The Service Industries Journal Friendly flexible ...

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The Service Industries Journal

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Friendly flexible working practices within the internal marketing framework: a service perspective

Klement Podnara; Ursa Goloba a Marketing Communication and Public Relations Department, Faculty of Social Sciences, University of Ljubljana, Ljubljana, Slovenia First published on: 19 May 2010

To cite this Article Podnar, Klement and Golob, Ursa(2010) 'Friendly flexible working practices within the internal

marketing framework: a service perspective', The Service Industries Journal, 30: 11, 1773 — 1786, First published on: 19 May 2010 (iFirst) To link to this Article: DOI: 10.1080/02642060802626824 URL: http://dx.doi.org/10.1080/02642060802626824

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The Service Industries Journal Vol. 30, No. 11, September 2010, 1773 –1786

Friendly flexible working practices within the internal marketing framework: a service perspective Klement Podnar and Ursa Golob Marketing Communication and Public Relations Department, Faculty of Social Sciences, University of Ljubljana, Ljubljana, Slovenia

Downloaded By: [Golob, Ursa] At: 07:21 9 September 2010

(Received 7 June 2008; final version received 28 September 2008) The purpose of this paper is to increase the understanding of the existence of work flexibility and its relevance to internal marketing. Friendly forms of work flexibility are critical to an improved understanding of the role internal marketing should have to achieve better service quality performance. This exploratory study is based on a sample of 2997 private-sector organisations provided by the CRANET survey. The results show the divergence in industry business patterns in the use of friendly and unfriendly flexible work arrangements. Service companies tend to use friendly flexible working practices in larger proportions. The analysis reveals a small negative relationship between unfriendly practices and service quality. These findings may suggest that service organisations tend to create more supportive environments when offering flexible work arrangements that are friendlier for individual workers and their families. Keywords: internal marketing; friendly work flexibility; service-oriented companies; service quality

Introduction Globalisation, liberalisation, changes in technology, increased competition, and sophisticated customer demands have brought many changes to the internal environment of organisations. These changes reflect highly flexible organisational forms that have shown movement towards increasing work flexibility (Johnson, 2004). Work flexibility means a redefinition of work expanding to encompass more diversified forms of work with positive as well as negative connotations. One aim of work flexibility is to increase the market performance and effectiveness of a firm by managing labour resources more efficiently (Valverde, Tregaskis, & Brewster, 2000). Flexible work may be helpful in improving employees’ attitudes and behaviours towards their work, which will be positively linked to performance (Stavrou, 2005, p. 926). Therefore work flexibility is a relevant issue for internal marketing, which is aimed at the satisfaction of its internal customers (employees) to achieve success for the firm (Ewing & Caruana, 1999). In general, the term flexible job or flexible work refers to a wide range of work arrangements that differ from traditional employment practices. As such, they have brought about many challenges to internal marketing in which motivated and satisfied employees at every level are needed (Gummesson, 2000) thus requiring the redefinition of important features associated with traditional regular, full-time, and fixed-time jobs and lifetime employment (Bourhis & Wils, 2001; Kalleberg, 2000).

Corresponding author. Email: [email protected]

ISSN 0264-2069 print/ISSN 1743-9507 online # 2010 Taylor & Francis DOI: 10.1080/02642060802626824 http://www.informaworld.com


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K. Podnar and U. Golob

Although the theoretical human resource management (HRM) literature contained a number of discussions and studies concerning flexible working practices, articles dealing with work flexibility from an internal marketing perspective were considerably rarer. Only a few authors have tended to link internal marketing to job or work flexibility (Lings & Greenley, 2001). This was somehow surprising, as internal marketing is at the heart of the concept and the structure of a flexible organisation (Halal, 1994; Varey & Lewis, 1999). The purpose of this paper, therefore, is to increase the understanding of work flexibility in the context of internal marketing, a concept inseparably linked to service quality performance (Ewing & Caruana, 1999). A service-centred business philosophy central to the internal marketing concept is not only important for service companies but also has increasingly been an element of what manufacturing companies do for their customers (Varey, 1995). The issue of work flexibility is critical to an improved understanding of the role internal marketing should have in increasingly flexible organisational forms for achieving desired firm performance. The notion of flexible working practices has not been addressed empirically in the internal marketing literature. In addition, the empirical investigations on work flexibility have rarely been mostly focused on changes in the workforce rather than on policy and strategic decisions of organisations (Brewster, Hegewisch, & Mayne, 1994). Also, there has been a lack of evidence in the literature concerning whether different forms of flexible work fall into composite bundles such as friendly and unfriendly practices and how these bundles are linked to the organisational performance or competitiveness in which service quality is an important indicator (Stavrou, 2005). Thus, in the empirical part of this paper, we have examined to what extent organisations use different types of flexible working practices; which industry sector (manufacturing or service-oriented) employs which particular form of practice more often; and, how the positive or negative connotations of flexibility or the issue of (un)friendliness of working practices is linked to service quality performance. To achieve this, we conducted exploratory research based on the results of a survey administered to a large sample of international private-sector organisations. We have first presented an overview of the internal marketing literature underpinning work flexibility. After identifying the forms of flexibility, we have linked the issue of flexible working practices with the concept of service performance. We have then presented the methodological section and the analysis of data and results. We have concluded the paper with a discussion of the results and limitations of the study, and suggestions of some issues for further research. Review of literature Internal marketing, work flexibility, and service quality performance Ever since Berry (1981) and Gro¨nroos (1981) formulated the idea that companies should treat their employees as internal customers and their jobs as internal products, the use of the concept of internal marketing has grown rapidly (e.g. Flipo, 1986; Percy & Morgan, 1991; Sasser & Arbeit, 1976; Thomson, 1990; Varey, 1995; see Ahmed & Rafiq, 2003, for additional review). In their extensive literature review, Rafiq and Ahmed (2000b, p. 453) identified five main elements of internal marketing: employee motivation and satisfaction, customer orientation and customer satisfaction, inter-functional coordination and integration, a marketing-like approach to the aforementioned, and implementation of specific corporate and functional strategies. As such, internal marketing is a multidimensional concept (Voima & Gro¨nroos, 1997, p. 18) that has been developed from a transactional-oriented approach to a relationship-oriented one (Rafiq & Ahmed, 2000a) and from an internally directed marketing mix to a network of internal transactions (Bell, Mengu¨c¸, & Stefani, 2004). In short, the major


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role of the internal marketing concept has been to show employees that management cares about them and their needs (Ewing & Caruana, 1999). Hence, internal marketing has been related to HRM (Berry, 1981; Berry & Parasuraman, 1991; Mumby-Croft & Williams, 2002; Van Haastrecht & Bekkers, 1995) but has primarily been translated into positive employee attitudes towards their work including work motivation and satisfaction (Ewing & Caruana, 1999). In view of the diversity of the definitions (Varey, 1995; Varey & Lewis, 1999), Cahill (1996, p. 3) defined internal marketing as ‘attracting, developing, motivating and retaining qualified employees through job-products that satisfy their needs’. Jancˇicˇ (1990, p. 132) defined it as:


a philosophy and a managerial process of creating superb business results through satisfying the employee’s needs in the exchange process with an organisation.

Berry and Parasuraman (1991, p. 151) perceived internal marketing as ‘the philosophy of treating employees as internal customers, and it is the strategy of shaping job-product to fit human needs’. Thus, internal marketing has been focused on achieving an effective internal exchange between organisations and their employee groups as a prerequisite for successful exchanges with external markets (George, 1990). Recently, internal marketing has been operationalised as a set of managerial behaviours associated with the internal marketing philosophy and as an internal-market orientation (Gounaris, 2006; Lings, 2004; Lings & Greenley, 2005b; Naude´, Desai, & Murphy, 2003). Despite the conceptual development of internal marketing and the lack of a common definition, its basic idea has remained unchanged over time; organisations will not be successful in the external market if they have not first established reciprocal relationships within their internal markets – with their employees (Greene, Walls, & Schrest, 1994; Yoon, Beatty, & Suh, 2001). The link between internal marketing and service quality performance has been considered one of the most important issues in the internal marketing literature (e.g. Ahmed & Rafiq, 2003; Lings & Greenley, 2005a; 2005b). There has also been some empirical support for a significant relationship between internal marketing and service quality (e.g. Ewing & Caruana, 1999). Service quality has usually been defined as service that meets customer expectations (Parasuraman, Zeithaml, & Berry, 1985). As argued by Rafiq and Ahmed (2000a) it has been almost 30 years since internal marketing was proposed as a solution to the problem of delivering consistently high service quality. The latter has remained a core concept of internal marketing, although some other more recent definitions have also stressed the purpose of enhancing service quality (Ballantyne, 2000). The link between internal marketing and service quality has been mediated by such notions as employee satisfaction and organisational climate (Berry & Parasuraman, 1991; Nwankwo, Owusu-Frimpong, & Ekwulugo, 2004; Schneider, 1994), which are in turn the result of internal marketing policies and practices. Therefore, internal marketing has been recognised as the process of ensuring that employees are committed to the goal of ensuring the best possible treatment of customers (Varey, 1995, p. 42), which is in part dependent on employee motivation and satisfaction (Lings & Greenley, 2001). Such a process has thus included policies of marketing aimed at creating happy, motivated employees by meeting their needs through managerial consideration of employee-friendly practices (Lings & Greenley, 2001). One of these practices has been work flexibility in its friendly forms that represent new and better ways of organising the lives and work of employees (Brewster et al., 1994; Kanjuo Mrcˇela & Ignjatovic´, 2005). Such forms of flexibility could result in high quality products and services for consumers (Dyer, 1998).


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Hence, responsiveness to internal market (i.e. employees) has involved the design of jobs as internal products which meet the needs of employees (Lings & Greenley, 2001). According to internal marketing theory, this has been an essential or generic part of the exchange between employees and firms (Berry & Parasuraman, 1991, 2000; Lings & Greenley, 2005a). Employees have experienced their jobs as services offered by organisations in exchange for their time and physical and psychical energy. As Straughan and Cooper (2002, p. 254) argued, a job was a service product which ‘consists of any number of intrinsic and extrinsic components which employees exchange for their time, effort, expertise, creativity, commitment and numerous psychological costs’. By carefully defining the way in which customers perceive, evaluate, and use the offerings of a firm, different modifications could be made in terms of job design, work environments, and work processes to offer various benefits to the employees (Christopher, Payne, & Ballantyne, 1991; McCarthy, 1997). One such example was the issue of ‘friendly’ forms of work flexibility. Work flexibility could be understood as the process of changes to conditions of employment and the organisation of work (Kanjuo Mrcˇela & Ignjatovic´, 2005, p. 92). In general, work or job flexibility could be defined into different categories, such as postFordist, neo-Marxian, neo-Fordist, managerialist, or even neo-managerialist (Brewster, Mayne, & Tregaskis, 1997). In the last category, flexibility has been presented as a business objective, the achievement of which depends on firms responding effectively through a range of different work practices to the changing demands of a global environment (Valverde et al., 2000 p. 650), and thus concerned pragmatic managerial responses (Bagguley, 1991, p. 153). In light of this view, Lings and Greenley (2001) defined flexibility from an internal-marketing perspective, their argument being that to satisfy the identified needs and wants of employees, managers may respond with the two responsiveness dimensions of wage and job flexibility (Lings & Greenley, 2001). In their words, job flexibility suggested that employee claims are more than just financial. They were representative of the extent to which managers are willing to allow flexibility in working hours to accommodate their employees’ competing commitments (Lings & Greenley, 2001). Forms of flexible working practices The concept of flexibility in terms of working practices has had many different forms and dimensions, such as working conditions, status of employment, regulation of time and place, and so forth (Kanjuo Mrcˇela & Ignjatovic´, 2005). Accordingly, flexibility could be divided into three forms: functional flexibility, which means performing different tasks and functions within the company; numerical flexibility, which is related to the increase or decrease of the number of workers in the short term; and financial flexibility, which may be achieved through variable pay policies or profit-sharing policies (Atkinson, 1984). Blyton (1991) added an additional category, temporal flexibility, which involves varying patterns of work hours in response to changing demands through such means as part-time, flexitime, and shift systems. Although these forms of flexibility are not central to this paper they have revealed the fuzziness of the flexibility debate. Increasingly, authors have tended to classify working practices according to the friendliness or unfriendliness of flexible jobs for individuals and their families, taking into account the time and location of work or time and locational flexibility (Croucher & Mills, 2006; Kanjuo Mrcˇela & Ignjatovic´, 2006; Strachan & Burgess, 1998). The main focus of this classification has been the advantages and disadvantages of work flexibility for individual employees and other employment issues.



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The issue of friendliness could have advantages for both the employer and the employee (Brewster et al., 1994). On one side, it has been linked with the quality of the employees’ and their families’ working and domestic lives: and on the other, it has been used to address such direct perceived benefits for employers as higher productivity or low labour costs. Some scholars have asserted that friendly forms of flexible employment are a better way of organising the work and lives of individuals (Jansen, Kant, Nijhuis, Swaen, Kristensen, 2004; Schultz, McClain, & Thomas, 2003). However, one must take into consideration the different factors that influence the availability of flexibility for different groups of employees and the need to balance their flexibility with security. In the light of this, Croucher and Mills (2006) argued that some forms of flexibility in workplace contexts may be relatively unfriendly to employees and their families and that different factors may have impact on how flexibility operates in practice in terms of employee friendliness. The range of factors and possible variations within them have suggested that some forms of flexible working practices may indeed be friendly for most employees and that the opposite may be true for other forms of working and thus, all may be the result of the relationship between employers and employees and their interests (Croucher & Mills, 2006, p. 8). Accordingly, Kanjuo Mrcˇela & Ignjatovic´ (2006, p. 341) suggested that flexible working practices may be classified according to the freedom given to individuals to allocate their working time and their private lives. Thus, flexible forms of work and employment that enhance the intensity of work and increase the insecurity of employment could be defined as unfriendly and those that give employees greater autonomy about decisions concerning where and when they work could be defined as friendly (Kanjuo Mrcˇela & Ignjatovic´, 2006, p. 342).

Research propositions Unlike the internal marketing literature, with some notable exceptions (e.g. Lings & Greenley, 2001), the HRM literature has indicated much thought concerning both the issue of flexibility (Brewster et al., 1997; Croucher & Mills, 2006; Huang & Cullen, 2001) and the issue of customer-focused HRM (e.g. Schneider, 1994), which is similar to the notion of market orientation (e.g. Lings & Greenley, 2005b). As suggested by different authors, there were advantages and disadvantages of work flexibility for individual employees, meaning that different flexible working practices could be either friendly or unfriendly (e.g. Kanjuo Mrcˇela & Ignjatovic´, 2006). However, Croucher and Mills (2006) argued that there is no empirical support that in reality there is a simple relationship between a specific form of flexible work, such as flexible working hours, on one side and employee friendliness on the other. Also, there was no clear evidence that in practice different practices are grouped together in any way (Croucher & Mills, 2006, p. 11). Hence, we were interested in how flexible working practices are used in conjunction with one another and whether these practices were ‘bundled’ together according to the proposed definitions of friendly and unfriendly practices. We propose the following: Proposition 1 Two groups of flexible working practices (friendly and unfriendly) are used systematically by organisations. In the HRM literature, it has been argued that flexible working practices in general tend to be more widely used in the service sector than in the manufacturing sector (Brewster et al., 1994). It has also been acknowledged that flexible work design results in satisfied employees, which means the employee friendliness of flexible working practices may

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be an important factor especially in service companies (Redman & Mathews, 1998). Hence, we propose that:


Proposition 2 There are statistically significant differences in the usage of friendly and unfriendly forms of flexible working practices among service-oriented and manufacturing organisations. Scholars from both the internal marketing and HRM perspectives have agreed that organisations should be in a position to enhance employee satisfaction to generate external satisfaction (Ahmed & Rafiq, 2003). Although this assumption is intuitively plausible, according to Ahmed and Rafiq (2003, p. 1178), evidence supporting it has remained sketchy, at least in terms of internal marketing research. HRM literature, on the other hand, has revealed some evidence that employee satisfaction is indeed related to customer satisfaction (Schneider, 1994) and that work flexibility is essential to the business performance of firms (Johnson, 2004). Schneider and Bowen (1993), for instance, found that those organisations in which employees describe the HRM practices under which they work in positive terms offer superior service quality. Ichniowski, Shaw, and Prennushi (1997) and Johnson (2004) found that employees’ ability to balance work and private lives increases the quality of working life, which leads to improved job performance and increased productivity. Hence, we expect that: Proposition 3 Friendly forms of flexible work are positively related to service quality performance.

Methodology We drew the data for our exploratory research from the CRANET International Survey, the largest and most representative independent longitudinal survey used mainly to investigate questions linked with HRM. CRANET is a product of an international team of academics who have conducted research on HRM over the past 15 years or so (Stavrou, 2005). The survey was conducted in organisations around the world in all sectors of the economy as a postal survey. The unit of analysis was the organisation and the respondent was the senior HR director. Responses were collected by national groups, checked, and sent to Cranfield University for joint coding (Croucher & Mills, 2006; Valverde et al., 2000; see Brewster, Mayrhofer, & Morley, 2004 for the CRANET methodology). The validity and reliability of the questionnaires were assured by the premise of standardisation and repetition. The CRANET survey met all the requirements in terms of validity concerning the size of organisations in the sample (on average they had 1546 employees), the expertise of the source responding (members of the corporate HR team), and the clarity of items in the survey achieved through the international CRANET team of experts (Brewster, Tregaskis, Hegewisch, & Mayne, 1996). In addition, high absolute numbers of responses ensured reliability of results. The data was representative in terms of industry sector and organisation size. For this paper, we drew on the latest survey, which contained data from 8000 organisations across 32 countries and was conducted in 2003 and 2005. Our selected sample included 2997 private-sector organisations of which approximately half were in manufacturing and the other half produced services. The organisations were from 42 countries, with around 80% of them having headquarters in the European Union and other European countries, and the others coming from such countries as the USA, New Zealand, and Canada.


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Flexible working practices Respondents to the CRANET questionnaire were asked whether their organisations used a particular flexible working practice (see Stavrou, 2005, for the definitions of practices) and, if so, the percentage of workers covered by the practice within the following parameters (ranging from 1 to 6): ‘not used’, ‘used in 0 – 5%’, ‘used in 6 – 10%’, ‘used in 11– 20%’, ‘used in 21 – 50%’, and ‘used in more than 50%’. The responses were based on the knowledge and estimation of the HR director in a particular organisation.


Service quality performance In the questionnaire, respondents rated service quality performance by comparison with other organisations in their sector. They responded to this question: ‘Compared to other organisations in your sector, where would you rate the performance of your organisation in relation to service quality?’ The possible responses were rated on an ordinal scale with three ratings of top 10, upper half, and lower half. However, because the measures were only the perceptions of the respondents and we were not sure whether the respondents could have made precise comparisons, we decided to compute a new measure for service quality performance. We chose the minimum for the superior and above average service performance as the ‘upper half’ (coded as 2), while lower performers were coded as 1, meaning that their service quality performance was perceived as below average or ‘lower half’. This was borrowed from the strategic management field in which the ‘superior vs. below average’ dichotomy is commonly used as a categorical variable for measuring financial performance (Roberts & Dowling, 2002). To investigate our propositions, we used descriptive statistics, non-parametric correlations, analysis of variance, factor analysis and cluster analysis. Analysis and results Among all studied organisations, only 0.4% of them did not use flexible working practices at all. Figure 1 shows the shares of organisations that use particular forms of flexible work. The most frequently used forms were overtime and part-time work (more than 80% of companies), and the least frequently used was home-based work (less than 20% of companies). Table 1 shows the importance of particular forms of flexible working practices among organisations in our sample. As can be seen, organisations did not utilise forms of flexible

Figure 1. Shares of organisations using a particular form of flexible work.

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Table 1. Mean scores, median scores, and estimated percentages of particular flexible work arrangements. Flexible work form


Weekend work Shift work Overtime Annual hours contract Part-time work Job sharing Flexi-time Temporary/casual Fixed term contracts Home-based work Teleworking

Median

Mean

Estimation of average percentage employed by the arrangement

2.00 4.00 3.00 1.00 2.00 1.00 2.00 2.00 2.00 1.00 1.00

2.56 3.50 3.47 1.89 2.63 1.41 2.86 2.14 2.25 1.23 1.37

.5 .10 .10 0 –5 .5 0 –5 .5 0 –5 .5 0 –5 0 –5

Note: Percentages are an estimation based on mean scores considering the proportions used in the questionnaire (1, not used; 2, 0– 5%; 3, 6 –10%; 4, 11– 20%; 5, 21– 50%; and 6, used in more than 50%).

work in the workplace in large proportions. On average, shift and overtime work had the greatest proportion of use inside the workplace, with each of these arrangements being used on average by around 10% of all employees in the studied organisations (mean scores above 3.4; medians of 3.0 and 4.0, respectively). To find whether two groups of flexible working practices could be identified (Proposition 1), we conducted factor analysis. The Kaiser – Meyer – Olkin measure that shows the proportion of variance in the variables that may be caused by underlying factors had a value of 0.57 which is not very high (values above 0.5 are considered acceptable) but nevertheless indicates that a factor analysis may be useful for the detailed explanation of flexible working practices (Hair, Anderson, Tatham, & Black, 1998). Two groups of factors emerged from the principal components analysis, together explaining 30% of the variance. Nine of the practices loaded uniquely onto one of the two factors, while annualised hours and job sharing loaded onto two factors similarly. However, both had slightly higher loadings on the second factor. This is similar to the findings of Croucher and Mills (2006) in which both forms of working practices were not uniquely loaded on either of factors obtained in the analysis. We interpreted the two-factor solution of flexible working practices with the help of the typology suggested by Kanjuo Mrcˇela & Ignjatovic´ (2006), which means according to the freedom given to individuals to allocate their working time and their private lives. The first factor may thus be interpreted as ‘unfriendly’ and the second one as ‘friendly’ practices. The second factor also includes annualised hours and job sharing (Table 2). As can be seen from Table 1, all forms of flexible work classified as friendly were used on average in and up to 5% of all working arrangements, with unfriendly forms representing on average 6–10% of organisations’ working arrangements. In terms of all flexible working practices, friendly forms represented 41% of all practices in relation to unfriendly forms meaning that organisations are using more practices that may be defined as unfriendly for individual workers and their families (e.g. Kanjuo Mrcˇela & Ignjatovic´, 2006). Furthermore, we clustered organisations according to flexible working forms with K-means cluster analysis into two clusters. The main rationale for this structure was the relative p-values, as well as the interpretability of the clusters in terms of the friendliness of flexible forms of work. The two-cluster solution included 1291 organisations in the first


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Table 2. Factor structure of flexible working practices. Proportion

Unfriendly

On weekend work Shift work On overtime Temporary/casual On fixed term contracts Teleworking On flexi-time Home-based On part-time work Job sharing On annual hours contract Eigenvalues % of variance Cumulative % Downloaded By: [Golob, Ursa] At: 07:21 9 September 2010

Friendly

20.028 20.347 0.139 20.079 0.059 0.658† 0.573 0.555 0.490 0.307 0.276 1.61 14.61 29.71

0.728 0.642 0.522 0.413 0.287 20.174 20.152 20.040 0.209 0.245 0.214 1.66 15.11 15.11

Note: Principal components analysis. Oblimin rotation. The highest loadings on factor 1 and represent unfriendly working practices. † The highest loadings on factor 2 and represent friendly working practices.

cluster and 1287 organisations in the second; while 419 organisations had missing values. The first cluster had a bigger percentage of manufacturing companies (71%); the second cluster consisted mostly of service-oriented companies (56%). According to the one-way analysis of variance, the proportions of particular forms of flexible work were not the same across clusters. In most cases, significant differences existed between the two clusters (Table 3). Thus, as seen from the mean scores of particular practices, the first cluster consisted of organisations that tend to use more unfriendly flexible practices compared to the second cluster in which organisations use friendly practices in slightly larger proportions. The only exceptions were the job-sharing (p ¼ 0.11) and fixed-term contract practices (p ¼ 0.41) for which we found no significant differences between clusters (Table 3). This means that organisations in both clusters employ these forms of flexible work in similar proportions. Table 3. Results of cluster analysis and one-way ANOVA. Cluster means

Flexible work form Shift work Weekend work Overtime Temporary/casual Fixed term contracts Annual hours contract Job sharing Flexi-time Teleworking Part-time work Home-based work

ANOVA

Companies using mostly unfriendly practices

Companies using mostly friendly practices

F-value

p-value

5.29 3.25 3.82 2.25 2.29 1.95 1.42 2.56 1.28 2.49 1.17

1.69 1.87 3.10 1.99 2.21 1.71 1.39 3.04 1.44 2.71 1.25

10,638.99 492.08 129.47 41.71 2.51 12.85 0.673 37.64 32.06 20.10 15.78

0.00 0.00 0.00 0.00 0.11 0.00 0.41 0.00 0.00 0.00 0.00

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To explore further whether friendly practices are used more in service-oriented companies (Proposition 2), we found that the correlation between the friendly and unfriendly practices and a particular organisation being service-oriented confirmed cluster analysis findings which suggested that service companies tend to employ more friendly practices in comparison with manufacturing companies (the correlation coefficient between friendly practices and the service industry sector was r ¼ 0.271; p , 0.001). Table 4 shows that information. No statistically significant correlations were obtained between friendly flexible working practices and perceived service quality performance (Proposition 3), using Spearman’s non-parametric correlation coefficient (Table 5), which means that Proposition 3 cannot be confirmed and that there is no association between the two variables. However, we found a very small negative correlation between the use of unfriendly practices and service quality performance (r ¼ 0.045; p , 0.05).

Discussion, limitations, and further research Our study is a step forward towards introducing the question of (friendly) flexible working practices into the internal marketing domain as we have reported the use of flexible working practices in various organisations around the world. In the light of internal marketing, friendly flexible working practices are a way to make internal products (i.e. jobs) more attractive to the employees (Lings & Greenley, 2001). To sum up, the results reflect the divergence in industry business patterns and the usage of friendly and unfriendly flexible work arrangements. They also indicate that service organisations use higher proportions of friendly forms of flexible work, while predominantly manufacturing companies use higher proportions of unfriendly forms in their work arrangements. These findings may suggest that service organisations tend to create more supportive environments when offering flexible work arrangements that are friendlier for individual workers and their families (Kanjuo Mrcˇela & Ignjatovic´, 2006). From the internal marketing perspective, which is concerned with exchange items in the internal market this means offering social benefits for the employees (Varey, 1995). Questions that arise are whether service organisations are thus more aware of the importance of internal marketing in relation to work flexibility or if these differences just reflect blind forces of adaptation to the demands of the external environment. Viney and Tyson (1997) argued that, because of intangibility, services are more difficult for the customer to evaluate. Therefore, HRM policies and practices have a crucial role in the way services are delivered (Viney & Tyson, 1997). It is known that service organisations tend to be more eager to create motivated and friendly working environments (e.g. Gummesson, 2000). Origo and Pagani (2006) found that flexible working practices that enhance job satisfaction are more widespread in services than in industry. Table 4. Correlations between friendly flexible working practices and service industry sector.

Service industry sector Friendly working practices Unfriendly working practices

Service industry sector

Unfriendly working practices

– 0.271 20.063

20.006 ns –

Note: ns, not significant. Correlation is significant at the 0.01 level (two-tailed).


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Table 5. Correlations between friendly flexible working practices and service performance.

Service quality performance Friendly working practices Unfriendly working practices

Service quality performance

Unfriendly working practices

– 0.035 ns 20.045

20.006 ns –


Note: ns, not significant. Correlation is significant at the 0.05 level (two-tailed).

The non-parametric correlation revealed no statistically significant positive relationship between friendly flexible working practices and perceived service quality performance; however, there seems to be a very weak but nevertheless statistically significant negative correlation between unfriendly practices and service quality performance. Similar findings on relationships between flexible working practices and company competitiveness (which also include a measure of service quality performance) were presented by Stavrou (2005). He discovered no relationships, or indeed very weak ones, between different bundles of flexible working practices and competitiveness. Valverde et al. (2000), on the other hand, found positive relationships between some forms of flexible work and overall firm performance; and Tsaur and Lin (2004) found that positive HRM practices experienced by employees are positively related to the service quality performance of employees. Despite all this, our findings are not indicative of support for the arguments that positive HRM practices that enhance employee motivation are positively associated with perceptions of performance, product quality, and productivity (e.g. Ichniowski et al., 1997) and that the responsiveness dimensions of internal marketing can improve service quality (Lings, 1999). Arguments used by Stavrou (2005, p. 942) were that flexible working practices may not yet have a strong relationship to indicators such as service quality performance or that there is a lag time between adoption of a flexible working practice and subsequent outcome as it can take 2 or 3 years for an adopted practice to generate the desired effects. In addition, there may be other mediating variables, such as motivation, satisfaction or commitment of employees, that may affect the relationship between the flexible working practices and service quality performance. Our study had some limitations that also represent opportunities for further research as this was a study in which some new issues and relations were tackled. The data were obtained from an international database with a standardised questionnaire. The authors had no influence on question design. However, the study was conducted on a long-term basis involving a panel of academic experts to provide valid and reliable results (Brewster et al., 2004). Nevertheless, we believe that in future studies researchers will need to use measures to capture the studied variables more rigorously. Based on the limitations, our results are mainly evidence of different forms of flexibility and varying degrees of adoption of these flexible working practices and grounds for further work to explore their impact on employees and consequently customers. This could be done with case-based research and other qualitative approaches (e.g. in-depth interviews) to illuminate in more detail the views of senior HR personnel on this matter. In addition, more qualitative approaches could give us better insight concerning the tendencies of service companies to use more friendly working practices compared to manufacturing companies. In future research, it could also be interesting to include both the causal relations between variables and some mediating variables to explore the complex nature of the link between flexibility and performance from which more valuable implications for internal marketing could be drawn.

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Despite its limitations, this paper adds to the internal marketing literature. Through the research described in this paper, we have introduced the concept of (un)friendly working practices as means of societal exchanges in the internal market. We have also provided some empirical information on this by showing that friendly working practices tend to be more widely used in service companies in which one of the important challenges is the creation of a context in which employee motivation is achieved. This should be one of the most important tasks of internal marketing activities.


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