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Internal Marketing: A Systematic Review

Article in The Journal of Marketing Theory and Practice · February 2021

DOI: 10.1080/10696679.2021.1886588

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 Internal Marketing: A Systematic Review

Abstract

Responding to the inadequacies and fragmentation of the Internal Marketing (IM) literature,

this paper delivers a systematic review and synthesis of IM research. Based on an analysis of

349 articles, this work maps the evolution of IM research and identifies four distinct periods

and six aggregated dimensions of IM research as determinants of employees’ responses to IM

adoption. This article re-organizes IM knowledge and provides an integrated framework, in an

attempt to address the limitations of contemporaneous IM knowledge. This paper contributes

to the ongoing debate about the IM concept and its scope and presents an agenda for

researchers.

Keywords: Internal Marketing; Systematic review; Service Employees; Market Orientation

1
INTRODUCTION

The indispensable value of human capital for providing contemporary firms with a sustainable

competitive advantage and higher revenues is widely acknowledged (Edo et al., 2015).

Organizations like IBM put employees’ experience with the firm and job satisfaction at the

core of their activity, based on the belief that “if employees feel great about their job, so would

do their clients” (Burrell, 2018, p.54). In line with extensive research in the OB and HR

literatures that examine how organizations can enhance employees’ performance (del Brío et

al., 2007), Internal Marketing (IM) was originally proposed as the managerial philosophy of

treating employees as internal customers, designing jobs as products to satisfy and motivate

employees to deliver high quality service (Berry, 1981).

IM research primarily focuses on how organizations can improve frontline employees’

performance and render them more customer-conscious with the aim of generating positive

customer outcomes such as increased customer satisfaction and loyalty (Lings & Greenley,

2010; Kadic-Maglajlic et al., 2018). Studies in the field identify a variety of benefits for

employees stemming from IM activities such as increased job satisfaction, higher

identification, and better brand understanding (Huang & Rundle-Thiele, 2014; Ozuem et al.,

2018). However, the IM discourse faces two important challenges. From a theoretical

perspective, the exponential growth of the IM literature, the fragmentation of IM work and the

inconsistent conceptualizations of what IM is and its underlying practices prevent researchers

from providing an integrated picture of IM knowledge to service organizations. Moreover, a

significant amount of IM work remains disconnected from contemporary theoretical

frameworks. For instance, current IM wisdom advances a supplier-dominated perspective of

value creation, without looking into how employees can actively participate in value creation

activities, as the service-dominant logic (SDL) recommends (e.g. Santos-Vijande, Lopez-

Sanchez & Rudd, 2016).

2
 At the same time, the evolution of the global labour market has resulted in more flexible

and dynamic firm-employee contractual relationships (e.g. work on demand) and reduced

loyalty among staff (e.g. Curran & Healy, 2014). These changes in the role of service

employees challenge the static understanding of firm-employee relationships that most IM

frameworks advance (Gounaris, 2006) and restrict managerial understanding of how IM should

be implemented, and the managerial actions involved in its adoption (Paul & Sahadev, 2018).

Hence, these challenges have put at risk its relevance to contemporary business reality.

In response to these challenges, this article delivers a timely systematic review and

synthesis of the literature in the IM domain. By analysing 349 articles published in the area

since 1981, this systematic review aims at synthesizing IM research in a systematic, transparent

and reproducible approach with a dual objective; first; to better organize contemporaneous IM

knowledge and the benefits from adopting IM practices for both employees and organizations.

Second, it provides an understanding of the theoretical limitations of current IM research

frameworks and discusses a future research agenda for advancing the field in light of recent

theoretical and market developments.

METHOD

The aim of this article is to systematically search, evaluate and synthesize the existing IM work.

A comprehensive search of the IM literature was conducted by using the term ‘Internal

Marketing’ as a keyword in the Business Source Premier (BSP) database, which includes 98%

of bibliographic records for 25 business and management journals with the highest impact

factors (Niesten & Stefan, 2019). In addition, we utilized additional features in our search to

locate additional studies not identified by BSP (Bailey et al., 2017), such as citation tracking,

scanning reference lists and tracking new publication alerts on Google scholar. Additional

searches took place in specialised areas that have attracted IM research (i.e. Nursing, Education

3
and Social Science). Data collection covered the period from 1981, when Berry (1981) first

coined the term ‘Internal Marketing’ to July 2020.

To determine the eligibility of articles for the systematic review, first, we limited the

search into peer-reviewed English language journal articles (excluding books, book chapters,

conference papers, thesis and dissertations), as they are central in validating new knowledge

(Crossan & Apaydin, 2010). Based on these criteria, using the term ‘Internal Marketing’, in

the title, keywords, abstract and/or main body of the study, we resulted in an initial dataset of

1081 studies. A second criterion for inclusion was their empirical or conceptual relevance to

the field of IM. After a full-text screening of these studies, 349 IM studies remained in our final

dataset.

From this dataset, data was extracted in a number of areas (Leonidou & Leonidou,

2011): 1. Publication profile and impact (i.e. subject, publication date, journal); 2. Scope of

research (i.e. countries, industry coverage, unit of analysis; 3. Key content (i.e. keywords;

definitions, theories and frameworks); 3. IM practices and activities advocated and outcomes

(at the employee and organization level). By combining information about the scope,

conceptualization, approved practices and empirical outcomes of IM research this study offers

a granular understanding of IM research.

SCOPING OUT THE IM FIELD

To help us understand how the field emerged and developed both conceptually and empirically,

our analysis resulted in the articles in the dataset (N=349) being grouped into four near equal-

sized periods, namely the 4Es: the “Emergence” (pre-2007), the “Establishment” (2007-2012),

the “Explosion” (2013- 2016), and the “Ennui” era (2017–onwards). From the first article on

IM by Berry (1981) the area initially struggled to gain traction in academic literature, with only

81 articles being published before 2007 (an average of less than 3.1 articles per year). In the

4
establishment period, the first attempts to define IM emerge and the IM field is attracting

increasing attention with 88 articles being published (14.7 per year). In the two recent two

periods, there has been an exponential growth with an average of 22.5 article published per

year. The 349 articles included 50 conceptual articles, and 299 empirical studies (43 qualitative

and 256 quantitative studies). As the field developed there was a shift towards empirical

research and the proportion of conceptual and qualitative research has been steadily tailing off.

In terms of the empirical studies, employees (notably frontline employees) were predominantly

used as key informants (54.5%) reflecting the “employees as internal customers’ approach of

IM (see Table 1). Managers or research mixing the perspectives from different levels (e.g.

senior managers or line managers with employees), has become relatively underutilised in the

“ennui” era.

<Insert Table 1 - Research Design Over Time (Empirical Research)>

It is important to understand the contribution of IM research to the wider marketing and

management fields. We categorized the articles according to the subject areas in the

Association of Business Schools Journal List (ABS List, 2015; see Table 2). Journals not on

the ABS list were assigned by the authors according to their stated scope and content (44% of

articles were in non-ABS list journals). The majority of the papers not in ABS journals were

published in management or marketing journals that, whilst they are listed in Scientific Journal

Rankings (SJR) reports, have not as yet been ranked by ABS. Several papers were published

in sector and specialist journals in non-management areas (e.g. Journal of Advanced Nursing).

<Insert Table 2 - Main Subjects of IM Research>

IM research started out as a marketing concept with the majority of articles in marketing

journals. However, the choice of journals also reflects the service focus with sector specialist

journals, especially in financial services, hospitality and healthcare, being increasingly popular.

IM is aimed at employees and this is reflected in the steady stream of publications in more

5
general management journals. Nowadays, IM is not viewed as being solely resting within the

domain of marketing. Articles are increasingly emerging in other specialist subject areas.

One of the problems facing IM research is that it has failed to gain widespread

acceptance in so-called “A” level journals (classified as 4 or 4* on the ABS list, 2015). Only

two articles have been published in the highest quality journals (4*). These were Wieseke and

their colleagues (2009) and Lam and their colleagues (2010), both in the Journal of Marketing.

The heyday of IM scholarship appears to have been in the period of 2009-2015. Nine of the 11

top quality articles were published in this period with articles appearing in Journal of the

Academy of Marketing Science (Celsi & Gilly, 2010; Chan & Lam 2011; Hughes, 2013);

Journal of Service Research (Suh et al., 2011), Journal of Applied Psychology (Ehrhart et al.,

2011) and Tourism Management (Chow et al., 2015; Huang & Rundle-Thiele, 2014). This

suggests that the quality of IM research and its contribution to theory is somewhat lacking.

SYNTHESIS OF THE IM LITERATURE

To understand why the IM body of knowledge has not achieved a more significant impact we

scrutinise the literature over the four periods. In the emergence period, scholars highlight the

need for service firms to enhance the management of their employees (via marketing and HR

approaches) so that they can enhance customer perceived service quality (Green, Walls &

Schrest, 1994; Varey, 1995). During this period, the first strategic conceptualizations of IM are

introduced (e.g. Foreman & Money, 1995) aspiring to discuss its relevance with other

organizational functions. In the establishment period, a more extensive stream of works refines

IM and identifies a variety of strategies and tactic that underlie IM programs; also, empirical

evidence confirms IM’s practices strong impact on employees’ performance when interacting

with customers (Gounaris et al., 2010; Ehrhart et al., 2011). In the explosion period, a plethora

of studies replicate the effect of IM dimensions on various service industries and extend their

impact on frontline employees’ attitudes and behavioural intentions as well as link IM to

6
organizational performance (Fang et al., 2014; Kim et al., 2016). Last, in the “ennui” era,

pertinent work explores the value of IM for various aspects of organizational performance (e.g.

corporate brand, innovation teams) and links its adoption with customer experience with the

firm (Park & Tran, 2018; Gounaris et al., 2020).

Next, we explore further development of IM literature in terms of the divergent

conceptualizations of IM, the underlying IM dimensions, the outcomes of IM, and the

boundaries of IM theory.

The Conceptualization of Internal Marketing

The IM concept initially derives from a focus on enhancing the quality of (internal) service

delivered by employees. It is based on the premise that treating employees as internal

customers and designing job/products that are attractive to them will satisfy and motivate them

to deliver high-quality services (Berry, 1981). However, over the years there has been no clear

single accepted conceptualisation of IM and the literature has taken different perspectives.

One perspective is internally focused. Characterised by a transaction orientation, this

perspective views the quality of internal exchanges between the firm and employees as a

prerequisite for better external exchanges (George, 1990). Berry’s (1981) work views IM as a

mean of achieving employee satisfaction by viewing jobs as products aiming at satisfying

frontline employees, who are viewed as internal customers (Sasser & Arbeit, 1976). This is a

behavioural perspective emphasizing employees’ needs, well-being and performance (e.g.

Gounaris, 2006). This is despite criticism of this “jobs as products” perspective where jobs

might be unwanted and the contradictive sovereignty between internal and external customers

(Rafiq & Ahmed, 1993).

A second perspective views the main objective of IM as rendering employees more

motivated and customer-oriented (Gronroos, 1985). In this logic, keeping employees satisfied

is a minimum for firms to meet and they also need to develop a sales-oriented mentality (Rafiq

7
& Ahmed, 2000). Both approaches recognize the importance of employees’ centrality in

dealing with customer expectations, Gronroos’ logic focuses more on employees’ customer

orientation through influencing and training, rather than generating higher employee

satisfaction (Rafiq & Ahmed, 2000).

Another perspective considers IM a strategic approach for improving inter-functional

integration. Flipo (1986) proposed that inter-functional communication and coordination

reduce the situational conflict among functions, facilitating the achievement of strategic

objectives. Ahmed and Rafiq (1993; 2000) introduce IM as an organizational change

management strategy to overcome resistance and provide the first holistic definition of IM as

“a planned effort using a (1) marketing-like approach to (2) motivate employees, targeting on

delivering (3) customer satisfaction and (4) achieving organizational objectives through (5)

inter-functional coordination” (p. 454). This definition expands the scope of IM activities from

just focusing on employee motivation and customer consciousness to placing more attention

on the achievement of goals. Recognizing the central role of service provider, it integrates and

advances internal resources and capabilities to meet external objectives through process and

procedure improvement (Gounaris et al., 2010).

A sub-part of the IM literature also focuses on conceptualizing and measuring Internal

Market Orientation (IMO) (Lings, 2004; Lings and Greenley, 2005). Work around the notion

of IMO reflects service firms’ managerial care and strategic responsiveness to their internal

market’s functioning and explores integrated ways to improve employees’ role effectiveness,

communication norms and HR processes, among others (Gounaris, 2006). These studies

provide some preliminary evidence on IMO generating favourable customer outcomes (e.g.

customer perceived service quality (Edo et a., 2015; Gounaris et al., 2010). Later approaches

have begun to view IM as a set of organizational/dynamic capabilities that enable the firm to

meet its marketing and customer goals (Gounaris et al., 2020; Hughes et al., 2012) as well as

8
enhance employees’ engagement in value (co)-creation activities (Boukis, 2019; Vivek et al.,

2012). Consistent with value creation process through Service-dominant Logic (SDL), the

firms cannot create value for all stakeholders without employees’ participation in the process

(Madhavaram & Hunt, 2008; Boukis & Kabadayi, 2020). From this perspective, organizations

are no longer the ‘active implementers’ and the employees are no longer the ‘passive recipients’.

Both lying on the positions of value creators, the active relationship between corporates and

employees is reflected on the development of dynamic capabilities.

Emerging Dimensions of IM

The aforementioned fragmented IM perspectives empirically and conceptually advocate a

plethora of strategic and tactical activities, processes and practices that comprise successful IM

programs (Ahmed & Rafiq, 2003; Lings & Greenley, 2005). Drawing on the aim of this diverse

mix of IM activities, we classify them into six overarching dimensions: (1) Internal Market

Analytics; (2) Internal Communication; (3) Employee Development; (4) Employee Rewards

and Recognition; (5) Job Design and Empowerment; (6) Leadership and Organizational

Culture. The definitions of these dimensions and examples of their underlying practices are

discussed below.

This categorization of the scope of IM acknowledges prior work in the field that views

intelligence generation, dissemination and response as key IM dimensions (Gounaris, 2006;

Lings & Greenley, 2005); that considers IM a bundle of HR activities and an organized effort

of recruitment, training and retention of customer-conscious employees (e.g. Hwang & Chi,

2005); and, it advances an integrated framework of the IM literature, with five main dimensions

and “leadership and organizational culture” as an antecedent of these five dimensions (see

Figure 1).

<Insert Figure 1 – Key IM Dimensions Identified in Literature>

9
 Internal Market Analytics refers to activities towards collecting and analysing of

intelligence for the firm’s internal (employee) market (Gounaris, 2006). Similar to the adoption

of market orientation, employees’ needs and wants should be identified first, before customer-

oriented actions take place (Lings, 2004). This dimension reflects the extent to which

organizations gather and integrate intelligence and data regarding their employees from various

primary and secondary sources (Tortosa-Edo et al., 2015). However, empirical IM studies

rarely discuss how firms collect and act on employee data to improve their experience with the

firm (Shah et al., 2017).

Internal Communication captures the practices through which firms build relationships

between internal stakeholders and disseminate info across organizational echelons (Park &

Tran, 2018). This dimension consists of various elements, the dissemination of tacit and

explicit knowledge across the organization (Lings & Greenley, 2005), the formation of

effective vertical and horizontal interpersonal relationships (Smith & O’Sullivan, 2012), inter-

functional integration and cooperation mechanisms (Conduit & Mavondo, 2001), and shared

vision (Chow et al., 2015), composing a comprehensive dimension of intelligence exchange

and network interactions.

Employee Development represents the strategic investment of the organization to

support existing and new employees’ personal growth and career perspective. As a key IM

dimension, it helps frontline staff becomes more motivated and customer-oriented, as well as

equips them with service knowledge, skills and capabilities (Fang et al., 2014). HRM practices

such as employee recruitment and selection (Akroush et al., 2013), professional customer-

oriented training (Wieseke et al., 2009), educational development (Smith & O’Sullivan, 2012)

and career advancement opportunities (Budhwar et al., 2009) are employed to ensure the

sufficiency of qualified service providers.

10
 Employee Rewards and Recognition include financial and relational rewards to staff,

based on their job performance. Financial (extrinsic) and relational (intrinsic) rewards work

together to contribute to employee satisfaction, as well as service quality improvement.

Financial remuneration systems facilitate the establishment of specific company culture by

rewarding the behaviours aligned with corporate values and mission (Ahmed & Rafiq, 2003).

Feedback and performance appraisal systems (Chan & Lam, 2011) provide employees the

standards and objectives to achieve, and based on it, job evaluation (Budhwar et al., 2009), job

security (Bell et al., 2004) and recognition systems (Anaza & Rutherford, 2012) are designed

to improve human capital effectiveness.

Job Design and Empowerment emphasize role requirements such as job assignments,

content and description and provide employees with autonomy to make job-related decisions

to enhance internal and external service quality (Paul & Sahadev, 2018). The enhanced job

design can be considered as a better “product” to satisfy employee needs, and as such we argue

that this dimension bridges the marketing and HRM perspectives in IM. Employee

empowerment, the degree of discretion employees have to provide effective service is an

important aspect of this dimension (Chan & Lam, 2011). In addition, appropriate workload and

support (Yildiz & Kara, 2017), job control (Peltier et al., 2006), role clarity (Suh & Lee, 2016),

job rotation (Zampetakis & Moustakis, 2007), and work-family balance (Ruizalba et al., 2014)

are empirically confirmed to be positively related to internal service quality (Akroush et al.,

2013).

Leadership and Organizational Culture refers to the senior management team’s support

and leadership style adopted to establish a market-oriented service climate assisting employees

to solve job-related problems (Kim et al., 2016). Also, senior management should establish a

market-oriented organizational culture (Conduit & Mavondo, 2001), where employees are

encouraged to embark in extra-role activity and improve customers’ experience with the firm

11
(Lings & Greenley, 2010). A number of studies emphasise the importance of this dimension

for IM adoption (e.g. Wieseke et al., 2009; Chan & Lam, 2011; Ruizalba et al., 2014; Boukis

et al., 2021); therefore, we argue that this dimension enables the successful implementation of

the other IM dimensions.

However, the IM literature is very fragmented in the consideration of the

aforementioned dimensions. Table 3 shows the frequency each dimension has been measured

by the studies in the IM dataset (this excludes qualitative research articles). Internal

communication is emphasised the most, especially in the “ennui” period with 93% of the

studies including a measure of internal communication, considerably more frequently than all

other dimensions. This is the equivalent of limiting marketing to external customer

communication. In contrast, internal market analytics – aimed at understanding the ‘customer’

- is measured relatively infrequently demonstrating a lack of a true internal marketing

orientation. Whilst articles often measure multiple facets of a dimension, only seven articles

measure all six dimensions (the average number of dimensions measured is 3.4). There is a

lack of research that demonstrates the contribution of each dimension to IM adoption success.

<Insert Table 3 - Distribution of Internal Marketing Dimensions>

Currently, limited consensus exists on which elements of an IM program should be

emphasised, or which communication and integration practices are most effective in IM

programs (Ferreira-Vasconcelos, 2008; Snell & White, 2009). IM research has also failed to

demonstrate how these dimensions dynamically interact with each other to collectively affect

employee responses and/or organization performance. IM work also fails to provide insights

into the different phases of IM adoption, the various tactical and strategic steps in each phase

and the role of different functions in them (Papasolomou et al., 2017). As a result, the lack of

unanimity of a ‘roadmap’ for IM adoption prevents firms from understanding the extent to

12
which their existing capabilities are aligned with tactical-level actions that IM work advances

(Pavlou & El Sawy, 2011).

Internal Marketing Outcomes

Turning to the outcomes of IM, these can be classified into employee-level (attitudinal and

behavioural) and organizational-level (financial and non-financial) outcomes. Examples of

outcomes employed are given in Figure 2.

<Insert Figure 2 – IM Outcomes and Contextual Factors>

Considerable qualitative and quantitative work in the IM stream confirms various

employee-attitudinal benefits from IM implementation such as: higher employee retention

(Berry & Parasuraman, 1991), increased employee commitment (Yao et al., 2019), employee

empowerment (Gounaris, 2006), higher job satisfaction (Huang & Rundle-Thiele, 2014).

These aforementioned attitudes are also confirmed as drivers of various employee behaviours

including in- and extra-role activity (Lings & Greenley, 2010), citizenship behaviour (Chow et

al., 2015), customer complaint handling performance (Chan & Lam, 2011), customer-oriented

behaviours (Park & Tran, 2018), and brand supportive behaviours (Boukis et al., 2014). In turn,

these drive organizational outcomes. The organizational consequences from IM adoption can

also be divided into two types: financial and non-financial benefits. Financial benefits remain

limited and include profits and market performance (Lings & Greenley, 2009), growth in

income (e.g. Rodrigues and Pinho, 2012), overall profit (e.g. Fang et al., 2014), and sales

growth (e.g. Yu et al., 2019). The non-financial benefits include customer satisfaction (Tortosa-

Edo et al., 2009), staff retention (Yu et al. 2019); service quality (Podnar & Golob, 2010),

brand equity (Boukis & Christodoulides, 2018); customer loyalty (Ozuem et al., 2018),

innovation team performance (Gounaris et al., 2020), and market orientation (e.g. Lings and

Greenley, 2010).

<Insert Table 4. Distribution of IM Outcomes>

13
Table 4 provides frequency data for the four types of IM outcomes in the literature. Attitudinal

outcomes are by far the most commonly measured IM outcomes (61% of articles) reflecting

the employee focus of data collection mentioned earlier. There is a trend to now measure

multiple IM outcomes i.e. at both the employee level and organization level. This is reflected

by the use of structural equation modelling for analysis. However, research on the impact of

IM on organizational financial performance remains very limited (7% of studies) which may

be one explanation of the lack of traction of the IM literature.

The Boundaries of IM Research

The contextual factors in IM research set the boundary conditions for generalizability. These

are shown in Figure 2. This include the market context in which research was conducted, firm-

level factors and individual-level factors.

In the early stages, IM research concentrated on a few sectors and regions, but

eventually, it expanded to most service sectors demonstrating its wide-ranging applicability.

We list the main sectors studies in Table 5. Financial services are the most popular industry

investigated, accounting for 25% of the total studies. The hospitality and tourism industries

have recently grown in popularity as a research context (e.g. Yao et al., 2019), reflecting the

move to a more leisure-based economy in the western world. Education has also emerged as a

fertile research context – perhaps reflecting the relative ease of access. The field still remains

focused on high contact service sectors. Further studies are needed to compare IM effects on

different sectors (e.g. high contact vs. low contact). Manufacturing is only studied infrequently,

suggesting that IM, and the idea of internal customers, is a service-specific framework.

However, with the growth of servitization there is scope for IM research in such sectors.

<Insert Table 5 - Sector Distribution of IM Research>

In terms of geographical distributions of IM research, the conceptual and empirical

development of the IM field was located in Europe (e.g. Flipo, 1986; Gummesson, 1987) and

14
North America (e.g. Berry, 1981). These two areas accounted for 83% of the emerging research

(with Australia also contributing). In contrast, in the last period, Asia came to the fore with

over 56% of the studies. Also, in the past few years, Africa has emerged as a research context.

The explosion of publications in the IM is very much driven by these developing regions. The

interest in IM amongst western scholars appears to have has tailed off, perhaps reflecting how

they view IM as a theory.

The literature also examines several contingent factors that limit or drive the

effectiveness of IM. Individual-level factors include employee tenure (Wieseke et al., 2009),

job type and interpersonal relationship (Yu et al., 2019) network size (Lam et al. 2010). Firm

factors include customer complaints (Bell et al., 2004), feedback accuracy and frequency (Chan

& Lam, 2011), cultural congruence (Burmann et al., 2009), cross-functional connectivity

(Kadic-Maglajilic et al., 2018) and ownership type (Yu et al. 2019). However, there is scope

for significant further research on the boundaries of IM research.

FUTURE RESEARCH AGENDA FOR IM

The analysis of the current state of the IM literature demonstrates that IM as a theory and a

field of research has not developed despite the promise of its early years. There is a lack of a

unified theoretical framework underlying the IM domain (e.g. Ahmed et al., 2003; Kaur et al.,

2013). This leads to a fragmentation of the contribution IM makes to the services marketing

literature. Our systematic review identified 123 mentions of theoretical frameworks. The

majority of papers had no clear theoretical base with the research being more descriptive in

nature and this hinders the take-up of IM in the wider literature. Social Exchange Theory,

Equity Theory and Social Identity Theory are the most widely used frameworks in IM research

(e.g. Tortosa et al., 2009; Suh et al., 2011; Chow et al., 2015). However, these theories, together,

are only mentioned in 13% of articles.

15
 The relatively atheoretical nature of the IM discourse renders the emergence of a solid

and unified IM framework as a sine qua non, as it limits its potential to evolve into an inclusive

managerial approach for contemporary organizations. Scholars often criticize the internal

customer perspective, as there are some elements of coercion in the employee market

(Papasolomou, 2006; Boukis et al., 2017). Moreover, prior work questions the legitimacy of

IM as a marketing philosophy, given the overlap of some of its elements with other functions

(e.g. HR) (Collins & Payne 1991). For instance, scholars view IM as “a reemphasis of

normative HRM, and a mere labelling of a concept that was not clearly defined (...), ambiguous

and highly rhetorical” (Gyepi-Garbrah & Asamoah, 2015; p. 276). Future efforts should

delineate IM’s conceptual nature and underlying dimensions and integrate this with

contemporary theoretical frameworks.

The following section provides an agenda with some important challenges that need to

be addressed in the field if IM is going rise again, provide a significant contribution to academic

theory and demonstrate its importance for contemporary service organizations. In the past, IM

research has focused on front-line service employees in traditional service sectors assessing the

impact of an ever-changing set of IM dimensions (the services marketing mix). This agenda

suggests widening the focus of IM research away from its sole focus on the frontline employee;

conceptualizing IM as a dynamic capability and using big data to optimize this capability; and

understanding the boundaries of IM effectiveness in light of radical changes to the service

market landscape. Figure 3 summarizes this research agenda.

<Insert Figure 3 – Future Research Agenda for IM>

Expanding the Focus of IM Research

IM is conceptualized, whether within the ‘jobs as products’ perspective (Berry, 1981), as a

strategic orientation (Rafiq & Ahmed, 2000) or as an organizational-wide capability. However,

the focal point of the majority of IM studies is narrowly frontline staff and/or sales reps

16
(Akroush et al., 2013; Park & Tran, 2018). This suggests that the explanatory power of existing

IM theories and frameworks (e.g. equity, social exchange theory) is limited and it mostly lies

at dyadic interactions (Ferdous et al., 2013).

IM should not be the remit of, or focused on, one department but be considered an

organization-wide orientation. Research has shown that behaviour is contagious (Wieseke et

al., 2009). Behaviours such as good service and customer responsiveness should percolate

through the organization with leaders influencing supervisors, supervisors influencing

employees, employees influencing colleagues (and vice-versa). As a result, research should

confirm IM’s delivery of value to all internal stakeholders (e.g. senior executives, back-office

staff, middle-level managers, etc.) and take into account situational factors such as the

relationship between co-workers (Chow et al., 2015) and the communication modes utilized

among employees. Given the trend for increased virtual and remote working, and the potential

for low employee engagement, these factors may be gaining importance in IM effectiveness.

However, not all types of jobs are equally attractive for employees and often,

employees have a strictly calculative perspective for narrowly defined roles (Lips-Wiersma et

al., 2016). Employee responses to IM cannot be always anticipated, without accommodating

their work role (Kelemen & Papasolomou, 2007). IM programs that treat all employees equally

could end up a very resource-consuming activity with ambiguous results for firms.

Additionally, there may be limits to the effectiveness of IM. For example, job empowerment

has been confirmed to lead to perceived workload increase, impeding employee performance

(Chan & Lam, 2011).

Therefore, research should strive to answer: To what extent should IM programs be

directed equivocally at all employees? Do IM programs equally benefit employees in different

departments or at different organizational levels? What is the role of the leaders and

17
colleagues in enhancing employees’ responsiveness to IM programs? What are the situational

factors, such as remote working, that may impede IM effectiveness?

Similarly, there is a narrow focus of existing IM research on employee outcomes.

Extensive research shows that IM elicits positive responses in turns of higher commitment or

engagement in citizenship activity (e.g. Chow et al., 2015; Chan & Lam, 2011). The theoretical

framework shown in Figure 2 suggests that the employee responses mediate between IM and

organizational performance. Surprisingly, limited research has linked IM (directly or

indirectly) to other (internal and external) aspects of organizational effectiveness, such as more

collaborative interdepartmental relationships, improved team functioning, and increased

operational efficiency (e.g. Lings & Greenley, 2010; Edo et al., 2015; Park & Tran, 2018).

Moreover, there is no strong empirical confirmation that IM actually creates value for the

firm’s customers (Lings & Greenley, 2010) and measures of financial performance remain rare

in the literature. As a result, practitioners lack an informed understanding of the benefits to the

firm from IM adoption. Research needs to expand to include the customer’s perspective,

matching internal and external responses.

The current theoretical grounds of IM also fail to address the rationale behind

exchanges between firm and employees and a comprehensive understanding of how employee-

firm value proposition exchanges occur is still missing (Papasolomou et al., 2017). The service

logic stream advocates that employees should be enacted as operant resources in the value co-

creation process and stress them as key actors in the creation of value for customers (Tsai &

Wu, 2011; Grönroos, 2011). However, how value creation in the internal market occurs and

the role of employees as co-creators in this process remains largely unexplored in the IM

literature (Ferdous et al., 2013; Vasconcelos, 2008).

Key questions still to be addressed include: To what extent do IM programs impact

employee acquisition, retention and their experience with the firm? How does IM adoption

18
affect customer satisfaction level and reviews valence? Do employee responses fully or

partially mediate between IM and organizational outcomes? Under which conditions do IM

capabilities encourage employees to actively participate in extra-role tasks that create value

for the firm? To what extent do IM programs motivate employees to engage in value co-

creation activities with customers?

Optimizing the IM Dynamic Capability

The dynamic capabilities framework can be utilized to build a clearer theoretical stand of the

IM domain at the strategic level (Pavlou & El Sawy, 2011). As underlying IM practices

constitute key processes to the performance of service organisations, they reflect their capacity

to modify human resources to improve their effective functioning (Boukis, 2019). Hence, IM

practices reflect capabilities that allow the management of the firm’s internal (human)

resources and processes in such a way that employees become better aligned to the company’s

customer objectives.

Currently, there is limited consensus on what constitutes an IM capability. We do not

know which dimensions should be emphasised, and which are most effective under which

circumstances (Ferreira-Vasconcelos, 2008). Furthermore, research has also failed to

demonstrate how these dimensions dynamically interact with each other to collectively affect

employee responses and/or organization performance.

Figure 1 shows an integrated framework of the six IM dimensions. Leadership provides

the vision and goals to pursue, and the senior management develop strategies, policies and

procedures to deliver value for the internal market. Internal intelligence collection and internal

communication dimensions represent the marketing perspective (Gounaris, 2006; Lings &

Greenley, 2005). The HRM/OB perspectives emphasis on selecting, developing, motivating

and retaining the right people in right roles by building financial and relational bonds with them

(e.g. Hwang & Chi, 2005). The job design and empowerment dimension lie on the overlap of

19
marketing perspective and HRM perspective; from the marketing perspective, job design as

the response of internal market intelligence collection and communication; and, from the HRM

perspective, it focuses on the role description, working procedures and

organizational/structural design to create a more attractive workplace.

Research has shown these dimensions to influence and interact with each other. For

example, firms collect information about training needs through internal market research, and

then develop training and development programs targeting on responding to the collected

information (Gounaris, 2006). Management commitment of IM adoption facilitates and

supports the two-way information-flow between employees and employers (Kim et al., 2016).

The six dimensions of IM establish an integrated capability, and collectively contribute

to favourable outcomes. Research needs to address: To what extent do IM practices reflect a

set of organizational capabilities? Which is the optimized combination of activities for IM

programmes? In what circumstances should the marketing and the HR dimensions be

emphasised? Which dimensions support and mutually reinforcing each other? Is there an

optimal level of IM above which there are decreasing returns?

To drive the optimization of an IM capability we suggest that organization move past

their reliance on surveys to understand employees and their needs (Edo et a., 2015). The

abundance of employee data on review sites (e.g. Glassdoor) and social media (e.g. LinkedIn)

as well as the development of organizational big data analytics skills and AI (Rialti et al., 2019),

in response to the massive generation of employee behavioural data from firms’ internal

systems (Gupta et al., 2020), have enabled organizations to optimize their human resource-

related decision-making. Much of IM research relies on surveys to measure employee attitudes

or performance. Research should encompass alternative outcome measures, as employees now

are more empowered to voice their opinions on social media (e.g. Glassdoor), impacting both

20
customers and employees (potential or existing). Such response could be a fruitful measure of

IM effectiveness.

This “big data”-driven understanding of employees’ behaviour along with the increased

AI capabilities that firms develop could result in some important changes for IM adoption and

widen its implementation scope (Boukis, 2019; Rialti et al., 2019). Leveraging big data to

inform an IM capability will offer better predictive analytics and a more customized

understanding of various IM practices affect employee engagement with their role.

For instance, how do different IM elements (e.g. HR vs marketing ones) affect

employees’ retention rates over time and across departments? How do aspects of IM affect

employees’ creativity and role efficiency? What is the role of IM programmes in employees’

behavioural engagement with their role in different organizational functions? How should

organization use different internal communications, as part of IM, to personalize employees’

learning and development experiences? What is the short- and long-term impact of IM

programs on brand equity, and the role employee’s social media use within this?

The Boundaries of IM Effectiveness

IM insights remain service industry-bounded and the value of IM practices is concentrated in

core service industries such as financial services, tourism and health (Mukherjee & Malhotra,

2006; Tsai & Wu, 2011). Research should provide more inclusive IM conceptualizations

applicable to a wider range of sectors (e.g. professional services and manufacturing markets in

general). The “one size fits all” approach is far from optimal, and more understanding is needed

as to how an IM capability should change to fit the nature of the organization. For instance,

given that IM is a resource-consuming process, cost-effective IM in SMEs is likely to be

markedly different from that in large organizations. More importantly the radical changes of

the service market landscape, notably the adoption of technology to augment or substitute of

21
service personnel and the emergence of the gig economy, questions the current understanding

of IM theory and its value of IM in such ecosystems.

In many industries, technology replaced the employees as the service provider (Rust &

Huang, 2014). As automated service delivery and chatbots become an integral part of firm-

customer interaction, frontline employees’ roles as corporate ambassadors are changing

(Bowen, 2016). The ubiquity of the online environment and social media allow service

organisations to reach their customers without any frontline employee intervention (Klaus &

Nguyen, 2013). In many cases, strategies involving the mechanisation of services relegate

employees to a secondary role and promote consumers to the primary role in service delivery

(Leeflang et al., 2014). This suggests that the impact of IM may be curtailed, or at least needs

to be reformulated or refocused.

Traditionally, IM literature considers settings where employees have a full-time

working status and physical interactions with their employer and customers (Podnar & Golob,

2010). Firms, and often employees, opt-in for more flexible work arrangements, changing

traditional distinctions in employment types and giving rise to some newer contractual

arrangements (e.g. on-demand contracts) and different forms of employment flexibility (e.g.

remote employees) (Tran & Sokas, 2017). The gig economy embraces 150 million workers in

North America and Western Europe, and it is increasingly being used by a large proportion of

companies (Petriglieri et al., 2018). Moreover, contractual relationships with multiple

employers are increasingly evident in sharing economy markets (i.e. Uber drivers who also

work for Lyft), resulting in the assertation that ‘employee loyalty is dead in the gig economy’

(Mosca, 2019). This begs the question as to whether IM is still relevant in these markets.

IM research is needed to address IM applicability in emerging working contexts and

changing firm-employee relationships, addressing questions such as: To what extent do

multifarious IM practices remain effective across different industries? And within specific

22
contexts such as start-ups or SMEs? To what extent does IM adoption remain beneficial for

firms when technology-mediated firm-employee interactions become more dominant? To what

extent does IM remain relevant in a sharing economy context, where flexible working

relationships, employment with multiple firms and work-on-demand constitute vital elements

of one’s work?

IMPLICATIONS FOR MANAGERIAL PRACTICE

Our systematic review offers some useful insights and directions for practitioners. First,

organizations should advance a nuanced big data-driven understanding of IM adoption and

move toward assessing the ROI of each of its underlying practices for different aspects of

employees’ (e.g. creativity, efficiency, citizenship) and firm’s performance (e.g. financial or

innovation). This big-data enabled approach should generate proxies that provide HR managers

with a better understanding of the internal firm’s climate and employees’ aggregate experience

with their employer. Second, the idea of accommodating individual employee needs and wants

into the strategic orientation of organizations that the IM advances should be at the forefront

of contemporary employee management. Rendering employees more empowered and more

influential in the firm’s strategic functioning is likely to create more value for them and make

them more prone in participating actively in value-adding activities either for the organization

(e.g. ideation, feedback) or its customers (e.g. customer consciousness). Overall, our insights

could help businesses move towards a dynamic, value creation-orientated and big data-enabled

understanding of their internal markets, allowing them to utilize IM practices to attract, retain

and engage employees.

CONCLUSION

IM research has advanced considerably since the early 80s conceptualizations. This literature

stream has generated a relatively rich but fragmented body of research, pointing in disparate

23
directions, which only allows practitioners and scholars with a marginal understanding of the

value of IM for organizational functioning. There is no standardized way of defining and

conceptualizing IM. Empirical evidence repeatedly demonstrates the narrow landscape of the

IM literature focusing on particular traditional service sectors (e.g. financial service), rarely

taking into the changing service environment.

Responding to the fragmentation and ambiguity in the IM research, and the changing

reality for service employees in contemporary global marketplaces (Bowen, 2016), this article

aspires to provide a critical inquiry into the IM discourse. Through this review, this work

contributes to the ongoing debate about the concept and the scope of IM as well as gives

directions that future research could take.

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 Tables

Table 1. Research Design Over Time (Empirical Research)

Emergence Establishing Explosion Ennui Row Totals

Informant
(Before 2007) (2007-2012) (2013-2016) (2017- Onwards) (299)

Manager 15 (9.8) 1 18 (14.5) 8 (14.5) 12 (14.2) 53

Employee 21 (30.0) 39 (44.7) 51 (44.8) 52 (43.6) 163

Mixed Level 19 (15.3) 25 (22.8) 23 (22.8) 16 (22.2) 83

χ2= 22.76; p < .00; 1. Cell numbers: Observed (expected)

Table 2. Main Subject Fields of IM Research

Emergence Establishing Explosion Ennui

Total
Subjects Before 2007 2007-2012 2013-2016 2017-Onwards
No. (%) No. (%) No. (%) No. (%) No.

Marketing 48 59.26% 37 42.05% 32 35.96% 18 19.78% 135

Management 21 25.93% 21 23.86% 19 21.35% 25 27.47% 86

Sector studies 7 8.64% 17 19.32% 19 21.35% 22 24.18% 65

International
Business and 0 0.00% 6 6.82% 8 8.99% 5 5.49% 19
Area Studies
Strategy 3 3.70% 2 2.27% 0 0.00% 2 2.20% 7

Innovation 0 0.00% 2 2.27% 2 2.25% 2 2.20% 6

Economics,
0 0.00% 0 0.00% 3 3.37% 2 2.20% 5
Econometrics

Psychology 0 0.00% 2 2.27% 1 1.12% 2 2.20% 5

Public Sector
2 2.47% 0 0.00% 1 1.12% 1 1.10% 4
and Health Care

Other Subjects 0 0.00% 1 1.14% 4 4.49% 12 13.19% 17

Total Number 81 88 89 91 349

38
Table 3. Statistical Distribution of IM Dimensions across the four periods

Ennui
Emergence Establishing Explosion
2017- Total
IM Before 2007 2007-2012 2013-2016
Onwards Chi-sq test
Dimension
N
s No. (%) No. (%) No. (%) No. (%) (%)
o.
Internal
6(8.2 17.1 17(16 24.6 18(17 23.6 19(17 25.0 23.4 χ2= 0.934;
Market 60
)1 4% .2) 4% .8) 8% .8) 0% 4% n.s
Analytics
Internal
27(30 77.1 54(59 78.2 69(65 90.7 71(65 93.4 22 86.3 χ2= 10.828; p
Communic
.2) 4% .6) 6% .6) 9% .6) 2% 1 3% < .05
ation
Employee
18(21 51.4 41(43 59.4 45(47 59.2 56(47 73.6 16 62.5 χ2= 6.517;
Developm
.9) 3% .1) 2% .5) 1% .5) 8% 0 0% n.s
ent
Employee
Rewards
18(17 37(34 29(37 42(37 12 49.2 χ2= 5.435;
and
.2) 51.4 .0) 53.6 .4) 38.1 .4) 55.2 6 2% n.s
Recognitio
n 3% 2% 6% 6%
Job Design
and 24(21 41(42 51(47 43(47 15 62.1 χ2= 2.627;
Empower .7) 68.5 .9) 59.4 .2) 67.1 .2) 56.5 9 1% n.s
ment 7% 2% 1% 8%
Leadership
and
19(19 46(39 36(43 44(43 14 56.6 χ2= 5.612;
Organizati
.8) 54.2 .1) 66.6 .0) 47.3 .0) 57.8 5 4% n.s
onal
Culture 9% 7% 7% 9%
No. of 25
35 69 76 76
articles 6
1.Cell numbers: Observed (expected)

39
 Table 4. Statistical Distribution of IM Outcomes across the four periods

Ennui
Emergence Establishing Explosion
2017- Total
Before 2007 2007-2012 2013-2016 Chi-
IM Outcomes Onwards
sq test
N
No. (%) No. (%) No. (%) No. (%) (%)
o.

Employee χ2 =
20(21. 57.14 38(41. 55.07 51(46. 67.11 46(46. 60.53 15 60.55
Attitudinal 2.404;
2)1 % 8) % 0) % 0) % 5 %
Outcomes n.s

Employee χ2 =
20.00 18(17. 26.09 19(19. 25.00 20(19. 26.32 25.00
Behavioural 7(8.8) 64 0.580;
% 3) % 0) % 0) % %
Outcomes n.s

Organizational χ2 =
10(11. 28.57 23(22. 33.33 25(24. 32.89 26(24. 34.21 32.81
Non-Financial 84 0.362;
5) % 6) % 9) % 9) % %
Outcomes n.s

Organizational χ2 =
5.71 10.14 5.26 6.58 7.03
Financial 2(2.5) 7(4.9) 4(5.3) 5(5.3) 18 1.503;
% % % % %
Outcomes n.s

25
No. of articles 35 69 76 76
6
1.Cell numbers: Observed (expected)

Table 5. Sector Distribution of IM Research across the four periods

Emergence Establishing Explosion Ennui

Total
Before 2007 2007-2012 2013-2016 2017-Onwards
Key Sectors
No. (%) No. (%) No. (%) No. (%) No. (%)

Financial 29.09
16 22 26.83% 20 24.39% 17 21.25% 75 25.08%
Services %
Hospitality & 9.09
5 16 19.51% 18 21.95% 18 22.50% 57 19.06%
Tourism %
14.55
Health care 8 9 10.98% 12 14.63% 8 10.00% 37 12.37%
%
Manufacturin 5.45
3 8 9.76% 5 6.10% 7 8.75% 23 7.69%
g %
0.00
Education 0 3 3.66% 6 7.32% 12 15.00% 21 7.02%
%
16.36
Mixed sectors 9 10 12.20% 3 3.66% 7 8.75% 29 9.70%
%
Other/unspeci 25.45
14 14 17.07% 18 21.9% 11 13.75% 56 18.72%
fied %
100.00
Total 55 82 82 80 299
%

40
Figures
Figure 1. Key IM Dimensions Identified in Literature

41
Figure 2. IM Outcomes and Contextual Factors

42
 Figure 3. Future Research Agenda for IM

43

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