Academic journal article Academy of Marketing Studies Journal

Internal Relationship Quality: The Impact of Relationship Quality on Internal Customer Perceptions

Academic journal article Academy of Marketing Studies Journal

Internal Relationship Quality: The Impact of Relationship Quality on Internal Customer Perceptions

Article excerpt

INTRODUCTION

Relationship marketing has become a heavily researched topic within the last decade; several studies call for the extension of relationship marketing to an internal or organizational setting (Bendapudi & Berry, 1997; Morgan & Hunt, 1994; Rust, Ambler, Carpenter, Kumar and Srivastava, 2004). Approximately 250 articles focusing on relationship marketing have been published the past 5 years with only 7 examining relationships in internal markets (Business Source Premiere, 2007). Internal markets refer to exchange structures comprised of individuals who are simultaneously internal suppliers to and internal customers inside the organization (Bowen and Schneider, 1988; Foreman and Money, 1995; Lings, 2004).

Berry and Parasuraman (1994) give three reasons for conducting employee research: (1) employees themselves are customers of internal services, (2) employees offer unique insights into variables that impact service quality in an organization as they consume such services daily, and (3) employees can offer pre-emptive information regarding failures or break-downs with external service delivery. Put simply, co-workers serve as the most readily used and richest source of information for employees regarding the organization (Dabos and Rousseau, 2004). Further, Gummesson (1995) believes that understanding and improving internal interactions are vital to the improvement of any external interaction such as service or product quality.

This study posits that an organization can benefit from improved relationships via psychological contract fulfillment between its internal exchange partners (i.e., employees) such that overall job assessments of satisfaction and embeddedness, both on-the-job and off-the-job embeddedness are positively impacted, while internal customer intentions to turnover are decreased (Figure 1). Data is reported from internal customers across two samples from organizations representing numerous internal customer-supplier relationships. Path analysis reveals that the quality of the internal customer-supplier relationship is a positive, significant predictor of job satisfaction and both on-the-job and off-the-job embeddedness. As expected, job satisfaction was shown to be a significant predictor of turnover across both samples, while off-the-job embeddedness was shown to be significant in only one sample. Further, Sample 2 reveals that internal customer-supplier relationship quality decreases internal customer intentions to turnover. A thorough discussion of the hypotheses, statistical results, managerial implications and suggestions for future research are presented in the following discussion.

[FIGURE 1 OMITTED]

INTERNAL EXCHANGE: INTERNAL CUSTOMERS AND SUPPLIERS

Lusch, Brown and Brunswick (1992) define internal exchange as "... the methods used to satisfy needs within the organization" which can be exhibited by groups within organizations who choose to "create, exchange, and use or consume things of value internally" (p. 119). Bagozzi (1975) categorizes internal market exchange between customers and suppliers as restricted exchange, which refers to the exchange of value between two parties due to the intimate environment in which these partners frequently exchange. Following Bagozzi's idea of restricted exchange, internal markets are (1) comprised of buyers and sellers called internal customers and suppliers, (2) exchange occurs between these two parties, where each has minimal expectation that the other will behave opportunistically and reciprocal exchange behaviors and times are relatively obvious to both parties, (3) the failure of one party to fulfill exchange expectations results in a negative reaction from the other, and finally, (4) exchange between the parties is relatively long-term or on-going, and social in nature (Bagozzi, 1975). Kotler and Levy define a customer, or client, as those who are the immediate recipients of an organization's good or service (1969). …

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