Critical review on Measurement of internal service quality: Application of the SERVQUAL battery to internal service quality".

University Degree Business and Administrative studies

000452231

Foundation Of Scholarship

Assignment:

Critical Literature Review on Journal

“Measurement of internal service quality: Application of the SERVQUAL battery to internal service quality”.

Presented To:

Matt Housden

Chris Rock

Presented By:

Muhammad Ali

ID # 000452231-1

University Of Greenwich

Table of Contents

Measurement of internal service quality: Application of the SERVQUAL battery to internal service quality

1: Abstract.

Internal marketing is an important concept to apply in any organization to create customer conscious and motivated employees to boost the internal services. However, the main objective of internal marketing is to create value in employees and internal suppliers. While researcher defines internal service quality depends on customer satisfaction which is base on 1: internal service, 2: Service capability, 3: Customer satisfaction but there is no general agreement to measurement of the concept. SERVQUAL and SERVPERF are two main instruments as a tool to measure internal service quality. The consensus however, still under discussion that which tool is superior to measure quality. Therefore many researcher believe that SURVPERF instrument is appropriate to measure overall service quality in large size of organization. On the other hand many researchers criticise the validity and reliability of SERQUAL measures on five dimensions and believe that it’s unreliable and confusing. Conversely, it is also accepted that SERVQUAL five dimensions is appropriate measure service quality in some industry like hospital environment.

2: Introduction

The central theme of marketing is to satisfying customers and all the aspects of company operations should be towards customer satisfaction (Barnes, 1989 cited in Quester & Kelly, 1999). In order to satisfy customers in any organization, it is best approach to adopt internal marketing concept because its ultimate goals are to get motivated and customer oriented personnel.(Stauss and Schulze, 1990 cited in Brooks et.al, 1999) in addition to this, it is generally accepted that satisfaction of employee needs enhances employee motivation and retention, and subsequently the higher the degree of employee satisfaction, the higher the possibility of achieving external satisfaction and retention(Papasolomou, 2006). Motivated and customer conscious employees are essential but that not enough effort to satisfied external customers. Its also need to have a planned effort using internal marketing-like approach to create coordinated and integrated culture among employees to implementation of corporate and functional strategies in order to deliver customer satisfaction (Ibid). However satisfaction is totally depend on understanding of expected service quality which is difference between consumer expectation of what they want and their perception what they get (Smit & Houston, 1982; Parasuraman et al, 1985, 1988 cited in Gupta & Jain 2004). To reduce the gap between expected service quality and consumer perception, it is ideal that each department operates like consumer-focused business (Albrecht, 1993 cited in Finn et al, 1996).

Thus the effort behind the study of internal service quality is to create standardized format of measurement, but there is no concrete agreement found to measure the concept. One popular measure of service quality is SERVQUAL, which capture service quality as the gap between consumer expectations and perceived delivery (Parasuraman, et al. 1985 cited in Jian, et al. 2002). However, in contrast Cronin and Taylor (1992, cited in Gupta & Jain, 2004) strongly criticised SERVQUAL scale, they questioned the conceptual basis of the SERVQUAL and found it confusing with service satisfaction. Despite theoretical arguments they referred “SERVPERF” scale which provide empirical evidence tested on different industry, prove superiority of their performance over SERVQUAL scale.

The paper analyses concepts of internal marketing, internal services, and measurement of internal quality, SERVQUAL scale and limitation of research methodology. It begins with concepts review of internal marketing literature following with internal services, measurement of services. It then discuss SERVQUAL vs. SERVPERF scale on the basis of published opinion review and provide reason why SERVPERF is more appropriate scale to measure service quality. Finally, paper concludes by indicating areas where more work need to be done, limitation of paper and reader may consider in finding the solutions.

3: Concepts define related to Internal service Quality

3.1: Internal marketing

The concept of internal marketing may be invented back twenty years or more. Ahmed & Rafiq, 2002 cited in Longbottom, et. al 2006). Early definitions talk about treating employee as customer (Berry, ibid) and job as product (Berry & Parasuraman, ibid). Later definitions have referred to customer orientation and satisfaction, inter functional co-ordination and integration, employee motivation, and satisfaction marketing like approaches, and specific strategies (Ahmed & Rafiq, ibid). In spite of this, summary of IM concept is dividing into different stages from series of perspectives developing an early focus on marketing orientation, to apply marketing concepts, to create customer conscious culture and most recently is focus on create value (ibid). In recent marketing literature several authors define value adding as a providing benefits to product and services that’s create competitive advantage (Piercy, MacDonald, Doyle & De Chernatony, ibid).

The key elements of IM are communication, training, education and information can be identified from literature (Gummesson, 1991 cited in Quester & Kelly, 1999) and developing, motivating, educating or training employee (Cahill, Foreman & Money, Gronroos, Rafiq & Ahmed, Varey, ibid). However, the basic objectives of IM is to gather information about employees, training employees to deal customer contact situation, creating acceptance of a customer orientation, develop culture in organization which create customer oriented attitudes and behaviour. (Brooks, et al. 1999).

Despite that to achieve sustain customer loyalty it is essential that to emphasize capability of internal employees to ...

This is a preview of the whole essay

Despite that to achieve sustain customer loyalty it is essential that to emphasize capability of internal employees to deliver consistent quality (Chaston, 1994). In case of employer success in internal marketing efforts, internal consumer satisfaction will lead employee job performance, employee loyalty and ultimately external customer satisfaction create competitive advantage. Furthermore discussion to this, who is responsible to implements these internal marketing concepts. Quester & Kelly (1999) suggested in literature, majority of companies use different combination of personnel although in 22.7% organization relies only one person in charge of it. Managing director, marketing manager particularly human resource manager is highly involve in making internal marking decision (ibid)

While the concept of Internal Marketing is define by many authors but there is no single concrete definition achieved consensus. There are appropriate definitions provide in journal literature which is being reviewed but to better understanding of Internal marketing concept, some definitions listed in Table 1 which cover different area related to internal marketing.

3.2: Definitions Table

The definitions define in journal article which is being reviewed, gives picture of internal marketing, employees as internal customers, job as internal products, clear understanding of corporate mission and objectives, focus staff attention, create service mindedness, customer oriented behaviour and fulfil wants and needs. These all concepts are being implemented to satisfy potential external customer by training, motivating and evaluation of internal employees. In broader context of the concept, above mention definitions in Table 1 gives slightly wider view of internal marketing by defining (TQM) total quality management (maintain existing quality and develop new quality standard according to customer changing demand) of product and service as IM, effective internal exchange between employee and organization, ranges of techniques to achieve goals and targets and define IM as hierarchical exchange, internal supplies exchange and organization employee process.

3.3: Internal Service

Internal customer concept in services organizations originally develop to sell jobs in service sector with the purpose of making job environment attractive and pleasant (Sasser & Arbeit, 1976 cited in Reynoso & Moores, 1995). Different authors have been addressed this idea subsequently in wider term of internal marketing (e.g. Berry, Gronroos, Gummesson, Ibid). However, the idea of ‘internal customer services’ is different from ‘internal marketing’, in relation to this, how employee provide service to other employees is relate to internal customer services and on the other hand company provide service to employees is related to internal marketing.(Berry.1981; George,1990; Gronroos, 1981 cited in Marshall, et al. 1998) Furthermore, internal services characterized by attitudes of peoples they have towards each other and the way they serve each other insides the organization (Heskett et al. Ibid). This suggest that employees working in different departments of organization and they are linked each other to fulfil different needs related to their job responsibilities. Thus these services among inter departments represent the quality of internal customer services in organization.

According to Hallowell et al. (1996) “Organizations attempting to deliver service quality to their external customers must begin by serving the needs of their internal customers”. A numbers of authors addressed that in order to satisfy external customer’s internal supports activities and operation play key role (Adamson, 1988; Davis, 1991; Jablonski, 1992; Milite, 1991; Sanfilippo1990 cited in Reynoso & Moores, 1994). In relation to this internal service quality is depends on customer satisfaction through service capability. This is defining as process of three steps 1: Internal services 2: Service capability 3: Customer satisfaction. It might be hypothesised that “internal service quality is related to service capability and service capability is related to customer satisfaction. (Hallowell, et al. 1996).

In spite of this, if the firms succeed to establish channels of relationship between external customers and internal employees result could lead customer loyalty, productivity, profit and growth. In order to create relationship between internal employees and external customer Reynoso & Moores (1995 cited in Lings & Brooks) define the implementation of internal customer approach which got some common sequential steps.

“Create internal awareness” (internal customer should be aware about company policies and procedures)
“Work on the identification of internal customers and suppliers”
“Identify the expectations of internal customers” (Need and Demand of employees should be clearly identify by management)
“Communicate these expectations to internal suppliers in order to discuss their own capabilities and /or obstacles to meeting these requirements” (Clear communication between employees and management is essential to create customer conscious employees which lead increase in firm’s capability)
“As a result of this previous point, internal suppliers should work to make the necessary changes so as to be able to deliver the level of service required and finally”
“Obtain a measure for internal customer satisfaction. Feed back should be given to internal suppliers if services are to be improved”.

Heskett, et al. (1994). “The service-profit chain established relationship between profitability, customer loyalty, and employee satisfaction, loyalty and productivity”. Loyalty is directly related to customer satisfaction and satisfaction is influenced by value of service provided to ultimate customer (ibid). The ideas concur from chart (see the chart. ” The Links in the Service- Profit Chain) is that all the efforts behind every operation of organization is to generate revenue and profitability. For that purpose firm’s has to satisfied customers according to their need and preferences. A closer look of the process of each link shows that how the service profit chain function as whole.

Heskett, et al. (1994) Derived the some propositions on the basis of service-profit chain.

“Customer Loyalty drives profitability and growth” (Customer loyalty comes from highly satisfied (delight) customer towards company product which drives company profit and growth.
“Customer satisfaction drives customer loyalty” (Appropriate service (TQM) provide over the period of time create customer satisfaction which lead customer towards band loyalty)
“Value drives customer satisfaction” (Standard service or product delivery according to need of customer drive customer satisfaction)

3.4 Service Profit Chain Chart

“Employee productivity drives value” (if Internal customers (employees) are motivated they can produce value in products or services)
“Employee loyalty drives productivity” (Retain and satisfied employees always happy with their jobs that’s create loyalty for firm’s in result of this firm’s productivity grow effectively)
“Employee Satisfaction drives loyalty” (If employees need and demands are effectively fulfil by company that’s creates loyalty towards their work)
“Internal quality drives employee satisfaction“ (By defining job design, work placement, employee selection process, rewards and recognition and clearly mention job description will drives less pressure on employee that create internal quality and satisfaction in employees )

Compare the concept of service profit chain with journal article which is being reviewed, gives the clear picture of understanding of internal services through step by step process to satisfied customers. E.g. profitability and growth comes from ‘customer loyalty’ and to create customer loyalty firm’s has to satisfy target customers needs through making effective service designed. In order to develop and implement effective service design firm’s need retain, proactive and productive employees which creates value. Thus retention and motivation of employees depend on customer satisfaction, to satisfy internal customer (employees) firm’s has to fulfil their desire need and expectation toward job positions they perceive. Internal service quality standards which are based on 1: work place design 2: job design 3: employee selection and development 4: employee rewards and recognition 5: tool for serving customers are prerequisite to develop ultimate customer orientated culture in organization, result of this process could lead to maximize firm revenue growth and profitability.

4: Measuring Internal Service Quality

Parasuraman et al. (1988 cited in Gupta & Jain, 2004) define “Service quality as ‘a global judgment, or attitude, relating to the superiority of the service’, and explicated it as involving evaluations of the out comes (i.e., what the customer actually receives from service) and process of service act (i.e, the manner in which service is delivered). The popular approach for measuring service quality is SERVQUAL scale which find the gap between expected service quality(in consumer point of view) and the quality of service delivery (company point of view) (Parasuraman et al. 1985 cited in Jiang et al. 2002). The SERVQUAL scale perceive as back bone in service quality literature and implication has been extensively acceptable in different service industries (Gupta & Jain, 2004) Therefore, Cronin and Talyor (1992 cited in Vanniarajan & Anbazhagan 2007) were two main researcher who strongly criticize on SERVQUAL scale and they provide empirical evidence across four industries to elicit the superiority of the performance over disconfirmation base on SERVQUAL scale. Thus they introduce SERVPERF which is performance measure of service quality for four industries (fast food, pest control, dry cleaning, and banking) (Cronin & Taylor, 1992 cited in Gupta & Jain, 2004). However, SERVQUAL and SERFERF are two main tools for quality measurement but there is still discussion on going which one is superior.

4.1: SERVQUAL

Marketers and researchers originally developed SERVQUAL to assess service quality in general by considering 22 items. SERVQUAL instrument works on five dimensions used by customers, however, use of these dimensions depend on the type of customer service that is being evaluated. (Parasuraman et al. 1985 cited in Jiang et al. 2002)

These dimensions include:

“Tangibles: The appearance of physical facilities, equipment, and personnel”
“Reliability: The ability to perform the promised service dependably and accurately”
“Responsiveness: The willingness to help customers and provide prompt service”
“Assurance: The knowledge and courtesy of employee and their ability to inspire trust and confidence”
“Empathy: Providing caring and individualized attention to customers”

Future more, the goal of SERVQUAL is to measure gap between customer expected level of service and their perception of actual standard of service delivery on the basis of defined dimensions (Parsuraman et al. 1988 cited in Jabnoun & Saad 2004). In addition, when their perceived service is more than expected service then it is believed that service quality is more then satisfactory and (Parsuraman et al. Cited in Gupta & Jain, 2004)

Buttle, (1994 cited in Jabnoun & Saad 2004) Define advantages of SERVQUAL in service industry.

To assessing different dimensions of service quality standard it is useful tool
It has been experienced to be accurate in different service situation
It has been demonstrated that to interpret similarly questions for different readers its give reliable meaning.
It has standardized analysis procedure to help interpret the results
To use this instrument it is helpful for customer and employees to fulfil limited number of items

Despite, the argument in favour of SERVQUAL some authors extensively criticized the application of SERVQUAL scale on various conceptual and operational grounds. Some main criticism against the scale relate to predictive power of the instruments, length of questionnaire, gap score and validity of the five dimension structure. (Babakus & Boller, 1992; Cronin & Taylor,1992; Dabholkar, Shepherd & Thorp, 2000; Teas, 1993,1994 cited in Gupta & Jain, 2004)

4.2: SERVQUAL vs SERVPERF

SERVQUAL and SERVPERF are apparently two recognized quality measurement scales. The consensus, however, is still under discussion that which one is superior. SERVQUAL has been found inconsistent in terms of dimensional structure, reliability and validity for information system (Cronin Taylor, 1992; Kettinger and Lee, 1997; Kettinger et al. 1995; Parasuraman et al. 1994 cited in Jiang et al. 2002). In relation to this, one main problem area with SERVQUAL scale is that it entails gigantic data collection task. Design lengthy questionnaire to acquire data about consumers, expectation and perceptions of firm’s performance on each of the 22 service quality attributes. (Gupta & Jain, 2004). There are some perceptions expectations conceptualization issue identify in SERVQUAL scale. PZB (1994 cited in Cronin Jr et al. 1994) critics and raised issue on the basis of SERVQUAL scale involves in the gap between perception and expectation appropriateness of the perceptions conceptualization. Comprehensive discussion of the criticisms found that there are serious problem in conceptualizing service quality as a different score (Brown, Churchill, and Peter Ibid). In contrast, Ramsaran & Roshnee (2005) apply SERVQUAL in health care industry and found yielded mixed finding. Babakus & Mangold (1989, 1992 cited in Pakdil & Harwood, 2005) found that reliability of SERVQUAL in hospital environment is valid and reliable. Bowers et al. (ibid) tested the SERVQUAL dimensions weather it’s sufficient for the measurement of health care quality. They found each of ten dimensions was contain patient response of their hospital care apart from two generic quality dimensions these two major categories emerged: caring and patient outcomes.

On the other hand, SERVPERF scale represents significant improvement over SERVQUAL scale. The scale efficiently reduces the number of items which measure by 50 percent and it has been empirically proved superior scale over SERVQUAL for being able to give wider picture of variance in overall service quality measured through the use of single item (Gupta & Jain, 2004). “Once again it is the SERVPERF scale which is found possessing the highest discriminant validity (ibid). However, FZB (1994 cited in Cronin Jr et al. 1994) demonstrate that SERVPERF model has largely lack of substance. They raise two general points and criticise Cronin and Taylor (1992) on these points first, in service quality research it is unnecessary to measure expectations because performance minus expectations are inappropriate basis to measurement of service quality. Second, service quality fails to affect purchase intentions

The conclusion is to be drawn is that the performance base measure of service quality captured by SERVPERF scale can provide a longitudinal index of the service quality perceptions of service firm’s constituencies. In other words, SERVPERF can provide summarised over all information to manager that can be plotted relative to time and specific consumer subgroups for instance, demographic subcategories, and individual constituencies. Thus SERVPERF is very effective tool for large size organizations to measure over all service quality attitudes. However it is suggested the manager’s of service firms should consider great care in order to get more specific information from data derived using the SERVPERF scale for strategic decision making. On the other hand SERVQUAL has great strength to diagnostic value for managers but it gives best result in particular situation.

5: Critique on Essay Literature

From the discussion above there are some area’s where more work need to be done in order to understand and implement the concepts.

Internal marketing definitions in literature produce the picture of internal marketing as employees as internal customers who need to be address properly in order to satisfy their needs and demands. Latest definition talk about emerging the concept of TQM ( total quality management) in organization to maintain the quality standard by considering employees as part of decision maker through effective internal exchange between employee and organization. Range of techniques use to achieve goals and targets completed.

SERVQUAL instrument has subjected to different number of theoretical and operational criticism. Tow main criticism has been raised. First SERVQUAL scale entails gigantic data collection task. It designs lengthy questionnaires to measure consumer expectation and perception towards firm’s performance which could affect the response. SERVQUAL has been criticized for focusing on the process of service delivery rather then outcomes of the service encounter. The most serious are concerned with the number of dimensions, and stability from various contexts.

6: Study Limitation

In this particular study, several limitations noted. First SERVQUAL instrument originally develop in English but applied in Korean market to get result so there been problem related to translation of the instrument in Korean. Second sample group 140 size could be not enough and the targeted only employee working in university they excluded the administration staff to external customer contact. It is also noted that SERVQUAL framework in five dimensions not enough to measure the actual service quality standard. There may be some other service quality dimensions which are also important.

7: Conclusion

From the discussion above, the conclusion to be drawn is that internal marketing create vital part to boost services in the corporate domain. Although internal marketing and internal service concept are implementing since many years so now it has been in more abstract position. The success of any organization depend on understanding and fulfilling need of external consumer by acknowledging the needs and demand of employee and treat them as internal customers. The objective of this study was to produce a conceptual framework and allow researcher on some usefulness of internal service quality in building a relationship between front-line customer and contact and support personnel in internal marketing. There has been develop and proposed several methods to measure internal service quality. However, two methods SERVQUAL and SERVPERF are favourable to measuring the service quality owing to its wide range of applicability and provide managers a strong pinpointing to solve problems. In order to measure over all attitude and perception of internal customer in large size of organizations SERVPERF give best result in order to create organization culture. A review of extant literature points from both parameters SERVPERF scale emerges to be better choice.

8: References:

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9: Bibliography

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