Relationships among Internal Marketing, Employee Job Satisfaction and International Hotel Performance: An Empirical Study

The concept of internal marketing employed in the service sector is crucial to excellent service provision and successful external marketing which calls for an exploration in details. Taking this concept into account, this paper presents an empirical study on the correlations among internal marketing, employee job satisfaction and organizational performance with respect to international hotels in Taiwan. Findings show significant correlations among internal marketing, employee job satisfaction and performance of international hotels. These findings can provide a basis for future academic research of related topics as well as a solid reference for business owners and managers in the service sector. I. Introduction Several experts (Thomas, 1978; Gronroos, 1990; Kotler, 2000) have consecutively proposed a conceptual framework of service marketing known as the "Service Triangle" to incorporate the concepts of Internal Marketing, External Marketing and Interaction Marketing into a more intensive concept. In developing these marketing strategies, attention shall be given to conventional marketing strategies with the aim of providing services that are unique and acceptable to the external customers to win their loyalty. Attention shall also be given to the value of employees, with the goal of determining them to be a contributory to the overall "organizational capital" of the business. Kotler (2000) explains that internal marketing is more important than conventional external marketing. Further, Greene et al., (1994) point out that internal marketing is the key to excellent service and to successful external marketing. These two views justify the exploration of the marketing concept, i.e., Internal Marketing, within a business organization in the service sector. Research reveals that the concept and the action of an enterprise's internal marketing upgrade employee job satisfaction (Tansuhaj et al., 1991; Rafig and Ahmed, 2000; Conduit and Mavondo, 2001), and in turn improve the organizational performance of the enterprise (Pfeffer and Veiga, 1999; Nebeker et al., 2001). This study presents an empirical exploration into the correlations among internal marketing, employee job satisfaction, and organizational performance of the international hotels in Taiwan, and thus to contribute to practical implementation of the correlations and additional academic research in the future. II. Literature Review 1. Implication of Internal Marketing Previous research about internal marketing can be divided into four categories: (1) Treating the Employee as an Internal Customer. Many experts (Sasser and Arbeit, 1976; Berry, 1981; Greene et al., 1994; Cahill, 1996; Huit et al., 2000) believe that the task of internal marketing is to view the jobs as products; and employees as customers. (2) Developing Employee Customer Orientated Behavior. Piercy and Morgan (1991) address the application of marketing skill in the internal marketing of a company. They argue that the company should adopt a framework similar to that of its external marketing and develop a marketing program aimed at the internal market. The goal would be to stimulate service awareness and customer oriented behavior. Many other experts share the same viewpoint (Gronroos, 1985; Heskett, 1987; Gronroos, 1994; Pfeffer and Veiga, 1999; Conduit and Mavondo, 2001). (3) Human Resource Management (HRM) Orientation. According to Joseph (1996), internal marketing should be incorporated with HRM theories, technologies and principles. Cooper and Cronin (2000) believe that internal marketing is comprised of efforts within organizations to train and encourage employees to provide better services. (4) Internal Exchange. Bak et al. ( 1994) propose that allowing efficient operation of an exchange relationship between the organization and its employees is the first move to arrive at the organization's objectives in the external market. …