The Effects of Internal Marketing on Organizational Commitment

The Effects of Internal Marketing on Organizational Commitment

Shahzaib Shahnawaz

Lahore Business School

University of Lahore (UOL)

Lahore, Pakistan

1. Introduction

With the ever-changing challenges and increasing expectations of customers, organizations not only focus on external marketing, but also improve their performance through increased efforts in internal marketing (J. Hauser, D. Simester, B. Wernerfelt, 1996) [1]. There was a time when organization treated their employees as servants, but as the management studies progressed and corporations evolved, the need to treat the employees as their human resource which is very much critical for the success of the organization has increased.

Successful organizations keep track of the changing needs of their customers, to provide them with high quality services, and gain competitive advantage through internal marketing (M. Azzolini, J. Shillaber, 1993) [2]. Lack of commitment from employees can be harmful for the organization as it increases cost and decreases the level of performance from within the organization (Caruana and Calleya, 1998) [3].

2. Literature Review

According to Berry (1981), Internal Marketing can be defined as “viewing employees as internal customers, viewing jobs as internal products that satisfy the needs and wants of these internal customers while addressing the objectives of the organization”. Internal marketing enables the employees to put maximum effort instead of a minimum effort, therefore satisfying the needs of the external customers in a positive manner [4].

In the 1990’s, Rafiq and Ahmed argued that internal marketing is really hard to implement in an organization due to conflicts and complexity between departments due to problems arising in communication systems and policies and/or resistance towards change [5]. In 2000 Rafiq and Ahmed developed a new definition for internal marketing: “Internal marketing is a planned effort using a marketing-like approach to overcome organizational resistance to change and to align, motivate and inter-functionally co-ordinate 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 orientated employees.” [6]. The above definition argues that the right kind of training and development of the company employees is necessary to cope with the ever-changing needs of the customers to satisfy them.

The major factor of internal marketing is that the employee perceives that management considers his needs and handles them. Internal marketing leads to improved employees’ commitment to the organization (Gronroos, 1985; Tansuhaj et al., 1991) [7]. In addition to this outcome, internal marketing also results in higher job performance and decreased turnover among employees (Jenkins and Thomlinson, 1992) [8]. In a related study, a significant relationship was found between internal marketing and organizational commitment by Caruana and Calleya (1998) [3] among managers of retail banks, with the relationship being highly significance with the affective dimension of the organizational commitment.