Academic journal article Journal of Global Business and Technology

The Predictors of Business Performance in the Investment Management Industry

Academic journal article Journal of Global Business and Technology

The Predictors of Business Performance in the Investment Management Industry

Article excerpt

INTRODUCTION

Investment banking as a research area has received much attention in recent years from authors such as Oesch, Schuette and Walter (2015) and Brou and Krueger (2016). Internal marketing efforts have the ability to alter organisational cultures for the better (Fortenberry & McGoldrick, 2016). An investment management department is also available in most of the big banks. Therefore, it is surprising to realise that there has not been much research done to find important elements to measure the business performance in the investment management industry. This is important for investment managers because increased customer satisfaction leads to increased revenue. In addition (Alexandras, Zahariadis, Tsorbatzoudis & Grouios, 2004) studied the internal marketing concept and realised that all the employees especially client servicing should be viewed as internal buyers, their day to day activities as company products. They should be treated as customers even though they work for the company (Alexandras et al., 2004). According to Ballantyne and Varey (2006) to achieve a great level of service quality, formulate relationships and company strategies that maintain a customer centric service culture, internal marketing has to be implemented (Ballantyne & Varey, 2006). Ravindra (2013) further adds by saying that to implement internal marketing goals, especially in the investment management industry, different strategies aimed at internal employees should be executed, this will also assist in improving internal communication. In addition customers often measure the company on the quality of service they receive from customer service employees hence the internal marketing, relationship quality, relationship continuity has to be explode in the investment management industry (Ravindra, 2013).

Introduction to the Investment Management Industry

According to Blake, Rossi, Timmermann, Tonks, and Wermers (2013), the investment management industry involves companies that are involved in managing retirement, health and welfare. These companies are called sponsors. Sponsors save funds so that they are able to pay their employees when they retire. Companies owning pensions funds sometimes manage their own funds or get fund managers or consultants to perform their investment activities (Blake et al., 2013). Pension funds are a very important vehicle through which workers can put aside some money while they are actively involved in performing their duties. This is so that they may retire comfortably or maintain a reasonable standard of living when they retire (Blake et al., 2013). The pension promise is everyone's responsibility as it has important implications for the economy and society in general (Blake et al., 2013). Johnson and Jan de Graaf (2009) pursued by saying that there is long-term commitment between employer, employees, trustees, asset consultants and a whole lot of other stakeholders. It is important to nurture those relationships as they foster economic growth.

PROBLEM STATEMENT

The investment management industry is very important to the development of the South African economy. It is surprising, then, that there has not been enough research done on the predictors of business performance in the investment management industry. Internal marketing has been identified as a predictor of business performance.

Main Problem and Sub-Problems

There is a lack of knowledge on how internal marketing, relationship quality, relationship continuity as variables contribute to business performance. Though the need for internal marketing is understood, the reality demonstrates that nothing much has been done to properly identify predictors of business performance in the investment management industry. This study will evaluate internal marketing, relationship quality and relationship continuity as predictors of business performance and contextualise its influence on relationship quality, relationship continuity and business performance in the investment management industry. …

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