Internal Marketing A study within the Profil Group

Bachelor’sthesiswithinBusinessAdministration

Author: AnnNguyen880930‐1321

Eva‐LenaSandlund790111‐2446

ZhangXu890416‐5050

Tutor: HamidJafari

Jönköping May2012

Acknowledgements

Theauthorsofthisthesiswouldliketoacknowledgeandshowgratitudetothosewhohavesupportedusthroughouttheworkingprocessofthisthesis,particularlyourfamiliesandfriendsforacceptingthephysicalandpsychologicalabsentness

duringthisperiod.

Mr.HamidJafarideservesmuchrecognitionandpraiseforhispatience,thorough‐nessandwisewords.

Theparticipantsofourseminargroupdeserveacknowledgmentforthereasonthattheyhaveprovideduswithfeedbackandmoralsupportthroughoutthewrit‐

ingprocess.

Lastlybutnottheleastthestudyloungesatthe2ndflooratJibsdeservesaspecialrecognitionaswell,becausetherewehavespentnumeroushourswhileworking

withthethesis.

JönköpingInternationalBusinessSchool

2012‐05‐18

Bachelor’sThesisinbusinessadministrationTitle: InternalMarketing:AstudywithintheProfilGroup

Author: AnnNguyen,Eva‐LenaSandlund,ZhangXu

Tutor: HamidJafari

Date: 2012‐05‐18

Subjectterms: Internalmarketing

Abstract Problem–TheexpansionoftheservicesectorinSwedenresultedwithmorejobsopportunities,whichleadstohigheremployeeturnoverrate.Moreoverthelackofinternalmarketingwithintheorganizationmakesthesituationevenworse.

Purpose–ThepurposeofourthesisistoexploreifinternalmarketingattheProfilgroupisusedtokeepthecompetenceofhumanresourceswithintheorganizationandinturnleadtoaloweremployeeturnoverrate.

Method–Inordertoanswertheresearchquestionsformedwiththepurpose inmind, data was collected from Profil group through face‐to‐face and over‐the‐phone interviews. Subsequently, a qualitative approachwas used to analyze thedifferencesandsimilaritiesbetweentheempiricalfindingsandthetheory.

Conclusion – The strategies and goals the organization is writing about on thecompanyWebPagesisjustthat;strategiesandgoals.Thereisinfactagapinhowtheinternalmarketingisperceivedbythefloorstaffandtheplantmanagers.Theorganization needs to be better at communicating theirmission andmotivatingtheirstaffinordertobeabletokeepthecompetencewithintheorganization.

Keywords–Internalmarketing,motivation,strategicmanagementandProfilgroup

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Table of Contents

Acknowledgements ..................................................................... i 

1  Introduction ............................................................................ 1 1.1  Background ................................................................................... 2 

1.1.1  The restaurant business - now and then ............................. 2 1.2  Purpose ......................................................................................... 4 1.3  Research question ........................................................................ 4 1.4  Delimitation ................................................................................... 4 1.5  Disposition ..................................................................................... 4 

2  Methodology .......................................................................... 5 

2.1  Research philosophy ..................................................................... 5 2.1.1  Ontology - Metaphysics ...................................................... 5 2.1.2  Epistemology ...................................................................... 5 2.1.2.1  Positivism – a perspective of philosophy of science ........................................... 5 2.1.2.2  Hermeneutics - a perspective of philosophy of science ...................................... 5 2.1.3  Inductive vs. deductive ....................................................... 6 

2.2  Qualitative vs. Quantitative research ............................................. 6 2.3  Data collection ............................................................................... 6 

2.3.1  Literature Review ................................................................ 7 2.4  Sample .......................................................................................... 7 2.5  Methods for data retrieval .............................................................. 7 

2.5.1  Reliability and Validity ......................................................... 8 2.5.1.1  Reliability .......................................................................................................... 8 2.5.1.2  Validity .............................................................................................................. 8 

2.6  Research Plan ............................................................................... 9 2.6.1  Interviews ........................................................................... 9 2.6.1.1  Interviews over the phone ................................................................................ 10 

2.7  Limitations ................................................................................... 10 

3  Theoretical framework ........................................................ 12 3.1  Strategic Management ................................................................ 12 

3.1.1  Strategic Analysis ............................................................. 13 3.1.2  Strategy development ....................................................... 15 3.1.3  Strategy implementation ................................................... 15 

3.2  Service ........................................................................................ 16 3.3  Internal marketing ........................................................................ 16 3.4  Why is internal marketing important? .......................................... 18 3.5  Motivation .................................................................................... 19 

3.5.1  Motivation Theory ............................................................. 19 3.6  How the authors interpret the relationship of the theories ........... 20 

4  Empirical study .................................................................... 22 4.1  Company Information .................................................................. 22 

4.1.1  Tastsinn AB ...................................................................... 22 4.1.2  ProfilEvents AB – ProfilHotels........................................... 22 4.1.3  ProfilRestauranger AB ...................................................... 23 

4.2  Company structure ...................................................................... 23 

5  Analysis ................................................................................ 28 

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5.1  Strategic management with internal marketing point of view 28 5.2  Internal Marketing ........................................................................ 30 5.3  Lack of Motivation ....................................................................... 32 

6  Conclusion ........................................................................... 34 6.1  Discussion ................................................................................... 35 

6.1.1  Reliability .......................................................................... 35 6.1.2  Further studies .................................................................. 35 

List of references ...................................................................... 36 

Figures

Figure 2-1 the relationship between theory and research (Source: National

Service-Learning Clearinghouse) ...................................................... 6 Figure 2-2 Validity & Reliability Source: http://www.experiment-

resources.com/validity-and-reliability.html) ........................................ 9 Figure 3-1 the prescriptive and emergent strategic approaches. Source:

Lynch (2009, p. 19) .......................................................................... 13 Figure 3-2 Essentials of Internal marketing. Source: Berry et al. (1991, p.

152). ................................................................................................ 18 Figure 3-3 Maslow’s Hierarchy Pyramid Source: Poston, 2009. .................. 19 Figure 3-4 The authors visualization of the connection of the theories ........ 21 Figure 4-1 Tastsinn AB Company Information (Tastinn AB, 2010). .............. 22 Figure 4-2 Profil group company structure (Authors contribution from

conducting the interviews) ............................................................... 23 

Tables Table 1 Interviewee information ...................... Error! Bookmark not defined. 

Appendix Interview questionnaire ................................................................................ 40 Interview 1 .................................................................................................... 41 Interview 2 .................................................................................................... 45 Interview 3 .................................................................................................... 48 Interview 4 .................................................................................................... 50 Interview 5 .................................................................................................... 51 Interview 6 .................................................................................................... 54 Interview 7 .................................................................................................... 55 Interview 8 .................................................................................................... 56 Interview 9 .................................................................................................... 58 

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1 Introduction Inthischapterthetopicsandissuesofthethesiswillbepresentedandtomakeiteasierforthereaders,certainterminologyandgeneralknowledgeofthesubjectwouldbeincluded.

TheservicebusinesssectorinSwedenisgrowinglarger,whichresultsinmorejobopportunities,aincreasedcompetitionandthatinturnleadstheemployeestofindotheremploymentsiftheywerenotsatisfiedwiththeircurrentpositions.Theres‐taurant business is one of those businesses that has the highest growth rate inSwedensince1995andhavesincelongexceededthemanufacturingsectorinbothturnover and number of employees (Turismens Utrednings Institut, 2010). Thestronggrowthrateisexpectedtodevelop(SvensktNäringsliv,2010)andtheres‐taurantrevenuecontinuestoincrease(SCB,2011).

IntheservicesectorandintherestaurantbusinessinSwedeninparticularisoneof the sectorswherehigh staff turnover is considerednormalpractice.BasedonfiguresfromStatisticsSweden‐StatistiskaCentralByrån(SCB,2001),onecanseethatonly67.4%stayinthesameemploymentfromoneyeartoanotherwithintherestaurant business. The employee turnover rate is high within the restaurantbusinesstodayaswell,buttheremaybeseveraldifferentreasonsforleavingonespositionandworkplace.Inmaybeduetothelongworkinghours,theworkpres‐sure,orjustachangeinworkingenvironment.

Howthencouldanemployerinfluenceitsemployeestostayintheircurrentjobs?

Inorderforamanagertoalterthecultureofanorganizationthereisaneedforadifferentcourseofactionwhichiscalledinternalmarketing.

InternalmarketingorIM:isabouttheinteractionwithinthecompany,mostlybe‐tweenthemanagersandemployees(Grönroos,2004).

The service sector in Sweden is experiencing increasing competition; thereforethere is apressingdesireofmany companies to create a competitive advantage.Thisofteninvolveschangesinthewaythecompanyisconductingtheirbusiness.Internalmarketingguidestheorganizationinhowto increaseemployeesatisfac‐tion and motivation through different processes which in turn will lead to in‐creased customer satisfaction and loyalty and with that profitability (Heskett,Jones,Loveman,Sasser&Schlesinger,1994).

WechosetofocusonProfilgroupasourmainservicechaintodoourresearchon,specificallytheirrestaurantSofieHof,whichhasahistoryofahighemployeeturn‐overrate.Therehasbeenasubstantialemployeeturnoverforitsservicepersonnelinthelasttwoyears.Anotherreasonforchoosingthiscompanywasbecauseoftheconvenientlocationandpriorfamiliarityaboutthecompanyanditsemployees.

ProfilGroupisagenericnamethattheauthorsusedtonametheorganizationthisthesisanalyses,thisbecauseofthemanydifferentparentcompaniesandsubsidi‐ariesthatarewithintheorganization.

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WhenstartingthewritingprocessthenamesoftheorganizationsthatwereusedintheanalysiswasProfilEventsandProfilRestauranger,hencethegenericnamebecameProfilGroup.

1.1 Background

1.1.1 The restaurant business - now and then

The restaurant business have since longbeen known for its longworkinghoursandthehighworkload.Theprofessionhashadalowstatusandbadreputationforalongtime.

Historical view Inthe1800´smostrestaurateursdemandedthattheiremployeesworkedextreme‐ly long shifts and longworkweeks,whichwere combinedwith a poor physicalwork environment with cramped, wet and unhealthy premises (Jarnhammar,2005).Theemployeeswereconsideredtobelazy,indecent,anddishonestalcohol‐icsbytheguestsandwerethereforeasubjectoftheirscreamingandyellingonadailybasisandbecausethecustomerwasconsideredtoalwaysberight, theres‐taurateursneverprotected theiremployees.Theworkforcewas takenadvantageofbytheiremployersthroughlowpayandpoorandunattractiveworkinghours,mostoften theemployeeswasonlyoffered foodandsimple lodgingwithoutanysalaries(Jarnhammar,2005pp.18‐28).

First trade union – until the turning point Thefirsttradeunionwascreatedinthe1890´sinSweden,butthisdidnotleadtobetterconditionsfortherestaurantemployees.Itwasnotuntil1917whentheun‐ion GothenburgHotel and Restaurant associationwas established andwith thatthefirstcollectiveagreement(Jarnhammar,2005),thatthefutureoftheemploy‐eesintherestaurantbusinessseemedalittlebrighter.Thoughtheworkingcondi‐tionsandworkinghoursdidnotimprovedrasticallyinthecomingyears,theem‐ployeeswereabletocreateastrongcohesionduringthe1930´sand1940´s.IntheaftermathofWorldWarII, therewereaboominSwedenandtherewereamoreseriousattempt to improve theworkingconditions in therestaurantsector, fourweeks’vacationandshorterworkinghourswasintroduced.

Itwasalsoduringthisperiodthattheystartedtooffereducationalcoursesinhotelandrestaurant.Butitwasnotuntilthe1980´sthattherestaurantbusinessexperi‐encedmajorchanges(Jarnhammar,2005), thestatusof thechefs in thebusinesswaschangedandthesalariesincreased.Thefocuswasmovedfromthefrontofthehouse,waiters,tothebackofthehouse,thechefs.Duringthe1990´stherewasanincreasinginterestandwiththatincreasingpublicityroundcookerycompetitions,cookingshowsandchefs(Jarnhammar,2005).

Present era Therestaurantbusinessisstilldominatedbylowbasesalariesandslowwagede‐velopments, ifcomparedtootherbusinesssectors.Despitethe lowbasicsalariesandtheslowwagedevelopmentresearchshowsthattherestaurantbusinessesaregrowing.Statisticsshowthatthenumberofemployeesintherestaurantsectorin‐

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creasedby62%between1994and2004andatthesametimesalesincreasedby65%(Gustafson,Öström,Johansson,Mossberg,2006).

Therehavebeenalargenumberofrestaurantssincelongandthereisconstantlyanovercrowdingwithfiercecompetitionandsmallmarginsasaresult(Jarnham‐mar,2005).Thecompetitionleadstothatthepricesofthegoodsandservicesbe‐comesagreatermeanofcompetition,ratherthanthecompetenceoftheemploy‐ees, thismakes the skill requirements of employees to remain low. The low de‐mandforskillsis,accordingtoEnglundandFierro(2006)thatbothemployersandemployeesseetheindustryasatraversalbranch.

Intheendthisleadstoalackofmotivationattheemployertoinvestintrainingitsemployees,sincetheyassumethattheinvestmentwillnotbeprofitableinthelongrunandaviciouscirclearises(Hähnel&Rudehill,2005).

Realizing the importance of employees Stewart (1997) says that in today’s society where knowledge is of great im‐portance the employers need to be aware of the fact that employees,thehumancapital, are the core of the service company success instead ofmanagementbynumbers,inwhichfinancialgoalssuchasreturnonassetswereconsideredthekeytosuccess.Humancapitalistiedtocompanyemployeesandconsistsoftheirabili‐ties, knowledge, skill, experience, motivation, creativity, and innovation (Ax, Jo‐hansson&Kullvén,2001,p.686).Hencethehumancapital iswhattheemployeebringstoworkandtakeswiththemwhentheyleave,thereforeitisimportantfortheemployertolure,attractandkeepthesepersonswithinthecompany.Accord‐ingtoStewart(1997)itisnotonlyfinancialcompensationthatmattersbutalsoin‐terestingworkmissions,stimulationsandagoodworkenvironment.

The interest for internalmarketing increased during the 1990s and has therebygivenusnewinsightsandperspectives.Thisattentionleadtoemployeestodayisbeing considered relationshippartners,which is all about getting the staff to feelthattheyareworkingtowardacommongoalatthesametimeasgettingrewardedforit.Astimulatingworkenvironment,developmentopportunitiesandgoodsala‐riesareexamplesofthis.Inthecaseswherethestaffisunmotivated,uninformedandhaveanunpleasantattitude,abadatmosphereiscreated,whichmakesitdiffi‐cult to properly deliver corporate messages to the customer (Grönroos,2004 p.367).

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1.2 Purpose

ThepurposeofourthesisistoanalyzehowinternalmarketingattheProfilgroupisusedtokeepthecompetenceofhumanresourceswithintheorganizationandinturnleadtoaloweremployeeturnoverrate.

Managerialimplicationswillbegiveniftheresearchresultallowsit.

1.3 Research question

Inordertoachieveourpurposewedecidedto limitourresearchtowhethertheinternalmarketingattheProfilhasanyeffectonthemotivationandwellbeingintheworkplace,whichmightleadtoadecreaseintheemployeeturnoverrate.Thus,wewillusethefollowingresearchquestions:

HowistheinternalmarketingcurrentlybeingconductedwithintheProfilgroup?

Istheinternalmarketingbeingperceiveddifferentlybytheemployeesandthemanagers?

1.4 Delimitation

Due to lack of resources,wewere unable to travel around Sweden to the citieswhereProfilhadlocatedtheirhotelsandrestaurantstoconductface‐to‐faceinter‐views.Thusoursamplesizecontainsmostlyofformer‐andcurrentemployeesoftheir Jönköpingbranch,as itwas theonlybranch thatwecouldconduct face‐to‐faceinterviews.Howeverwewereabletogetoverthephoneinterviewswithplantmanagersfromotherbranches.

1.5 Disposition

This heading is used to describe the structure of the thesis and its composition;thisisdonebyexplainingwhateachchapterwilldealwith.

Chapter two is about methodology and information retrieval. The chapter de‐scribestheselectionandmethodsoftheoreticalandempiricalmaterial.Italsoout‐lineshowtheinterviewprocesshasbeencompleted.

Chapter three will outline the relevant theories in internal marketing, strategicmanagement and motivation. The purpose is to create a theoretical frameworkthatcanbeusedintheremainingchapters.

Thefourthchapterpresentstheconductedinterviews.Thischapterwillalsopre‐sentbackgroundinformationabouttheorganizationProfilaswellasthemanage‐mentstructurewithintheorganization.

Inchapter fiveanalyses the findingsandcompare themto the theoretical frame‐workinordertodrawconclusionforchaptersix.Chaptersixiswheretheanalysisisconcludedandsuggestionsforimprovementsaremade.

Chaptersevenisthediscussionchapterwheresuggestionsforfurtherstudiesarementionedandalsoanevaluationonthechoiceofmethodsforthisthesis.

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2 Methodology Theresearchphilosophywillbeintroducedatthebeginningofthechaptertogivethereaderanoverviewofwhytheauthorschosethemethodsastheydid.Thischapteralsoincludesthewaysof retrievingdataand theessential reasons for thecollectionprocess.Moreover it ispresentedinawaysofurtherresearchcanbeconducted.

2.1 Research philosophy

Therearetwobasicconceptsofthephilosophiesofscience,ontologyandepiste‐mology.

2.1.1 Ontology - Metaphysics

Ontologyisaboutthenatureofbeingandexistence.Thetermisusedinmanydif‐ferentsenses,butbasically,ontologyisabranchofmetaphysicsthatspecifiesfun‐damentalpropertiesandrelationsofexistence,theveryelementarycategoriesoftheworld (Mathison,2012b).To clarify; ontology is theprincipleofwhat isandanswersthequestionofwhetherthereisarealityindependentofthebeholder.

Therearetwoaspectsofontology;objectivismandconstructivism.Objectivismisthattherealityappearstobethewayitis,whetherweconsideritornot.Itisanobjective reality independentof theobserver.Constructivism is thatourpercep‐tionofrealitydependsonhowwethinkabout itandhowwecommunicatewitheachotheraboutit.Itisasubjectiverealitywheretherealityiscreatedbytheob‐server.

2.1.2 Epistemology

Epistemology isoneof the coreareasofphilosophyalongwithmetaphysicsandethics and is concerned with the nature, sources, and limits of knowledge(Mathison,2012a).Epistemologywhich is also called the “scienceof knowledge”says firstly that reality can be studied and explained in a neutral and objectivemannerand/orsecondlythatrealityisinterpretedbythosewhostudyit,andallknowledgethereofissubjective.

2.1.2.1 Positivism – a perspective of philosophy of science

Positivism is “an epistemological position that advocates the application of themethodsofthenaturalsciencestothestudyofsocialrealityandbeyond”(Bryman&Bell,2007,p.16).Positivism isa theorywhichonly recognizescertaintiesandobservablephenomena.

2.1.2.2 Hermeneutics - a perspective of philosophy of science

Hermeneuticsisatheorythatemphasizesempathyandunderstandingitisorigi‐nallyascienceoftextualinterpretation.Itisanepistemologicalpositionwhichistheoppositeofpositivisminthattheviewoftheelementofsocialsciences,thatispeopleandinstitutionsarefundamentallydifferentfromnaturalsciences,hencesocialsciencescannottakethesamestanceasnaturalsciences(Bryman&Bell,2007,p.17).

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2.1.3 Inductive vs. deductive

Figure2‐1therelationshipbetweentheoryandresearch(Source:NationalService‐LearningClear‐inghouse)

Inductive method is a method that start out by having empirical data from re‐searches,onewillthenusethosedatatodetectpatternsofregularitiesorirregu‐larities, subsequentlyhypothesisaredeveloped toexplore thosepatterns, andattheendgeneralconclusionsortheorieswillbecreated(TrochimWM2006,deduc‐tion&induction)

Deductivemethodmeans that existing theories is used to illustrate the analysisandhencenonewtheoriesarecreated(Hartman1998,pp.129‐141),onemovesfromtheorytoempiricsbydevelopinghypothesisandtestthemontheempiricalfindings.

Thisthesiswillmainlybebasedontheinductiveapproach,asthepurposeofthethesisheavilyreliesonwhethertheinternalmarketingtheoryisworkingornotinreallifebasedontheinterviewresult,thoughnonewtheorieswillbecreated,theauthorsalsousesomedeductivemethodas theory isused to testify the findingsabouttheorganization.

2.2 Qualitative vs. Quantitative research

Qualitativeresearch involvesquite fewresearchobjectsand/orsituationswitharelatively limited scope, like interviews.Quantitative researchon theotherhandhasatendencytoaccountforalarger‐scaleresearchwithalargerquantity,morelikesurveys(Denscombe2000,pp.205‐206).

2.3 Data collection

When starting with the thesis the authors had asumptions of how the internalmarketingsituationlookedlikeandthatistheonlytruth.Withthattheauthorsas‐sumed that theywere positivistic. However after interviewing the employees oftheorganization,anewpictureoftheinternalmarketingwasformed.Consequent‐ly,theauthorsdecidedthathavingaconstructivistpointofviewwillbemoreap‐propriateforthisresearch.Astheanalysisandconclusionofthisresearchwillvarydependingonhowweinterpretourempiricalfindings,andhowtheintervieweesresponded.

Bothdeductiveandinductivemethodshavebeenusedinthedatacollectingpro‐cess, using the qualitative research approach. By using the qualitative approach,theauthorswillfocusthecollectionofprimarydatasolelyoninterviews,bothwithface‐to‐face and over‐the‐phonemethod, the concept will be explained later on.Theauthorshavedecidedtomakethestructureoftheinterviewssemi‐structuredmeaningthattherewillbeainterviewquestionnairethatincludeallthenecessaryquestions,howeveropen‐endquestionsarealsowelcomed.Withopen‐endques‐

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tionstheintervieweeswillbeabletoprovideuswiththeirownperspective,whichprovides the possibility of amore profound research. The collected data, in thiscasetheinterviwes,wasthenrecordedandtranscriptedinordertomakesurethatitiseasytocompare.Furthermore,thisisalsotomakesurethatthereisnomiss‐inginformationorbiasofunderstandingduringtheinterviewprocess.

Theempirics inthethesisconsistof theprimarydatacollected.Existingtheoriesandotherresearcharticlesareapartofthesecondarydatathatarebeingusedasatooltoobtainprimarydata.

2.3.1 Literature Review

A literature review discusses published information in a particular subject area,andsometimesinformationinaparticularsubjectareawithinacertaintimeperi‐od (UNC, 2010). Literature review provides the function of information seekingand critical appraisal on the study topic.With a literature reviewone can easilyprovide readers the knowledge or ideas thatwe absorb from the literature andwhichpartof thesewouldbehelpful in the research study.One can analyze thestrengthsandweaknessesoftheauthors’thoughtsandmakeuseofthem.

Duringourresearch,wecollectnumerousliteraturematerialsfromJournals,web‐sites,scientificpublicationsandpreviousthesisrelativetothetopic.

Key words used: Internal Marketing, Strategic Management, Motivation, HumanResource Relationship Management and Service Management. The database wemainlyuse is fromouruniversity’sarticle resourcedatabase,assistedbyarticlesandinformationfromGooglescholar,Jstor,BusinessSourcePremier,EmeraldandABI/Inform.

2.4 Sample

Thereare twomethodsused to select the sample fromapopulation;probabilityandnonprobabilityapproach(Bryman&Bell,2007,p.182).Probabilitysamplingiswhentheresearchersselectarandomsampletogiveanequalchancetoeveryunitofthepopulation.Nonprobabilitysamplingiswhentheresearcherdoesnotselectarandomsamplebecausetheymightwanttoselectsomeparticularunitinpopulationmorethanothers(Bryman&Bell,2007,p.12).

Thesamplingofchoiceisthenonprobabilityapproachandmorespecifically,con‐veniencesampling,wheretheparticipantsarechosenmostlyonthebasisofcon‐venience,theparticipantsshouldbeeasytohaveaccessto(Bryman&Bell,2007,p.197).

2.5 Methods for data retrieval

Atthebeginningweconsideredtomakethispaperwiththepropertiesofaquanti‐tativeresearch,meaningthatwewantedtosendoutlargescalee‐surveysforeve‐ryonewithinProfil.HoweverafterfewattemptsofsendingemailtotheirCEOandregionalmanager, inorder to ask for thepermission to conduct interviewswiththemandachingforemailaddressestotheemployees’,withoutreceivingareply.

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Theauthorsrealizedthatevenifpermissionandemailaddressesoftheemployeesweregiven, sendingoutemail surveyswasnotanoption,as it tends tobemoretimeconsumingtogetareply.Moreovertheauthorsfeltthatthequestionsinmindwerenotsuitedassurveyquestionsastheyrequiremoreexplicitrepliesfromtheemployeesthananumberrankingfromonetotencouldexplain.

To conclude a qualitative research approach is the one best suited for this re‐search,bothwhenitcomestothetimeframeandanswerwise,decisionwasmadetoconductpersonalinterviewswithcurrentmanagersandemployeesoftheProfil,togetherwithformeremployeesandmanagersinordertobemoreobjectiveandtoavoidanybiasnessinthedata.TheinterviewswillbeconductedandrecordedinSwedish,andthentranslatedtobeusedinappendix.

2.5.1 Reliability and Validity

2.5.1.1 Reliability

“…Theextenttowhichresultsareconsistentovertimeandanaccuraterepresenta‐tionofthetotalpopulationunderstudyisreferredtoasreliabilityandiftheresultsofastudycanbereproducedunderasimilarmethodology,thentheresearchinstru‐mentisconsideredtobereliable.”(Joppe,2000)

To make it short, reliability is the inherently repeatable and consistent results that are accurate and can be retested over time under a certain circumstance with similar meth-ods. The reliability takes an important role in the research process since without reliabil-ity one cannot satisfactorily come up with proper conclusions. Reliability can offer the proof that makes people believe that the hypothesis or results are trustworthy and that they can redo the research themselves end up with the same results.

2.5.1.2 Validity

Based on Mehrens and Lehman’s (1987) definition of validity, validity basically defines the truthfulness of the research, it includes the concept of the experiment and decides whether the research process meet the requirement of the research method. Like Joppe says in his research paper,

“Validitydetermineswhethertheresearchtrulymeasuresthatwhichitwasintendedtomeasureorhowtruthfultheresearchresultsare.Inotherwords,doestheresearchinstrumentallowyoutohit"thebull’seye"ofyourresearchobject?Researchersgen‐erallydeterminevaliditybyaskingaseriesofquestions,andwilloften look for theanswersintheresearchofothers.” (Joppe, 2000)

When conducting research, the external and internal validity are the two kinds of validi-ties needed to care about. The external validity is about whether the study results are transferable or understandable to your audience, while the internal validity refers to the rigor and strict way to which the research is conducted. Understanding the importance of validity helps authors know whether the test result is trustworthy since it means whether the research process met the basic requirements of carrying it out.

To conclude once knowing what reliability and validity is, there is a need to keep con-trol of them thus the research is more valid and more likely to get accepted by our audi-ence. As shown in figure 2-2, our research aims to have a result that is both reliable and valid. There are some factors throughout the study that might have biased effects on the

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results, for example, because of the employees’ fear of losing their job, some infor-mation might be hidden instead of being told which will make the study result less reli-able than expected. Other limits that may be encountered during the research will be discussed in the limitation section. However, to avoid this kind of situation the inter-views will be easier and comfortable thus to reach our goal of a reliable of valid result.

Figure 2‐2 Validity & Reliability Source: http://www.experiment‐resources.com/validity‐and‐reliability.html)

2.6 Research Plan

Settingupagoodresearchplancanhelptheauthorsworksmoothlyandsteadilyinthefurtherresearchprocess.Inthiscase,theauthorsdecidedtomakecontactwiththeinterviewcompany,theProfilgroupwiththeformalresearch.Since,theinter‐nalmarketingisnotonlyfromtheworkers’perspective;includinginterviewswithmangerscandiversifytheresearchobjectandgiveamorecomprehensiveresult.Main strategiesare face‐to‐faceandover thephone‐ interviews.Theauthorsde‐cidedtocontactsomeoftheemployeeswithintheProfilgroupandextendthere‐searchwith“connect‐research”.

Tomakethemostoftheinterviewsthedecisiontogivetheintervieweetheoptiontobeanonymouswasgiven,thissothattheintervieweeswouldfeelfreetospeaktheirmind.

2.6.1 Interviews

Regardinginterviewsasameanforresearcherstocollectdata,therearethreedif‐ferenttypesofinterviews.

Structured also called standardized interviews consist of the re‐searcher asking the same type of questions to all the respondents(Bryman&Bell,2007,p.210).

Semistructured–theinterviewerpreparesalistofquestionswhichisrelatedtothetopicathand,thoughitisnotofimportancethatthequestionsarebeingasked in theorderas listed.Theorderand thephrasingofthequestionscanbechangedandtheresearchercanalsoaskfollow‐upquestionsinordertoretrievemoreinformation(Bry‐man&Bell,2007,p.474).

Unstructured–isalsoreferredtoasinformalinterview.Itismoreaconversation thanan interviewbetween the researcherand the in‐

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terviewee. Inpreparationof the interview there isnoneed to con‐struct a list of questions to be followed (Bryman & Bell, 2007, p.474).

Forthisthesisasemi‐structuredinterviewwiththemanagersandotherkeyper‐sons within the organization will be prepared, this because there is always thepossibilityofmoreordifferentquestionsarisingwhen interviewingaperson. Inordertoretrievethebest information,andensure that the informationretrievedfromtheinterviewswillbereliable,theintervieweewasaskedwhetheritwasac‐ceptablefortheinterviewtoberecorded.

2.6.1.1 Interviews over the phone

Interviewsareusuallyconducted in the face‐to‐facemanner,which isalsocalledpersonal interviews,howevertherearecaseswherethat isnotanoption,as it isusuallycostlyandtimeconsuming,insuchcases,interviewsoverthephoneisthenextbestalternative(Jacobsen,2002,p.161).

Theintervieweesforover‐the‐phoneinterviewsmightbemorewillingtoansweruncomfortablequestionsastheyfeelmoreanonymousthaninaface‐to‐faceinter‐view,andalsoaccordingtoGrovesandKahn(1979),theintervieweecanavoidtheinterviewereffectwhen the interview isbeingconductedover thephone,due tothattheyarenotabletoseetofacialexpressionsorthebodylanguageoftheinter‐viewer as they answer and therefore theywill not in some conscious or uncon‐sciouswaytrytopleasetheinterviewerbyalteringthereply.

2.7 Limitations

Thereareafewpossiblelimitationsofourmethodology:

1. Thetimeframeofourresearch;itispossibletorandomlyselectsomeoftheemployeeswithin the ProfilEvents AB to interview rather than a broaderresearchtarget.Thusthesamplepopulationoftheresearchis limited;theauthorsstrivetomaketheresearchresultreliableinordertobeusefulforfurtheranalysis.

2. Languagebarriers.Therearemanydifferentways tocommunicateand tointerpretwhatisbeingsaidandasked,weaskandgetouranswerfromdif‐ferent perspectives which might be barriers ( Erikkson, L. T. & Wie‐dersheim‐Paul,F.,2006,pp.97‐99).Sinceinterviewsarebeingconducted,theremightbeaprobleminthewaythequestionsareasked,whichisbasedontheneedsoftheresearch.Thenreceivetheanswers inadifferentway,theiranswersmightnotbefromanacademicpointofviewtherebyitcouldbebiasedinunderstanding.

3. Athirdlimitationwouldbewhethertheanswerfromtheintervieweesisre‐liable.Meaningthatonehavetodoublechecksothatnoinformation,con‐sciousorunconsciousbeen left outby the interviewees (Erikkson&Wie‐dersheim‐Paul, 2006, pp. 97‐98). The authors assume that theperiodoftime the intervieweeshavebeenworkingwithin thecompanyhasagreateffectontheanswersreceived.Thereforethereisaneedtoseparatefactors

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like this tomake the test reliable andworthy. Other factorsmay includepsychological factors,working conditions, and the atmosphere during theinterview.

4. Over the phone interview has its advantages, however there are somescholars thatargues that it iseasier for the interviewees to liewhen theyarebeinginterviewedoverthephoneastheinterviewerisnotabletoseetheirfacialexpression.Anotherpointbeingargued, is thatsensitivetopicsareeasiertobeaskedduringaface‐to‐face‐thanover‐the‐phoneinterviewasitiseasiertogetpersonalcontactwhentwopeoplearefacingeachother(Jacobsen,2002,p161).

Thelimitationstomethodologycouldbepartoftheproblemduringtheresearch,theyarealsothepartsthatmaketheprocessinterestingandattractive,astheau‐thors try toovercometheseproblems, subsequently, leads toamorereliablere‐search.

Thefollowingmethodsarewhathavebeendonetoavoidtheselimitations:Inter‐views are being conducted through phone calls and face‐to‐face conversations,whichcansolvetheproblemoftimelimitsinsomewayandallowsmoretimetodomore interviews. The questionnaire is designedmore from an academic per‐spectiveandwhen the research isdone, theauthors tried tomake the interviewenvironmentmorecomfortableandeasierwhichwillinsomewayerasethenerv‐ousnessof the interviewees,someof the intervieweesareassociatedwithoneoftheauthorthustheinterviewprocesswillgoquitesmoothly.Furthermore,thein‐terviewhavebeenrecordedandtranscriptedtomakesurethatnobiasormissinginformationwilloccurduringtheresearch,whichinsomewayguaranteethereli‐abilityoftheinterviewresult.

Table2‐1Intervieweesinformation

Interviewees Title Date

Interviewee1 Floorstaff/Restaurantmanager(former)

April9–2012

Interviewee2 FloorStaff April17‐2012

Interviewee3 FloorStaff April18–2012

Interviewee4 Headchef(former) April20–2012

Interviewee5 Chef(former) April23–2012

Interviewee6 Plantmanager April25–2012

Interviewee7 Plantmanager April25–2012

Interviewee8 Plantmanager May4–2012

Interviewee9 Plantmanager May7–2012

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3 Theoretical framework Current theoriesand studiesdonepreviously related toour topicwillbepresented in thischaptersothatthereaderincreasestheirknowledgeofthesubjectandthefocusofthere‐search.

3.1 Strategic Management

“Strategicmanagemententailstheanalysisofinternalandexternalenvironmentsofafirmtomaximizetheutilizationofresourcesinrelationtoobjectives.”(BrackerJef‐fery1980,p.221)

Inorder to fullycomprehendthedefinitionofstrategicmanagement,weneedtounderstandwhatthewordstrategymeans;thewordstrategybyitselfcamefromGreek’swordstrategoswhichmeansageneral,andwasoriginatedfromthewordsarmyandlead.Strategoswrittenintheverbformasstrategomeansplanthede‐structionofyourenemiesbyeffectiveuseofresources(Bracker1980,p.219).

AccordingtoKay,J(1993),strategicmanagementcanbeseenasalinkingprocessbetweenthemanagementofaorganization’sinternalresourcesanditsexternalre‐lationshipswith the customers, suppliers, competitors and last but not least theeconomic and social environments. With several other fields of studies such aseconomics,sociology,marketing,finance,andpsychologyincludedinthestrategicmanagement business theories it is considered to be a broad academic field ofstudy(Nag,R,Hambrick,DCandChen,M‐J,2006,p.935).Howeverasanacademicfield of study, strategic management is a relatively young concept compared toothermanagementtheoriesasthischildwasbornin1960sbutwasnotdevelopeduntilthe1970s,albeitactualpracticesoftheideahavebeendonesincelongbeforethen.

Eventhoughstrategicmanagementisabroadfieldofstudyitcanstillbeexplainedbythethreemaincoreareas;strategicanalysis,strategydevelopmentandstrategyimplementation.Moreoverdependingonhowtherelationshipofthesethreecoreareas’isbeingvieweditcanleadtotwodifferentapproaches:

1. The prescriptive approach – in this approach the three core areas areconsideredtobelinkedtogethersequentially,meaningthatthereareanor‐der to follow.First theanalysisareahas tobeused todevelopa strategy,andthenthestrategydevelopedwillbeimplementedintheorganization.

2. The emergent approach – opposite of the prescriptive approach, theemergentapproachconsiderthethreeareastobefundamentallyinterrelat‐ed.Whichmeansthatoneelementisrespondingtotheresultsobtainedbytheother.Nevertheless,theanalysisareaisusuallyregardedasdistinctiveandshouldbedoneinadvancebeforethestrategydevelopmentandstrate‐gyimplementation.Usuallyduringthestrategydevelopmentprocessexper‐imentaltryoutsareincludedanditisofteninvolvedwithtrialsandanerror,hence making a clear distinction between the strategy development andstrategy implementation phases is not an ingenious act (Lynch Richard,2009,pp.13‐17).

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Figure3‐1theprescriptiveandemergentstrategicapproaches.Source:Lynch(2009,p.19)

3.1.1 Strategic Analysis

This strategic analysis phase canbedivided into twoelements forboth thepre‐scriptive–andemergentapproaches.

Thefirstoneistheanalysisoftheenvironment,thisisthepartwhereexaminingofoccurrencesthatiscurrentlyhappening,orthatarelikelytohappenoutsideoftheorganizationsuchaseconomicandpoliticaldevelopments,competitionofthecur‐rentmarketornewentries isbeingmade(Lynch,2009,p.13).Bydoingthistheorganizationwillbeabletodetermineitspositioninthemarketandseeopportu‐nitiesandthreats.

Secondly is theanalysisofresources, themain focusof thispart is theresourcesand skills available inside the organization. In other word this part of strategicanalysisisaboutanalyzingtheinternalpartoftheorganizationtofindthestrengthandweaknesses. The resources in the organization are being divided into threecategories:

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1. Tangibleresources– Tangibleresourcesarethephysicalresourcesoftheorganizationthatcanbeaddedtoitsvalue.Plantandequipmentareexam‐plesoftangibleresources.

2. Intangibleresources–meanstheresourcesofthefirmthathavenophysi‐calformsthatcanbeseenwithblueeyes,howeveritistheactualbenefitfortheorganization.Examples for intangibleresourcesarebrandnames, ser‐vicelevelsandtechnologythattheorganizationhas.

3. Organizationalcapabilities–Havingthetangibleandintangibleresourcesbythemselvesseparatelyisnotenough,becausetheorganizationneedstobeabletouse,share, andlinktheseresourcestodifferentpartsoftheor‐ganizationandalsotoco‐ordinatethevariousongoingactivities.Asaresultorganizationalcapabilitiesareamustandcanbeconsideredasparttwoofintangible resources. Those capabilities are skills, routines, managementandleadershipoftheorganization.(Lynch,2009,p.123).

When theanalysis of both the external environments and internal resources aredone,theorganizationneedstospecifytheirobjectivesinordertomatchupwiththe findings of the analyses,which leads to the identification of a firm’smissionstatementandvision(Lynch,2009,pp.17‐18).

Theparttwoofthestrategicanalysis–theanalysisofresources–iswhatinterestsusthemost,asourstudyisabouttheinternalmarketingoftheservicesector.Inorder to findout about the valueof internalmarketingandhow it is being con‐ducted,wewillneedtoanalyzethefunctionoftheorganizationalcapabilitiesandintangible resource involvedwith it.Consequently there isaneed toanalyze theintangibleresourcesoftheorganization,whichinthiscaseishumanresource.Andby analyzing thehuman resourcewewill be able to identifywhatmotivates theemployeestoperformabetterwork.

Manyauthorsarguedthatoneofthefactorsthatareaddingvaluetothestrategicmanagement is the human resource management (HRM), and it has since longbeenan important topicas ithasgreat impactonbusinessperformances (Jones,G.T.,&Wright,P.M,1992,pp.271‐299).Thishasbeenprovedbyfindingsofposi‐tiverelationshipsbetweenhumanresourcesandbusinessperformances,donebygeneralresearchesthroughempiricalstudies(Boselie,P.Boon,C.&Dietz,G.,2005,pp.67‐94),(Combs,J.Liu,Y.Hall,A.&Ketchen,D.,2006,pp.501‐528).

HumanresourcemanagementaccordingtoPorter(1985), isanecessaryelementinthestrategicmanagement.HRMactasasupporter,andevenmoresowhenitisintegratedwithothervaluechainactivities,suchasfirminfrastructure,technologyandprocurement.Togethertheywillcreatenecessitiesforabusinesstobeabletosustainandachievecompetitiveadvantage.Subsequently,afteracompetitivead‐vantagehasbeenachieved,itcanbeenhancedbyafirm’sopportunitytoaccessre‐sourcesthatarerare,valuableandmostimportantnon‐imitable(Barney,J.,1995).Therefore, from a resource‐based point of view, a firm’s nature is being definedbasedontheresourcesitcontrolstogetherwiththeassumptionthatnotallfirmsarehomogenous,meaning that theresources in thepossessionofbusinessesare

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notallthesame.Consequently,itwillleadtodifferencesinbusinessperformances(Barney,J.,1991),(Phanetal,2005).

InastudyCarmeliandSchaubroeck(2005,pp.391‐412),reasonedthathumanre‐sourcesareimportantwhenabusinessistryingtoachievecompetitiveadvantagesincetheyarerareandvaluableandusuallydifficulttoimitate.Thestudyalsocon‐cludedthatbusinesseswithhigh levelofhumanresourcetendtoperformbetterwhenthemanagersconsiderthisresourceasuniqueandvaluable.Thereforeitiscrucialforfirmstointegrateemployeesfromalllevelsinthehierarchysothattheymightallmovetowardthesamestrategicgoals.Itismoreimportantthattheem‐ployeesknowhow to contribute to thepursuitof the strategicgoals rather thanjust tounderstandwhat goals there are, and thiswill likely lead to that the em‐ployeeswillhaveasenseofbelongingtothefirm(Boswell,R.,2006,p.1504).

3.1.2 Strategy development

The phase after the strategic analysis is the strategy development. A successfulstrategyisastrategythattendstobedevelopedbasedontheorganization’spar‐ticularskillandonrelationships that ithasorcandevelopwith theexternal fac‐tors.Thosearefoundbyanalyzingthestrengthsandweaknessesoftheresourceswithintheorganizationandtheopportunitiesandthreatsoftheexternalenviron‐ments.Duringthestrategydevelopmentprocess,variousstrategyoptionswillbefoundthatmatchthecompany’sresourcesandcapabilitiestothedemandsoftheenvironmentsinwhichitoperates.However,itisamanager’sjobtocompareandcontrastthedifferentstrategicoptionsagainsteachother.Inordertoidentifyasetofpossiblestrategiesthatwillcreateandsustainacompetitiveadvantageforthefirm.Therearefourlevelsthatthestrategiescanbedividedinto;functional‐levelstrategies, business‐level strategies, global strategies and Corporate‐level strate‐gies(Hill,C.W.L.Jones,R.G.,2009,p.18)..

Inourstudiesweareonlyinterestedinthefunctional‐levelstrategies,asthissetofstrategiesisaimedtoimprovetheeffectivenessoftheoperationswithinacompa‐ny.Marketing,customerservicesandmaterialsmanagement forexampleare thefewfactorsthatcanimprovetheeffectivenessoftheoperations(Hill,C.W.L.Jones,R.G.,2009,p.18).Internalmarketingisoneofthefewfunctional‐levelstrategiesthatthebusinessinservicesectorheavilyrelieson.

3.1.3 Strategy implementation

Accordingtotheprescriptiveapproach,aftertheobjectivesareset, theanalyzingpartisdoneandstrategyoptionsaredeveloped,thestrategymanagersnowneedtochoosefromtheoptionsofthestrategiesandimplementthestrategymostsuit‐edfortheorganizationbyassemblethenecessaryresourcesandapplythem.Forexample:dependingonthestrategy,newcapacitymighthavetobebuild,orexist‐ingcapacitymighthavetobetapdown.However,majordifficultiesmayoccurintermsofmotivation,power relationships, governmentnegotiations, companyac‐quisitions for example. If a strategy that has been developed, cannot be imple‐mented, the value of that strategy isworthnothing. (Lynch, 2009, p. 13) (Hill&Jones,2009,p.19)Assoonas thestrategyhasbeen implemented, themanagersneed tomonitor its progress toward achieving theobjectives set.And thenonce

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againreturntotheanalysisphasetoanalysewhetherornotthereareanychangesintheinternalresourcesorexternalenvironmentsthatmightleadtoaneedforal‐terationinthestrategy.

Ontheotherhand,accordingtotheemergentapproach,thereisnocleardistinc‐tion between the strategy development and implementation phase as these twophases are interrelated to each other. In otherwords, the strategy developmentandimplementationphaseisnotbutcontinuousongoingexperimentsofdifferentstrategies involving trial and error, therefore there is no final strategy (Lynch,2009,p.19).

3.2 Service

"Aserviceisaprocessconsistingofaseriesofmoreorlessintangibleactivitiesthatnormally,butnotnecessarilyalways,takeplaceininteractionsbetweenthecustomerandtheserviceemployeesand/orphysicalresourcesorgoodsand/orsystemsoftheserviceprovider,whichareprovidedassolutions tocustomerproblems"(Grönroos,2007,pg.52)

AccordingtoKotler,Armstrong,Saunders,&Wong,(2002,p.546)asuccessfulser‐vicecompanyshouldpayfocustobothitsemployeesaswellastheircustomers.AserviceisaccordingtoGrönroos(2007,p.51)complexandofanonapparentna‐tureanditisproducedatthesametimeitisconsumed.Thisindicatesthattheser‐viceemployeesplayagreaterroleinthedeliveryoftheservicesandhenceisakeytohowthecustomerexperiencesthequalityoftheservice.Thecompanyisthere‐foredependentonthemotivationandskillsofemployeesinperformingtheirjobs.HoweverGrönroos (2007)providesuswithsome fundamental characteristics torecognizeaservice.Asmentionedinthequoteaboveaserviceisaprocessconsist‐ingofoneormoreactivities,itisalsoproducedatthesametimethatitisconsumed.Lastly he mentions that the customer is to someextentparticipating in the con‐structionoftheservice.

Iftheservicewithinacompanyisinsufficient,thecustomermightbadmouththecompanytoothers,whichinturnleadstoabadreputationandreducedturnover(Grönroos,2007).Thisiswhypropermanagementoftheinternalmarketingisofimportance,tokeeptheemployeesmotivatedtodoagoodjobandalwaysstrivetosatisfytheexternalcustomers.

3.3 Internal marketing

“Internalmarketingisattracting,developing,motivatingandretainingqualifiedem‐ployeesthrough job‐productsthatsatisfytheirneeds.Internalmarketing isthephi‐losophyoftreatingemployeesascustomers‐indeed,“wooing”employees‐andisthestrategyofshaping job‐productstofithumanneeds”(Varey,R.J.Lewis,B.R,2000p.176)

Internalmarketingislookingatandfocusesontheinternalrelationships,betweenthedifferent levels ofpersonnel in anorganization, andhow these influence theservicequalitytotheexternalcustomers.Intheconceptofinternalmarketingtheemployeesisgiventheexpressioninternalcustomers(Bowen&Johnston,1999,p.120).

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InternalMarketingisaboutthe interactionwithinthecompanyandthe ideathatthe employees are the company’s first, internalmarket. Each employee at everylevelwithin thecompanyknowsabout theoperation, itsactivitiesandprocesses(Grönroos, 2004, p.365). Thismeans that the employees have the right attitudeandthattheyaremotivatedtooperateasacoherentteamwiththemissiontoofferservice‐orientedhandlingofexternalrelationshipswithcustomersandotherpar‐ties.Henceitisimportantthatallemployeesinthecompanyarepreparedforcus‐tomerorientedwork(Kotleretal.2002,p.547).

AccordingtoBerryetal. (1991) in"MarketingServiceCompetingthroughQuality”andVareyetal.(2000)in"Internalmarketing,directionsformanagement",internalmarketing is about attracting, developing, motivating and keeping the qualifiedworkersbyofferingworktasksthatsatisfiestheemployeeneeds.Bysatisfyingtheemployees, the company is also increasing the ability to satisfy its external cus‐tomers.Therearesevenbasicelementsofamodelfortheimplementationoftheinternalmarketing.Thesecomponentsare:

1. Competefortalent–acompanyshouldstrivetohirethemostcompetentemployeesinordertocompeteforthecustomers

2. Offeravision–explainthetruevisionofthecompanyandwhatitstandsfortotheemployees.

3. Preparepeopletoperform–hereitisaboutpreparingtheemployeestoperformandmarkettheservice.Inordertobeabletoreachthis,thereisaneedforeducationandskills.

4. Stressteamplay – thestaffought towork in teamtobeable to increasetheopportunities topresent a good serviceoffering. Everyone in theunitshouldfeelthattheyareworkingforeachotherandthattheyarenotcom‐petingwitheachother, this inordertobeabletoprovideagoodexternalservice.Thegoaloftheteamworkisforeveryindividualtofeelimportant.Thereisaneedforteamworkwhentherearealotofemployeesandfunc‐tionsinvolvedintheservicechain.

5. Leverage the freedom factor ‐ The employees of a company should beempowered in theirworkwhichmeans that themanagers have been en‐trustedtodistributetheresponsibilitytotheiremployees.

6. Measureandreward–Theobjectivesofinternalmarketingarepreventedif the employees' performance is measured and rewarded Berry et al.(1991). Berry urges companies to this because they are to achieve a per‐formanceculturewithinthecompany.Frequentfeedbackprovidesaregu‐lar reinforcement of the reasonsof training and continuous improvementrequires.

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7. Knowthecustomer– thecustomersatisfactionrequirements iswhatthedecision‐makers should understand, what the customer want and need.Sincetheemployeesareconsideredtobecustomersandbydesigningworktasksthatattract,develop,motivateandretaintheseinternalcustomersre‐quirescertainsensitivitytotheiraspirationsandattitudes. 

 

Figure3‐2EssentialsofInternalmarketing.Source:Berryetal.(1991,p.152).

Berryetal.(1991)Vareyetal.(2000)andGrönroos(2003,2004)deliverstheirre‐spective explanationsof thedifferent internal processes of themodel,whichareusedtodrawtheconclusionsabove.

Grönroos(2003,p.80)mentionsavarietyoftheoriesconcerninginternalmarket‐ing and how it can be used to create a service‐ and customer oriented attitudeamong the employees of a service provider. These theories refer to the internalmarketingandincludeanumberofactivitieswhosepurposeistostrengthenandmotivate employees to service awareness (Grönroos 2004, p.365). The activitiesinclude management support, staff welfare, training, information support andtechnicalassistance(Grönroos2004,pp.377‐380).

3.4 Why is internal marketing important?

With an increasing competition the importance of creating a competitive ad‐vantageraises.Thecompaniesneedtocraftstrategiestoretainemployeesandin‐crease customer satisfaction and loyalty. Susan L Taylor & Robert M Consenza(1997,pp.3‐5)discussesfourdifferentbenefitsforacompanythatstemsfromin‐ternalmarketing.

Firstly is thepossibilityofadecreasingemployee’s turnoverrate,whichmayde‐crease the cost that is part of the recruitment process and training. Secondly aproper internalmarketingcan increasetheservicequality,meaningthat theem‐ployeesareencouragedtoimprovethewaytheyprovidetheservicetotheexter‐nalcustomer.Thirdlyisahigherlevelofemployeesatisfaction,amotivationoftheworkerstobemoreengagedwhichinturnresultinanincreasedcustomersatis‐

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factionand loyaltyandwith thatprofitability for thecompany.Lastly there isanimproved ability to implement change in the organization. Internal marketinghelpssupportanddevelopaculturewheretheneedforchangeisunderstoodandacknowledged.Thismightleadtoasuccessfulimplementationofstrategies,whichimprovesthechancesofthesestrategiesbeingsuccessful.

3.5 Motivation

Motivation has been defined as the process that initiates, guides andmaintainsgoal‐orientedbehaviors;it isthedrivingforcewhatcausesustoact,tofulfillourpsychologicalneedsandtoachieveourfurtherplans(James,1998).Inourcase,webasically considermotivation as one of themain inner force that influences ouremployeestoimprovetheirworkingefficiency,makethemfeelmoresatisfiedandcomfortableatwork.Company’spolicy, reward system,and internal competitivestrategyaresomeexamplesofthemotivatorsthatinfluenceemployees.

Employeesarethemaininputtogettoaccesstoproductionandservice(Lindner,1998).Someformerresearchershadalreadydonesomeresearchinthisareathatchangedourtraditionalviewtowardsemployeemotivation,theHawthorneStud‐ies,conductedbyEltonMayofrom1924to1932(Dickson,1973,p.298‐302),havefoundthatthemotivationforemployeesarenotonlyfrommoneybutalargeper‐centageisbytheirattitudetowardswhattheyaredoing(Lindner,1998).Therebytheimportanceofmotivationisself‐statedandoneshouldputmorefocusonmo‐tivation.

3.5.1 Motivation Theory

Thereareseveralapproachesoftheoriestowardsmotivation:Maslow’sHierarchyof Needs theory, Herzberg's two‐ factor theory, Vroom's expectancy theory, Ad‐ams'equitytheory,andSkinner'sreinforcementtheory(Lindner,1998).Thetheo‐ryusedinourcaseformotivationisMaslow’sHierarchyofNeeds.

Maslow’sHierarchyofNeeds isavaluableassessmenttool that iswidelyused inmanydifferentfieldssuchaseducation,healthcareandworkingneeds.Basedonthetheory,theideasofhumanneedsareaddressedinorder,followedasthebodyresolvesthemostbasicphysicalneedsforsurvivalbeforemovingontomorecom‐plexpsychologicalneedsandself‐fulfillmentneeds(Poston,2009).

Figure3‐3Maslow’sHierarchyPyramidSource:Poston,2009.

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Figure 3:3 shows Maslow’s Hierarchy Pyramid, starting from the bottom is thephysiologicalneeds toself‐actualizationneedsat the top, follows inorderby thesafetyneeds,belongingnessandloveneedsandesteemneeds.

Thephysiologicalneedsarehumansimplebasicneedsprocesstowardsfood,wa‐ter, warmth and rest that we need consist throughout our life, and the need tomaintain enough physiological balance will always be necessary (Poston, 2009,p.349).

Theseneedsarequitesimilar tophysiologicalneedsthatweneedsafetyandthesenseofsecuritythroughoutourlife,thesafetyneedscouldbedifferentfromper‐son to person. At different ages and to different genders the definition of safetycouldbetotallydifferent.Forexample,thesafetyneedforachildcouldbeawarmandintegratedfamily,whileforamiddleagedwealthymanthesafetyneedcouldthenbethesafetyofhislifeandhiswealth.

Next step up the pyramid is the psychological needs, such as belongingness andlove,thiswecometohaveneedsconnectedwithotherpeopleandsociallife.Peo‐ple like to have the sense of belongingness and a relationship with friends orsomeoneelse, thisneedforbelongingnessandlovecouldbespeciallybuiltwhenyoureallywanttohaveaconnectionwithsomeoneoryourdesiretomakefriendswithotherpeople.

Another psychological need is the esteem need, when people have fulfilled theformerbasicneeds;theywanttohavesomeachievementintheircareerthrough‐out their life,where they can get respect fromother people and/or the externalenvironment.Atthisstage,peoplewouldbemoreeagertosuccessratherthanjusttoliveanormallife.Accomplishmentandachievementwouldbetheirgoalinthishierarchyofneeds.

Lastlywecometothetoppartofthepyramidwhichistheself‐fulfillmentneeds‐theselfactualization.This thehighest levelofneeds forhumanbeings thataftertheyhavegainedandachievedthepreviousneedsrequirementtheywouldliketodosomethingmoreoutstanding,theywanttodefinewhotheyareandgetrecog‐nized by others. Theywould like to do something creative, solving previous un‐solvedproblems,etc.(Poston,2009,p.349–351).

3.6 How the authors interpret the relationship of the theories

Strategic management is a concept with three core areas, in the first phase iswherethecompanyororganizationanalysetheirstrengths,weaknesses,opportu‐nitiesandthreats,whichcorrespondstointernalandexternalfactors.However,inthiscasetheauthorsfocusontheinternalfactors,astheproblemofthisthesiswasaboutthebadworkingenvironmentwhichleadstohighturn‐overrate.Thereforeinthesecondphaseofthestrategicmanagement‐thestrategydevelopment–thestrategythathasbeendevelopedinordertosuitstheorganizationcondition,andmightmaketheemployeeswanttoremainintheorganizationistheinternalmar‐keting.thirdphaseisnowhowthisstrategyisbeingimplementedinreallife,thefactor that the authors considered had themain effect onwhether the internalmarketingisbeingimplementedornotisthemotivation.

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Iftheauthorsweretogivethereaderavisualpictureofthewholeidea,usinganonionasanexample,thentherewillbeacorewhichistheInternalMarketing.Lat‐er therewillbeouterringswhich is themotivationandthe factorsthatbuilduptheinternalmarketingandlastlythestrategicmanagementwhichistheskinoftheonion,whichactsasacontainerforalltheconcept

Figure3‐4Theauthorsvisualizationoftheconnectionofthetheories

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4 Empirical study

Theempiricaldatacollectedissummarizedandpresentedinthischapteraccordingtothepurposeandtheresearchquestions.

4.1 Company Information

4.1.1 Tastsinn AB

TastsinnABisthegroupthatwillbeanalyzedinthisthesisandistheparentcom‐pany to restaurant SofieHof and hotel Savoy I Jönköping, Central hotel in Stock‐holmandhotelAvenyinUmeå,whicharepartsofthesubsidiaryProfilEventsAB.

Figure4‐1TastsinnABCompanyInformation(TastinnAB,2010).

ThebusinessconceptofTastsinnABistoengageinconsulting,securitiestradingandinvestmentsinsubsidiariesthatareinvolvedinactivitieswheretheprincipalowner has knowledge or where he with reasonable efforts are able to acquireknowledgeabout.Investmentsintheserviceindustry,realestateand/orthecapi‐talmarketareprioritized.Thecompanyshouldstrivetohaveabalancedriskdi‐versificationbetweentheinvestments(TastsinnAB,2010).

4.1.2 ProfilEvents AB – ProfilHotels

ProfilEventsABisoperatedunderthebrandnameProfilHotels.Theportfoliocon‐sistsofeightHotelsinSwedenandtwoinCopenhagen,Denmarkwhichisstillop‐eratedbythesubsidiaryMarkgrafA/S(ProfilEvents,2012).

ThebusinessconceptofProfilHotelsistobeprofessionalandhaveapersonalser‐vicewhilecreatingachainofhotelsbyacquiring,establishingandrefininghotelsinSwedenandEurope.GuidingprinciplesforProfilHotelsshouldbeelegantfunc‐tionality, management, operatorship and responsibility. The target audience isbusinesstravelersandprivateperson(ProfilEvents,2012).

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4.1.3 ProfilRestauranger AB

ThebusinessconceptofProfilRestaurangerABistobeprofessionalandwiththeassistance of a humble confidence create success, bymanaging, establishing andcultivatingbrandsandconceptswithintheHotelandRestaurantindustry.Thetar‐getgroup isbothbusiness travelersandprivatepersons (ProfilRestaurangerAB,2012).

ProfilRestauranger AB delivers certain promises to their guests, which basicallysaysthattheyshoulddoalmosteverythingintheirpowertopleasethewishesoftheguests,theirmissionistomeettheguests’desiresandtheemployeesaresup‐posedto,inaprofessionalandseriousmanner,dotheirabsolutebesttomeettheexpectationsoftheguests(ProfilRestauranger,2010).

TheprospectiveaimforProfilRestaurangerABistoraisethestatusfortheindus‐trythroughtheirworkandtocreateaworkenvironmentthatmakesthemamoreattractiveemployerofchoice,thestrategytoreachtheaimistocareforandfostertheiremployees(ProfilRestauranger,2010).

4.2 Company structure

ForthecorporatestructureofProfil,isadecentralized,top‐downorganizationasshowninthe figurebelow,wheretheCEO/owner isat theabsolutetopandhasmanagersbeneathhimtorunthedifferentsectionswithintheorganization(Pro‐filRestaurangerAB,2010).

Figure4‐2Profilgroupcompanystructure(Authorscontributionfromconductingtheinterviews)

In a hierarchal management structure and more specifically in our case, Profilgroup,theCEOdoesnotcommunicatewiththeworkersinanydirectway.TheCEOcommunicateswiththeregional‐andplantmanagerswhichinturncommunicatewith the plantmanagers; this way ofmanaging then follows down to the otherunitswithintheorganizationlikethedifferenthotelsandrestaurants.

Halal(1994)discussesinternalmarket,internalcustomerandhierarchyandhowtheconceptofinternalmarketisbeingrefusedbymostpersonsbecauseitissup‐posedlybreakstheperspectiveoftheconventionalhierarchy.

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ProfilandmorespecificallytherestaurantSofieHofisaplaceofconstantchange.Whentheauthorsstartedplanningandwritingthisthesis,theyhadasupervisorintheheadmanageroftheHotelSavoyandtheSofieHofrestaurant.Thenwhentheprocessof interviewingstartedsheweredismissedfromherpositionandhadtoleavetheemploymentwithimmediateeffect.Westruggledtogetpeopletotalktousandevenhardertoallowingustointerviewthem.

However, it has been possible to interview some current and former employeesandmanagerswithintheorganization,theintervieweesarealleducatedtoworkintheservicesectoreitherinhotelsorrestaurants.Toreachabroaderstancethein‐tervieweeswereofdifferentages,withdifferentcompetencesanddifferentworkexperience.Anonymitywasaskedbytheintervieweesbecausetheyfeltunsecureofthecompanypolicyaboutgivinginterviewstooutsiders,whileothersrefusedtogiveusinterviewsbecausetheywerenotallowedtobytheirmanagers.

Theintervieweeswereplantmanagers,departmentheadsandfloorstaffandtheyallconsiderallemployeestobe importantbutthatthefloorstaff is themost im‐portantresourcesoftheorganization.Theirreasonforthisisthattheyarethefac‐esof theorganizationand thosewho interactswith theguests. If theguest feelsthat they have beenwronged somehowby the floor staff, theywill immediatelygivethecompanyabadnamethatiswhyitisimportanttohavesatisfiedemploy‐eesthatarepreparedtodotheirbestandbeattheirbestbehaviorwhileatwork.

CommunicationThefloorstaffandthedepartmentheadsfeelthatthecompanyandmanagementteamfailedatcommunicatingproperlyattimes.Themanagementteamheldmeet‐ingsonceaweek,wheretheydiscussedcurrenteventsandwhatwasgoingtohap‐penwithintheorganizationandthecompanyinthenearfuture.Thenthedifferentmanagers are responsible to inform their subordinates ofwhat has been said inthatmeeting.Onlyoneoftheplantmanagersdidinfacthandoutaprotocolfromthemeetingfortherestofthestafftoreadandoneoftheotherpostedanewslet‐terinthestaffroom.

“Thecircleisclosedwhenallmanagersinformtheirsubordinates,andthentheprob‐lemwithlackofcommunicationissolved”(Interviewee1,2012).

Relationshipbuilding&PersonalcarestrategiesEveryintervieweedidfeelthatthereisagoodrelationshiptheworkersinthedif‐ferentcompanies,theremightbesomediscrepanciesattimesbutallinalltherela‐tionshipsaregood.Thoughneitherofthefloorstaffconsidersrelationshipbuildingtobeencouragedneitherbytheorganizationnorbytheheadmanager.Duringtheyears the floor staff and departmentmanagers thatwere interviewed, had beenworking within the company, there has only been one occasion of relationshipbuilding,astaffparty.Oneoftheplantmanagersexplainedthatintheircompanytheyhadtwopartiesayear,oncearoundChristmasandonceinthesummerasapersonalcareandrelationshipbuildingstrategy.

Theredonotexistanyrewardsystemsorotherhealthcarebenefitswithintheor‐ganizationtotheirknowledge.Thoughlaterithascometoourknowledgethatthe

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permanentfulltimeemployeesareallowedadiscountwhenstayingathotelsandeatingatrestaurantsownedbytheorganization.

MotivationWhenaskediftheyfeltmotivatedinsomewaybytheorganization,allofthefloorstaffanddepartmentheadsansweredwithacoherentNO.Theemployeesfeltthattheyonlymotivated themselves todo a good job and that therewasnomotiva‐tionalincentivesfromtheorganizationortheplantmanager.Thereishoweveranorganizationalguidecalled“Thewayofconduct”,butitismostlyabouttheclothestowear,howtohaveyourhairanddoyournails.

Clothing such as shirt and vest has been received from the company for thefulltimefloorstaff(Interviewee1&2,2012).

CompetencedevelopmentOneofthedepartmentheads,interviewee1,hadbeenofferedaneducationtode‐velop new and improved competence. Though the felt that the offer was madewhenhewasonefootoutthedoorofthecompany,asanincentivetokeephiminhisposition.Hewastoldbythepresentplantmanagerthatshewasnotallowedtoincreasehissalaryortoofferanyothertypeoffinancialbenefits.Howevershedidsay that education thatwould benefit both the company aswell as themanagerwaspossible forhim to receive.Theproblem thoughtwas that themanager feltthattheofferwasonlysomethingthatwaspromisedandthenwasnotmaintained.

Neitherhadtherebeenanyactualprofessionaldevelopmentwithinthecompanythattherestoftheintervieweeswereawareof.

Empowerment‐floorstaffWhen it came to thequestionofempowermentwithinProfil, therewerevariousanswers by the different interviewees depending on which position they havewithin the company. The questionwaswhether theywere empowered tomaketheirowndecisionswhenitcametocustomercomplaintsandsuchorwhetheritwasthedirectionsoftheplantmanagerorthetopmanagerthatwereapplied.

Interviewee4and5twoofthechefsworkinginthekitchenfeltliketheywereem‐powered, becausewhen therewere complaints about the food they prepared itwas up to them to fix it, however itwas always encouraged to consultwith thehead chef and if possible with the plant manager. The service personnel, inter‐viewee1 and2, felt that theydid thebest they could to satisfy theguest, if thatmeantthatacompensationwerejustifiedtheywouldgiveit.Theydidnotfeelem‐poweredthough;insteadtheyactedonthebasisoftheirgutfeelingandwhattheyfeltwasbestfortheguest.Theemployeelackoffeelingempoweredwasbecausetherewerealwayssupposedtobeatleastonemanageratthepremiseduringtheopeninghours.

Inoneoftheunitstheplantmanager,interviewee8,didinfactempowerthefloorstaffuptoacertainamountofcompensation,thisbecausetherewouldbeaquickresolutiontotheproblemfortheguest.

Thecompanypolicythoughisthattheguestshouldfeelsatisfiedwiththeserviceexperiencewhenleavingtherestaurant.

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EmpowermentplantmanagersTheplantmanagersdoreceivedifferentdirectives fromtheheadquarters that isthese are based on the policies, missions and visions of the organization. Otherthan that it is the responsibilityof eachof theplantmanagers tomake the rightandproperdecisionfortheorganizationandtheircompany.

FloorstaffandtheirinfluenceWhenitcametothequestionofwhetherthefloorstafffeltthattheywereabletoinfluencedecisionsmadeorthewayofdoingthings,therewereavariationofan‐swers.Current floorstaff felt that therehadbeenachange inthe influencesincetheformerplantmanagerleftherposition.Beforealldecisionshadtogothroughher, this leadtodelayedanswers for theguestsandmoreoftendismissedoffers.Nowtheyareabletomaketheirowndecisions,whichresultsinafasterresponsetotheguests.Thestafffeelsthatthisismoresuitablefortheservicebusiness,sincethepreferencesaresodiffuseanddifferentwiththedifferentguest.Intheservicesector,onemustbeabletobeflexibletosatisfytheneedandwantsoftheguests.

Thekitchenstaffdidalwaysfeelthattheyhadbeenabletoinfluencethefoodandthemenuswith certainexceptions.Thereare some foods thathave tobeon themenubecauseitisthesameintheentireorganizationandalsobecausetheyalsoservethehotelguestsroomserviceandsuch.

Whenitcametoinfluencingintheorganizationingeneral,theyfeltthattheplantmanagerwouldlistenandencouragethemtohaveideas,butwhenitcametoful‐filling the ideasorproposals,nothinghappened.This leadto theemployees feel‐ing:“notimportantatall”.

PlantmanagersviewoffloorstaffinfluenceTheplantmanagersdofeelthatitisimportantfortheemployeestofeelthattheyareabletoinfluencethewaytheydotheirjobs,thingsthatmightworkbetterandthatmayreduceproblemsandrisksfortheemployees.Hencethefloorstaffisen‐couragedtomakesuggestionsforchangestobedonebutallinalltheydonothaveanyinfluenceatallinthedecision‐makingprocess(Interviewee6,2012).

Plantmanager&DepartmentheadsandtheirinfluenceThemanagershoweverdidfeelliketheyhadsomemoreinfluencewhenitcametoalteringthewayofworkfortheirsubordinatesaslongastherewasnotanycostinvolvedinthechanges(Interviewee1&5,2012).

Inoneof the sites thedepartmentheadsdohavemore influence in thedecisionmaking process than in others, the plantmanager does not decidemuch on herown.Insteadalldecisionsaredecidedbythemanagementteams,becauseseveralmindsthinkwellthanjustone(Interviewee8,2012).

StrivingtokeepandemploycompetenceNoneoftheemployeesorthemanagersfeltthattheorganizationwaswillingtoof‐fer higher salaries or training to keep the competenceswithin the organization.Whencompetingforthecompetentpersonnelahighersalarymightbesufficient,buttheemployeesratherfeelliketheorganizationspendstheirmoneyonunnec‐essaryaccessories,likefreshroses,insteadofthestaff.

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Duringtherecruitmentprocesstheyfeltlikethemanagerratherhiredpersonsasafavortosomeoneratherthathiringsomeonebasedontheircompetence.

Theintervieweesfeellikeitwouldbemoreefficientandcheaperfortheorganiza‐tiontohaveexperiencedandcompetentpersonnelthatknowstheimportanceofadditional sales and keeping the guest satisfied. Inexperienced employees oftenworkslowerandarenotawareofhowtofullysatisfyacustomer.Whichwinetopairwithwhat foodisaquestionofcompetenceorexperience,andisnottaughtthateasily.

Workingenvironment?Alloftheintervieweestalkaboutadecentworkingenvironment;muchofitthoughisbecausetheyenjoyeachother’scompany.Althoughineverygoodthingthereisroomforimprovements(Interviewee5,2012).

Evaluationsorperformanceappraisals?One of the managers interviewed mentioned that he had had performance ap‐praisalswithitssubordinatesandalsohadoneofhisownwiththeheadmanager.Otherwisethemeetingshadbeenwhensomethinghadoccurred,likeaclashwithaguestoranothermemberofstaff,but thesemeetingswerenotabout theperfor‐manceasawhole.

Therehadbeensomeoccasionswithstaffmeetings,butthemajorityofthemeet‐ingwasabouttheorganizationasawhole.

HierarchyWeaskedthefloorstaffofthegroupabouttheCEO,whethertheyfeltthathewasthekindofpersonthatspreadtheservicecultureintheorganizationandinspiredhisworkers.UnfortunatelynooneoftheaskedfeltthattheCEOwasservicemind‐edatall,theyfeltthathewasunreachable,agoodbusinessmanbutapitifulper‐sontoworkfor.Mostlybecausehedidnotevenbothertoacknowledgethefloorstaffwhilevisitingthesite.

ReasonforleavingthepositionatProfil?ThreeoftheintervieweesdonotcurrentlyworkwithintheorganizationProfil;thereasonforleavingwasbecausesomehadfoundanotherjobandthatinrelationtosomebrawlattheworkplace.Oneleftbecauseofasplitbetweenhimandthesitemanagerandanotherbecausehefeltthatthebusinesswasnothandledproperlythewayitshouldhaveorcouldhavebeen.

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5 Analysis

Inthischapter,thefindingsfromtheempiricalpartwillbeanalyzedwiththerespecttothetheoreticalframework.Thehighlightsofdataarethencomparedtothetheory.

Therearealotofseparatecompanieswithintheorganization,andeachandeverycompanyisownedbythesameman.Fromwhattheauthorshaveheard,basedoninformationfromseveralofthefloorstaffandthedepartmentheads,theCEOisamanthatrunsallofhiscompaniesinahierarchalstructure.Thelackofempower‐mentandmotivation fromthetopmanagementhas leadtothe floorstaff feelingunmotivatedanduninspired.

Eachunitofbusinessismoreorlessruninthesametop‐downmanner.Eachplantmanagerhasdifferentdepartmentheadsthatareresponsibleforthefloorstaffre‐spectively.There isa longwayforthecommunicationtotravelandhumanflawsaremoreoftenthannotinthewayofaperfectlydeliveredmessage.

Afterobservingandlisteningtotheinterviewsonecaneasilyseethatsomeoftheemployeesareafraidto losetheir jobs, ifsomeoneelsecandoitaswell.Forthisreasonthesomeofthedepartmentheadsdoesnottraintheirsubordinatesinor‐derforthemtobemorecompetent.Thereisalackofteamworkwhenyouarenotwillingtoteachothers.

Therearenocleardirectionsinhowtodothingswithintheorganizationorwhatrulesthatapplies.Theywerenotsureofwhethertheywereallowedtotalktousornot,somedecidedtodoso,whileotherstoldusthattheywerenotallowedbytheorganizationortheirrespectivemanager.

5.1 Strategic management with internal marketing point of view

Profil Group is an organization that belongs to the service sector. This indicatesthat theorganization itself isbuildupbymanyprocessesof intangible activitiesbetweenthecustomersandtheorganization’semployees(Grönroos,2007,p.52).AndifweweretosummarizetheProfilgroup’sobjectives,itistostrivetopleasethecustomersinthebestpossiblewaybyutilizingtheiremployeestotheoutmost(annualreport2010andwebpage2012).Whattheauthorssawfromthesummaryofthemissionstatementisthattheorganizationhasdoneanalysisforboththeex‐ternalenvironmentandinternalresource,andfoundoutwheretheiropportunitieslieandwhatneededtobedoneinordertoachievetheirobjective.Moreover,fromthe mission statement, the authors could conclude that Profil group’s most im‐portantinternalresourceistheemployeesastheyareaserviceorganizationandtheemployeesaretheonlyonesinteractingwiththecostumerswhichinturn,arethekeyfactorofhowthecostumerexperiencesthequalityoftheservicedelivered(Grönroos,2007,p.51). Thishasalsobeenconfirmed fromour interviewswiththeplantmanagers,asallofthem,eventhoughexplaineddifferently,stillstatethatthe employees are the organization’s most important resource, especially inter‐viewee 9 (Appendix, 2012), as he states that; “Thestaff, ifyoudonothavethem,thenyoudonotgettheguests”.

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Priorunderthestrategicmanagementsection,theauthorsdiscussedthataccord‐ingtoCarmeliandSchaubroeck(2005,pp.391‐412),businesseswithhighlevelofhuman resourcewill tend to performbetter if themanagers in the organizationconsidertheemployeesvaluableanduniqueandthiswillleadtotheorganizationattainingcompetitiveadvantageashumanresourceisaresourcethatisnotimita‐ble.Hence,toachievethecompany’sobjective,Profilgrouphavetokeeptheem‐ployeeswithin the organization, thus strategies for just this particular objectivehavetobedeveloped.

Thesecondstageinthestrategicmanagementisthestrategicdevelopment,inthisstage,onehastoknowwhatresourcesafirmownstobeabletodevelopcompati‐blestrategies thatutilize theresourcesto themaximum,andthis isexactlywhatProfil group tried to do.With the knowledge of the employees being the Profilgroup’smostimportantinternalresource,theyusedtheideaofcreatinganattrac‐tiveworkplaceasoneoftheirmainstrategiestokeeptheemployees–thecompe‐tence–withintheorganization.Bydoingso, theemployeeswillaccordingtotheMaslow’s theorybemotivatedandalsosatisfiedwith their job.Theauthorscon‐siderthatintheprocessofcreatingthistypeofemployeesatisfaction,theorgani‐zationmust have awell‐structured andworking plan for the internalmarketingwithintheorganization.ThereforetheemployeesaccordingtoBerryetal(1991)mustberegardedasinternalcustomers,andacustomersatisfactionisattainedbyhowwell thedecision‐makersunderstand the customer.However this isnot thecaseintheProfilgroup,asnoneofourintervieweecanseethemselvesbeingtreat‐edascustomers,astheyhardlycanthinkofanypersonalbenefit,ifnotnone,thattheyhavegotfromtheorganization.

As far asweknow,Profil group consider the strategyof creatingagoodenoughworkingenvironmenttoattracttheemployeestoremainwithinthecompanyandbythat,asdiscussedearlier,thestrategyofcreatingagoodworkingenvironmentisequaltotheinternalmarketing.Howevertobeabletoimplementastrategyinaorganization with a company structure that is decentralized with separate de‐partmentsineachhierarchies,withthepowerdistributedfromtoptodownisnotalwayspossible.Halal(1994)amongotherexperts,disputedthatinsuchcompanystructure,whetherornotinternalmarketingcouldactuallywork,sinceitshatterstheviewoftheusualhierarchy.Thiscanthenbeprovedfromwhattheauthorsofthisthesishavelearnedwhileconductingtheinterviews.Asthefactthattheorgan‐izationeventhough, theythemselves,knowthattheemployeesaretheorganiza‐tionmost important resourcewasactuallynotverykeenonkeeping them.oratleast theupper level inhierarchydoesnotgive themiddle level in thehierarchyenoughpowertoprovideanycompetencedevelopmentstrategyoranyofsuchna‐tureforthebottomlevelsothattheycanfeelliketheyhaveafutureinthecompa‐ny. The lack of communication between CEO and bottom level of the hierarchymakeitevenhardertoimplementwhateverstrategythathasbeendeveloped.

We have had prior knowledge about the fact that there is a high staff turnoverwithintheorganizationingeneral,butwegotthisconfirmedwhenweinterviewedinterviewee1(Appendix,2012).Howeverthehighstaffturnoverwasnotappliedto all the branches as one of the brancheswithin Profil group, stated that eventhoughtheydohavestaffturnover,neverthelesstherateislow,thereasonforthe

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turnover isusuallydueemployeeswanting toquit their current joband start tostudy again. The authors can assume that either the employees see the job as atemporaryonewhilewaitingforenrollmentinschools,oranotherreasonforquit‐tingtheirjobisduetothefactthattheemployeesdonotgetanycompetencede‐velopmentthereforetheythemselvescannotseeafuturedevelopmentinthecom‐panyandthereforehavetouseothermethodstodevelopthemselves.Oursecondassumptiongot confirmedby the interviewswith the formeremployeesasallofthemstatedthat thereasonforquittingtheir jobswasduetothe lackofcompe‐tence development (Appendix, 2012, Interview 1‐3). Therefore we dare to con‐cludethatthefactthattheemployeeshavetoquittheirjobtostartstudyingagainisbecausetheydonotgetanycoursesintherelatedareasfromtheorganization,hencetheyhavetoquittheirjobandstartstudy.

Duringtheinterviews,welearnedthattheemployeeswereafraidtospeaktoout‐siders like ourselves.Our perception is that there is a lack of information abouthowtohandlesuchsituationsandinfearofangeringthetopmanagerstheyratheravoidbeing interviewed.Therefore itwas impossible toconduct interviewswithfloorstaffswithoutthetopmanagers’knowledgeorthefloorstaffthemselveswillflatoutrefuseourinterviewattemptsandtheylaterreferustothemanagers.Evenformeremployeesaretroubledwhenbeinginterviewedastheyconsidersomein‐formationmightbeconfidentialthereforetheycouldnotspeaktheirfreemind.

InthefollowingpartwewilltalkspecificallyabouttheinternalmarketingwithinProfilgroup.Basedontheresultofourinterviews,theinternalmarketingwithintheProfilgroupislackinginmanyareas,suchaslackofcommunicationbetweenCEOandplantmanagers,as theonlyonesupervisingtheplantmanagersaretheregionmanagers (Appendix,2012, Interviewee6).Thisresulted to theemployeeunsatisfactoryaboutworkingrelationshipbetweenthedifferentlevelsinthehier‐archyandlackofmotivations.

5.2 Internal Marketing

Internalmarketingislookingatandfocusesontheinternalrelationshipwithintheorganization.Asdiscussedinthetheoretical framework, the internalrelationshipbetweenfloorstaff,departmentheads,plantmanagersandthetopmanagerswaswhat needed to be taken into consideration ofwhen conducting the interviews.The seven basic elements for implementing internal marketing by Berry et al.(1991) will be used to analyze whether the organization of Profil has a properstrategyfortheinternalmarketing.

1. Competefortalent–intherecruitmentprocesstoonepositionthereisnoindicationthattheorganizationstrivetohavethemostcompetentperson‐nel.Interviewees1and2discussestherecruitmentprocessasbeingmoreofemployingwhoyouknowratherthanwhattheyareabletodo.Thoughthisdebatewaswhenitcametoemployfloorstaffandeventhedepartmentheads. There were no indicators of how the recruitment process for theplantmanager looked like. Basedon thenewly employedplantmanagersonecanseethateducationand/orworkingexperienceseemstobeofgreatimportance.

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Whencompetingfortalentitisalsoimportanttotrytomotivatethecompe‐tent employees to stay in their position.Offering thema carrot like somerewardsystemormaybesomeotherbenefitsliketraining.Iftheorganiza‐tionweretoimplementsomemotivationalcarrotslikehealthcarebenefitsorarewardsystemtherewouldbeabetterincentivefortheemployeestostayintheirpositionwithintheorganizationandeventodoabetterjob.

2. Offeravision–herethereisalapinthecommunicationfromthetoplay‐ers of the organization. The floor staff interviewees felt that they had toread thevisionof theorganization fromthecompanywebpage.Howevertheplantmanagersaregivenmissionsandvisiontofollowbytheorganiza‐tion,but somewherealong theway the information is lost. Interviewee2,feltthatshehadtomotivateherselftodoagoodjobthatisuptothecom‐panystandard,basedonwhatiswrittenonthehomepage.

3. Preparepeopletoperform–when itcomes topreparing theemployeesfor conductinga service to theexternalguest in thebestmanner it is im‐portantforthefloorstafftobeinformedaboutthevisionthecompanyhas.Theimportanceofasatisfiedguestissomethingthatismostoftentakenforgrantedwithin the service sector.Thequestionhowever ishowdoesonecomplete the taskofpleasing theguest andoffer thema solution to theirfuzzyexpectations?Educatedandskilledfloorstaffoftenknows,butwhentheyareinexperienced,whichisoftenthecasewithintherestaurantofSo‐fieHof, there is a pressing need to train their employees into being goodserviceproviders.Hereweseeagapintheinternalmarketing,becausethenewand inexperiencedworkersare thrown intoahectic serviceenviron‐mentwithoutanyorslightpreparationsfromtheorganization.

4. Stressteamplay–thecompaniesofProfilgrouparedividedintodifferentdepartments,eachdepartmenthaveaheadmanagerthatisresponsiblefortheinformationtoandfromthatdepartment.Inorderfortheorganizationtoworkproperlyitisimportantthatthiscommunicationworksflawlessly.Therearealotofindicatorsthatthehumanfactorplaysagreatroleinthegapsofthecommunicationwithintheteams,whichleadstoargumentsandbrawls.

When it comes to the organizational unit here in Jönköping, inwhich So‐fieHofisapart,thereareindicatorsofalapseintheteamwork.Interviewee2explainsthatthedepartmentheaddoesnoteducatehersubordinatesinhowtodocertaintasks,outoffearofrenderingunnecessary.Shefeelsthatthemanagerisafraidoflosingherjobifsomeoneelseisabletodoitaswellorperhapsevenbetter.Withabetterteamworktheorganizationisabletoofferbetterandmoreefficientservicestotheirguests.

5. Leveragethe freedom factor –Empowerment isnot something that is amatterofcoursewithintheorganization.Therearenoknownguidelinesinhowtohandlecomplaintsandhowtheemployeesareallowedtocompen‐sate. The vision of the company is for the guest to be satisfiedwith theirserviceexperienceandifonecanreachthatvisionwithlimitedmeans,theemployees are allowed to compensate without consulting with the plant

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managers.Otherwise thecomplaintsare tobehandledby thedepartmentheadortheplantmanager.

6. Measureandreward–Motivationfactorissomethingthattheinterview‐eesfeelismissingwithintheorganization.Thefloorstaffdoesnotfeelmo‐tivated to do a good job in their working environment, they feel that itcomes fromwithin them. There are nomotivational strategies like healthcarebenefits,bonusesorrewardsystemsfortheemployees.

Neither do the companieswithin the organization offer feedback to theiremployeesinorderforthemtoperformbetter.Therearemeetingswherethey inform the employees about the figures of the company, but noper‐sonalperformancemeetings.

7. Know the customer – The organization is well aware of how to satisfytheir external guests however, there is a flaw in the internal marketingwithintheProfilgroup.Themanagementhasonewayoflookingatthingsand the floor staff has another. Firstly relationship building is importantwithin the service sector, but it is not encouraged by the organization.Thereforethecompanyshoulddealwiththeinternalmarketfirsttoestab‐lish a good relationship network and working climate. It is important tomake the employees feel like they are working in a straightforward andcomfortableenvironmentratherthancompetingagainsteachother.

ThemanagementteamsofProfilgroupshouldbethebridgethatlinkstheemployeewiththecompany’scorporateculture.

5.3 Lack of Motivation

Animportantfactorthatcausesthehighemployeeturnoverratethatthreeofourintervieweeshave talked about is themotivation.BasedonMaslow’smotivationtheory, people’s needs are divided into three parts (basic needs, psychologicalneedsandself‐fulfillmentneeds)anddetailedintofivestages.Inourcase,themainneedsinvolvedwiththeemployeesarethepsychologicalones,especiallythethirdstage,whichare thesenseofbelongingsand loveneeds.Likewehaveexplainedbefore in the theoretical framework, it is about the intimate relationship andfriendsneed.Boswell(2006)alsomentionedthatinorderforemployeestohaveasenseofbelongingtotheorganization,theyhavetounderstandwhatthestrategicgoalsareandwhattheyneedtocontributetotheorganizationtoachievethisgoal.Whenthepreviouspsychologicalneedsaremet,theemployeeswillhavethemoti‐vationtoaimfortopoftheMaslowpyramidwhichistosatisfytheirneedofself‐fulfillments,whichwouldresultinabetterworkingperformance.

Althoughwehavestatedbeforethatmotivationisanimportantfactorfortheem‐ployeestogetthefeelingsofwantingtodobetterjobsandstayintheorganization,theProfilgrouphasomittedthewholeideaofmotivatingtheiremployees.Byask‐ingtheintervieweesquestionsrelatedtowhethertheorganizationhasanyguide‐linesinhowtomotivatetheiremployees,welearnedthattherearenosuchguide‐lines, due to the fact that all of the interviewees answered no. Therefore, eventhoughtheworkingrelationshipsbetweenthestaffsfromthesamelevelinthehi‐

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erarchyisgood,whichfulfilloneofthecriteriainthesecondpartofMaslowpyra‐mid– loveneeds‐, it isnotenoughtoactasamotivatorfortheemployeestore‐main.Afterconductingtheempiricalstudiestogetherwiththeinterviews,wealsolearnedthatthereisalackofinternalcommunication,especiallyfromoneleveltoanotherinthehierarchy,especiallyfromtheCEOtothefloorstaffs.TheCEO,ac‐cording to the former employee interviewee 1 (Appendix, 2012),wouldmost oftimenotpayattentiontothefloorstaff,andalsoduringhismanyyearsworkinginthe Profil group, never heard any encouragement words directly from the CEOwhen he is visiting the place. Interviewee 1 also said that he really admire thework that theCEOdoes,howeverhewished that theCEOwould just saidsome‐thingtointerviewee1,evennotmuchthatwouldmotivatehimtodoabetterjob.Interviewee7(Appendix,2012)alsosaid that theonlyonesupervising theplantmanagersaretheregionmanagers,subsequentlythereareslimchancestointeractdirectlywiththeCEO.

IfweweretoanalyzethissituationfollowingtheBoswell’s(2006)argumentationthatinorderfortheemployeestohaveasenseofbelongingstotheorganization,theymustknowwhattheyneedtocontributetotheorganizationforittobeabletoachievethestrategicgoalsandnotjustwhatthestrategicgoalsare.Wewillendupwiththeconclusionthattheemployeesdonotfeelanysenseofbelonging,nottomentionno loyalty to theorganization,as theydonotgetanyencouragementdirectly or indirectly for the works they have done, which will give them thethoughtssuchas;WhyshouldIdoagoodjobwhennoonecares,andIdonotgetanybenefitsfromdoingabetterjobthanmymates.Meaningthatwithoutencour‐agement words, no reward systems and insufficient working relationship, therewouldbenomotivation for theemployees tomake them lingeror reconsider tostayintheorganizationoncetheywantmadeuptheirmindtoquit.Thereforetheformeremployees thathavequitted theirpositions inProfil arenowworking innewservicebusinessesorinsearchfornewservicejobs.

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6 Conclusion

Thischapterincludestheanswertotheresearchquestionstogetherwiththesolutionfortheproblem,andalsothefulfillmentofthepurpose.Thereafterdiscussionsaboutreliabilityandfurtherresearchwillbeincluded.

Intoday’ssocietywherethehumanresourceisbeingconsideredasthecoreofaservicebusiness,hasmadetheinternalmarketingbecomingamoreimportanttop‐ic,asitisabletogivenewinsightsandperspectivesonhowtheemployeesshouldbetreated.

Eventhoughtheservicesectortodayhavetheknowledgeofthattheinternalmar‐ketingisimportant,thereisstillalackoftheoreticalcontributionsinreallife.Theanalysispartofthisthesishasshownthattheupperlevelmanagersarecertainlyawareofwhatinternalmarketingisandthatitisimportant.Howevertheydonotimplement the strategy to the fullest, asmany components, such as compete fortalent, offer a vision, prepare people to perform, leverage the freedom factor,measureandreward,andlastbutnotleastknowthecustomer,havebarelybeenputinuse.ThefirstresearchquestionwasconcerninghowtheinternalmarketingwasconductedwithintheProfilGroup.Itwasprovedthattheydoindeedtrytoactfollowingthecomponentsthatbuildupthe internalmarketing,albeit, theydosobyaddinglimitations.ForexampletheCEOhasindeedgiventhepowerinchargeforeachhoteltotherespectiveplantmanager,buttheyarethen,theonlyonemak‐ingdecisionincaseanyoccurrencearise,eventothesmallestones,andthefloorstaffshavenosayinsuchsituationstogetherwiththefactthattheycannotmaketheirowndecisiononhowitcanbesolved.

Toanswerthesecondresearchquestioninthisthesis,wefoundthattheinternalmarketingisbeingperceiveddifferentlybythemanagersandtheemployees.Sincethe managers are more optimistic toward the employees’ empowerment andworkingrelationshipbetweenco‐workers.Ontheotherhand,thatisnotthecase,ifoneweretoseeitfromtheemployees’perspective.Astheemployeesdonotfeelliketheyhaveenoughempowerment,andthattheythemselveshardlyknowwhattheorganization’sstrategicgoalsareorhowtheycaninfluenceit.Theemployeesalso tend to realize tense relationship amongworkers faster than themanagers,and occasionally solve it before the managers even realize that something iswrong.

To conclude our thesis,wewill say that the internalmarketing is usually not aswell conducted as it appears on thewebsites and annual reports. The strategiesused to keep thehuman resource– the competence –within theorganization isimportant, if failed,thatwillbethemajorcauseforstaffturnover. ThereforetheProfil groupneeds to improve their internalmarketingsystem inorder to lowertheircurrentlyhighstaffturnoverrate.Withthestaffturnoverratebeinglowthecompetencewill remainwithin the organization, and therewill be no additionalcostoftrainingnewemployees.Inordertokeepthecompetence;theyhavetocon‐structarewardsystem, improvethecommunicationbetweenthedifferent levelsofthehierarchyanddepartments,andmotivatetheemployeesmore.

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6.1 Discussion

6.1.1 Reliability

Instead of conducting surveys and using the quantitative method, which wouldmaketheanalysisprocesseasier,wechoosetomakeinterviewswithformerandcurrentemployeesandmanagers,andthenput thesequalitativedata intobetterperspective.Thequalitativedataoftheactualopinionsoftheemployeesandman‐agers,wouldgiveustheactualpictureofinternalmarketingimplementation.Thelimitationsmentionedunderthemethodologypartcouldalsobecritiques.Aswehad fourpointsof limitations that canmakeonewonderwhether the thesis canstillbereliable.Howevertheselimitationswereovercamebytheinterviewerbe‐inginvolvedallthetime;theinterviewerwouldalwaysdoublechecktheanswersfromtheinterviewees,andalsocompareoneinterviewee’srespondwithanother.

Weasresearchersmighthavebeenbiasedasoneofourgroupmemberswerealsoonceapartoftheorganizationweusedinourresearch.Bybelongingtotheorgan‐izationwillmake her have certain preconceptions.However, themajority of thegroupisoutsiders,therefore,asthisstudyisbasesonalltheauthorsopinionthepossibilityofbiasnessisveryslim.

6.1.2 Further studies

For furtherstudies in the internalmarketing,wesuggest todoaquantitativere‐searchinthisfield,asthequalitativeapproachwastheonlyoneusedinthisthesis.Withonlyoneorganizationisbeingusedtocollecttheprimarydata,thisthesisis’conclusioncannotbegeneralized,thereforemakingacasestudiesofvariousfirmswillgiveabetterpictureofhowtheinternalmarketingisbeingconductedinreallife.Alsoifotherresearchesdecidedtousethesameorganization,theymightwanttoconsiderusingalargersampleofemployees’andmanagers’perceptionsoftheinternalmarketing,mightgiveyetanotherviewofthefield.

Listofreferences

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Appendix

40

Interview questionnaire

Gender?

Age?

Education?

Yearsinthebusiness?YearsattheProfilgroup?

Mostimportantresourcesinthecompany?

Howdoyoucommunicatewithinthecompany?

Personalcarestrategiesintheorganization?

Competencedevelopmentintheorganization?

Aretheemployeesempoweredbytheorganization?

Aretheemployeesabletoinfluencedecicionsmade?

Arerelationshipsbetweentheemployeesencouragedbytheorganization?

Doestheorganizationevaluatetheemployees?