INTERNAL MARKETING ESTABLISHES A CULTURE OF LEARNING ORGANIZATION

INTERNAL MARKETING ESTABLISHES A CULTURE OF LEARNING ORGANIZATION Yafang Tsai, Department of Health Policy and Management, Chung-Shan Medical University, Taiwan, (886)-4-24730022 ext.12127, avon611@gmail.com Shih-Wang Wu, Department of Hospital and Health Care Administration, Chia Nan University of Pharmacy & Science, Taiwan, (886)-6-2664911 ext.5225, scottwu101@mail.chna.edu.tw ABSTRACT Internal marketing is a way to assist hospital administrators in improving the service quality provided by staff to patients. Through internal marketing, a hospital can establish a learning culture and enhance the organizational commitment of its employees. This study aims to explore the relationships between learning organization, internal marketing, and organizational commitment. This research uses a cross-sectional study to survey nursing staff perceptions regarding learning organization, internal marketing, and organizational commitment. The sample includes a medical center hospital and a regional teaching hospital in Taiwan. Two hundred questionnaires were distributed, and 114 valid questionnaires were returned, yielding a response rate of 57%. The survey process lasted from October 1 to October 31, 2009. The data were analyzed with SPSS 17.0, including descriptive statistics and inferential statistical analysis. The findings reveal that internal marketing plays a critical role in explaining employee perceptions of learning organization and organizational commitment. Keywords: learning organization, internal marketing, organizational commitment INTRODUCTION In an era of knowledge-driven economies, knowledge and learning are the vigor that can not only push individuals, organizations, and societies to progress continuously but can also expand organizational development [1]. The most important assets of an organization are personnel and knowledge; a learning organization emphasizes the fact that individuals in an organization are the focal points for sharing organizational information and creating knowledge. One of the most important leadership tasks in learning organizations is to become a role model and a strong sponsor of the learning efforts of such organizations [2]. By establishing a learning organization, organizational managers can promote the sharing and creation of knowledge among different department members and promote continual learning within the organization. Because the Bureau of National Health Insurance (NHI) in Taiwan has focused on reducing its financial deficit for several years, the predicament faced by hospitals and the health care administration is becoming more complex. As in many other countries, hospital managers in Taiwan face the challenges of controlling costs while maintaining service quality. As a result, hospital administration teams must now focus on patient satisfaction and employee organizational commitment to ensure hospital development and stability in a competitive environment [3]. Organizations can not only enhance creativity and efficiency through individual learning, but they can also satisfy employees job demands and improve the organizational commitment of staff by promoting the idea of a learning organization. Learning organizations should create increments of collective knowledge as a vital resource to be used internally in building agency and externally in creating competitive advantage [4] in a competitive environment. Hospital staffs must continually

learn to provide superior service to customers; this makes hospital administrators pay more attention to the promotion of a learning organization in Taiwan. Ballantyne [5] argues that internal marketing plays an important role in promoting learning organization, one that can improve cross-functional flows of information and tap into experience-based personal knowledge from diverse sources. Managers implement internal marketing to promote knowledge exchange among different departmental staffs and improve their skills to ensure that they can accomplish their assigned mission. Thus, internal marketing contributes to the promotion of organized learning activities. This study explored the relationship between learning organization, internal marketing and organizational commitment. Importance of the study and research purpose Learning organization is a management approach that can be applied to a wide range of organizations, including businesses, government agencies, and schools [6]. Health care organizations are highly knowledge-intensive institutions that require continual learning to improve their capabilities. Establishing a culture of learning organization is an important issue for health care organizations, especially for nursing care institutions [7]. Organizational commitment is a predictor of nursing turnover [8]. Employee mobility and turnover lead to higher labor costs in the form of recruitment and training. As employees become more committed to their organization, the employee retention rate improves, which in turn reduces operating costs [9]. How can one improve employees organizational commitment? Internal marketing plays an important role by reinforcing a hospital s mission, strengthening employee relationships, increasing organizational commitment, and reducing turnover. Internal marketing is a useful tool for hospital administrators to improve employees organizational commitment [3]. Most previous studies that have adopted an internal marketing approach have focused on for-profit sectors such as the service sector [10], airlines [11] and banks [12]. However, administrators of nonprofit organizations, such as hospitals, should pay greater attention to improving the internal management process, due to the influence of changes in the medical environment and health policy [3]. Cooper & Cronin [13] concentrated on nursing home care, and their focus was limited to internal marketing activity. However, the one goal of internal marketing is to enhance the organizational commitment of employees [14]. This study explored the relationship between learning organization, internal marketing and organizational commitment. BACKGROUND Learning organization Learning organizations are able to transform themselves in the face of multiple complex forces. They are designed deliberately to facilitate learning [4], where people are continually learning how to learn together [15]. Learning organization actions are purposive and the patterns of interaction in members approach to work provide opportunities for learning and demonstrate responsibility and collective competence in addressing organizational goals [6]. Because learning organizations use generative learning for to conduct continuous evaluation and provide feedback to reprogram how information is processed, learning organizations encourage experimentation and system-wide thinking. Different labels may be used to describe the processes that reflect this action component of organizational learning, such as team orientation, innovation, involvement, information flow, tolerance for error, and result orientation [16]. Senge [17] listed the five disciplines of learning organization: personal mastery, mental models, building shared vision, team learning, and systems thinking. Huw et al. [18] proposed five key features of a learning organization: open systems thinking, improving individual capabilities, team learning, updating mental models, and cohesive vision. How does one determine if an organization has the features of a learning organization?

O Neil [19] describes four dimensions of measurement variables used to identify learning organizations: experience, structure, culture and information. Internal marketing The concept of internal marketing first appeared in the service marketing literature in the early 1980s [11]. Internal marketing stresses that organizations can retain employees through motivating, mobilizing, cooperating, managing, and continuing to improve the services provided to external customers [20]. It also focuses on training and inspiring employees to serve customers well [21]. Tansuhaj et al. [22] proposed that internal marketing must involve various plans that emphasize employee development and that a complete internal marketing program must necessarily include employee recruitment, training, encouragement, communication, and retention activities that lead to changes in employee attitudes and behavior. In other words, internal marketing is a company s human resource management tool used to successfully hire, train, and encourage employees and provide better services to customers [23]. Organizational commitment The extensive body of scientific studies on organizational commitment, which largely focus on organizational behavior/psychology, has produced various definitions of the factor construct and a considerable discussion of its development, consequences, and measurement [24]. At a general level, most researchers agree that organizational commitment describes a psychological state that characterizes the relationship between an employee and the organization for which they work and that has implications for the employee s decision to remain within the organization [25]. Organizational commitment involves employees attachment to their organization [26] [27]. Meyer & Allen [28] have identified three types of organizational commitment. Affective commitment describes individual emotional attachment and identification with and involvement in a particular organization. Furthermore, continuance commitment reflects an employee s awareness of the costs of leaving an organization. Finally, normative commitment reflects an individual s sense of obligation to remain in an organization. Relationships among learning organization, internal marketing, and organizational commitment The first goal that organizations attempt to achieve in a learning organization is to mold an organizational culture of learning [29]. The courses are not only meant for training or simple individual development; they aim to popularize learning in all aspects of the organization, thereby providing the best service [30]. Organization administrations should encourage staff dialogue [31], interaction and knowledge exchange among members of different departments and seek internal communication channels to announce policies, vision, and targets of the organization when promoting a learning organization [32]. Internal marketing encourages administrators to transmit the vision and goals of their organizations and allow the staff to clearly understand their mission by communicating with different departments. The most important mission is to change the forced nature of traditional training into voluntary learning. Internal marketing also emphasizes the need for the organization to select staff with passion, strengthen their capability by training [33], and nurture service-oriented behavior by clarifying their business vision and management beliefs [34]. Both of the abovementioned perspectives demand that organizations transmit the vision to their staff and adopt human resource management activities to improve their ability to serve external customers, thus creating good customer value [14]. Therefore, learning organizations have positive effects on internal marketing. Hypothesis 1. There is a significantly positive relationship between learning organization and internal marketing.

Internal marketing is based on the idea that organizations satisfy their employees needs through their work and are committed to their employees [35]. This commitment should be reflected by employees by demonstrating enhanced job satisfaction, loyalty, and trust [36]. Previous studies have shown that employees organizational commitment is positively related to job satisfaction [37]. Internal marketing emphasizes the fact that organizations can hire employees who can help achieve organizational missions while providing a clear vision and goals [38]. Organizational commitment indicates the degree to which individuals are attached to an organization and identify with organizational goals [39]. Organizations can use internal marketing programs to enhance employee organizational commitment [40]. Hypothesis 2. There is a significantly positive relationship between internal marketing and organizational commitment. A health care organization is one kind of knowledge-dense organization. Managers can ensure health care quality and technology and can then meet the requirement of patients for health care service via the staffs continual learning. Learning organizations emphasize the fact that organization managers should empower employees with respect to their work. Health care organizations should also empower their staff by authorizing them to immediately address questions when caring for patients [42]. This can improve service efficiency for patients. Health care staffs usually transfer knowledge, introduce new concepts, and enhance their abilities by communicating and coordinating with members of the health care team. Hospital administrators should not only encourage their staff to solve problems on the job through systematic thinking, but they should also encourage team learning. Though learning improves employees skills, employees gain more by solving health care problems on their own, which can improve employees commitment to an organization. Hypothesis 3. There is a significantly positive relationship between learning organization and organizational commitment. METHODS Design This research is a cross-sectional study focused on nurses of various hospitals in Taiwan. Sampling The respondents in this study were all nurses working in a medical center hospital and a regional teaching hospital that have implemented a learning organization culture for several years in Taiwan. Because nurses are always busy, we adopted convenience sampling to select nurses who agreed to be involved in the study. We sent out 200 questionnaires and received 114 valid questionnaires, yielding a response rate of 57%. The survey process lasted from October 1 to October 31, 2009. The majority of the subjects were female (86.8%). The majority had been working between seven and nine years (25.4%) and had a university education (54.4%). The majority of the hospital employees were general nurses (85.1%), but most had previously worked in a medical center (61.4%). Finally, the majority was between 31 and 40 years of age (50.0%). Data collection Given the latent character of the variables considered in the study, multi-item Likert-type five-point scales were used (1=strongly disagree and 5=strongly agree). Learning organization (LO). We referred to the concept of a learning organization proposed by O Neil [19] for design variables with

20 items using the Likert-type scale previously described. Internal marketing (IM). We referred to the questionnaire developed by Tsai & Tang [43] and produced 14 items using the same Likert-type scale. Organizational commitment (OC). Organizational commitment was measured by a 15-item survey according to Mowday et al. [27]; the same multi-item Likert-type scale was used. Pilot study First, the content of the questionnaires was developed by consulting the relevant literature. Existing items were then slightly modified to create the initial questionnaires based on the research purpose and specific industry features. Then, three directors or supervisors from the medical center were invited to perform an expert validation of the questionnaire, after which it was further revised. Next, a pilot run of the questionnaire was administered to 50 nurses. The pilot results indicated that all corrected item-total correlations were greater than 0.40 and that all Cronbach s coefficients of the subscales and scales exceeded 0.65; therefore, no item was deleted [44]. Data analysis Descriptive statistics including the mean value (M) and standard deviation (SD) of each item and construct were reported. Exploratory factor analysis was performed to explore the factor structure, and Cronbach s α was used to evaluate the internal consistency of the factors. To examine hypotheses 1 to 3 proposed in this study, Pearson correlation analysis was used to analyze the data. Validity and Reliability of Questionnaires The corrected item-total correlation was used to evaluate the quality of items before performing EFA [44]. Among all three scales, two items (No. 3 and 7) of organizational commitment were deleted due to a low item-total correlation (<0.30), which indicated poor quality. Principal component analysis was used to extract major contributing factors, and Varimax rotation (Orthogonal) was performed to recognize common factors. In addition, factors with eigenvalues greater than 1 were extracted. The factor loading was greater than 0.40 was regarded as practical significant according to the suggestion of Hair et al. [45]. In the initial EFA of learning organization, four factors were extracted. Because the fourth dimension only dominated two items (No. 10 and 12), we decided to delete the dimension and the two items. After performing a second EFA with the remaining 18 items, three factors were extracted. The remaining three factors were named Experience & Structure, Culture, and Information. The EFA result of internal marketing indicated there were two prominent factors: one was named Vision & Development, and the other one was named Human Resource Management. The number of items retained was 14. Four factors of organizational commitment were extracted. Because the fourth dimension only dominated one item (No. 15), this dimension and item were deleted. Three factors were extracted in the second EFA with the remaining 14 items and were named Affective commitment, Normative commitment, and Continuance commitment. All Cronbach s coefficients of sub-construct exceeded 0.65, which is regarded as acceptable for internal consistency [44]. RESULTS Descriptive statistics and correlation analysis The means and standard deviations and bivariate correlations for all observational variables are given in Table 1. The mean values of learning organization ranged from 3.46 and 3.64.The mean values of internal marketing ranged between 3.48 and 3.49, whereas those of organizational commitment ranged between 3.21 and 3.46.

Table 1. Descriptive statistics and correlations for all study variables (N = 114) No. Variables M SD 1 2 3 4 5 6 7 8 9 10 1 Learning Organization(LO) 3.58 0.50-2 Experience & Structure 3.64 0.52.92 *** - 3 Culture 3.46 0.61.88 ***.68 *** - 4 Information 3.62 0.58.82 ***.62 ***.69 *** - 5 Internal Marketing(IM) 3.48 0.50.71 ***.65 ***.66 ***.55 *** - 6 Vision & Development 3.48 0.53.68 ***.63 ***.62 ***.51 ***.92 *** - 7 Human Resource Management 3.49 0.59.60 ***.53 ***.56 ***.48 ***.88 ***.63 *** - 8 Organization Commitment(OC) 3.37 0.41.65 ***.68 ***.54 ***.42 ***.68 ***.60 ***.63 *** - 9 Affective Commitment 3.39 0.55.55 ***.56 ***.45 ***.40 ***.58 ***.52 ***.52 ***.78 *** - 10 Normative Commitment 3.46 0.56.61 ***.64 ***.50 ***.38 ***.62 ***.58 ***.53 ***.81 ***.48 *** - 11 Continuance Commitment 3.21 0.65.19 *.22 *.18.07.21 *.12.27 **.52 ***.02.26 ** Note: * p <.05, * p <.01, *** p <.001. CONCLUSION AND RELEVANCE TO CLINICAL PRACTICE Because of extreme variations in the industrial environment, we must improve internal management skills and sustain competitive advantages. Learning organization and internal marketing are considered useful ways to succeed in this respect. For hospitals that deliver health care services to patients, the competence and skills of employees will affect the quality of service that they provide. Administrators of hospitals must improve employee competence before they can develop employees operative skills. Setting up a learning organization is one of the ways to improve employee competence. As competencies rise, administrators should devote efforts to select and retain outstanding employees and avoid internal recruiting. Internal marketing is an important human resource management activity that can be used to maintain an excellent staff. The results indicate a positive correlation between learning organization and internal marketing and a staff s organizational commitment. We suggest that hospital administrators apply these findings to improve employee competence, increase the centripetal force between organizations and employees and enable them to face the challenges of violent variation. This study involved only the nursing staff of two hospitals as the sample respondents. We will later increase the sample size to improve the extrapolation of results in future studies. REFERENCES References available upon request from Yafang Tsai.