The Importance of Employees in an Organization - Term Paper Example

Introduction: The article focuses on the importance of employees in an organization. The categorization of employees as the most valuable asset of an organization has been proclaimed by many marketing, human resource and other business experts. However, it is just a claim and no concrete measures are taken to harvest this invaluable asset. Companies focus on the four P’s of marketing strategy, rather than the role of employees in delivering customer satisfaction. This article advocates the concept of the fifth P, which is not packaging or public relations but rather people-power. Achieving customer orientation using people-power, the 5th P The article focuses on the importance of an organization’s workforce in marketing strategy. The author touches on general marketing concepts covered by great authors such as Kotler and Levitt and builds upon them with relation to the human resources of an organization. In the academic context, the article is a practical approach to internal marketing and covers the concept of including the 5th P in the marketing mix. From an industrial context, the theoretical concepts covered stress the implementation of these concepts in the industry. The author reiterates the importance of refraining from platitudes and instilling the value of employees with regards to customer service at all levels of the organization. From a scholarly point of view, the article builds on attempts to include people power by authors such as Parkinson (1988), Gross et al. (1993), Rafiq and Ahmed (2000) and Judd himself in 1987 and 2001. The difference between this article and others is that it focuses on people power as an integral part of the marketing mix over all sectors in an economy whereas other articles focused on its role in specific industries or the importance of employees in internal marketing. An organization needs customers to survive and be profitable and customers are looking for value. Marketing persuades the customer that value is to be found in a specific organization’s product or service thus an organization has two main marketing objectives which are to satisfy customers and to provide customers with a differentiated product that holds value for them. An introduction of marketing mix in the article explains that it is the combination of price, promotion, placement and most importantly product that an organization develops to attract and satisfy customers. The marketing mix elements must provide an offering that holds value for customers and substantially differentiates the offering from competitors. According to Levitt (1986), marketing is basically about getting the customer and this customer orientation defines all aspects of marketing strategy. The article bases its argument for the 5th P firstly on this concept of customer orientation which is the cornerstone of marketing principles. The second concept is the role of employees in differentiating and delivering value. Kotler (2000) mentions employees as a differentiating element for organizations. According to him, an organization consisting of qualified, courteous and helpful staff is automatically differentiated from a competitor who does not have a customer-oriented staff. According to the author, most business authors mention the employees as the most important asset of an organization (Freeman, 1993; Shoniwa and Gilmore, 1996; Peak, 1997; Business Week, 2000). This assertion by various authors has not had any real impact on the way organizations consider their human resources Although motivational theories have changes from a more scientific to humanistic approach and managers of every organization claim in their annual reports that their employees are the driving force, or they are invaluable but implementation of these assertions in strategies and organizational behavior has been lacking. Thus the central idea of the article is that the main aims of marketing which are delivering value to customers through differentiation and achieving customer satisfaction are attainable through the organization’s employees. The organization cannot be fully customer oriented until its employees are focused on creating and delivering value to the customers. Employees at all levels of the organization should be committed to the customer and that is the only way an organization can be fully customer oriented. Accordingly, it is vital that employees be included in the marketing strategy as the fifth P. The author proposes that people-power be included in the marketing mix as employees are as important in differentiating and delivering value to the customer as price, product, placement and promotion. In explaining this orientation towards people-power, the article explores the marketing ideas of differentiation and the marketing mix which are the basis of marketing strategy. An organization can differentiate its product offering through product, design, style, name, logo, packaging, features, store location, availability, branding, goodwill and personal touch (Chamberlin, 1965). But the core concept is perceived differentiation in the mind of the customer, thus differentiation is only effective if it is perceived by the customer to add value to the product (Kotler 1986). Thus, on this basis of differentiation the organization can attract customers and satisfy them. The marketing mix denotes elements of marketing strategy and product development that can be modified by the organization. These elements represent the augmented product or service offering to the customer and can be differentiated to suit the customers’ needs. Price, place, promotion and product are widely accepted as the four P’s (McCarthy, 1960). However Kotler (1986) the marketing Guru, suggested that public relations should be a part of the marketing mix as did Mindak and Fine (1981). Political power has also been suggested as a marketing mix variable (Kotler, 1986) whereas Wind (1986) asserted there were 11 P’s in the marketing mix. However, recently the concept of relationship marketing has been pushed forward as a replacement for the marketing mix (Groönroos, 1994). Although, relationship marketing has gained prominence it does not compromise the significance of the marketing mix; according to the author. In fact, it is another concept of marketing that requires the harvesting of human resource to develop relationships and thus deliver value to the customer. The inclusion of people-power was first discussed by the author in previous articles with regards to field sales in B2B marketing (Judd, 1986) and with regards to non-profit organizations (Judd, 2001). With reference to industrial and manufacturing concerns it was included in the marketing mix by Gross et al. (1993) and to small businesses by Parkinson (1988). Although, it has been discussed by many other scholars (Christopher et al., 1993; Harris, 1999), recently people power has ignited more interest with regards to organizations across all sectors of the economy. The strengths of the article are that it clearly states the concepts of marketing and its aim to introduce people-power in the marketing. It clearly refers to many previous articles and books about marketing and makes an informed leap into the stretching of the marketing mix. The conclusions derived in the article, are easy for the reader and the student to grasp as there is a logical progression from one concept to another. The concept of employees as a major force that determines the success and failure of an organization is not a new one, however mostly it is just a statement with no real actions by marketers or managers to instill it in their strategies; this article correctly identifies and criticizes this and provides a real workable path to employee involvement in creating value for the customer. It does not focus on the customer relations employees or the board of directors; rather it covers all employees that work in an organization whether or not they directly or indirectly influence the marketing strategy. The author believes that every employee influences the customer through his performance whether directly or indirectly. The main weakness of the article is that though it advocates the importance of employees in a marketing concept; he does not put forth details about how different employees can affect the organization. The author states many sources but only focus on major concepts from Levitt (1969). The article does not bring any major new conclusions to the marketing world except for the employee matrix and how different employee roles should change due to the induction of people power. The research methodology the article follows is basically usage of secondary research. A wide variety of sources and references have been incorporated from the books and journals. The author covers different perspectives of the marketing mix and differentiation. He considers different views of employees. In detail, he discusses Levitt’s theories and Rafiq and Ahmed’s summary on internal marketing. The author has not conducted survey’s and study’s himself although he has build upon concepts and ideas from his older articles in 1987 and 2001; both dealt with people power in specific types of organizations. The author has chosen to specific examples in his article for the implementation of people power in the marketing mix. One is an industrial setting and the other a non-profit organization. In each organization there are different levels of contact with the customers and different levels of involvement with the design and execution of the marketing mix. The most involved in both areas are the contactors which would include marketing management, sales people, customer service, design engineers and so on. Influencers are involved in the marketing mix but have little chance of customer interaction; they include R&D, senior management and process engineers. Modifiers have high customer contact but no involvement in the marketing mix and include receptionists, credit and billing departments. Isolateds are not involved in either of the two areas and examples include Human resources, accounts payable and personnel department. In a nonprofit organization the situation is slightly different as most employees are customer oriented and involved in the marketing mix. Volunteers in a nonprofit organization make up a major part of the ‘people’ and are an integral part of the organization. Thus the major finding of the article is that as people power becomes the 5th P; the management needs to develop a strategy for the contactors, modifiers, influencers and most importantly the isolateds. The strategy of managing people in the organization to develop a customer oriented approach is found in many articles about internal marketing. Piercy (1995) states that views of performance diverge amongst internal and external markets and employees may perceive service to be high quality but customers may be of a differing opinion thus even employees not in contact with the customer should be aware of the customer’s needs and priorities and an analysis of divergence between external and internal market should be carried out. Internal barriers may be recognized and should be the basis of the internal marketing strategy and thus the gap between the external and internal market should be closed. Rashid and Ahmed (2000) in their article focus on the three step implementation of internal marketing. Firstly employees should be treated as customers and thus the second step involves marketing techniques to be used to move the employees to a more customer oriented approach. Thirdly, strategies should be developed create awareness about the employees’ role in the organization and its strategy and change management should be undertaken. Another approach to managing people power is that the CEO should be responsible for directing the organization into a more customer oriented approach (Levitt, 1969). Webster (1988) agrees with this concept of the CEO being the guiding force for commitment to marketing strategy. This article however, takes a different approach by dividing employees into categories based on the level of involvement in the marketing mix and customer contact as mentioned previously. The article proposes different strategies for different types of employees and claims this will be more effective than a blanket approach. As contactors and influencers may already be customer oriented but modifiers and isolates may need different strategies to develop customer orientation and focus on the bigger picture. The article outlines a management process as a result of the analysis which details the desired strategies and outcomes for specific types of employees. Contactors are directly involved in the marketing strategy and have high probability of contact with the customers; thus it is vital that the organization firstly hires qualified people who understand the customer. The contactors should be experts in their field, highly motivated and have in depth knowledge about the organization’s customers. As they are the designers of the marketing mix, if their focus is on customer satisfaction, so will be the strategies they design. Modifiers should be effective communicators, and frequent communication training should be carried out. As the modifiers have customer contact but are not involved in marketing strategy. They should be thoroughly educated with regards to the customer’s value to the organization, the marketing strategies and the customer’s needs. Modifiers need to be reminded regularly of the bigger picture and customer focus, as a rude receptionist can entirely change the customer’s perception of an organization. Influencers are the driving force behind the marketing strategy, thus they should be knowledgeable about the market and be able to judge things from a customer’s point of view. In order to increase their customer orientation they should be evaluated on customer orientation based standards. As they lack contact with the customer, programs should be implemented that enable them to interact with customers directly. Isolateds have no contact with the customer and are not involved in the marketing mix such as accountants, HR department, and operations and so on. They are the support staff and carry out organizational activities that enable service to the customer. However, these employees are focused on the organization and processes and have no sense of serving the customer. Thus they should be made aware of the customers and their needs. Methods such as written, audio and visual materials should be used to present the customer, the marketing strategy and their contribution to satisfying the customer. Regular inter department events can be held to make them feel a part of the organization and learn more about its strategy and goals. The processes explained in the article are useful for the academic community for the development of a human resource oriented marketing strategy. The concepts of differentiation and marketing may mention people in the organization but for students to realize the importance of people in the success of an organization is vital. Marketing strategies that focus on customer orientation and differentiation through employees may be just as successful as forming strategies based on branding or product features. This focus is useful for practitioners as well, as organizations need to actualize the potential of their employees. As commitment to the customer is not a part of motivational strategies, management needs to develop their own strategies to develop customer orientation through internal marketing. For marketers to develop a customer oriented approach in the organization, formalizing people power and developing and implementing strategies to harness this power is vital. Evaluation The article brings up an interesting view of employees and how to develop customer orientation in them. Although the importance of employees and HR is a common subject, this article develops a marketing perspective on employees. It proposes that for all types of organizations, the marketing mix should include people-power as the fifth element and thus strategies should be developed for employees to achieve customer orientation at all levels of the organization. The author builds up on his previous article on the same topic and thus it is not an entirely new concept. The strategies that the article proposes may achieve customer orientation in the organization, but it seems unlikely that the support staff and receptionists can be convinced to value the marketing strategy of the organization and customer focus as much as contactors and influencers. The article provides new roles for employees and new management responses based on the inclusion of the 5th P and customer orientation; however it might be difficult for marketers to convince other managers to implement these strategies unless there is high level commitment from the top. Thus, the initiative should be taken from the very top in order for customer orientation to take root at every level of the organization. References Bagozzi, R.P., Jose, A.R., Kirti, S.C. and Franciso, C. (1998), Marketing Management, Prentice-Hall, Upper Saddle River, NJ. Borden, N.H. (1964), “The concept of the marketing mix”, Journal of Advertising Research, Vol. 4, June, pp. 2-7. 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