The impact of internal marketing on employee satisfaction in the Vietnamese telecommunication industry

Thi Minh Ngoc Luu; Nguyen Phuong Mai; Thi Huong Dang; Thi Minh Hien Vu Article The impact of internal marketing on employee satisfaction in the Vietnamese telecommunication industry Contemporary Economics Provided in Cooperation with: VIZJA University, Warsaw Suggested Citation: Thi Minh Ngoc Luu; Nguyen Phuong Mai; Thi Huong Dang; Thi Minh Hien Vu (2022) : The impact of internal marketing on employee satisfaction in the Vietnamese telecommunication industry, Contemporary Economics, ISSN 2300-8814, University of Economics and Human Sciences in Warsaw, Warsaw, Vol. 16, Iss. 4, pp. 424-442, https://doi.org/10.5709/ce.1897-9254.492 This Version is available at: https://hdl.handle.net/10419/297615 Standard-Nutzungsbedingungen: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen. Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in EconStor may be saved and copied for your personal and scholarly purposes. You are not to copy documents for public or commercial purposes, to exhibit the documents publicly, to make them publicly available on the internet, or to distribute or otherwise use the documents in public. If the documents have been made available under an Open Content Licence (especially Creative Commons Licences), you may exercise further usage rights as specified in the indicated licence. https://creativecommons.org/licenses/by/4.0/ www.ce.vizja.pl 424 This work is licensed under a Creative Commons Attribution 4.0 International License. Internal marketing (IM) has become essential in service industries since employees are considered critical to excel in customer service due to fierce competition. Previous studies have examined and proved the role of IM in retaining happy and loyal customers in a variety of industries. However, little research on IM was conducted in the telecommunication industry in both developed and developing countries. Thus, this paper aims to test the impact of IM elements on employee satisfaction in the Vietnamese telecommunication industry, one of the fastest-growing industries in recent years. We developed a research model based on the social exchange theory and adopted seven IM elements from previous studies. Data was collected from a sample of 362 employees working in the Vietnamese telecommunication industry through an online questionnaire survey and analyzed in SmartPLS 3.0 using the PLS-SEM technique to test the hypotheses. Our analysis results showed that reward had the strongest impact on employee satisfaction, followed by internal communication and vision. The least influential factor on employee satisfaction was training and development. On the contrary, fairness was identified not to have statistical significance on employee satisfaction. Thus, practical implications for managers in the telecommunication industry were proposed to promote employee satisfaction and engagement with the company by using IM practices. 1. Introduction1. Introduction Remarkably, the fastest-growing industry is the service sector in today’s world, which contributes more to global output and employs more people than any other industry (Deloitte, 2015). As a result, the service industry has become a critical component of a country’s economic growth model. However, service firms are operating in a highly competitive and rapidly changing business environment due to globalization. Consequently, companies in the service sector must transform and innovate their operations to survive in the competition and meet the increasing demands of customers. Among many initiatives to gain a competitive advantage, service companies have realized that improving customer service quality and customer responsiveness would be the distinctive factor. Service companies need to have customer-oriented employees to serve customers better. In such a context of increasingly fierce competition among service companies and higher demand of customers, the internal marketing (IM) concept emerged in the late 1970s. This new The Impact of Internal Marketing on Employee Satisfaction in the Vietnamese Telecommunication Industry ABSTRACT M31, M50. KEY WORDS: JEL Classification: internal marketing, employee satisfaction, human resource management, telecommunication industry, Vietnam. 1 International School, Vietnam National University, Hanoi 2 University of Economics and Business, Vietnam National University Hanoi Correspondence concerning this article should be addressed to: Phuong Mai Nguyen, International School, Vietnam National University, Hanoi, 144 Xuan Thuy Street, Cau Giay District, Hanoi, Vietnam . E-mail: [email protected] Thi Minh Ngoc Luu1 , Phuong Mai Nguyen1 , Thi Huong Dang2 , and Thi Minh Hien Vu2 Primary submission: 04.02.2021 | Final acceptance: 21.03.2022 425 Luu et al. 10.5709/ce.1897-9254.492DOI: CONTEMPORARY ECONOMICS Vol. 16 Issue 4 424-4422022 concept started from the notion that the success of any organization depends on the employees (Dülgeroğlu & Taşkın, 2015), and external customers are satisfied only when being served by satisfied employees (Kotler & Keller, 2000; Schultz, 2002). Thus, IM focuses on employees and treat them as important as customers (Ali, 2016; Grönroos, 1981; Kanyurhi & Akonkwa, 2016). Moreover, IM also aims at promoting a positive relationship with the employees by paying attention to their emotions and formulating a long-term relationship based on their satisfaction and engagement (Roberts-Lombard, 2010). Consequently, engaged employees are willing to devote themselves to the company and lead to the satisfaction and loyalty of external customers. For the above result, IM is considered philosophy or a management method that becomes a critical success factor of the company’s corporate strategies (Roberts-Lombard, 2010). Thus, IM is becoming more attractive and used by companies as a tool to influence employee satisfaction and job engagement (Allada & Rajyalakshmi, 2012; Iliopoulos & Priporas, 2011). Previous studies show that IM practices make employees satisfied, and then the customers are satisfied when being served by happy employees (Al-Makhadmah, 2015; Dülgeroğlu & Taşkın, 2015; Frye et al., 2020; Ismai & Sheriff, 2017; Kameswari & Rajyalakshmi, 2012 Kotler & Keller, 2000; Pitt et al., 1999; Schultz, 2002), and increase firm performance (Al-Makhadmah, 2015; Conduit & Mavondo, 2001; Rafiq & Ahmed, 2000; Sarker & Ashrafi, 2018). Most empirical studies use samples from multiple industries, including banking (Kameswari & Rajyalakshmi, 2012; Ismail & Sheriff, 2017; Kajuria, 2018; Park & Tran, 2018), hospitality (Braimah, 2016; Nart et al., 2019), gaming (Martin & To, 2013), healthcare (Sharifabadi & Bideh, 2016; Wu & Zhao, 2002), microfinance (Kanyurhi & Akonkwa, 2016), retailing (Sarker & Ashrafi, 2018), electronics product manufacturing (Wu et al., 2013). Although many studies have examined the relationship between IM and employee engagement and satisfaction, the focus has been on developed countries rather than transition countries like Vietnam. In Vietnam, there has not been much research on IM. Some studies have addressed the IM issue in manufacturing, such as textile (Dao, 2021) and seafood (Nguyen & Nguyen, 2020). However, few studies have focused on the service industry like hospitality (Hang, 2019). Notably, research on IM in the telecommunication industry has not been adequately addressed. Meanwhile, with more than 95 million people, Vietnam is a low-middle-income country with a high potential for development, particularly for service industries. Among the potential service industries in Vietnam, the telecommunication industry is an important sector that supplies the necessary foundation for developing a modern economy. According to the Ministry of Information and Communications (2020), the telecommunication industry continued to be an important economic sector with total revenue of over USD 5.6 billion in 2019. Vietnamese telecommunication companies’ rapid growth and success are attributed to some factors, including infrastructure investment, new service innovation, and excellent customer services (Ministry of Information & Communication, 2020). Besides, one critical success factor is the dynamic employees. In addition, the large market size of the telecommunication industry appears to be attractive for foreign investors. As a result, competition will become more and more fierce in the coming time. Thus, the quest for excellence in satisfying customer demand requires the Vietnamese telecommunication companies to consider employees as a core factor to improve operational efficiency and customer responsiveness. In such a dynamic and fast-growing service industry like telecommunication, companies need to change their perception of human resource management activities and treat employees as valuable resources in compliance with the IM concept. However, up to date, few empirical studies have investigated how the IM concept is being acquired and applied in Vietnamese telecommunication companies. In this regard, this study aims to fill in the existing research gap by examining the influence of IM elements on employee satisfaction in the telecommunication industry to propose suggestions for IM practices to be further executed. The rest of this paper is as follows. Section 2 discusses the theoretical background of internal marketing and employee satisfaction. Section 3 proposes a research model and methods. Section 4 discusses the findings. Section 5 elaborates the implications, study limitations, and future research directions. Finally, Section 6 concludes the paper. www.ce.vizja.pl 426 The Impact of Internal Marketing on Employee Satisfaction in the Vietnamese Telecommunication Industry This work is licensed under a Creative Commons Attribution 4.0 International License. 2. Theoretical Background and 2. Theoretical Background and Hypothesis DevelopmentHypothesis Development 2.1. Internal Marketing Internal marketing (IM) is not only a concept but also a philosophy, a method to manage a company (George, 1990; Gronroos, 1985; Wilson & Fook, 1990). In the late 1970s, in studies of George (1977) and Berry et al. (1976), IM started with the notion of satisfying the employees and treating them as customers (Azzam, 2016; Berry, 1981; Sasser & Arbeit, 1976). From this basic premise, there have been many definitions of IM. IM is a deliberate effort to overcome organizational resistance to change and align, motivate, and integrate employees toward the effective implementation of corporate and functional strategies (Rafiq & Ahmed, 2000). In recent decades, IM has been used as a tool to raise the quality of services (Mainardes & Cerqueira, 2015). According to the IM concept, employees form an internal market within an organization because they need to be trained, rewarded, and motivated to meet external customers’ expectations (Varey & Lewis, 2000). Studies emphasize that IM should be a priority before external marketing (Kotler & Keller, 2000) because IM is a critical component of employeeoriented marketing strategy. IM begins with selecting the right people, putting them in the right position to become satisfied employees and ready to do their jobs and satisfy the customers. The essence of IM is to consider employees as necessary as external customers by treating them as internal customers (Ali, 2016; Kanyurhi & Akonkwa, 2016). Up to date, IM has changed since its inception, focusing on three main development stages (Khajuria, 2018; Rafiq & Ahmed, 2000). In the early stage, IM started with the idea that satisfied employees bring customer satisfaction in the organization received significant attention, and the core of motivation activities to achieve employee satisfaction is the work (Rafiq & Ahmed, 2000). Therefore, IM sees the main business as internal products (Ewing & Caruana, 1999). These internal products must be attractive, advanced, and motivated to satisfy the employees’ desires. The next stage focuses on increasing customeroriented behaviors. IM focuses on motivating employees and satisfying employees’ needs to engage in appropriate customer behaviors and work better (Grönroos, 1985). Accordingly, Grönroos (1985) proposed that every employee in the organization is a supplier and an internal customer and that internal suppliers must meet the needs of internal customers. In the third stage, IM is seen as an essential tool in operating the organization’s strategy. In this regard, IM is the primary tool to promote the implementation of external marketing strategy (Piercy & Morgan, 1991). The purpose of IM is to motivate internal customers from which external customers will be satisfied. Therefore, IM aims to align with the organization’s efforts to provide better services to customers (Cooper & Cronin, 2000). Moreover, it makes employees realize the organization’s mission and goals (Joseph, 1996) and be aware of the importance of customer satisfaction (Tsai & Tang, 2008). As a result, they will cooperate with the marketing department to provide excellent customer service. Therefore, IM is seen as an extended function of traditional marketing-mix towards the employees in the organization and treat them as customers to increase business efficiency based on improving relationships within the organization (Khajuria, 2018). 2.2. Employee Satisfaction Employee satisfaction has been mentioned as one of the most complex issues managers today face (Al-Hawary et al., 2013). The concept of employee satisfaction is often referred to as job satisfaction with many different approaches. According to Herzberg et al. (1966), employee satisfaction is the level of job enjoyment or job maintenance through their cognition (positive, negative, or both) of different aspects of the job that affect individuals. Employee satisfaction is also considered a pleasant or positive emotional state resulting from a job performance evaluation or experience (Locke, 1976). It is emphasized that job satisfaction is an essential factor that leads to recognition, income, promotion, and other goals, which satisfy employees (Kaliski, 2007). Thus, job satisfaction is the perception of real value that an employee receives compared to their expectation from the job. Employee satisfaction also leads to higher productivity, higher efficiency, and good organizational performance (Aziri, 2011). In addition, higher 427 Luu et al. 10.5709/ce.1897-9254.492DOI: CONTEMPORARY ECONOMICS Vol. 16 Issue 4 424-4422022 employee satisfaction levels improve morale and reduce employee turnover (Dole & Schroeder, 2001). As a result, an organization should put employee satisfaction as the top priority and think of it as a vital factor in organizational success. Rewards, recognition, career advancement, promotion opportunities, work environment, leadership support, relationship with peers, empowerment, delegation, internal communication, clear division of work, fairness, decentralized decision making, and human resource development are factors that affect employee satisfaction (Ahmad et al., 2012; Ali, 2016; Braimah, 2016). 2.3. Social Exchange Theory: Linking Internal Marketing and Employee Satisfaction According to George and Gronroos (1989), IM integrates human resource management with marketing. The concept of exchange is at the heart of marketing science, and it is crucial in the relationship between employees and their employers. As a result, the purpose of IM is to meet the requirements of employees through fostering amicable interactions between employees and businesses. These exchanges are congruent with the goal of human resource management to retain satisfied and loyal employees. Therefore, social exchange theory (SET) is considered the foundation for studies on the link between IM and employee behaviors. SET is one of the most often used conceptual paradigms in studying workplace behavior. SET focuses on the exchange relationship that develops when one party initiates a measure to benefit another party. The other party responds by paying back in the form of a measure valued in the eyes of the initiator of the process. SET dates back to the 1920s bridging disciplines such as anthropology, social psychology, and sociology (Emerson, 1976). Even though numerous perspectives on social exchange have arisen, theorists agree that social exchange entails a sequence of encounters that result in obligations (Emerson, 1976; Cropanzano & Mitchell, 2005). From the SET perspective, employees who develop high-quality exchanges with their organizations reciprocate by displaying positive attitudes and behaviors targeted at the organization, including job satisfaction, commitment, organization-directed citizenship behaviors, and staying with the organization for a more extended period. SET has been adopted in studies on IM to explain the influence of IM elements on employee behaviors. For example, Heskett et al. (1994) introduced an internal marketing model, reflecting a chain of reaction that began with high-quality internal support services and policies and gradually moved through the satisfaction and loyalty of staff to the high service quality resulting in customer satisfaction and loyalty. Studies showed that the ultimate goals to satisfy the customers and to improve the organizational performance could be achieved once employees are satisfied with the internal marketing program (Conduit & Mavondo, 2001; Ismail & Sheriff, 2017; Pitt et al., 1999; Rafiq & Ahmed, 2000; Sarker & Ashrafi, 2018; Schultz, 2002). Implementing IM practices will help to attract and retain talents, motivate employees, and foster the relationship among employees in the company (Nguyen & Nguyen, 2020, Tang et al., 2017). Among IM practices, human resource policies, particularly training and development, play a central role (Dao, 2021) and often help to reduce the turnover rate (López-Cabarcos et al., 2015). Some studies examine the direct relationship between IM pratices and employee job satisfaction (Gounaris, 2008; Kamesswari & Rajyalakshmi, 2012; Pelit et al., 2011). Several IM activities that affect employee satisfaction may include skill training and development, job enrichment, leadership support, and peer recognition (Al-Makhadmah, 2015). Furthermore, employee job satisfaction is also influenced by many other IM factors such as salary, autonomy, communication, and organizational commitment. In the study of the impact of IM factors on job motivation and job satisfaction in retail stores, findings show that working conditions and hours, work environment, superiors’ support, and peers’ attitudes have a high positive impact on employee satisfaction and work motivation (Kameswari & Rajyalakshmi, 2012). Similarly, a positive relationship between IM activities, including training, recognition, autonomy, communication, and employee satisfaction, has been confirmed in commercial banks in India (Allada & Rajyalakshmi, 2012) and Jordan (Al-Hawary et al., 2013). Besides, many other studies emphasize that the following IM elements, including equity, service quality, organization’s mission, leadership, internal commun i- www.ce.vizja.pl 428 The Impact of Internal Marketing on Employee Satisfaction in the Vietnamese Telecommunication Industry This work is licensed under a Creative Commons Attribution 4.0 International License. cation influencing employee satisfaction (Gounaris, 2008), are the key factors to retain talents (Gronroos, 1990). It is also believed that top management commitment affects the deployment of internal marketing practices. For instance, To et al. (2015) argued that formal internal marketing and informal internal marketing positively related to employees’ satisfaction and attitudes. Similarly, Sharifabadi and Bideh (2016) examined the effect of management commitment to internal marketing on employees’ satisfaction in the healthcare industry. The results showed no significant relationship between internal marketing and employees’ satisfaction. Recently, Frye et al. (2020) examined the elements of IM, including empowerment, work environment, manager and staff relationship, and payment, on the job satisfaction, commitment, and intention to continue working of the generation Y in the hospitality industry. Their research results showed that IM positively influenced the job satisfaction of generation Y employees in hotels. Particularly, empowerment has the largest impact. A similar study in the hospitality industry of Vietnam by Hang (2019) also confirmed the positive effect of reward on employee satisfaction. Furthermore, Hang (2019) insisted that training activity is essential to satisfy the employees and should be designed for both freshmen and experienced employees of the company. Fairness in compensation and clear communication of incentive policies also influence the employees’ job satisfaction. Based on the survey data of 403 employees working in seafood processing companies in Vietnam, Nguyen and Nguyen (2020) revealed that the compensation system, internal communication, training and development, leadership style, and organizational culture positively affect employees’ organizational commitment. Nguyen and Nguyen (2020) suggested that IM tools be regularly innovated to take advantage of IM in retaining competent employees. 2.4. Research Model and Hypotheses From the existing literature review, we adopted and adapted seven elements of IM in our study which are (a) vision; (b) training and development; (c) reward; (d) work environment; (e) empowerment; (f) internal communication; (g) fairness. The research model in this study was presented in Figure 1. As demonstrated in Figure 1, we aimed to examine the impact of IM elements on employee satisfaction. Thus, our hypotheses were formulated and elaborated as follows. Figure 1 Research Model 429 Luu et al. 10.5709/ce.1897-9254.492DOI: CONTEMPORARY ECONOMICS Vol. 16 Issue 4 424-4422022 2.4.1. Vision Vision is the long-term goal resulting from the strategic formulation process, then is shared with the employees and integrated into the organization’s training activities (Foreman & Money, 1995). Therefore, it is considered one of three IM factors (Foreman & Money, 1995). Some studies have argued that employees are more satisfied when they understand the company’s vision and are motivated toward achieving that vision. For example, Ismail & Sheriff (2016) confirmed the positive influence of vision on employee satisfaction. Thus, we also hypothesized the positive impact of vision on employee satisfaction in this study as follows: H1: Vision has a positive impact on employee satisfaction. 2.4.2. Training and Development Training and development is a term used to describe a company’s systematic efforts to help staff develop their technical and behavioral abilities, foster a good attitude, and adapt to various challenging conditions to accomplish their job responsibilities (Huang & Chen, 2013). The training program is described as a way to release the anxiety of the employees when they lack the necessary skills and knowledge for the job (Sahinidis & Bouris, 2008). Training and development enhance knowledge and skills to ensure the high performance of employees (Ali, 2016; Sahinidis & Bouris, 2008). Employee training and development can be considered a long-term strategic investment of an enterprise (Foreman & Money, 1995). It can also be part of the IM program that has positively influenced employees’ performance and satisfaction (Ismail & Sheriff, 2017; Poor et al., 2013) and led to customer satisfaction (Martey, 2014; Long & OweeKowang, 2015). Moreover, training and development are also a part of activities that stimulates the improvement of IM and organization’s service quality. Nart et al. (2019) confirmed that training as an element of IM was positively related to employees’ customer-oriented behaviors as they had genuine emotions when being treated well. Therefore, we proposed the second hypothesis: H2: Training and development have a positive impact on employee satisfaction. 2.4.3. Reward A reward is the benefits, including financial and non-financial ones that employees receive from their job (Govindarajulu & Daily, 2004). The high reward will motivate employees to do a better job and be more committed to the organization (ELSamen & Alshurideh, 2012). Moreover, if the reward is based on the employee’s performance, it will satisfy them and create their commitment and belief in the managers as well as a positive work environment (Huseman & Hatfield, 1990; McMullan & Gilmore, 2008) in a study of internal marketing, also confirmed the positive of reward on job satisfaction. Thus, the third hypothesis is raised in this study: H3: Reward has a positive impact on employee satisfaction. 2.4.4. Work Environment In research on the impact of IM on employee turnover, Budhwar et al. (2009) showed that a monotonous job, stressful work environment, unfavorable working conditions, and lack of career development opportunities are associated with the increase of employee turnover rate. On the contrary, good working conditions were positively inter-correlated with job satisfaction in the construction industry (Sang et al., 2009) or banking (Kameswari & Rajyalakshmi, 2012). Moreover, in the healthcare industry, it is discussed that the workplace environment provided nurses with greater access to information, support, and opportunities to learn and grow over time and the experience of higher levels of job satisfaction (Chang & Chang, 2007; Laschinger et al., 2004). Thus, the following hypothesis was proposed: H4: Work environment has a positive impact on employee satisfaction. 2.4.5. Empowerment Empowerment is one of the IM factors affecting employee satisfaction (Ahmed & Rafiq, 2003; Ahmed et al., 2003; Ali, 2016). Empowerment is defined as improving self-efficacy and enabling employees to make decisions in daily work situations www.ce.vizja.pl 430 The Impact of Internal Marketing on Employee Satisfaction in the Vietnamese Telecommunication Industry This work is licensed under a Creative Commons Attribution 4.0 International License. (Ali, 2016; Bowen & Lawler III, 2006). Some studies examined the impact of factors on employee satisfaction concluded that empowerment, as well as training, culture, and reward, are positively related to employee satisfaction (Baird & Wang, 2010; Ali, 2016, Kanyurhi & Akonkwa, 2016). The same positive result was also found in an empirical study of Pelit et al. (2011) in Turkish five-star hotels. Consequently, we also assumed the positive impact of empowerment on employee satisfaction as follows: H5: Empowerment has a positive impact on employee satisfaction. 2.4.6. Empowerment Internal communication is defined as a form of communication between members of an organization, including the relationship between managers and managers, managers and employees, employees, and employees (Lovelock & Wright, 2001). Internal communication refers to sharing ideas to contribute to the growth of an organization (Gilmore & Carson, 1995). Internal communication is considered an essential element in creating harmony between employee attitudes and organizational goals (Grönroos, 1990). Internal communication also refers to a company’s systematic efforts to share information with employees about the organization’s key priorities and communicate all the relevant materials to employees (Huang et al., 2019). In an organization, if people cannot communicate, there will be no coordination between functions and jobs (Al-Hawary et al., 2013). Therefore, IM is the core means of internal communication. Good internal communication will lead to a high level of employee satisfaction that creates trust, respect, and loyalty of employees, helping the organization to achieve its goals (Lovelock & Wright, 2001). Internal communication is also an essential part of IM that nurtures mutual understanding among organization’s members as well as a critical condition to the harmony between the attitude, behaviour, and goals of the organization (Ahmed & Rafiq, 2003; Ahmed et al., 2003), and eventually would lead to employee satisfaction and engagement (Nart et al., 2019). Thus, the following hypothesis is developed: H¬6: Internal communication has a positive impact on employee satisfaction. 2.4.7. Fairness Yang and Coates (2010), in their research on internal marketing, have shown that fairness is one of the important factors in building the role of managers. Fairness is shown in the way managers treat employees to perceive equal treatment (Yang & Coates, 2010). Managers need to meet and discuss regularly with employees to listen to their needs, requests, complaints, and recommendations to address their needs equitably (Braimah, 2016; Roberts-Lombard, 2010). Creating fairness among employees through equal reward with positive interaction and sharing the vision will create employee satisfaction (Awwad & Agti, 2011). Consequently, fairness will positively influence employee satisfaction (Braimah, 2016). Inequity may create poor work results and indifference of employees (Roberts-Lombard, 2010). Therefore, fairness is considered a tool of internal marketing, which will reduce doubts among employees and create a pleasant work environment. In this study, we propose the seventh hypothesis as follows: H7: Fairness has a positive impact on employee satisfaction. 3. Methodology3. Methodology 3.1. Measurement This study used a questionnaire to collect data from the respondents. The questionnaire had two parts. Part 1 included 40 items of seven IM elements and the measurement scales of employee satisfaction. Part 2 collected respondents’ demographic information. The measurement of this study includes seven factors of internal marketing that are adopted and adapted from previous studies. Two measurements which are vision (5 items) and reward (5 items) were adopted from Ismail and Sheriff (2016), Foreman and Money (1995). Training and development (5 items), work environment (5 items), empowerment (5 items), internal communication (5 items) were adopted from Ismail and Sheriff (2017), Huang and Chen (2019), Braimah (2016), Kameswari and Rajyalakshmi (2012) and Frye et al. (2020). Fairness with five items is adopted from 431 Luu et al. 10.5709/ce.1897-9254.492DOI: CONTEMPORARY ECONOMICS Vol. 16 Issue 4 424-4422022 Braimah (2016). Last but not least, employee satisfaction (5 items) was developed by Kameswari and Rajyalakshmi (2012), Sang et al. (2009) and Frye et al. (2020), and adapted in this study. Details of the measurements with sample items were presented in the Appendix. The measurement was evaluated using a Likert-five-point scale from 1 = “totally disagree” to 5 = “totally agree”. In this study, we adopted the measurement scales from previous studies in a various industries which are hospitality, banking, healthcare and retailing. We translated the measurement items into Vietnamese to conduct the survey in telecommunication industry. A slight change was made in terms of language expressions with help of two linguistics experts to make it easier for potential respondents to comprehend. As we adopted the measurements, the initial questionnaire was tested with a small pilot sample of 20 employees in one branch of a telecommunication company in Hanoi. The pilot test showed that the questionnaire was easy to read and understand. Thus, the initial questionnaire remained unchanged. Then the official survey followed. To avoid the common method bias problem in data collection process, we strictly treated each response with complete confidentiality. Moreover, we use the reverse question items in the questionnaire and mix the measurement items to avoid the careless answers of respondents. The reverse questions will be recoded before the data are put into the SPSS software. 3.2. Sampling and Data Collection The official questionnaire was designed on Google Form and sent to the survey participants working in Vietnamese telecommunication companies. Viettel, VinaPhone and MobiFone are the three largest companies with approximately 79,000 employees in the telecommunication industry. We chose these three companies to study for two reasons. Firstly, these companies are large enough to represent the Vietnamese telecommunication industry as they hold 97% of the total market share (Ministry of Information and Communications, 2020). Secondly, they have branches nationwide and have the impetus for investment in IM to strengthen their competitive advantages. The top managers of these telecommunication companies approved our research team to conduct the questionnaire survey. Before the survey, the companies’ human resource department checked the contents of the questionnaire and provided the email list of potential participants upon their agreement to take part in the survey. As a result, email address of 3,100 potential respondents was collected from these telecommunication companies. We sent an email to the potential respondents, then received 362 valid responses after three months, reaching the response rate of 11.7%. The respondents are working in branches of selected companies in Hanoi, Da Nang city, and Ho Chi Minh city, which are the three most crowded cities in Vietnam and where most customers are targeted. In the sample, 56% is male, and 44% is female. The age distribution in the sample is 40% for the group from 30 to 40 years old, 31% for the group from 23 to 30 years old, and 29% for the over 40-year-old group. 3 .3. Data Analysis Strategy The reliability and validity of the measurements were examined in SmartPLS 3.0 software. Cronbach’s alpha was the criterion for the reliability test. The validity of the measures were evaluated based on the Variance Composite reliability (CR), Variance inflation factor (VIF), and Average variance extracted (AVE). The influence of IM elements on employee satisfaction was assessed using the partial least squares structural equation path modeling (PLS-SEM) technique. We chose PLS-SEM for analysis for several reasons. Firstly, PLS-SEM enables researchers to estimate complex models with many constructs, indicator variables, and structural paths without imposing distributional assumptions on the data. Secondly, PLS-SEM is a causalpredictive approach to SEM that emphasizes prediction in estimating statistical models, whose structure is designed to provide causal explanations. Third, PLS-SEM is suitable for small sample size. In our study, our sample is very small as the population of e mployees in the Vietnamese telecommunication industry is over 79,000 while our sample include 362 employees. Thus, PLS-SEM is most suitable for our study. 4. Results and discussion4. Results and discussion 4.1. Commom Method Bias, Reliability, and Validity Test Results The reliability test was run, and seven items could not meet the cut-off value, then they were removed from the measurement scales, which are EMP3, FAI2, www.ce.vizja.pl 438 The Impact of Internal Marketing on Employee Satisfaction in the Vietnamese Telecommunication Industry This work is licensed under a Creative Commons Attribution 4.0 International License. Commerce and Management, 4(4), 380-393. Baird, K., & Wang, H. (2010). Employee empowerment: Extent of adoption and influential factors. Personnel Review, 3(4), 77-86. doi: https://doi. org/10.1108/00483481011064154 Berry, L. L. (1981). The employee as customer. Journal of Retail Banking, 3(1), 33-40. https://doi.org/10.1108/ EUM0000000001240 Berry, L. L., Hensel, J. S., & Burke, M. C. (1976). Improving retailer capability for effective consumerism response. Journal of Retailing, 52(3), 3-14. https://doi.org/10.2307/1991699 Bowen, D. E., & Lawler III, E. E. (2006). The empowerment of service workers: What, why, how, and when. Managing Innovation and Change, 33, 155-169. Braimah, M. (2016). Internal marketing and employee commitment in the hospitality industry. African Journal of Hospitality, Tourism and Leisure, 5(2), 1-22. Budhwar, P. S., Varma, A., Malhotra, N., & Mukherjee, A. (2009). Insights into the Indian call centre industry: can internal marketing help tackle high employee turnover? Journal of Services Marketing, 23(5), 351362.: https://doi.org/10.1108/08876040910973459 Chang, C. S., & Chang, H. H. (2007). Effects of internal marketing on nurse job satisfaction and organizational commitment: Example of medical centers in southern Taiwan. The Journal of Nursing Research, 15(4), 265-274. https://doi. org/10.1097/01.jnr.0000387623.02931.a3 Conduit, J., & Mavondo, F. T. (2001). How critical is internal customer orientation to market orientation? Journal of Business Research, 51(1), 1124. https://doi.org/10.1016/S0148-2963(99)00044-2 Cooper, J., & Cronin, J. J. (2000). Internal marketing: A competitive strategy for the long-term care industry. Journal of Business Research, 48(3), 177-181. https:// doi.org/10.1016/S0148-2963(98)00084-8 Cropanzano, R., & Mitchell, M. S. (2005). Social exchange theory: An interdisciplinary review. Journal of Management, 31(6), 874-900. https://doi.org/10.1177%2F0149206305279602 Dao. T. H (2021). Building a research framework of internal marketing in textile and garment companies. Economy and Forecast Review, 3, 80-82. Deloitte. (2015, April 4). Global Human Capital Trends 2015. Leading in the new world of work. https://documents.dupressdeloitte.com/HCTrends2015 Dole, C., & Schroeder, R. G. (2001). The impact of various factors on the personality, job satisfaction and turnover intentions of professional accountants. Managerial Auditing Journal, 16(4), 234-245. doi: https://doi.org/10.1108/02686900110389188 Dülgeroğlu, İ, & Taşkın, Ç. (2015). Internal Marketing in public sector and its effect on job satisfaction. Ejovoc (Electronic Journal of Vocational Colleges), 5(2), 1-6. https://dergipark.org.tr/en/pub/ejovoc/ issue/45168/565500 ELSamen, A. A., & Alshurideh, M. (2012). The impact of internal marketing on internal service quality: A case study in a Jordanian pharmaceutical company. International Journal of Business and Management, 7(19), 84-95. https://doi.org/10.5539/ijbm. v7n19p84 Emerson, R. (1976). Social exchange theory. Annual Review of Sociology, 2, 335-362. Ewing, M. T., & Caruana, A. (1999). An internal marketing approach to public sector management. International Journal of Public Sector Management, 12(1), 17-29. https://doi. org/10.1108/09513559910262652 Foreman, S. K., & Money, A. H. (1995). Internal marketing: concepts, measurement and application. Journal of Marketing Management, 11(8), 755-768. doi: https://doi.org/10.1080/026725 7X.1995.9964388 Frye, W. D., Kang, S., Huh, C., & Lee, M. J. M. (2020). What factors influence Generation Y’s employee retention in the hospitality industry? An internal marketing approach. International Journal of Hospitality Management,85. https://doi. org/10.1016/j.ijhm.2019.102352 George, W. R. (1977). Retailing of services-challenging future. Journal of Retailing, 53(3), 85-98. George, W. R. (1990). Internal marketing and organizational behavior: A partnership in developing customer-conscious employees at every level. Journal of Business Research, 20(1), 63-70. https://doi.org/10.1016/0148-2963(90)90043-D George, W. R., & Grönroos, C. (1989). Developing customer-conscious employees at every level: internal marketing. In C. A. & Friedman M. L. (Eds.), Handbook of Services Marketing (pp. 29-37). AMACOM, New York. Gilmore, A., & Carson, D. (1995). Managing and marketing to internal customers. In B. J. B. Glynn W.J. (Eds.), Understanding Services Management (pp. 295-321). John Wiley & Sons Ltd. Gounaris, S. (2008). Antecedents of internal marketing practice: some preliminary empirical evidence. International Journal of Service Industry Management, 19(3), 400-434. https://doi. org/10.1108/09564230810875039 439 Luu et al. 10.5709/ce.1897-9254.492DOI: CONTEMPORARY ECONOMICS Vol. 16 Issue 4 424-4422022 Govindarajulu, N., & Daily, B. F. (2004). Motivating employees for environmental improvement. Industrial Management & Data Systems, 104(4), 364372. https://doi.org/10.1108/02635570410530775 Grönroos, C. (1981). Internal marketing–an integral part of marketing theory. Marketing of Services, 236, 238. Grönroos, C. (1985). Internal marketing-theory and practice. Services Marketing in a Changing Environment, American Marketing Association, Chicago, IL, 41(7). Grönroos, C. (1990). Relationship approach to marketing in service contexts: The marketing and organizational behavior interface. Journal of Business Research, 20(1), 3-11. doi: https://doi. org/10.1016/0148-2963(90)90037-E Hang, L. C. P. (2019). Impact of internal marketing and market orientation on organizational commitment in hotel industry in Ho Chi Minh city. Industry and Trade Magazine, 12 (11/2019), 154-158. Hernandez-Diaz, A., Calderon-Abreu, T., Amador-Dumois, M., & Cordova-Claudio, M. (2017). Internal marketing and customer-contact employees’ attitudinal outcomes.Academia Revista Latinoamericana de Administración. 30(1), 124-143. https://doi. org/10.1108/ARLA-08-2015-0190 Herzberg, F., Snyderman, B. B., & Mausner, B. (1966). The motivation to work: 2d Ed: J. Wiley. Heskett, J. L., Jones, T. O., Loveman, G. W., Sasser, W. E., & Schlesinger, L. A. (1994). Putting the serviceprofit chain to work. Harvard Business Review, 72(2), 164-174. Huang, M., & Chen, M. Y. (2013). Internal marketing, customer orientation, and organizational commitment: Moderating effects of work status. Psychological Reports, 113(1), 180-198. https://doi. org/10.24662F01.11.PR0.113x18z8 Huang, Y. T. (2020). Internal marketing and internal customer: A review, reconceptualization, and extension. Journal of Relationship Marketing, 19(3), 165-181. https://doi.org/10.1080/15332667.2019.1 664873 Huang, Y. T., Rundle-Thiele, S., & Chen, Y. H. (2019). Extending understanding of the internal marketing practice and employee satisfaction relationship: A budget Chinese airline empirical examination.Journal of Vacation Marketing,25(1), 88-98. https://doi. org/10.1177%2F1356766718757270 Huseman, R. C., & Hatfield, J. D. (1990). Equity theory and the managerial matrix. Training & Development Journal, 44(4), 98-103. Iliopoulos, E., & Priporas, C.-V. (2011). The effect of internal marketing on job satisfaction in health services: a pilot study in public hospitals in Northern Greece. BMC Health Services Research, 11(1), 261. https://doi.org/10.1186/1472-6963-11261 Ismail, W., & Sheriff, N. M. (2016). Impact of internal marketing on job satisfaction among bank employees in Yemen. Journal of Marketing, 4(2), 210-227. Ismail, W., & Sheriff, N. M. (2017). The effect of internal marketing on organizational commitment: an empirical study in banking sector in Yemen. Polish Journal of Management Studies, 15(1), 88-98. http:// dx.doi.org/10.17512/pjms.2017.15.1.09 Joseph, W. B. (1996). Internal marketing builds service quality. Journal of Health Care Marketing, 16(1), 54-59. Kaliski, B. S. (2007). Encyclopedia of business and finance (1ed.): Macmillan. Kameswari, A. V., & Rajyalakshmi, N. (2012). Role of internal marketing in job satisfaction of employees in state bank of India. In Ninth AIMS International Conference on Management (Vol. 2, No. 7, pp. 4755). Kang, Y. H., & Na, K. (2020). The effectiveness of employee training on firm performance: Evidence from Vietnam. International Journal of Business and Social Science, 11(2), 13-24. https://doi. org/10.30845/ijbss.v11n2p2 Kanyurhi, E. B., & Akonkwa, D. B. M. (2016). Internal marketing, employee job satisfaction, and perceived organizational performance in microfinance institutions. International Journal of Bank Marketing, 34(5), 773-796. https://doi.org/10.1108/ IJBM-06-2015-0083 Khajuria, P. (2018). Impact of internal marketing practices on employee satisfaction: A case study of State Bank of India. International Journal of Advanced Scientific Research and Management, 3(8), 221-228. Kotler, P., & Keller, K. L. (2000). Marketing management. Prentice-Hall.. Locke, E. A. (1976). The nature and causes of job satisfaction. Handbook of industrial and organizational psychology. Chicago: RandMc Narlly, 2(5), 360-580. Long, C. S., & OweeKowang, T. (2015). Improving organizational performance through training function. In Deyao Tan (Ed), Engineering Technology, Engineering Education and Engineering Management (pp. 119-122). CRC Press. Taylor & Francis Group. www.ce.vizja.pl 440 The Impact of Internal Marketing on Employee Satisfaction in the Vietnamese Telecommunication Industry This work is licensed under a Creative Commons Attribution 4.0 International License. López-Cabarcos, M. Á., Pinho, A. I. M., & Vázquez-Rodríguez, P. (2015). The Influence of Organizational Justice and Job Satisfaction on Organizational Commitment in Portugal’s Hotel Industry. Cornell Hospitality Quarterly, 56(3), 258-272. https://doi. org/10.1177/1938965514545680 Lovelock, C., & Wright, L. (2001). Principles of service marketing and management: Prentice Hall. Martey, E. M. (2014). The impact of internal marketing on employee performance in the insurance industry of Ghana. International Journal of Research, 1(7), 1175-1189. Martin Jr, E. F., & To, W.M. (2013). Effect of internal market orientation on organizational performance: The case of Macao’s gaming industry. International Journal of Hospitality and Tourism Administration, 14, 233–254. https://doi.org/10.1080/1 5256480.2013.809980 McMullan, R., & Gilmore, A. (2008). Customer loyalty: an empirical study. European Journal of Marketing, 42(9/10), 1084-1094. https://doi. org/10.1108/03090560810891154 Ministry of Information & Communication (2020). White book of Vietnam information and communication technology 2020. Information and Communication Publishing House, Vietnam. Ministry of Information & Communication (2021). The role of telecommunication companies in economy recovery post COVID-19. Information and Communication Journal, 3, 25-30. Nart, S., Sututemiz, N., Nart, S., & Karatepe, O. M. (2019). Internal marketing practices, genuine emotions and their effects on hotel employees’ customer-oriented behaviors.Journal of Human Resources in Hospitality & Tourism,18(1), 47-70. https://doi. org/10.1080/15332845.2019.1526509 Narteh, B. (2012). Internal marketing and employee commitment: Evidence from the Ghanaian banking industry. Journal of Financial Services Marketing, 17(4), 284-300. https://doi.org/10.1057/fsm.2012.22 Nazemetz. P., & Ruch, W. (2012). An Unlikely Partnership: When HR and Marketing Join Forces. Harvard Business Review. Nguyen, T. N. P., & Nguyen, M. H. (2020). Internal marketing factors affecting employee organizational engagement in seafood enterprises in Tien Giang province. Industry and Trade Magazine, 6(4/2020), 230237. Park, J. H., & Tran, T. B. H. (2018). Internal marketing, employee customer‐oriented behaviors, and customer behavioral responses.Psychology & Marketing, 35(6), 412-426. https://doi.org/10.1002/ mar.21095 Pelit, E., Öztürk, Y., & Arslantürk, Y. (2011). The effects of employee empowerment on employee job satisfaction. International Journal of Contemporary Hospitality Management, 23(6), 784-802.: https:// doi.org/10.1108/09596111111153475 Piercy, N., & Morgan, N. (1991). Internal marketing— The missing half of the marketing programme. Long Range Planning, 24(2), 82-93. doi: https://doi. org/10.1016/0024-6301(91)90083-Z Pitt, M., Bruwer, J., Nel, D., & Berthon, P. (1999). A framework for research in internal marketing and the study of service quality: some propositions. Management Research News, 22(7), 1-11. https:// doi.org/10.1108/01409179910781715 Poor, E. R., Akhlaq, E. M., & Akhavan, M. R. (2013). Evaluate the effect of internal marketing on employees behavior. International Journal of Research and Reviews in Applied Sciences, 16(1), 134-146. Rafiq, M., & Ahmed, P. K. (2000). Advances in the internal marketing concept: definition, synthesis and extension. Journal of Services Marketing, 14(6), 449462. https://doi.org/10.1108/08876040010347589 Roberts-Lombard, M. (2010). Employees as customers An internal marketing study of the Avis car rental group in South Africa. African Journal of Business Management, 4(4), 362-372. https://doi. org/10.5897/AJBM.9000254 Sahinidis, A. G., & Bouris, J. (2008). Employee perceived training effectiveness relationship to employee attitudes. Journal of European Industrial Training, 32(1), 63-76. https://doi. org/10.1108/03090590810846575 Salamoura, M., Ntamposis, V., & Gaki, E. (2020). The Implementation of Internal Marketing in Public Sector Organizations: The Case of Job Satisfaction at Chios Police Department. InStrategic Innovative Marketing and Tourism (pp. 861‐870). Springer. https://doi.org/10.1007/978-3-030-36126-6_95 Sang, K. J., Ison, S. G., & Dainty, A. R. (2009). The job satisfaction of UK architects and relationships with work‐life balance and turnover intentions. Engineering, Construction and Architectural Management. 16(3). 288-300. doi: https://doi.org/10.1108/09699980910951681 Sarangal, K. R., & Nargota, M. (2017). Internal Marketing, Employee Job Satisfaction and Employee Engagement A Case of J &K Bank.Pacific Business Review International Journal,10(4), 80-89. Sarker, M. A. R., & Ashrafi, D. M. (2018). The 441 Luu et al. 10.5709/ce.1897-9254.492DOI: CONTEMPORARY ECONOMICS Vol. 16 Issue 4 424-4422022 relationship between internal marketing and employee job satisfaction: A study from retail shops in Bangladesh. Journal of Business and Retail Management Research, 12(3), 149-159. Sasser, W. E., & Arbeit, S. P. (1976). Selling jobs in the service sector. Business Horizons, 19(3), 61-65. https://doi.org/10.1016/0007-6813(76)90053-7 Schultz, D. E. (2002). Study internal marketing for better impact. Marketing News, 36(21), 8-10. Sharifabadi, A. M., and Bideh, S. S., 2016. Effect of management commitment to internal marketing on employees’ satisfaction. A case study: Iman Jafar Sadegh hospital nurses. Asian Academy of Management Journal, Vol. 21, No. 2, 135–152, 2016 Tang, A. D., Chang, M. L., & Cheng, C. F. (2017). Enhancing knowledge sharing from self-initiated expatriates in Vietnam: the role of internal marketing and work-role adjustment in an emerging economy.Asia Pacific Business Review,23(5), 677-696. https://doi. org/10.1080/13602381.2017.1366404 Thang, N. N., & Quang, T. (2011). The impact of training on firm performance in a transitional economy: Evidence from Vietnam.Research & Practice in Human Resource Management,19(1), 11-24. To, W. M., Martin Jr, E. F., & Yu, B. T. W. (2015). Effect of management commitment to internal marketing on employee work attitude. International Journal of Hospitality Management, 45, 14–21. https://doi. org/10.1016/j.ijhm.2014.11.002 Tsai, Y., & Tang, T.-W. (2008). How to improve service quality: Internal marketing as a determining factor. Total Quality Management, 19(11), 1117-1126. https://doi.org/10.1080/14783360802323479 Varey, R. J., & Lewis, B. R. (2000). Internal marketing: directions for management: Psychology Press. Wilson, R., & Fook, N. (1990). Improving marketing orientation. Marketing Business, 11, 22-30. Wu, S. J., & Zhao, B. X. (2002). The relationship between internal marketing and customer oriented behavior: The evidence from Kaohsiung Municipal Hospital. Journal of Human Resource Management, 2(1), 99117. Wu, W. Y., Tsai, C. C., & Fu, C. S. (2013). The relationships among internal marketing, job satisfaction, relationship marketing, customer orientation, and organizational performance: An empirical study of TFT‐LCD companies in Taiwan.Human Factors and Ergonomics in Manufacturing & Service Industries, 23(5), 436-449. https://doi.org/10.1002/ hfm.20329 Yang, H., & Coates, N. (2010). Internal marketing: service quality in leisure services. Marketing Intelligence & Planning, 28(6), 754-769. https://doi. org/10.1108/02634501011078147 Appendix Measurements Construct Number of items Code Item Source Vision (VIS) 5 VIS1 My company offers employees a vision that they can believe in. Ismail & Sheriff (2016); Foreman & Money (1995) VIS2 My company’s vision is well communicated to employees. VIS3 My company has a clear vision. VIS4 My company has a binding plan to accomplish the goals. VIS5 My company prepares employees to perform well toward achieving the company’s vision. Training and Development (DEV) 5DEV1 My company constantly trains staff. Ismail & Sheriff (2017); Huang & Chen (2019) DEV2 Skills and knowledge development happens as an ongoing process in my company. DEV3 My company encourage staff to train themselves. DEV4 My company ensures training is linked to roles played by staff. DEV5 My company supports me to achieve my career goals. www.ce.vizja.pl 442 The Impact of Internal Marketing on Employee Satisfaction in the Vietnamese Telecommunication Industry This work is licensed under a Creative Commons Attribution 4.0 International License. Measurements (Continued) Construct Number of items Code Item Source Reward (REW) 5 REW1 Our performance measurement and reward systems encourage employees to work together. Ismail & Sheriff (2016); Foreman & Money (1995) REW2 My company measures and rewards employee performance that contributes most to the company’s vision. REW3 In my company, those employees who provide excellent service are rewarded for their efforts. REW4 My managers praise me in front of others. REW5 My managers often inform me good outcomes that affect me. Work Environment (WE) 5 WE1 My company is flexible to accommodate the various needs of employees. Kameswari & Rajyalakshmi (2012); Frye et al. (2020) WE2 The physical working conditions of the job match my expectations. WE3 My company provides an environment in which I feel safe and secure. WE4 The policies and practices toward employees of my company are good. WE5 My company creates challenges for employees. Empowerment (EMP) 5 EMP1 My company encourages me to take initiatives. Braimah (2016); Frye et al. (2020)EMP2 My company allows me to make decision on my own. EMP3 My company gives me the chance to do the kind of work that I do best. EMP4 My company gives me the chance to make use of my best abilities. EMP5 My company allows me to try something different. Internal Communication (ICO) 5ICO1 My company has interactive communication channels. Braimah (2016); Huang & Chen (2019) ICO2 Employees at all levels understand the direction and key priorities of my company. ICO3 My company has an internal communication program for all employees. ICO4 My company communicates clearly and unambiguously with all employees. ICO5 Messages that I receive are aligned with business wide communication. Fairness (FAI) 5 FAI1 I am treated fairly in salary issues. Braimah (2016) FAI2 I am treated fairly in promotion issues. FAI3 I am treated fairly in training and development issues. FAI4 I am treated fairly in workload issues FAI5 I am treated fairly in reward, incentives and benefits issues Employee Satisfaction (SAT) 5 SAT1 I feel fairly well satisfied with my present job. Kameswari & Rajyalakshmi, (2012); Sang et al (2009); Frye et al. (2020) SAT2 I find real enjoyment in work. SAT3 I get a feeling of accomplishment from my job. SAT4 I feel happy at work. SAT5 I feel motivated to do my job.