Executive summary
Internal marketing—that is, the application of the marketing concept to the internal market, in which “jobs” are the products to be marketed to employees—can overhaul the face of a company. Several anecdotal accounts and meager empirical research underscore the importance of internal marketing in enhancing employee understanding of corporate values, employee retention, customer satisfaction, and loyalty. Despite its intuitive appeal, internal marketing appears to be losing steam among practitioners and academia. The waning interests lead to the question, Is employee job satisfaction, the focal starting point of internal marketing, sufficient?
Adopting a social identity theory perspective, the authors propose that internal marketing is fundamentally a process in which leaders instill into followers a sense of oneness with the organization, formally known as “organizational identification” (OI). The authors test this OI-transfer research model in two studies using data collected from regional directors, business unit managers, and customer-contact employees in a large U.S. pharmaceutical company and approximately 400 German travel agencies. The results show that the OI transfer takes place in the relationships between business unit managers and salespeople and between regional directors and business unit managers, but not directly from regional directors to salespeople. Customer-contact employees who identify strongly with the organization achieve higher levels of sales performance, and both employees’ and sales managers’ OI are positively related to their business units’ financial performance. However, job satisfaction is not related to business unit performance.
Among many important managerial implications, the studies show that the OI-transfer process holds even in geographically dispersed working conditions, a phenomenon that is prevalent across several industries, especially in the era of globalization. The crucial link between highly autonomous and geographically dispersed salespeople and the organization, as well as its top management, is sales managers. The cascading effects of OI transfer underscore the critical but often neglected role of middle managers (e.g., sales managers) in internal marketing. Ignoring these middle managers in internal marketing is synonymous with breaking the cascading flow of OI transfer. Building OI among these middle-level managers should pay off twice—first, by the leader’s direct influence on the business unit performance and, second, by igniting the multiplier effect among leader–follower dyads. In terms of implications for leadership, the studies show that charismatic leadership does not necessarily exert a positive impact on followers when charismatic leaders do not perceive themselves and the organization as one. Furthermore, although it is generally believed that high OI is beneficial, the studies show that high-OI leaders with low charisma actually impair followers’ OI. These detrimental effects are particularly visible for followers who work under these leaders for a longer time. Given the substantial performance implications of OI, firms that engage in internal marketing activities should be aware of the possible liabilities of the interaction between charismatic leadership and leaders’ OI over time. In summary, this research provides strong empirical evidence for the role of leaders, especially middle managers, in building followers’ OI that lays the foundation for internal marketing.
Biography
Jan Wieseke is Professor of Marketing and Chair of Marketing Department at Ruhr-University of Bochum, Germany. He currently leads a research project on the evaluation of predictors of service quality, which is supported by a grant from the German Research Foundation (No. WI 3146/1-2). His research interests center on internal marketing, services marketing, the employee–customer interface, and the application of social identity theory in marketing settings. Jan serves as associate editor of British Journal of Management. His work has been published in outlets such as Journal of the Academy of Marketing Science, Marketing Letters, Journal of Marketing Theory and Practice, and Journal of Vocational Behavior.
Michael Ahearne is Associate Professor of Marketing and Executive Director of the Sales Excellence Institute in the C.T. Bauer College of Business at the University of Houston. He has both a PhD and an MS in Marketing with a minor in Decision Sciences from Indiana University. He has an MBA and a BS in Mathematics with honors from Worcester Polytechnic Institute. His research examines factors that influence the performance of salespeople, sales teams, and sales organizations. He has published in Journal of Marketing, Journal of Marketing Research, Management Science, Journal of Applied Psychology, International Journal of Research in Marketing, Journal of the Academy of Marketing Science, Journal of Management, and the Journal of Personal Selling and Sales Management, as well as several other journals.
Son K. Lam is a doctoral candidate in Marketing in C.T. Bauer College of Business at the University of Houston. His current research interests focus on corporate identity and functional/organizational identification in the context of internal marketing, marketing interface with other functions, salesperson behavior and performance, and customer–brand relationships. He also conducts research on team selling, the service–profit chain, and service quality. Son has extensive working experience in the footwear industry as an Export Manager and a Design Coordinator.
Rolf van Dick is Professor of Social Psychology at the Goethe-University Frankfurt (Germany) and is a faculty member in the joint executive MBA program of the Goethe Business School and the Fuqua School of Business at Duke University. Before his current position, Rolf van Dick was Professor of Social Psychology and Organizational Behavior at Aston Business School Birmingham (United Kingdom). He received his PhD in Social Psychology from Philipps-University Marburg (Germany). His research interests center on the application of social identity theory in organizational settings. Rolf served as associate editor of European Journal of Work & Organizational Psychology and is editor in chief of British Journal of Management. His work has been published in outlets including Academy of Management Journal, Journal of Organizational Behavior, Journal of Vocational Behavior, and Journal of Personality and Social Psychology.
Journal of Marketing, Volume 73, Number 2, March 2009
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