Internal Marketing: Improving Internal Processes, and Quality of Products - Essay Example

Internal Marketing To handle the topic of internal marketing successfully we must first have a clear definition of what the term ‘internal marketing’ actually means, what activities it refers to and how it is implemented. According to Rafiq and Ahmed (2000), the concept ‘internal marketing’ has gone through three different stages, each stage holding a new focus for the meaning of this term. The first stage looked at employee job satisfaction as the primary goal. It was argued that internal marketing was embedded in the concept of providing good services to customers and this would only take place if employees were satisfied with the job given to them. The second stage which a saw a growth in the term internal marketing included the consideration that the employees that are hired should have a disposition that they can interact effectively with the customers. This is different from stage one as it requires that the employees are not only satisfied with their job and wanting to perform better but that they should be mindful of customers and aware of how to serve their needs through excellent provision of services. The third stage in the advancement of the phrase internal marketing enhanced the objectives beyond just employee satisfaction or customer awareness. Internal marketing came to be a tool to decrease departmental remoteness, conquer opposition to change within the organization as well as put into practice the organizational policies; its focus shifted to that of implementation. Other authors too shed light on the topic of internal marketing and its scope. George (1990) argues that internal marketing can be very effective in setting up a direction towards providing services as the organization’s focus. Singh (1990) talks about the concept of competitive advantage and how providing excellent services can be a great way to achieve this competitive advantage and have an edge over your competitors. This in turn will require internal marketing, which should center on trying to make everyone in the whole organization have the same commitment to providing customers with such services. Business practices used by organizations Having considered the importance of internal marketing we can now shift our discussion to some of the modern business practices organizations are adopting. We will evaluate these practices and then discuss how they are implemented in businesses and what challenges are faced during implementation. According to a study conducted (Incentive performance Central, 2006), there are six main internal marketing practices. The best practice is seen as active participation by senior managers. This is seen as the basis on which internal marketing is based. Encouragement from senior members and their commitment to such practices is seen as the foundation upon which internal marketing is based. Another important practice is to include employees at all levels in communication taking place in the organization. This is done by reducing the hierarchies in the workings of the organization and by using delegation as a tool to empower them. Another critical practice is to create a work environment where employees feel motivated; this would enhance employee job satisfaction and lead to more commitment from them in implementing internal marketing strategies. Business process improvement is another vey important business practice that can be considered under internal marketing. Business process improvement, according to Harrington (1991) is a strategic approach developed to enhance, improve and develop the business processes within an organization. He highlights for us the three main objectives of business process improvement. These include making the business process effectual, resourceful and flexible. The important things to remember about the business process is that it can and should be controlled, that the business needs to work in compliance with these processes rather than trying to find loopholes through them and that the business process is important and its importance should not be downplayed. The advantages of this approach are that it makes the business process more flexible so that changing customer needs can be incorporated into the business. It also simplifies the business process by cutting down on waste and reducing delays. However, business process improvement leads to incremental improvements and changes and thus companies that are trying to stay competitive in today’s cut throat markets now resort to business process reengineering which leads to faster alterations in the business process. Hammer and Champy (2001) define the endeavor to achieve remarkable achievements in important areas of performance through an essential change in the basic system as business process reengineering. Some key features of this business practice is the compression of many jobs into one, that is, work that used to previously be done by many worker is now done by one. Another key feature is the increased delegation that takes place, hence giving workers increased decision making power. Some important advantages of business process reengineering is that it leads to greater employee job satisfaction and gives employees more power to make independent decisions. There would be some disadvantages to this approach too, which could include employee opposition to the changes being implemented in the business; another possible challenge could be that the increased delegation to the employee would mean increased expectations from the employee which some employees may not be able to handle. As Zairi (1998) explains Total Quality Management is a philosophy of contemporary management; it has developed to include a variety of business processes and activities. It has to be seen as a holistic approach to managing a business and it aims to recognize output from every person working in the organization; it tries to ensure that people are aligned towards achieving the same objective that is catering in the best possible way to the needs of the customer. Some of the principles upon which this is based include: the process is lead by the management; quality should be given the highest priority and the aim should be to put a stop to defect rather than discovering defect when it happens. Six-Sigma is another business tool for improving business practices and how it is critical for business advancement and survival. It literally means to have no more than 3.4 defects in a million goods or services provided to a customer. Hahn, Hill, Hoerl and Zinkgraf (1999) explain the term Six Sigma as a process to continuously improve the goods, services and business process over all of the business. There have been many advantages of this business process. One of them is that it generates great enthusiasm and commitment from top level management as it is they who are to implement this practice in the business the first place. Also, it is a practice that leads to companies better understanding and fulfilling the needs of customers. Jarrar and Zairi (2001) define benchmarking as a process where one compares ones business practices with the best in the business. There are two kinds of benchmarking, benching of metrics and benching of practices. Metrics looks at objective facts and data; it looks at goals that can be quantified. However, the problem with this is that the focus is solely on achieving the goal; consideration is not given to the method used to achieve the goal. Thus benchmarking of practices is ignored while benchmarking of metrics is focused on. Jarrar and Zairi (2001) argue that there are four critical business aspects that should be benchmarked. These include teamwork and joint collaboration, sharing the initiator’s vision, managing time and creating proficiency throughout the organization. The important thing to remember is that when benchmarking these activities, attention should be paid to both metric benching and the benching of practices. Toyota Company Before delving into the problems with implementation, let us first look at the history of concepts such as Kaizen to better understand how such business practices evolved and were put into practice. According to Gondhaleka and Babu (1995), concepts such as Kaizen meaning continuous improvement were first introduced in Japan, in companies such as Toyota, right after the Second World War. Today, many manufacturing companies are trying to adopt the same business practices as that of Toyota. According to Bates and Snell (2009), Toyota has applied its lean approach to not just manufacturing but also non manufacturing processes. For example, Toyota’s product development too uses aspects of lean production. Fist, identification is made of what exactly the customer values. Once this is decided, problems in the production process are predicted by experts, and in response to this solutions are generated to overcome these problems. Next, estimates are made for number of workers and experts required. Furthermore, in cases where it is possible, standard parts and skills are used. Thus, using methods such as these, Toyota has managed to develop products in line with customer demand using efficient and low cost production methods. In his book, The Elegant Solution, May (2006) accounts for the reasons why Toyota is now one of the leading car companies in the US. The success is associated with the innovative business practices of this company. The primary aim is to find a solution, and it is this endeavor to find solutions that result in the various innovative business practices and procedures. The chase for excellence is the other main driving force; it is the enthusiasm to want to perfect the business process and the final product that leads to innovation. The crux of the reason for Toyota being where it is today is because of the drive to constantly improve, the belief that nothing is ever good enough, there is always a way to somehow make it better. Another very important is with regards to the implementation of ideas; Toyota receives over a million ideas every year and consideration is given to all of them, again going back to the philosophy that there is always room for improvement. Kaizen, the belief in continuous improvement is firmly embedded in Toyota; the search for a better method is always a goal that needs to be reached out to. However, this does not mean that implementation of ideas such as Kaizen were easy for Toyota or that it has had a smooth journey in putting these practices into place. In fact, if we look at Toyota today, there are several problems it is facing, according to Yong (2010) one of which is the increased growth of Toyota. This increased growth, it is predicted may lead the company’s focus away from quality to quantity, an occurrence that would compromise the very ideology upon which Toyota is being run. Problems in implementing these business practices Now that we have discussed the various business practices and evaluated them in terms of their advantages and drawbacks, we must now consider how these practices are implemented and what factors affect their implementation. According to Burkitt and Zealley (2006) communicating the correct message to employees is not the only challenging task; the difficult part is to communicate the message in such a manner that it gets stuck in the thoughts of the individual employees and positively impacts their behavior. Business practices can be very hard to implement and although companies may understand the theory behind these practices they may find it hard to put them in to practice. For example, Eti, Ogaji and Probert (2004) who conducted a research on the execution of practices such as TQM more commonly known as Total Quality Management in Nigerian companies found that they faced several problems. Streeck (1996) analyses lean production in more depth and argues that one major point has been missed out when analyzing the implementation of this practice; the implementation of lean production is seen in isolation with what its competitors are doing. Thus, even if a company does manage to successfully implement lean production in its business, it will still not gain competitive advantage, which for some might be the most important advantage of lean production. The reason for this is because its competitors too have adopted the same technique. Stuart (1998) argues how weak our knowledge base is with regards to designing new service designs. Although some authors have tried to come up with new models they have still been limited in their application. There are further problems with implementation of lean production methods as certain criteria’s need to first be met. As Sahlin and Vasilash (1999) mention, some of these criteria are that people have to be generally trained rather than specialized, relationship with supplier must be very strong, communication should be horizontal among employees and not hierarchical and groups should be organized on the basis of teams. Thus, considering these criteria it becomes obvious that not every company can adopt lean production, and thus this can be considered a set back of the lean production process as it is a business practice only certain businesses can afford to adopt (unless of course the entire structure of the business is changed). The relevance and importance for modern organizations of these business practices The question to ask, after having considered these various business practices, is why are all these business practices so important in today’s world? What was it about previous, traditional methods of production that lead to the evolution and need for modern business practices such as Six Sigma, Benchmarking and Business Process Improvement? Dennis (2002) explores the problems in traditional methods of production. One of the biggest problems was the low level of employee job satisfaction. This was because of mass production processes in which many workers had to do repetitive jobs and were given no decision making power. This obviously impacted quality negatively. Zairi (1998) mentions other differences in the business process as it was previously and its workings today. Now, pay is no longer the only source of motivation for employees; workers also feel pride on the work that has been done. Also, there is a very strong linkage between the higher management and the remaining workforce. Kaysen (1957) talks about the modern organization and discusses the various changes that are taking place. This includes the disappearance of ownership, the growing stability of employees in a single job, the increased emphasis on rationality of management, increased dependence on technology and the increased responsibility of corporations to their stakeholders. Similarly, Weitz, Barton, Jones, Eli, Brown, Zoltners, Andris (2005) discuss the changing trends in both the external and internal environment of a business and how this is leading to changing practices within a business. One of these is the fast paced changing nature of customers and their rising expectations from products and services. In fact, the pace of change is so fast, according to Colletti and Chonko (1997) that expectations of customers are rising at a faster pace than the ability of organizations to meet these demands. Furthermore, there is a soaring expectation from the knowledge that a salesperson should be equipped with; this again goes back to the increased expectations of customers. Considering all these changes in the micro and macro environment, the usefulness, in fact, the need of business practices such as Just in Time or Six Sigma becomes apparent to us. In order for businesses to survive in today’s cut throat competition, innovation is not just a bonus it has actually become a requirement. The increase in information, the demand for good quality products delivered on time, the need to cut down on costs, the necessity of gaining a competitive advantage over rivals, the requirement of providing excellent services are all factors that require a business to be flexible and respond to the changes using appropriate business methods. Recent Trends and Researches Lazer (1993) looks ahead at the future of internal marketing, seeing an increase in international concerns for many businesses. Emphasis is laid on the phenomenon of globalization, which in today’s world has completely changed the way a business must operate and think. Even if a company continues to operate locally, it must always bear in mind that the market is open and thus competition is fierce. Globalization will impact companies in such a way that they will now have to take into account developments in the world market. Also, different values, beliefs and customs of different countries will need to be kept in mind when considering marketing internationally. Murray (1998) offers some insight regarding the changing nature of marketing in today’s world. He associates these changes to factors such as technological change and transformations in markets. He believes that these shifting trends influence both theory and practice of businesses. His argument is that theory is trailing behind practice and there is now no longer any synthesis between the two. Summary and Conclusion Considering the topic of internal marketing, we first clearly defined the term, in order to lay the basis on which the rest of the report is based. Perspectives from different authors were used to analyze the definition, and it was found that the very term ‘Internal Marketing’ has evolved over time to include various practices and focuses. We next considered the different ‘best practices’ used in contemporary organizations to gain competitive advantage over their rivals. The possible advantages and drawbacks of these different approaches were considered; challenges in converting these theories into practices were also looked at and various causes were associated the difficulty in conversion. Toyota Company was looked at, its business practices were considered and reasons given for why it is doing so well. Furthermore, challenges that Toyota is facing in contemporary times is considered, where its growth is seen as perhaps leading to problems such as a compromise on quality. The report considers the importance of the topic at hand, that is, why is it important for modern businesses to improve their internal business processes and provide better goods and services. Finally, a few emerging trends and recent researches are considered in the context of internal marketing, trends predicted for the future are looked at and considerations made as to how companies can deal with these changes. As an end note, it should be noted that the underlying key of all successful businesses is their belief in continuous improvement. It is this belief that drives innovation and leads to increasingly efficient business practices. References Bateman, S. Thomas & Snell, A. Scott (2009), Leading and collaborating in a competitive World, Tata McGraw-Hill Publishing Company Limited Burkitt, Hugh & Zealley, John (2006) Marketing Excellence: Winning companies reveal the secrets of their success. John Wiley & Sons Ltd. p. 295 Colletti, Jerome A., and Lawrence B. 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