TH1802

SERVICE CULTURE
Service culture is a culture that supports customer service through policies, procedures, reward systems, and
actions (Hudson & Hudson, 2017). It is also mentioned that the flow of internal marketing begins with service
culture. Internal marketing is a form of marketing that is aimed internally, targeted at a company’s own
employees (Hudson & Hudson, 2017). Its focus is to deliver consistent high quality of service.
Despite its growing presence in literature, internal marketing is still not vastly applied, or not at all, by
organizations due to the following issues:
o Non-existence of a unified concept of internal marketing
o Lack of investment in internal marketing of corporations
o Prioritizing revenue boosts and cost-cutting
o Companies don’t see why they should spend money on employees.
With these problems, companies are unable to realize that their employees are the very people who deliver
the brand promises they make.
Internal Marketing Objective
The main objective of internal marketing is to enable employees to deliver satisfying products and services to
guests. An effective internal marketing also has a positive effect on:
• Service Quality • Loyalty
• Customer Satisfaction • Profits
In the tourism and hospitality industry, internal marketing takes place through a four-step process (Hudson &
Hudson, 2017):
a) Establishment of a service culture – Since tourism and hospitality businesses interact with customers
on a daily basis, the culture must support its objectives, which is to satisfy the customer through
service. With this, every staff who embodies the culture within the organization will know what to do
in almost every situation.
b) Development of a marketing approach to human resource management – Employee turnover in
tourism and hospitality is relatively high, so establishments need to find a way on how to satisfy and
keep their employees. Marketing can help determine what makes employees stay. When they work
hand in hand with the human resource (HR) department, they can form offers and benefits that will
entice employees to work long term.
c) Communication or dissemination of marketing information to employees – Including employees
frequently in the communication cycle regarding company matters increases their feeling of
importance as part of the organization and job satisfaction.
d) Implementation of a reward and recognition system – Recognizing employee performance and giving
constructive feedback for continuous improvement further motivates an employee to stay and do
better.

Strategies for Creating or Establishing a Successful Service Culture

• Understand clients’ objectives by showing genuine interest in their important needs or wants and
molding the culture around it.
• Be consistent in how the culture is communicated starting from the top organization, which sets the
tone through words and actions for the entire organization.
• Train and develop employees to execute on core values, including everyone, for them to be equipped
with the right standards to implement the service culture.
• Reward and recognize employees who embody the core values that a company is trying to project.

09 Handout 1 *Property of STI

 student.feedback@sti.edu Page 1 of 4
 TH1802

EMPOWERMENT
Empowerment is the act of giving employees the authority to identify and solve guest problems or complaints
on the spot, and make improvements in the work processes when necessary (Hudson & Hudson, 2017). It also
involves decentralizing decision-making and flattening organizational charts to give power to employees who
directly deal with customers. With empowerment, managers trust their subordinates more and respect their
judgment.
Below are the benefits of empowerment and drawbacks of disempowerment to employees:
Benefits of Empowerment Drawbacks of Disempowerment
✓ More responsive service  Limited authority to meet service needs
✓ Complaints are quickly dealt with  Complaints are dealt with slowly
✓ Greater customer satisfaction  Higher level of costs in generating new customers
✓ More repeat business  Fewer loyal customers
✓ Well-motivated staff  Poor motivation and low morale
✓ Less turnover of staff  High turnover of staff
✓ Increase in productivity  Low productivity
✓ Lower labor cost  Low wages but higher costs
✓ Increase in profits  Low profits
Table 1. Empowerment and disempowerment in tourism and hospitality operations
Source: Customer Service for Hospitality and Tourism, 2017. p. 74

Inhibitors of Empowerment
According to Goetsch (2017), these are the factors that inhibit empowerment:
• Resistance from Employees and Unions
o For employees – Resistance to change is a part of human nature, so it is recognized that
skepticism and inertia occur when employees get involved in an unfamiliar setting and feel
uncomfortable even when going through positive change.
o For unions – Unions may resent the idea and think that the changes that are happening are
not their original idea. Suspicions may also arise due to the traditional adversarial relationship
between labor union and management.
• Resistance from Management
o Managers as people are also subject to negative traits like insecurity, ego, and personal
preferences, which are some of the reasons they become resistant to empowerment, along
with the following:
▪ Fear of losing control – This involves managers who value their power to the extent
that their perspective of initiative is a threat to their authority. Another cause is the
fear of being revealed as the reason for inefficiency when problems are being
identified within the organization.
▪ I’m-the-Boss syndrome – This involves managers who strictly follow the dogma of
“employees should do what they’re told, when they’re told, and how they’re told.”
▪ Status – This involves ego-focused managers who are proud and protective of their
position and power.
▪ Outdated management training – This involves managers who are not people-
oriented and still follow theories and scientific type of management.
▪ Old-school syndrome – This involves managers who are more task-oriented than
people-oriented. They only care about the task and care less about the people who
perform it.

09 Handout 1 *Property of STI

 student.feedback@sti.edu Page 2 of 4
 TH1802

▪ Fear of exclusion – This involves middle-level managers who show resistance to being
left out in the whole process of empowerment. It is important to remember for top
managers that empowerment should involve all personnel.
• Workforce Readiness
o Empowerment is about decentralizing decision-making and giving power to employees. It is,
therefore, possible that some employees are not ready to face this kind of responsibility.
• Organizational Structure and Management Practices
o In an organization, there are layers of managers who can say “yes” or “no” to a decision. An
initiative by an employee working through many layers of managerial decisions can hinder the
risk-taking and initiative attitude of employees.

Empowerment Vehicles
Below are the methods or vehicles used in implementing empowerment (Goetsch, 2016):
• Brainstorming – Managers gather all members of the organization and solicit ideas and feedback from
the employees, which are recorded for later review. No judgmental comments and evaluation of ideas
among members are allowed as the review process evaluates each idea and narrows down choices to
a specific number to reserve the best selections of ideas that will be used.
• Nominal Group Technique (NGT) – This is a more sophisticated form of brainstorming which has five
(5) steps:
A. Stating the problem – The manager states what the problem is and ensures that every member
of the organization understands.
B. Silent recording of ideas – Each member of the organization silently lists down his/her ideas.
C. Public recording of group ideas – Each idea from the members of the organization is shared
publicly and gathered one by one until all ideas are recorded. There is no discussion among
members in this step.
D. Clarification of ideas – Each idea is clarified by asking the members who shared it to explain
clearly. This is to ensure that each member understands what the idea meant; no judgmental
comments and gestures are allowed from all members.
E. Silent voting of ideas – This is when the ideas are voted on silently. The idea receiving the most
points is selected as the best idea.
• Quality Circles – It is a regular meeting held by a group of employees to discuss workplace
improvements. The difference between quality circles and brainstorming is that while the latter is
conducted by the manager, the former has an employee that acts as a facilitator. Quality circles are
mostly done before, during, or after a shift.
• Suggestion Boxes – It is considered as the oldest form of gathering employee feedback in which all
employees’ inputs and written suggestions are put in a box by the managers.
• Walking and Talking – It is a simple form of empowerment where managers walk around the
workplace and talk to employees, ask questions, and collect their insights that may be used for
improving the workplace.

Empowerment as Part of the Service Marketing Triangle

Service Marketing Triangle is a framework that addresses the challenges inherent in services. It can be used
to assess and guide strategies, as well as sprovide a roadmap for implementation planning (Hudson & Hudson,
2017).

09 Handout 1 *Property of STI

 student.feedback@sti.edu Page 3 of 4
 TH1802

Company

Internal Marketing External Marketing

Enabling Promises Making Promises

Service Providers Customers

Interactive Marketing
Keeping Promises
Figure 1. The services marketing triangle
Source: Customer Service for Hospitality and Tourism, 2017. p. 9

In this triangle, there are three (3) interlinked groups that work together to develop, promote, and deliver
services. These key players are the company, customers, and service providers.
In between these key players, there are three (3) types of marketing that need to be carried out in order to
deliver a successful service. These are essential for building and maintaining relationships. These are the
following:
• External Marketing (Making Promises) – This is when a company makes promises to its customers
regarding what they can expect from their services and its delivery.
• Interactive Marketing (Keeping Promises) – This occurs when the customer and an organization
interact and the service is consumed where the impression of the customer is most vivid and
contributes to his/her overall satisfaction.
• Internal Marketing (Enabling Promises) – This happens when service providers are recruited, trained,
provided with tools and appropriate internal systems, and rewarded for good services in order to keep
the promise made to the customer.
Empowerment is an essential part of internal marketing which is a part of the service delivery triangle
framework.
For interactive marketing to occur, the following points need to be addressed in empowering frontline
employees:
• Employees require a degree of control over the service task performance in order to be responsive to
customer needs and perform service recovery.
• The degree of empowerment is contingent on the complexity and variability of customer needs and
the degree of task complexity.
• Empowerment does not suit all employees because of the extra responsibility that it inevitably entails.
References:
Goetsch, D. L., & Davis, S. (2016). Quality management for organizational excellence: Introduction to total quality. Boston: Pearson.
Hudson, S., & Hudson, L. (2017). Customer service for hospitality and tourism (2nd ed.). Oxford: Goodfellow Limited.
Irace, R. (2017, December 6). Strategies for creating a successful service culture [Online exclusive]. Chief Executive. Retrieved from https://chiefexecutive.net/strategies-
creating-successful-service-culture/ on November 6, 2018

09 Handout 1 *Property of STI

 student.feedback@sti.edu Page 4 of 4