The Important of Integrating Internal Stakeholders into an Organisation and Some Methods

The Important of Integrating Internal Stakeholders

into an Organisation and Some Methods

Ismail Sulaiman

Lecturer of Department of Dakwah at STAIN Zawiyah Cot Kala Langsa

(ismailaceh@gmail.com)

Abstract

Perusahaan harus mempertimbangkan kebijakan reward (penghargaan) bagi stakeholders internal untuk meningkatkan hubungankerjasama jangka panjang dan memotivasi serta meningkatkan komitmen stakeholders terhadap organisasi. Imbalan ini mungkin melibatkan dengan memberikan saham atau harga khusus untuk membeli saham pada stakeholder internal. Hal ini dapat membantu mereka menjadi lebih banyak komitmen secara internal dan loyalitas dalam rangka melakukan sebuah organisasi yang sehat.

Keywords: Integrating, stakeholder, organization, communication

A. Introduction

Historically, most Integrated Marketing Communication (IMC) programs have focused on delivering external messages to customers. In addition, the IMC approach involves the coordination of marketing communications efforts, which the firm can execute to reach diverse audiences with a consistent message.  As a result, they can achieve an optimal market coverage and greater impact on the target market. This means, IMC is an “inclusive approach for marketing”.[1] According to Claw and Baack[2], communication to each of internal and external is very important to the company.  It is useful to ensure the consistency of messages to the stake holders and to develop a clear communication clearly to create good corporate image for company.

Moreover, IMC objectives should be integrated on a variety of dimensions. These dimensions include integration of the promotional and marketing mix, internal and external integration in the organisation, and integration of communication which targets to both internal and external stakeholders. Kitchen and Schultz (2003) pointed out that communication throughout an organisation can allow the firm to develop strong relationships with stakeholder groups if strategically managed. In addition, positive relationships are becoming a necessity in increasing a firm’s competitiveness where stakeholder groups can impact on organisational performance. This will help the organisation communicate one voice to the customers and publics.

Furthermore, the concept of integrated internal stakeholders is developed to improve organisations’ service quality. It is believed that the quality of service delivery is a reflection from organisational culture. If organisations are able to communicate to deliver consistent quality service to their internal stakeholder, it may achieve the synergy in the organisation. In addition, to enhance good relationship among internal stakeholders, organisations are not only enough serve by “lip service” to employees but they should consider to produce high standards by providing  programs, resources and rewards to enable and encourage employee to deliver good service. According to Walker and Mullins[3], “employee must be provided with training, equipment, and time necessary to deliver good service”. It means for service should be evaluated, measured and good performance. Moreover, employees must be rewarded by giving incentives or bonus and promotion, in order to motivate employees can effort good service because employees’ service delivery may affect to customer satisfaction and loyalty. In public sector, service and relationships with the internal stakeholders can be disrupted between “silos” which providing a poor service experience and inconsistent organisational message to customers. Public sector governance can be improved by introducing stakeholders’ relationship marketing to improve service offering quality and customer service delivery. 

However, there are still several organisations that have failed or have not integrated internal stakeholders to their marketing communication campaign.  As a result, they failed to deliver the message to customers consistently. If a company fails to effectively communicate the messages, it will impact of the company’s image and their brand value. Thus, it is important to integrate internal stakeholders into an organisation to maintain the brand identity. This essay will explain the importance and some methods to integrated internal stakeholders (employees, suppliers, retailers and investors) within in the organisation

B. IMC Principle

IMC has an increasingly central role to play in today's marketplace, because it offers organisations a way to strategically coordinate messages and establish a meaningful dialogue with customers. In short, IMC provides organisations with a strategic method for both establishing and maintaining relationships with key stakeholders. This is essential for marketing success in the twenty first (21^st) centuries.

IMC is a communication method for organisations to use one strategy for everything, making every communication consistent with one message and one strategy.  The outcome of this is therefore more because this involves a wider range of activities. Clow and Baack (2007) pointed out that to make an organisation successful, it should involve every part of the organisation.

In addition, IMC is “ the strategic analysis, selection, execution, evaluation, end control of all communicative actions that can effectively and efficiently enable and facilitate productive exchange in the provider’s stakeholders relationship network”.[4] It means that these communication actions are the ways to create a good strategy and to foster good relationship among stakeholders.

Moreover, it is a medium to maintain good dialogue among stakeholders and can improve the quality of relationships between the organisation and its stakeholders. Duncan, states that IMC is “… a cross- functional process for creating and nourishing profitable relationships with customers and other stakeholders by strategically controlling or influencing all messages sent to these groups and encouraging data-driven, purposeful dialogue with them”.[5] This definition is a reflection of IMC as a strategy for managing relationships that drive brand value in an organisation.

C. Internal Communications

It can be seen that internal communication has an important function which affects the ability to engage the stakeholders, particularly employees. Cheney and Christensen in Welch and Jackson, pointed out that internal communication is crucial for “employee relationship, statements of missions and organisational development.[6]  Internal communication is a strategy to build relationships between stakeholders and all levels in an organisation. According to Freeman, in Varey (2001),[7] a stakeholder is “a person who is affected by the accomplishment of corporate purpose”.  In this part, there are several types of internal stakeholders namely, employees, suppliers, wholesales/retailers, investors or shareholders and members. These stakeholders play an essential role in organisations because they can affect a company’s performance, business and image. In addition, a stakeholder is “anyone who has a stake in the success of the company or its product”.[8]

Firstly, employees are very important part of an organisation, because they are the face of organisation who will communicate to customers. They can build good relationships as well as having the ability to break this relationship between organisation, customers and stakeholders. If an organisation has good relationships with employees, they will identify themselves with the brand and also become committed to create a good image of the brand because employees are often the first point of contact and face of an organisation. They have accountability to make success company likes Dell company give chances “to ensuring staff see themselves like an owner to bring more success to the company”.[9] Moreover, employees will have a sense of belonging to the organisations because the organisation cares and awares to them. For example, in the case of Southwest airline in 1970s, when the fuel prices increased tremendously, employees at Southwest airline volunteered to cut their pay to help the airline to remain in operation as this budget airline was in crisis time (The Wall Street Journal Online, 2003).[10]

Moreover, to enhance the organisation’s reputation, it is important that employees have good communication skills to communicate well. “Word of mouth communication from employee can impact decision about purchasing and investing”.[11] Organisation should constantly communicate employees and other internal stakeholders.  For instance, the Motorola advertisement sends the same message about “Wireless Communications Center help you stay connected”. As a result, employees who are aware of this theme can communicate the same message dealing with customers and publics (Clow and Baack, 2007). In Starbucks, employees play the most important role in the company. Howard Schultz as CEO of Starbucks said that “customer is always come in second-employee matter more”.[12] It means that if an employee is happy from the company’s rewards, this can impact their enthusiasm to service customers.

Secondly, wholesalers or retailers and business partners have a key role in an organisation. They can help an organisation push products to end consumers, deliver the brands messages or assist with a company’s communication campaign. They can help in building consistent brands image or message. For example, Starbucks join venture or partner stores have a function of transferring the brand culture by being a good responsible brand through their participation in their local community (Press Room, Starbuck, 2008). In addition, the wholesalers may develop a line of private brand that helps small retailers compete and also to strengthen the wholesalers’ position.[13]

Thirdly, investors or shareholders can choose to sell their stock, hold on or buy more. Each decision affects to the price of a company’s stock or public and other stakeholders’ image of the organisation. They also can make contributions by submitting their business proposals to organisation. In addition, Investors or shareholders can report to the organisation about a competitor’s business information. Maintaining relationships with investors may build a good cooperate image in the organisation.[14]

Moreover, a supplier is an essential internal stakeholder. They can a company’s operation or manufacturing, if they do not deliver or produce the material on schedule. According to Blythe (2006), suppliers can communicate with small and specific audiences by using different messages for each group. If the supplier of the company has a crisis, it will also strongly affect the company. “Interruptions in the flow of parts and materials can shut down the production process, resulting in costly delay and lost sales”.[15]  As a result, to avoid the interruption in supply, the organisations rely on suppliers established reputation on reliability and delivery.

Finally, members of organisations through memberships are stakeholders that can improve the image an organisation. This membership forms a part of a professional organisation. This Internal audience is vital to achieving their organisation's objectives. Therefore, communicating to this internal stakeholder is as important as listening to them. For example, motoring and services insurance company, NRMA, is a member-owned mutual organisation offering roadside assistance, travel advisory, vehicle inspections, insurance and other services in New South Wales and Australian Capital Territory. These members have the right as part of the organisation to give opinions that influence decisions. For instances, there was a protest within the NRMA community when the director donated political money to the candidate and parties. As a result, this controversial donation was decided whether it was right or wrong after 1. 8 million members voted to express their feelings as whether the directors have been spending the group's money wisely or not (The Sydney Morning Herald, 2008).[16]

As it is illustrated above, every internal stakeholder plays a crucial role to the organisation in maintaining the bottom line and brand image. According to William’s research (Schultz and Schultz, 2003, p.164), “forty percent of an organisation’s marketing and communications dollars can be either wasted or destroyed when the internal marketing program do not support or align with the external marketing and communication program”.[17] The first priority of integrating internal stakeholders is the delivery of a consistent brand image in the integrated marketing program. It is known that brands are built through customer’s experience. The customers’ experience that represent customers’ interaction with the company based on products and services.

Another important factor of integrating internal stakeholders is to retain long-term benefits. This means when company can integrate with suppliers, it will help the company gain extra knowledge in business operations which translate to the profit-making of an organisation. Moreover, a company can transfer the communication message to suppliers to help them understand the brand message or brand value. For example, Starbucks work together with partners employees, suppliers, farmers and others to help create a more sustainable approach to high-quality coffee production by providing financial and technical supports to coffee-producing communities (Starbucks, 2008). When integrated, this strengthens it overall reputation .

Finally, integrating internal stakeholders is important for the support organisation can get in cases of crisis. If crisis occur, the integrated employees, suppliers, shareholders or business partners will more likely help the organisation manage the internal information and internal stakeholders to better deliver a consistent message to the public. Supplier and business partners or stakeholders can help to give feedback about any communication message the organisation sends out to the public.

D. External Communication

For external communication, organisations sometimes do not have much power over external stakeholders. The organisation sometimes can not handle these force that influence their opinions. External stakeholders may include media, local community, financial community, government, competitors and special interest groups (NGOs). 

An organisation does not enough power to influence to these groups say or interpret about the company. Therefore, an organisation should consider sending positive information and to react quickly if there are any negative opinions are expressed.[18] For example, Freeport Indonesia Limited Company (FI Ltd), which operates a mining business in West Papua Province, Indonesia, has tried to implement the concept of corporate social responsibility (CSR). Certainly, this implementation is intended to minimise the social, political, cultural, economical, and environmental risks in running their businesses. However, some problems have arisen, such as the allegation of a violation of human rights; the discrimination between local laborers (West Papuan Laborers) and non local laborers and expatriates; the negligence of indigenous cultural and economical rights, and the minimum level of indigenous welfare. The company’s approach was disseminating positive information to the media i.e newspapers and television to explain and what they have done for the community such as education, training and development for Papuan laborers, and land recognition programs.[19]

Furthermore, competitors can be important stakeholders. This can be useful to the creation of strategy to protect their market shares. For instance in Asia, Singapore Airline, Cathay Pacific, Malaysia Airline and Thai Airways introduced a cooperative frequent flyer program to protect themselves from the large international airline company that fly into their market and also offer the same service.[20]

Finally, government regulators are an essential part of an organisation planning for doing do the business or competing in the industry successfully.  For example, there are organisations fears the risk of monopoly potential in cigarette manufactures i.e Gudang Garam and Sampoerna as the two biggest producers of cigarette in Indonesia, because of their competition.[21] In this case Indonesian government provides a regulation to cigarette companies to avoid the monopoly business. The regulation has already mentioned in Law Number 5, 1999 on prohibition of monopoly and unfair business competition that the government will protect the company from the monopoly business.[22]

E. Methods

There are several methods for integrated internal stakeholders to communicate efficiently for example through consultations, meetings, as well as communication vehicles including websites and training staff based on the organisational behavior.

1. Consultations

Consultations with internal stakeholders are methods for involving internal stakeholders in policy and program evaluation. The technique may be used at the specific evaluation stage to identify problems and to identify the most appropriate consultation method to suit the organisation. Consultations can also analyse what the preference, interest suchand perspective of different stakeholders. The consultations could be face-to face discussion and exchange of views which is facilitated by a mediator. For example, The Executing Agency for Rehabilitation and Reconstruction (BRR) for Aceh and Nias has considered consultations as a communication strategy to all stakeholders who control the multi-donor funds. This communication strategy is essential because the stakeholders want to discover what the agency has done. Some stakeholders demands BRR to provide transparent information including local government, local NGOs, donors, the United Nations, central government, international NGOs and Red Cross/ Red Crescent.[23] So, consultations are the best way to facilitate discussions regarding this.

2. Meetings

Meetings are also beneficial to discuss and to communicate effectively with stakeholders because participants come from different level with an organisation. According to Burnett and Morriaty (1998), meetings provide stakeholders with some power because they can communicate directly and interactively, to be involve and have the opportunity to raise concerns. However, meetings also have limitations such as the size of the setting which can cause discomfort. As a result, they should focus on communicating with small stakeholder groups like an annual meeting with investors or employee meetings to inform them new of policy in an organisation. Moreover, conducting meetings are a solution to give a chance for the stakeholders, especially for employees, “to speak out the matter on their mind” (Zetlin, 1997).  For example every year BRR invites all donors, NGOs and stakeholders to annual meetings which is called Coordination Forum for Aceh and Nias (CFAN). If there are problems regarding the implementation of projects, discussion would be facilitated to introduce new concepts of planning. Donors, NGOs and stakeholders are invited, but it is a closed meeting. Every month the agency always reports on completed projects in the annual report to the stakeholders at the annual meeting to ensure that all stakeholders are well integrated.[24]

F. Communication Vehicles

Communication vehicles for the internal stakeholders may include, publications, e-mail, bulletin boards, face-to-face interaction, video and the intranet which they can interactive communicate and sharing their opinions about the organisation. These tools make it easier for people in companies to talk each rather than having to hold formal dialogue opportunities. For instance, the Southwest Airline believes that the most substantial and important problem learning through conversation. When employees receive and read the monthly company newsletter, the airline encourages them to create dialogues with each other about the information in it.[25] However, a number of suitability factors need to be considered. It causes each organisation to use different vehicles based on their characteristics of the organisation that includes knowing the audience, considering the culture and determining communication preferences.[26] For example, in BRR uses the face-to-face method is the traditional method for identifying what the problem are facing by employees and other stakeholders in order to directly address the problem during the rehabilitation and reconstruction activities.

1. Website

The internet media and the websites has become increasingly important to IMC. This tool is useful to improve the communication among stakeholders. Providing a website for the organisation is useful to provide information as well collecting opinions and their expectations of stakeholders. In several the public offices, the website facilities are provided to the staff and publics to gather information about the organisation. Moreover, websites have the purpose of providing financial information to investors and to act as a communication channel with stakeholders through email, blogs and online forums.[27] This is better media to integrate for internal stakeholders.

2. Staff

Staff training is useful to increase employees’ understanding about the functions of the organisation and business.  To shape their understanding of their roles in it, an organisation should conduct an effective training program. In addition, training may focuses on everything from products features to customers or publics’ interaction.  In Indonesia, especially for new government employees, they are required to training for one month prior to commencement of work (President Regulation of the Republic of Indonesia, No, 5.1996). This training aims to provide information to employees and explain their position, roles and their rights aligned to organisation’s missions. As a result, completion of the training they can work effectively to service publics and create synergy which one of the key benefit of IMC.

G. Conclusion

In conclusion, an organisation can not have a truly integrated marketing communication, unless it facilitates superior internal communication and also external. As a role of internal stakeholders, it is essential to the business operation and communication. In particular, an organisation should have strategy to build long term relationships and organisational value to internal stakeholders.  It is beneficial to an organisation to get support from internals stakeholders for the growth of the business. Building relationships, knowledge management methods, reward policies and internal training of the organisation in managing their internal stakeholders can enhance their advantage in the dynamic business environment.

In addition, to be successfully integrated internal stakeholders, organisation should build up a learning organisation culture thorugh strategic management of an organisation. An organisation may deal with the employees by approach emotionally. As a result, this can create a sense of the belonging among employees for an organisation to enhance commitment and integration with the organisation.

Finally, the company should consider a reward policy for internal stakeholders to enhance the long-term relationship and motivate and increase commitment of stakeholders towards the organisation. This reward may involve by giving shares or a special price of buying stock for internal stakeholders. This can assist them internal to be more commitment and loyalty in order to conduct a healthy organisation.

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[1] Schultz, D. and Schultz, H., IMC The Next Generation. Five Step for Delivering Value and Measuring Return Using Marketing Communication. (USA: Mc Graw Hill, 2003)

[2] Clow . K. E. and Baack, D.. Integrated Advertising, Promotion and Marketing Communication 3^rd edition. (Upper Saddle River, New Jersey: Pearson, 2007)

[3] Walker and Mullins, Marketing Strategy, A Decision-focused Approach,  6^th edition (Hill Irwin: McGraw, 2008), p. 233

[4] Varey, J. R., Marketing Communication. Principle and Practice (London and New York: Routledge, Taylor and Francis Group), p. 251

[5] Duncan in Moffatt et al, The Relevance of IMC to Prefessional Service Firms, in proceedings 2007 Australia And New Zealand Marketing Academy Conference (ANZMAC), Dunedin, (retrieved 15^th October 2008 from http://www.eprints.equ.au)

[6] Welch, M. and Jackson, P.R., Rethinking Internal Communication: a stakeholder approach, ( retrieved 7^th October 2008 from http://www.emeraldinsight.com), p. 2

[7] Varey, J. R., Marketing…, p. 98

[8] Burnet, J. and Moriarty, S., Introduction to Marketing Communication. An Integral Approach (Upper Saddle River, New Jersey: Prentice Hall, 1998), p. 5

[9]Ambler, T., Marketing and The Bottom Line. The marketing metrics to pump up cash flow, 2^nd edition (New Jersey: Prentice Hall and Pearson Education Limited, 2003), p. 169

[10] Trottman, M., The Wall Street Journal Online. Inside Southwest Airlines, Storied Culture Feels Strains. Spirit of Fun and Hard Work is Clouded by Picketing and Employee Complaints (Retrieved 14^th October 2008 from http://www.magement.eku.edu)

[11]Clow, K. E. and Baack, D., Intregated Advertising, Promotion and Marketing Communication,  3^rd edition (Upper Saddle, New Jersey: Pearson, 2007) , p. 374

[12] Kotler, P. and Amstrong, G., Principle Marketing, 11^th edition (Upper Saddle River, New Jersey: Pearson Pentrice Hall, 2006), p. 225

[13] Boone, E. L. and Kurtz, D. L., Contemporary Marketing , 13^th edition (New Jersey: Prentice Hall, 2008), p. 428

[14] Kotler, P. and Amstrong, G., Principle…, p. 475

[15] Wells et al, Advertising Principle and Practice, 3^rd edition (Englewood Cliff, New Jersey: Prentice Hall, 1995),  p. 711

[16] Gilmore, H. and Benns, M., NRMA faces uproar over $225,000 in political gifts, The Sydney Morning Herald  (retrieved 12nd October 2008 from http://www.smh.com.au)

[17]Schultz, D. and Schultz, H., IMC… , p. 164

[18]Clow, K. E. and Baack, D., Integrated… , p. 375

[19] Freeport Indonesia, Social Change and Development (retrieved 15^th October 2008 from http://www.fcx.com

[20]Burnet, J. and Moriarty, S., Introducing… , p. 6

[21] Reuters, Indonesian Cigarette Production Up 64.5 Percent in February (retrieved 12^th October 2008 from http://www.reuters.com) 

[22] The Minister of Industry of The Republic of Indonesia, Law Number 5 Year 1999 on Prohibtion of  Monopoly and Unfair Business Competition  (retrieved 15^th October 2008 from http://www.depperin.go.id)

[23] BRR Information Sheet, Executing for Rehabilitation and Reconstruction of Aceh-Nias (BRR), (retrieved 13^th October 2008 from http://www.e-aceh.org)

[24] Ibid.,

[25] Fento, T. L., The Democratic Company. Four Organisations Transforming our Workplace and our World (retrieved 16^th October 2008 from http://www.disgnnine.com)

[26] BNET Australia, Use Communication What They Do Best (retrieved 9^th October 2008 from http://www.jobfunction.bnet.com)

[27] Boone, E. L. and Kurtz, D. L., Contemporary…, p. 116

tH �Da e `�� Q� widows: 2; word-spacing: 0px; -webkit-text-size-adjust: auto; -webkit-text-stroke-width: 0px; text-indent: -36pt;">Saleh. Nabil (2009). “The Role of Intention (niyya) under Saudi Arabian Hanbali Law” in Arab Law Quarterly 23.

March. Andrew F. (2009). Islam and Liberal Citizenship: The Search for an Overlapping Consensus. New York: Oxford University Press.

Bourdieu. Pierre (1998). Practical Reason. Stanford: Stanford University Press.

Benslama. Fethi (2009). Psychoanalysis and the Challenge of Islam. trs. by Robert Bononno (Minneapolis: University of Minnesota Press.

Tripp. Charles (2006). Islam and the Moral Economy: The Challenge of Capitalism. Cambridge: Cambridge University Press.

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[1] Hasan Hanafi, “Alternative Conceptions of Civil Society: A Reflective Islamic Approach” in Sohail H. Hashmi, ed.,  Islamic Political Ethics: Civil Society, Pluralism, and Conflict (Princeton: Princeton University Press, 2002), h.  56-75

                 [2] Ibid., h. 65

[3] Citizenship has of course been well theorized in political theory, e.g. Ronald Beiner,  ed. Theorizing Citizenship (Albany: SUNY Press 1995) Joseph H. Carens, Culture, citizenship, and community : a contextual exploration of justice as evenhandedness (Oxford: Oxford University Press, 2000). What I think is under theorized is the psychological structure of the individual agent/citizen.  My thanks to my colleague Neil Roberts for help here.

[4] Wendy Brown, “The Sacred, the Secular and the Profane” in  Michael Warner, et al., Varieties of Secularism in a Secular Age (Cambridge: Harvard University Press, 2010), h. 83-104

[5] Sami Zubaida, “Cosmopolitan citizenship in the Middle East” accessed July 20, 2010 from Open Democracy http://www.opendemocracy.net/sami-zubaida/cosmopolitan-citizenship-in-middle-east

[6] Terry Eagleton, The Trouble with Strangers; A Study of Ethics (Chichester, West Sussex: Wiley-Blackwell, 2009). h. 13.

[7] Ibid., h. 82

[8] Ibid., h. 83

[9] Ibid., h. 99

[10]  Ibid., h. 105

[11] Ibid., h. 117

[12] Ibid., h. 148

[13] Ibid., h. 163-164

[14] Ibid., h. 253-254

[15] Ibid., h. 325

[16] “Nīya”  in H.A.R. Gibb and J. H. Kramers, Shorter Encyclopedia of Islam, (Leiden: E.J. Brill 1961) , h. 449-450

[17] Ibn Rushd, Bidāyat al-Mujtahid wa Nihāyat al-Muqtaṣid, The Distinguished Jurists Primer trs. Professor Imran Ahsan Khan Nyazee (Reading, UK: Garnet Publishing, 1994) I.1.2.1 h.  3-4

[18]Ibid.,  7.1.1.2.3, h. 341-343

[19] Nabil Saleh, “The Role of Intention (niyya) under Saudi Arabian Hanbali Law” in Arab Law Quarterly 23 (2009), h. 474-475

[20] Andrew F. March, Islam and Liberal Citizenship: The Search for an Overlapping Consensus (New York: Oxford University Press, 2009)

[21] Ibid.,

[22] Pierre Bourdieu, Practical Reason (Stanford: Stanford University Press, 1998), h. 143

[23] Ibid., h. 144-145

[24] Fethi Benslama, Psychoanalysis and the Challenge of Islam, trs. by Robert Bononno (Minneapolis: University of Minnesota Press, 2009), h. 5

[25] Charles Tripp, Islam and the Moral Economy: The Challenge of Capitalism (Cambridge: Cambridge University Press, 2006)

[26] Eagleton, The Trouble with Strangers…, h. 324

[27] Ibid., h. 319