescriptive this review will attempt to

situation. More precisely it is to say that especially in

provide a helpful overview about the terms evolution

the area of business software and software services a

within the economic literature, its current discussion

significant number of companies are still fighting to

and implications for practical research.

overcome the childhood phase with the goal to enter a

The first part of the paper focuses on analysing three

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

major pillars of IM and their purpose for the

two different companies (Virtual Identity, Impress

conceptualisation of the program. The findings are

Software), competing within the segment of e-

critically examined and the limitations of the concept

Business have been analysed in terms of history,

are discussed before an attempt is started to synthesis

current perspective, market forces and strategy. The

the different definitions with the aim to illustrate a

results have shown that due to the fast development

broader definition of IM. While the second part

organizational

done

examines the current discussion in the field of IM and

sufficiently. In detail it is to say that internal

provides fruitful implications for future research

operations and external intersections (customers,

activities.

homework

has

not

been

partners and employees) are not clearly defined and do

The

variety

there exists a great

of

approaches

and

2.1. Internal Marketing and Service

Quality

not support the main purpose which is to satisfy the

customers needs and wants on a long-term basis

In consideration of the named differences and the

through a high service quality.

difficulties to define the concept of IM (Piercy and

In this paper the model of internal marketing is

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

highlighted with the purpose to clarify its scope and

seem to accept that IM should create quantitative and

qualitative improvements in terms of service quality

considered on an equal footing (Greenley 1995; Foss,

through the observation and control of service output

1997). This is in contrast to the conventional

that is executed by employees (George, 1990;

understanding of marketing strategies which are

Gummersson, 1987, Berry and Parasuraman, 1991;

executed by executives and mangers who primarily

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

focus on the external environment: customers,

sustainable

organizational

competitors, suppliers and markets. The balanced

capability to deliver high service quality that fits with

approach brings to the discussion the internal

customers needs and wants, as a basis of competitive

marketing program that

advantage has drawn the attention within the academic

marketplace and internal customers to carry out

and professional management literature (Christopher

essentially

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

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

This focus has directed the observation mainly in the

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

field of service providers like health care, financial

1995; Varey and Lewis, 1999).

improvement

in

the

service, logistics and professional services (George,

general researches have also emphasized that actually

internal

and what differences / commonness between the

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

internal and external program can be identified (Piercy

service-centred business philosophy finds its most

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

accurate wording from Vandermerwe and Rand

an internally executed marketing approach and its

(1988) who call it servitization.

balanced input for the overall marketing strategy we

will examine and define three different but closely

Balanced Approach
a

the

have to be taken into account when tackling the issue

customer loyalty and distinct competitive advantages

towards

for

marketing poses the critical question which elements

service competence is an important factor in creating

tendency

process

The thinking of a balanced orientation in the field of

all suppliers are service providers and that their

The

same

internal

2.3. Identifying the evolutionary pillars of

IM

1986; Grnroos, 1983; Gummesson, 1991). More

2.2.

the

considers the

related pillars from the evolutionary context of IM and

service

culture

in

finally synthesize the findings with the aim to provide

organizations raises questions about the rigour

a comprehensive definition of IM and adumbrate its

external view of marketing. As the attention and

scope as boundaries and classification are fundamental

performance to customers is lived and pursued by

prerequisites to marketing analysis (Lovelock, 1983).

employees a pressing need can be identified in the

The pillars to be analysed in the context are:

literature to harmonise the balance between internal

employee relationship

and external factors (Grnroos, 1985; Gummersson,

market orientation perspective

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

strategy implementation

mentioned before, the limited focus on customers and

competitors

only

seems

not

to

satisfy

an

All of the named perspectives have interrelationships

organizations goal to determine a long-term market

and overlapping moments with business domains

share and profitability. Gummesson (1991) argues that

outside marketing. For example Human Resource

the management of service quality has to take into

Management, Total Quality Management, Strategic

account external influences form the market space and

Management

internal factors from the organisation. Other authors

dimension underlines the opening paragraph where the

have pointed out the unapologetic approach of

exact domain of IM is questioned and this in turn

marketing strategy that can adequately satisfy the idea

should encourage managers and practitioners to

that both internal and external factors have to be

approach the issue as a company-wide management

and

others.

This

interdisciplinary

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

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

al., 1992).

academics who consider the service quality and its

In the ongoing process of this review the different

delivery process as a task for the whole organization

perspectives are analysed and finally concluded with

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

the idea to come forward with a definition that has

1992; Rafiq and Ahmed, 1993).

been synthesised from the findings of reviewed

literature.

The core difficulty that occurs when

With the first group giving the assumption that

defining the relatively independent but relevant

motivated and satisfied contact-employees are a

perspectives is their limited practical use for the

crucial precondition for the delivery of good service,

overall conceptual framework, particularly if we

the second group more or less considers the overall

aspire to precisely name the domain and value of IM

process within the organization as a successive

in order to legitimise organisations to make use of

composition of the service output. Richardson and

strategies that go beyond the external marketing

Robinson (1986) for example have highlighted the

program. In order to tackle the difficulty a synthesis of

internal customer-supplier chain as an important factor

the definitions form the three pillars is undertaken

of good service to external customers.

with the aim to take into consideration the requisite

With simultaneous consideration of both perspectives

components that are necessary to propose a set of

it becomes obvious that by means of this the selection,

criteria for a general use and understanding of IM.

motivation,

competence

and

performance

of

employees can significantly influence the service

3. A broader concept of Internal

Marketing

quality and also tangents the customer satisfaction.

The aspect of an internal customer orientation is based

Before the named pillars are discussed in detail a

on the notion that quality of internal operations is a

broader concept of IM is delineated perusing the goal

progressive function and therefore will influence the

to determine its scope and definable boundaries which

quality output with the external market and satisfy the

are necessary for a thorough discussion of the subject

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

. As mentioned in the chapter above the concept of IM

these assumptions and experiences the traditional

is descended from the discipline of service marketing

marketing concept has been extended by a further

(Berry, 1981; George, 1990; Varey and Lewis, 1999).

category the internal customers or the employees.

Whereas in contrast to product marketing or the

product-centric view of an organisation the service

The Organization as a marketplace

and its output are physically intangible. More

This leads us to the underlying idea of IM which is to

precisely, a product can be produced in a constant

view an organization as an internal marketplace. With

quality while the service quality of a supplier has an

this idea all departments of an organization have

inseparable relation with the person who is executing

customers that need to be served with performance

the service.

either those customers are internally or externally

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

Focus on contact and non-contact

employees

Rafiq and Ahmed, 1993). The idea of internal

customers and the ongoing relations between them in

Reviewing the literature we find publications and

terms of service quality, service delivery processes

researchers mainly focusing on customer contact

and common goals and values has been carried out

personnel in service intensive businesses (Sasser and

form different points of views such as TQM; HRM,

Arbeit, 1976; Berry 1984 ; Bowen and Schneider,

Strategic Management (Piercy and Morgan, 1990 and

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

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

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

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

to establish a common understanding for success

chameleonic disciplines where IM finds its purpose

factors as well as organizational culture are treated by

also inherits one of the most challenging tasks, namely

Mastenbroek (1991). Barnes (1989) identifies the

the exact definition of its domain and responsibilities.

importance for a marketing-like approach of HRM, in

Reichelt (1997) for instance brought up the loyalty

which marketing techniques have a strong impact on

effect. He found out the strong correlation of loyalty

recruitment and training. He describes IM as a

between organizations to its employees and the

philosophy for managing the organizations human

positive outcomes that is has on the overall customer

resources as a holistic management process to

loyalty. He further argues that through the high loyalty

integrate the multiple functions of the organization.

of its employees and customers the organization can

Grnross (1981) accentuates that IM strives for the

increase its total customer retention rate which brings

integration of business functions and the creation of a

significantly positive effects on long-term market

customer conscious employee environment.

share, turnover and overall margins.

integrative approach finds further attendance from

This

Stauss and Schulze (1999). They propose a human

3.1.

Employee Relations

resource oriented IM approach, which should secure,

The first dimension of IM to be analysed in this

continue and achieve the external marketing strategy

section is the management of employee relations. As

through the fellow employee.

service quality depends on the human resources who

Keeping in mind the employee-customer and job-

fulfil

external

product perspective mentioned above the important

customers, George (1977) outlined that satisfied

thing is to satisfy and motivate the needs and wants of

customers require satisfied employees within the

internal customers with a marketing like technique.

organization. His idea was primarily tested in the

This seems to form a critical element of IM (Tansuhaj

sectors where retail marketing had a strong influence

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

and provided some argument and little evidence. Later

intensive businesses are buying a non insubstantial

publications extended the idea of a link between

portion of labour, the performance and with it the

customer satisfaction and employee motivation but

motivation and satisfaction of the person who

also intended to extend and define the boundaries of

generates it are inseparable (Berry, 1984).

the

service

perceptions

of

the

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

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

The perspective of an internal market place in which

approach that has been aligned by Berry (1981, p.34)

employees are treated as customers who buy products,

where he defines IM as viewing employees as

namely jobs from the employers is the basic notion of

internal customers, viewing jobs as internal products

the first pillar of IM described in this section. This

that satisfy the needs and wants of these internal

approach mainly is based on the assumption that the

customers while addressing the objectives of the

level of service quality served to external customers

organization.

depends on the motivation and satisfaction of the

internal customers (Sasser and Arbeit, 1976; Grnross,

Considering the fact that each employee is an

1981; Berry and Parasuraman, 1991) and therefore

individual with different attitudes and perceptions and

requires an inversed use of marketing techniques

therefore the problem of fluctuation in output and

(Grnroos, 1981; Gummesson, 1987; Piercy and

commitment triggers the need for a convergence of

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

HRM activities and Marketing practices (Collins and

initial marketing goal to know what needs and wants

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

the internal customer has is one part of the challenge

operation and inter-functional integration with the aim

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

part requires an inter-functional alliance between

influence the behaviour of the firm and its overall

HRM and Marketing with the aim to optimise the

performance. Slater (1990) any longer suggests that

synergetic potentials in employing motivated and

market orientation consists of two dimensions:

satisfied internal customers by offering internal

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

products (jobs) that are more attractive in comparison

An example of customer orientation would be the

to competitors (Grnross, 1981, Stauss and Schulz,

attempt

1999). Having identified the initial definition of IM

customers based on the notion that they understand the

and the perspective of inter-functional collaboration

customers

with HR finally leads us to an extended definition

competitive understanding would be the behaviour of

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

salespeople when sharing competitive information

state: Internal Marketing is attracting, motivating

with other functions and using them to take advantage

and retaining qualified employees through job-

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

products that satisfy their needs. Internal marketing is

Generally speaken the management of a market

the

as

oriented business approach and with it the market

customersand it is the strategy of shaping job-

oriented response represents the ability to understand

products to fit their human needs:

and satisfy customers and competitors through a

philosophy

of

treating

employees

to

monitor

needs

employee

and

wants.

commitment

An

example

to

of

defined contribution of all employees and all

3.2.

Market Orientation

departments to collect and disseminate data and

The second pillar to be identified in the evolutionary

design response modes (Day, 1990; Day and

context of IM is the dimension of market orientation

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

within the organisation. Taking into account the basic

Jaworski, 1990).

notion of George (1977) that satisfied customers

The consequences of market oriented behaviour are

require motivated employees some writers especially

treated for instance by Kohli and Jaworski (1990).

in the area of the service marketing literature have

They have asserted that it internally impacts on

analysed the need and methods to make personnel

employees and externally on customers. The internal

aware

sales-

influence is further on supported by Lichtenthal and

mindedness in order to maintain and improve the

Wilson (1992) who see significant consequences for

service quality for the sake of the overall performance

organisational

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

common internal benefits that occur through market

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

oriented

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

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

Wilson et al.,1992).

de corps (Jaworski and Kohli, 1993) and job

of

customer-consciousness

and

and

approaches

individual

are

behaviour.

employee

Most

commitment

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

In an attempt to define market orientation Narver and

of market orientation on sales people have been

Slater (1990) suggests that market orientation is a

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

philosophy of doing business and defines it as: The

people show more customer focus, less role ambiguity

organisational culturethat most effectively and

and less role conflict. A popular tool to measure and

efficiently creates the necessary behaviours for the

educate an organisation in terms of market orientation

creation of superior value for buyers and, thus,

are reward systems. Jaworski and Kohli (1993) report

continuous superior performance for the business.

that organisational reward systems have the strongest

His definition of a guiding philosophy finds a wide

impact on market orientation and that intelligently

acceptance in the academic literature and expresses

chosen reward systems can help to support the three

that organisational attitudes, values and beliefs do

main elements of market orientation: collecting

information, dissemination of data and design of

view and demands that employees have to be

responsive actions.

motivated and educated to identify the external

customer

by

thinking

backwards

from

the

Grnroos (1981) focused in his research on customer-

customers needs and wants to the necessary actions to

contact people and brought to the discussion the point

be undertaken. The importance to make service

that buyer-seller interactions not only provide

providers aware of service skills and marketing

important interaction for re-purchasing opportunities

approaches is addressed by Green et al (1994) who

but that buyer-seller interactions also provide a

states that the quality of the service is inseparable

marketing opportunity for the organisation. Extending

from the quality of the service provider.

the original view of George (1977) that employees

Customer orientation as a further facet of IM is

have to be motivated in order to deliver best

dealing with service providers and their delivered

performance for their customers Grnroos (1981) and

quality output through the mechanism of a market

collaborators stressed that employees also have to be

orientated

market orientated or sales-minded (Grnroos, 1981,

consequences on the overall performance, return on

George 1990, Day and Wensley 1988; Narver and

assets,

Slater 1990; Kohli and Jaworski 1990). Parasuraman

customers in consideration of IM aspects and

et. al (1988) expresses that failures in customer

strategies we recommend the definition of Grnroos

satisfaction are reduced by a company wide exchange

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

of information on customers perceptions and that it

concept holds that an organisations internal market

might improve the integration of work activities

of employees can be identified most effectively and

between all members of the organisation. In order to

hence motivated to customer consciousness, market

reach this goal Ballantyne (1991a) treats the

orientation and sales mindedness by a marketing-like

importance for an organisation to educate their

internal approach and by applying marketing-like

employees on customer service skills. He further

activities internally.

business

employee

philosophy.

motivation

and

The

desired

retention

of

names techniques like quality improvement that can

be reached through a market-oriented business

3.3.

philosophy and further on identifies it as a source for

The 3rd pillar of IM has recently gained a major

competitive advantage and differentiation.

attention in the general management literature and

order

to

take

advantage

of

of

more specifically in the marketing literature (Berry,

differentiation the will of the employees to co-operate

1981, Bonoma, 1984; Crainer, 1990; Flipo, 1986;

and commit is required and it is considered to be an

Grnroos, 1985; Gummersson, 1991, Stainsby, 1992;

important task of IM to make the employees buy-in

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

the basic belief of a customer-focused quality

1985; Rafiq and Ahmed, 1993).

management philosophy (Barnes, 1989; Ballantyne,

The discussion starts form a point where researchers

1991b).

and practitioners have identified a number of

Influencing and educating the internal market of

difficulties that occur when new strategies and plans

employees to a customer oriented and sales driven

have to be implemented within an organisation

attitude is extensively treated by George (1990) and

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

Grnross (1985). They propose the implementation

al. 1992). Supposing that changes to be undertaken

and use of active marketing-like techniques for the

effect the organisational culture and therefore provoke

internal customers with the aim to educate employees

strong resistance in terms of cross-functional adoption

towards

sales-

in enterprises has been observed. This is due to the

mindedness. Drummond (1992) expands this point of

fact that changes in terms of strategy often are decided

customer-consciousness

this

But in

source

Strategy Implementation

and

out of context and without consideration of the

effectively convert marketing plans. At this viewpoint

organisations existing culture (Burke, 1987). Flipo

IM appears to be an implementation tool that has a

(1986) outlined that the effective implementation of

general use for any type of marketing strategy (Piercy

new strategies requires a planned effort to overcome

and Morgan 1989). Other authors have identified IM

inter-functional conflict and the need to improve

as a central program to reduce departmental isolation,

internal

have

inter-functional friction and the opportunity to

mentioned the failure of managers to integrate the

overcome resistance to change (Martin, 1992; Darling

respected employees who are actively influenced by

and Taylor, 1989). Addressing the latter findings

the changes and to communicate the content of their

above Piercy and Morgan (198) expressed that IM can

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

not only be seen within the context of service

1992). A further problem for the effective planning

marketing it further has to be generalized to a broader

and implementation of change strategies seems to be

range of use. Applying the concept for manufacturing

the lack of ownership resulting in undefined

firms for example was proposed by Harrell and Fors

commitment form different managers (Pettigrew and

(1992) . Ahmed and Rafiq (1995) propose IM as a

Whipp, 1991). More specifically Pettigrew and Whipp

management implementation methodology that is

(1991) observed that differences between senior

suitable for a diverse range of contexts.

management in terms of responsibility and distinctions

Recapitulating the involvement of IM in the field of

in interest are not treated actively and therefore can

strategy implementation this section ones again

have negative influence on the overall process of

expands the broader scope if IM. Having dealt with

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

employee relations first and secondly with market

IM should provide a vital application enabling

orientation the 3rd pillar explicitly does also focus on

decision takers and organizations to close the gap

non-contact employees who influence the customer

between the formulation and implementation of

service capabilities through back-office excellence.

corporate strategies. His approach finds further

The wider approach in terms of employees and

support from other writers who extend his view with

functions and the suitable link towards strategic

the necessity to generate knowledge, understanding,

changes requires a more generalist approach from

involvement and consensus for marketing strategies

managers and enterprises. Considering the integrative

within the organisation (Christopher et. al. 1991;

approach between changes and functions IM can reach

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

success factors like market orientation, performance,

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

service quality and collaborative support for new

considered as a mechanism for implementation and a

strategies. Referring to Wilson and Fook (1990) the

vehicle to integrate cross-functional departments and

sustainable implementation of IM tools that facilitate

interests (Rafiq and Ahmed, 2000). The integrative

the change process leading to competitive advantages

potential of IM is more explicitly clarified by

requires to market the marketing concept and

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

function. Mercer (1992) even concludes that the

of IM in integrating marketing and personnel

marketers role is equivalent to those of a change

perspective plus viewing personnel as a potential

agent.

resource for the marketing function. Especially

Taking these issues into account and striving for the

Ballantyne

for

need to define IM and classify its boundaries we

marketers to identify the single employee in order to

propose the definition of Ahmed and Rafiq (1993,

actively influence and motivate them to commonly

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

anticipate the change process. He further highlighted

overcome organizational resistance to change and to

the importance to implement internal processes to

align, motivate and integrate employees towards the

communication.

(1991a)

Other

stresses

the

authors

necessity

effective implementation of corporate and functional

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

strategies. Their definition clarifies that all kind of

traditional marketing program the only customer that

changes in strategy require an IM effort to bypass

exists is the external customer. Bringing together the

organisational obstacles and to motivate employees.

ideas of internal customers with external customers

As

raises the question as to weather the needs and wants

most

departments

of
or

strategic

changes

functions

they

affect

several

emphasize

the

of which customers have primacy. Tom Farmer,

importance of cross-functional integration.

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

said: in any business there are two types of customers

4. Limitations of the IM concept

internal customers and external customers. The

The outlined model of IM which as been developed

academic literature doesnt give a clear answer to the

from the traditional environment of marketing

question. Sasser and Arbeit (1976) for instance

includes a number of limitations. Applying the

propose that human resources are the most influential

concept for the inner market of an enterprise some

marketplace for a service driven organization and

authors have highlighted considerable aspects in the

therefore impart the internal customer primacy over

theoretical dimension as well as in the managerial

the external customer. Rosenblunth and Peters (1992)

context.

argue that the needs and wants of external customers

The most fundamental problems occur due to the

only can satisfactorily be met after those of employees

missing definition of IM. The problem of a missing

have been successfully met. This point of view indeed

definition not only leads to confusion in the practical

would reverse one of the most constitutional

use and implementation, but also create contradictions

presupposition of marketing that the external

at the conceptual level with respect to the defined

customer has primacy.

boundaries and precise domain. Despite the variety of

argumentation, it is proposed that a common

definitions the missing of a unified concept prevents

definition of IM avoiding the contradictions cited

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

above, should drop the phrase of employee as a

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

customer

who is supposed to do it.

On the basis of the

4.1.
Synthesising the findings and
proposing a definition for IM

Ahmed and Rafiq (1993) have identified a number of

potential limitations in the current set of definitions

The detailed review of the academic literature has

and approaches. For example unlikely the external

shown that there exist a number of different but

marketing dimension the product that employees

closely related areas where the broader concept of IM

can buy may in fact be unwanted by them. Secondly

can be used. Having analysed and identified three

they put forward that the employees will not have a

independent pillars where IM finds appropriation

choice in the products they select. Considering the

(employee

contractual nature of employment they argument that

relationship,

market

orientation

perspective and strategy implementation) the

employees in the final stage might accept products

following section attempts to combine the points of

they do not want. Further they point out the financial

views and definitions with the aim to provide a set of

aspects of having satisfied employees. And finally the

criteria to conceptualise the main elements of IM.

question is raised whether the internal customer or the

Summarizing

external customer has primacy when dealing with the

the

findings

in

the

evolutional

development of IM from the chapters above the

notion of the employee as customer.

following key criteria of what IM consists can be

The discussion of the primacy of customers finds a

mentioned:

wide attention among academics form different

-

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

motivating and satisfying employees

customer orientation and sales mindedness

suggest that IM involves the following aspects: a

use of marketing-like approaches internally

planned effort to overcome organizational resistance

cross-functional collaboration and integration

to change and to align, motivate and integrate

change strategy and implementation

employees towards the effective implementation of

corporate and functional strategies.

Their

Considering the criteria above it is to say that the three

definition respects the strategic importance and the

main pillars do not include all the headlines

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

simultaneously. In the first pillar for example Berry

marketing like techniques to accomplish.

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

Expanding both definitions and merging with the

motivation and satisfaction of employees that can be

criteria listed above the following definition of IM is

reached through job-products that satisfy the human

proposed:

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

IM is a planned effort using marketing-like

second pillar the importance of a market orientated

techniques internally to overcome cross-

and sales minded employee who can be educated with

functional resistance to change and to align,

a marketing-like technique internally. Finally Ahmed

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

motivate and cross-functionally integrate

the strategic dimension of IM. They point out the need

employees

for an effective implementation of corporate and

implementation of change strategies in order

functional

to deliver customer satisfaction through a

strategies

in

order

to

overcome

organisational resistance.
Bearing

in

mind

that

the

lowest

philosophy

common

towards

of

creating

the

effective

motivated

and

customer conscious employees.

determination of IM is the aim to improve the overall

service quality within enterprises (George, 1990;

5. Influences on the current discussion of

Internal Marketing

Gummersson, 1987, Berry and Parasuraman, 1991;

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

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

precise the current definitions to expand the area of

decades has revealed that the academic discourse on

application. However it is being realized that the

internal marketing has shifted its emphasis from

domain of IM includes far more than the traditional

defining the nature of internal marketing to finding

implementation of marketing programs it is necessary

practical ways of implementing IM strategies or using

to name a set of boundaries which include the

IM as a practical way of strategy implementation.

different perspectives. One definition that gives a very

clear and comprehensible picture of IM is proposed by
Grnross

(1985,

p.41).

He

says

Varey (1999) has identified a number of themes

that:an

offering a contribution to the development of a more

organisations internal market of employees can be

sophisticated and valuable conception of internal

influenced most effectively and hence motivated to

marketing:

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)

10

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;

phase, and third a strategy implementation/change

empowerment; and
internal marketing as a new form of industrial
relations.

management phase.
For Rafiq et al the beginning of the third phase is

Varey (1995) concludes that internal marketing as

marked by authors explicitly recognising the role of

such can no longer be understood as a specialist

IM as a vehicle for strategy implementation. Winter

functional approach but as a holistic model for

(1985) is named as one of the earliest to bring to

market-oriented management that permits a variety of

prominence the potential role of IM as a technique for

internal change management approaches to enhance

managing employees towards the achievement of

the operation of the model. He states The functional

organisational goals. Winter defines IM as: Aligning,

distinctions of marketing, personnel, and quality

educating and motivating staff towards institutional

management are no longer helpful in understanding

objectives the process by which personnel

the complexity of strategic management of adaptive

understand and recognise not only the value of the

organisations. Internal marketing is not the property

program but their place in it (p. 69).

of a single functional specialism, but includes

Rafiq et al conclude that this emphasis appears to

organisational

organisational

have implanted the initial notions of IM as an

development, strategic management, and other areas

implementation mechanism. Further he states that the

(Varey 1995, p.23). Therefore IM really represents the

development of IM as an implementation vehicle was

convergence of a number of previously separate

also aided by the growing belief that IM has potential

management technologies, such as human resource

as a cross-functional integration mechanism within the

development,

behaviour,

relations,

strategic

organisation recognising that if strategies are to be

management,

corporate

implemented more effectively then there is a need to

communications and macro-marketing. He stresses the

overcome inter-functional conflict (Flipo, 1986) and a

rising recognition that managing a business effectively

need to achieve better internal communication.

management,

employee
quality

requires the close integration of several functional

specialisms, and that management is a continual and

Grnroos (1994) brings into discussion that the

complex process and cannot be seen as a sequence of

marketing mix management paradigm has dominated

discrete steps or a set of discrete functions. Indeed it is

marketing thought, research and practice since it was

commonly recognised that the work of a manager is

introduced almost 40 years ago. Grnroos introduces

not compartmentalised into different areas but is a

the evolving paradigm-shift towards relationship

portfolio of skills which are not functionally

marketing

distinguishable and which cut across the traditional

marketing. He sees relationship marketing develop

functions e.g. the manager as negotiator, resource

into a new approach to managing marketing problems,

allocator,

to organising the firm for marketing, and to other

information

disseminator

(See

also

and

its

consequences

for

internal

areas as well.

Mintzberg, 1973).
Also George (1990, p.64) argues that IM is a
philosophy for managing the organisations human

Ballantyne et al. (1995), taking a relationship

resources as a holistic management process to

marketing perspective, seek to legitimise internal

integrate the multiple functions.

marketing, not by its methods but by its purpose,

In the literature on Internal Marketing Rafiq (2000) et

which for them is to channel staff commitment and

al indicate the existence of three separate yet closely

team-work into market-orientated problem solving

intertwined strands of theoretical development of the

and opportunity seeking. They conceptualise IM as:

IM conceptualisation, namely first an employee

Internal marketing is any form of marketing within

satisfaction phase, second a customer orientation

an organisation which focuses staff attention on the

11

internal activities that need to be changed in order to

marketing paradigm. Internal marketing is seen as a

enhance

performance

process to be integrated with the total marketing

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

function. External marketing, both the traditional parts

the common denominator in all internal marketing

of it and interactive marketing performance, starts

perspectives is knowledge renewal. He defines

from within the organisation. As compared to

knowledge renewal as generating and circulating new

transaction marketing situations, a thorough and on-

knowledge.

going internal marketing process is required to make

external

marketplace

relationship

marketing

successful.

If

internal

Also Lings (1999) identifies three phases of

marketing is neglected, external marketing suffers or

approaches on IM. His classification for the third

fails.

phase is the aiming at marketing and the marketing

concept and creating common values amongst all

He argues that the four Ps of the marketing mix are

employees. He finds the common denominator of IM

not well able to fulfil the requirements of the

conceptualisations

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

is

the

need

of

collecting

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

information about the internal market.

from being concerned with a customers interests the

The next part of this review will concentrate on

views implicit in the four P approach is that the

relationship marketing and the learning organisation

customer is somebody to whom something is done

which has been brought into the most recent

To use a marketing metaphor, the marketing mix and

discussion in operationalising internal marketing in

its four Ps constitute a production-oriented definition

the literature reviewed.

of marketing, and not a market-oriented or customeroriented one. Moreover, although McCarthy (1960)

5.1.

Relationship Marketing

recognises the interactive nature of the Ps, the model

Varey (1999) states that the relationship between

itself does not explicitly include any interactive

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

elements. Furthermore, it does not indicate the nature

gain sustainable competitive advantage through a

and scope of such interactions. Especially since these

customer orientation, becomes clearer. Still the

interactions occur between customers and part-time

implementation of a practicable marketing approach

marketers employees who are not considered

remains a recurring problem. In the literature, this is

marketing people.

often centred on the question of attaining and

Service

maintaining effective communicative relationships

relationships

between organisation members and between work

developed the customer relationship life-cycle

groups and the development of a super-ordinate goal

model to describe the long-term nature of the

for co-operative working.

establishment and evolution of the relationship

providers
with

tend
their

to

build

customers.

long-lasting
Grnroos

between a firm and its customers. He identified that

One leading new approach for relationship building

managing this life-cycle is a relationship marketing

and management has been labelled relationship

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

marketing which eventually has entered the marketing

traditional four P approach only partly determine the

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

success of a company with an individual customer

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

whereas the part-time marketers of a service

Grnroos sees relationship marketing as a paradigm

provider may often have a much more important

shift from the traditional 4P marketing mix.

impact on the future purchasing decisions of the

Relationship marketing is suggested as one new

customer.

12

Therefore

an

interactive

marketing

performance requires that all parts of the firm that are

Piercy (1996) refers to relationship marketing as the

involved in taking care of customers can collaborate

attention being focused on making relationships and

and support each other in order to provide customers

partnerships the dominant model of how we manage

with a good total perceived quality and make them

the interface between an organisation and the outside

satisfied. Thus, for a firm pursuing a relationship

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

marketing strategy the internal interface between

1992; McKenna, 1991), where the most important

marketing, operations, personnel and other functions

relationship is with the customer, and the goal is a

is of strategic importance to success.

satisfied

customer

and

productive,

enduring

relationship (e.g. Gummesson, 1994).

Grnroos (1990) defines relationship marketing in the
following way: Marketing is to establish, maintain,

Varey

and enhance relationships with customers and other

communication as the mode of the organisation, rather

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

than the means. The achievement of goals is seen as

parties involved are met. This is achieved by a mutual

occurring within relationships rather than in discrete

exchange and fulfilment of promises.

transactions of discrete individuals or groups. Internal

(following

Drucker,

1973)

defines

marketing seen as internal relationship management is

Berry (1983) views relationship marketing as a

an integrative process within a system for fostering

strategy to attract, maintain and enhance customer

positive working relationships in a developmental way

relationships.

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

internal customer relationship management system has

Rapp and Collins (1990) say that the goals of

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

relationship marketing are to create and maintain

1992):

lasting relationships between the firm and its

customers that are rewarding for both sides.

Christopher

marketing

(1991)
an

et

approach

al consider
that

aligns

relationship
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

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

and the firm is trying to achieve profitability through

the

decrease

of

customer

turnover

and

Also Sargeant (1998) identifies the integrative element

the

of communication and relationship management as

strengthening of customer relationships.

key since it shifts the emphasis in internal marketing

13

away from the organisations relationship with its

between internal suppliers and customers can be

employees to the relationships that employees have

identified and the communications associated with

with each other. Enhancing the quality of integrated

these interactions can be examined to identify

customer-supplier relationships is thus seen as a key

possibilities for improvement. The value chain (Porter,

role for marketing to perform.

1985) is used to develop an internal customer structure

of the firm, which differentiates between different

Ballantyne (2000) concludes that internal marketing is

types of internal customers. Morgan and Hunt (1994)

a strategy in action for developing relationships

identify the need to manage relationships between

between employees across internal organisational

internal customers and their internal

boundaries challenging any internal activities that

simultaneously with the management of supply chain

need to be changed. The intention is to enhance the

relationships.

quality of external marketing relationships. Further he

It appears that the management of supply chain

states (following Gummesson) that all marketing is

relationships may have important similarities to the

grounded

of

management of internal value chain relationships and

relationships, regardless of defining industry groups

that the tools for the identification and management of

and regardless of legal-rational company borders. On

internal suppliers and their internal customers may

this basis, all internal marketing is potentially

also be useful in the management of suppliers and

relationship marketing turned inward.

customer in the supply chain relationship. As each

The strength of internal marketing is its intent coupled

department

with trusting employees and being trustworthy.

customers and suppliers a relationship network is

Interpersonal relationship development within internal

identified. Lings concludes that such networks can be

marketing, based on these fluxing behavioural

expected to be complex and as such the responsibility

intentions, is interpreted as the evolution of a series of

for the management of these interactions should be

cognitive re-appraisals along a personal path to

that of the departmental manager rather than the

customer consciousness.

marketing function. In this way the whole organisation

in

interactions

within

networks

identifies

its

internal

and

suppliers

external

becomes responsible for the creation and maintenance

Lings (1999) links the applicability of internal

of marketing relationships in which individuals in

marketing approaches to the management of external

different departments can physically relate to their

relationships. He examines the relation between

customers. This provides all individuals in the firm

internal marketing, supply chain relationships and

with easily identifiable customers, both internal and

service quality.

external, and a clear responsibility to maintain the

His arguments are based upon the view that the

quality of the service, which is provided to those

internal market consists of groups communicating to

customers.

other groups within the organisation and internal

Handfield and Nichols (1999) identify several

marketing is considered to be the process of creating

elements of trust between the firm and the supply

market conditions within the organisation to ensure

chain partner, which include reliability, competence,

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

openness and the importance of the primary interface.

Bekkers and Van Haastrecht, 1993). He sees this

These factors in the development of trust between

relationship between internal customers and their

supply chain partners are similar in nature to those

internal suppliers as the focus of the internal

identified by Parasuraman (1988) et al. as important

marketing effort.

components of service quality.

By identifying internal customers and suppliers as part

of the internal marketing campaign, interactions

14

Grnroos (1994) calls the promise concept an integral

Marsick (1993) giving five statements about what a

element of the relationship marketing approach. It

learning organisation is:

includes giving promises

and

thus persuading

customers as passive counterparts on the marketplace

1.

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

The learning organisation is more than just a

collection of individuals who are learning.

and initially build relationships. Fulfilling these

2.

promises is equally important as means of achieving

The

learning

organisation

demonstrates

organisational capacity for change.

customer satisfaction, retention of the customer base,

3.

The

learning

organisation

and long-term profitability. Like others Grnroos

individual

identifies trust as another key element. The resources

redefines organisational structure, culture,

of the seller personnel, technology and systems

job design, and assumptions about the way

have to be used in such a manner that the customers

things are.

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

4.

The

learning

accelerates

learning

capacity

but

organisation

also

involves

itself is maintained and strengthened( Grnroos,

widespread participation of employees and

1990, p. 5).

often customers in decision making and

information sharing.

Concluding from the literature reviewed it can be said

5.

The learning organisation promotes systemic

that in the current discussion of internal marketing

thinking and building of organisational

relationship marketing holds a dominant role in

memory.

operationalising the internal marketing concept. In

order to achieve customer orientation the traditional

Cahill (1995) develops the concept of the learning

concept of transactional marketing is no longer seen as

organisation

appropriate to fulfil this task. The multi-dimensional

organisational learning and going forward in terms of

interactions between internal and external customers

systems theory to create a new kind of organisation.

and suppliers can only be maintained and enhanced

The difference between organisational learning and

through two-way communication on a personal level

the learning organisation is that only a learning

rather than by a single marketing department. In this

organisation consciously learns and that it understands

sense internal marketing becomes a strategy for

its culture as well as the impact that being a learning

relationship development in order to serve another

organisation has on the firms culture and the

purpose: creating and circulating new knowledge

reciprocal impact that the culture has on the firms

within networks of relationships.

ability to learn.

5.2.

Learning Organisation

as

starting

from

the

point

of

Thompson and Lutherans (1990) further state several

Cahill (1995) focusses in his discussion on internal

properties that emerge when relating behavioural and

marketing on another recently introduced concept.

learning principles to organisational culture:

This concept is called the learning organisation. The

Culture is a generic term.

introduction of the learning organisation concept to

Culture is learned.

internal marketing is to provide a recommended

Culture is transmitted through a pattern of

method of organising, the better to provide services to

behavioural interactions.

firms customers.

In an organisational setting, there are

In identifying that a general definition of the learning

multiple

organisation its still missing he follows Watkins and

agents.

15

reinforcements

and

reinforcing

Each individual carries predispositions that

shape his or her interpretation of the

Varey (1999) contributes that a broader concept of

organisational culture.

internal marketing requires that a process, or meta-

A symbiotic relationship exists between the

structure, perspective is taken for organisational

reinforcing agent and target.

development through learning in a consciously created

Changing an established culture is difficult.

interactive communication system, i.e. a social system

which is not solely concerned with economic
transactions.

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

Ballantyne (2000) defines the common denominator in

implement internal marketing to get the organisation

all internal marketing perspectives as knowledge

to provide its services to its customers better, with

renewal differentiating it in two forms. The first is

more competence and understanding of who the

knowledge generation, meaning the creation or

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

discovery of new knowledge for use within the

the culmination of all the empowerment and human

organisation, with external market intelligence as

factors design or organisations, the jump from theory

inputs.

X to theory Y to learning organisations(Cahill, 1995

representing the diffusion of knowledge to all that can

p.32).

benefit, through the chain of internal customers to

The

second

is

knowledge

circulation,

external customers.
Dixon (1992) states that organisational learning may

He develops his model of knowledge renewal in three

have become the critical competence of the 1990s.

steps. First he depicts the main modes of learning

activity. Second, he reconstructs these as a continuing

Halal (1996) suggests that organisational learning may

process for knowledge renewal. Third, he matches

merely be the rebirth of organisation development, in

both of these with the intentions that permit an insight

using team learning to encourage change from the

into the participants behaviour. Thus he sets a general

bottom of the hierarchy of authority. This is needed to

framework for internal marketing that might be tested

build effective teams, but does not recognise the

in any organisational setting.

growing

need

to

transform

organisations

into

entrepreneurial, democratic systems (Halal et al.,

Four distinct modes for learning activity are revealed

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

(following Ballantyne):

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).

16

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 directly
from 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
members. The first steps are often intuitive; what
will work cannot really be known until tested in
action. However, testing personal know-how in a
group setting is a necessary part of checking out
the wider application of personal experience and,
in doing so, gaining confidence to challenge
entrenched internal policies and procedures.
Clearly, working to discover and uncover

operational solutions to customer problems is

customer 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 an
organisation-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 requires
advocacy 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 is
more than one-way message making. Many new
ways of working can be tested and negotiated
through dialogue. A trustworthy management
would seem to be the secret of gaining staff
commitment. However, any large organisation
have hierarchical and specialist divisions that
constrain interaction across internal borders. The
effect is that these become barriers to trust and
commitment if left unattended.

Ballantyne introduces the third connection as key to

To connect the four learning activity modes to the

of concepts which need attending to in order to build

concept of knowledge renewal Ballantyne draws

an

particularly on the insights of Nonaka and Takeuchi

organisation: philosophy; attitudes and beliefs; skills

(1995). He discusses each phase once more linking

and capabilities; and tools. He beliefs that developing

them to Nonaka and Takeuchis four-phase theory of

this foundation and the new organisational skills and

knowledge creation:

capabilities which need to flow from them may be the

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

organisational

foundation

for

the

learning

highest-leverage area for creating lasting change (

Energising: developing common knowledge: This

phase is energised by the sharing of tacit
knowledge, a tacit to tacit process, thus
amplifying 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 developing
mutual 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 rationality
nonetheless is informed by a sense of obligation
and trust.
Diffusing: integrating knowledge: This phase is
characterised by the integration of new
knowledge into the working ways of the
organisation, an explicit to tacit process, in which
the store of organisational knowledge is renewed,
at the explicit level, enhanced by personal
knowledge and commitment.

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 in
the literature reviewed.

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

17

philosophy by managers should be evaluated and if

examine these and explore the propositions that they

they recognise their own role in providing excellent

differ according to the nature of the supplier-customer

service to their employees?

interaction.

Varey (1995) suggest to conduct research in

References

organisations which do not have a strong marketing

Ballantyne, D.F. (1991a), Internal marketing, collaboration

and motivation in service quality management, working
paper No. SWP 23/91 , Cranfield School of
Management.

orientation to test the applicability of IM in nonmarketing companies. Further he points at a number

Ballantyne, D.F. (1991b), Coming to grips with service

intangibles using quality management techniques,
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