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Service marketing control as practice: A case study

Article in Qualitative Market Research An International Journal · September 2011

DOI: 10.1108/13522751111163218

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SERVICE MARKETING CONTROL AS PRACTICE

A Case Study

Per Skålén

ABSTRACT

Purpose: Service marketing research has developed practices for managing and controlling

the human resources. However, the role of these control practices in organizations have

neither been empirically studied in a systematic way nor been analyzed in relation to control

theory. This paper addresses these gaps in previous research.

Methodology: Single case study of a Swedish financial service firm referred to as the

Financial Institute (FI) which has drawn on service marketing practices to manage the

organization and control the employees.

Findings: The empirical findings suggest that that control practices associated with service

marketing discourse controls for the customer orientation of the human resources.

Originality: In order to analyze the empirical findings the paper draws on the control theory

of organization studies. More particularly Labour Process Theory (LPT) and Foucauldian

Organization Theory (FOT) are invoked. The analysis suggests that mainly FOT explains how

service marketing practices controls the customer orientation of the human resources.

Type of paper: Research paper

Keywords: Control, Service marketing, Labour Process Theory, Foucauldian Organization

Theory, Customer orientation.

1
INTRODUCTION

In her seminal article that contributed significantly to open up a space for service marketing

research Shostack (1977: 73, emphasis added) argued that ‘service industries have been slow

to integrate marketing into the mainstream of decision-making and control because marketing

offers no guidance, terminology, or practical rules that are clearly relevant for services’.

Shostack claimed that the central managerial practices of previous academic marketing

research, such as the marketing mix, fostered the customer orientation of products but not

people which made it inappropriate for services (see also Grönroos, 1982).

According to Shostack (1977: 79) ‘services are often inextricably entwined with their

human representatives. In many fields a person is perceived to be the service’. Grönroos

(1978: 598) holds a similar position: ‘The performance of the personnel is considered to a

great extent to shape the service that is offered’. Based on this premise of the centrality of the

human resources for service marketing practice Shostack and Grönroos drew the conclusion

that academic marketing research needed to turn its focus towards the human resources

organizations employ. Shostack wrote: ‘the potential power of more deliberately controlling

or structuring [the human resource] element is clear…The point is that service marketers

should be charged with tactics and strategy in this area, and must consider it a management

responsibility’ (Shostack, 1977: 79, emphasis added).

Thus, Shostack and Grönroos envisioned marketing as a discipline devoted to producing

knowledge for managing and controlling the human resources. In this regard their intervention

was very successful. Many sub-disciplines of service marketing – for instance service quality,

service development and service culture research – has focused on developing practices for

managing and controlling the human resources. Similar ambitions have also guided research

disciplines closely associated with service marketing such as relationship marketing and

market orientation research. Even though the management practices associated with these

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fields of research not always have explicitly been referred to as control practices many of

them have as their main object and target the human resources.

However, in marketing little attention have been devoted to studying how organizations

use and utilize the practices that have been developed to control the human resources.

Needless to say service marketing research has also failed to utilize the control theory of

organization studies to analyze what type of control its practices foster and represents. The

result is a paucity of knowledge about what control theory that best explain the form of

control exercised by service marketing practices and how service marketing control practices

heuristically relates to other types of control.

This paper addresses these gaps in previous research by perceiving and empirically

studying service marketing as a control discourse from the perspective of control theory. It

draws on a case study of a Swedish financial service firm that has utilized service marketing

practices and practices from associated disciplines – measurement of service quality, coaching

and relationship marketing – to control its employees. The aim is not managerial but critical;

it is not to develop more service marketing control practices but to study and understand

service marketing as a control practice in a local empirical context. The empirical findings

suggest that that the control practices associated with service marketing discourse controls for

the customer orientation of the human resources. In order to analyze the empirical findings the

paper draws on the control theory of organization studies. More particularly Labour Process

Theory (LPT) and Foucauldian Organization Theory (FOT) are invoked. The analysis

suggests that mainly FOT explains how service marketing practices controls the customer

orientation of the human resources.

The paper is structured as follows. The next section introduces the control theories of

LPT and FOT which is followed by the method section. Then, the findings are presented

focused on describing the service marketing control practices and the other control practices

3
that the studied company used. The analysis and discussion section which follows positions

service marketing control practices in relation to LPT and FOT. The paper ends with a

summary of the conclusions and contributions and offers suggestions for further research.

CONTROL

The concept of ‘control’ has traditionally been associated with the theory and practice of

management accounting. It has been defined as ‘… a formal system for gathering and

communicating data for the ends of aiding and coordinating collective decisions in the light of

the overall goals or objectives of an organization’ (Horngren and Sundem, 1990 in Macintosh,

1994: 2). This managerial notion of control has also informed the scarce previous research on

control in service marketing (see e.g., Modell, 1996). However, a managerial understanding

of control is inappropriate for studying control practices associated with service marketing

from a sociological critical perspective as in the present paper. Labour process theory (LPT)

and Foucauldian organization theory (FOT), on the other hand, are highly relevant

perspectives for pursuing such a project. In this section major works on control in LPT and

FOT is reviewed. In addition, since notions of control always are based in a theory of power,

LPT and FOT are related to different notions of power. It must be noted though that the aim

with the present paper is not to merge LPT and FOT. These perspectives are articulated upon

incommensurable epistemological and ontological positions. The aim is rather to position

service marketing control practices against the backdrop of LPT and FOT in order to generate

knowledge about what type of control service marketing practices foster and represents.

Labour process theory

Control is a central notion in LPT. Departing from the works of Marx, which are central to

LPT, is the view that capitalism is characterized by opposition between the capitalist and the

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worker (Braverman, 1974). Furthermore, labor power is seen as a commodity; however, ‘that

commodity is unique in that it is indeterminate – labor power is a potential for work that has

to be converted into profitable labor’ (Warhurst et al., 2009: 98). Even though the labor

process requires some degree of consent between the capitalist and the worker (Burrawoy,

1979), the work behavior that the capitalist seeks to obtain from the worker is not always in

the interests of the worker. Central to LPT, thus, is the fact that ‘there is a control imperative

arising from the need to reduce indeterminacy’ (Warhurst et al., 2009: 98). Accordingly,

Edwards (1979: 17) has defined control as ‘the ability of capitalists and/or managers to obtain

desired work behavior from workers’.

Control, as formulated in LPT, is founded on a material notion of power – it is the

capitalist/manager who has power over the worker. The capitalist/manager embodies power. It

is also a notion of power that is agency-orientated and largely (but not exclusively) negative.

When capitalists/managers exercise control over workers, they force them to carry out actions

that are against their will.

Foucauldian organization theory

Foucauldian organization theory (FOT) has also contributed to the understanding of control in

organization studies. To Foucault (1977; 1981; 2007), power is not primarily a commodity

that belongs to certain actors (such as capitalists or managers) and which these actors can use

to force someone else (workers) to carry out actions against their will. Power, Foucault

argued, is situated in discourses or forms of knowledge, hence the notion of

power/knowledge. According to this perspective, behaviour and action are always mediated

by discourse constituting the relationship between people. Even though actors can choose

which discourses to position themselves in, they cannot choose to stand outside of discourse.

Furthermore, power is not only negative but also positive, empowering people to do things.

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 Based on this understanding of power, studies of control within the boundaries of FOT

have focused on how managerial discourse order and frame organizational life (see, for

instance, Covaleski et al., 1998). Control can be conceptualized as framing effects (Edenius

and Hasselbladh, 2002), meaning that certain discourses foster certain ways of seeing and

acting, while simultaneously making alternative ways less likely. Empirical analysis has

shown how discourses such as total quality management (Quist et al., 2007), management by

objectives (Covaleski et al., 1998), and human resource management (Bergström and Knights,

2006) frame organizational action and perception. In FOT, thus, control is not based on the

proposition that there is a structural conflict between capitalists/managers and workers in

capitalist economies which the capitalists/managers have to overcome in order to accomplish

control, but rather as stemming from the rationalities and norms built into discourse which

might have been produced without a clear intention to control work. While control in FOT

stems from the discourses governing a particular control situation, control in LPT stems from

the material reality of capitalist production.

WORKPLACE AND METHODOLOGY

The present paper reports on a case study of a Swedish service firm labeled the Financial

Institute (FI). The FI’s core business is home loans. With approximately 10 percent of the

Swedish market, and a net annual profit of SEK462m (approx. €50m), it is one of the major

players on the Swedish home loans market. In 2006, it had 410 employees, of whom

approximately 60% were women (annual report, 2006). The FI is divided into three divisions:

borrowing, business-to-business loans, and consumer loans. The present paper focuses solely

on the consumer loans division, which has the highest number of employees (210 according to

the 2006 annual report) and constitutes the core business of the FI1. Basically, this division

6
consists of a hierarchically-structured management function, back office functions and a

customer service center.

It is the front line employees (FLEs) working at the customer service center that are the

main object of control. The FLEs at the FI make outgoing calls and receive incoming ones.

The main task of the FLEs at the FI is to issue home loans. The total interaction time with a

customer before a loan is finally issued might last for several hours and span several calls.

Data collection

The main data collection technique used in the present study was face-to-face interviews. In

total, 41 interviews were conducted between March 2006 and December 2007. Each interview

lasted between 45 and 90 minutes and was conducted by the first author. All but one of the

interviews was conducted at the FI. Thirteen interviews were conducted with managers, 6

with back office staff, and 22 with FLEs. Seven of the respondents – 3 managers, 2 back

office staff and 2 FLEs – were interviewed a second time giving a total of 34 respondents, 24

of whom were women and 10 of whom were men. A contract of anonymity was set up with

each interviewee. It was also agreed that the name of the company would remain anonymous.

The interviewees were not randomly selected. Rather, a convenient sample was used. Usually,

the interviewees were asked about whom to interview about a specific topic. The aim was not

to statistically generalize but to make an analytical generalization. When the latter form of

generalization is utilized ‘…a previously developed theory is used as a template with which to

compare the empirical results of the case study’ (Yin, 1984: 31), and thus to support and

develop its claims.

In order to develop an understanding about service marketing control in practice,

theoretical sampling (Glaser and Strauss, 1967) was used. The process of data collection was

thus controlled by the emerging themes. Thus, once a few of the interviews had been

7
conducted, they were transcribed verbatim, then coded and categorized. As soon as themes

started to emerge, these were probed during subsequent interviews. At the same time,

openness to the emergence of new themes was retained. This cycle was repeated several

times. In addition to interviews and documents, official public materials (e.g. advertisements,

annual reports, etc.) as well as internal materials (project plans, quality measurement forms,

etc.) were also collected and analyzed.

Data analysis

The interviews were transcribed and coded as soon as possible after being conducted – Nvivo

7 was used as the data analysis software. The coding first focused on identifying in vivo codes

(Glaser and Strauss, 1967) or when in vivo codes was impossible to identify, simple

descriptive phrases relevant to understanding control in the studied firm. Since the paper, in

addition to studying the effects of service marketing control practices on organizations, seek

to say something about how service marketing relates to other control practices and the

relative significance of service marketing control in relation to other types of control, the

coding was not limited to ‘service marketing codes’. Rather all codes with relevance for

control in the studied firm were considered. Examples of codes include ‘customer loyalty’,

‘proactive’, ‘quality’ and ‘(credit) rules’. These first order codes are linked to six second order

categories (Strauss and Corbin, 1998) or control practices linked to two control themes

resulting in the following scheme:

Goals and results

1. Measurements of results and feedback.

2. The credit review system (CRS).

3. Recruitment and selection.

Service marketing

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 1. Measurement of service quality.

2. Relationship marketing.

3. Coaching.

FINDINGS

This section reports on the empirical findings. The control themes and practices identified in

the data analysis provide the structure.

Goals and results

According to the FI’s annual report for 2006, its major formal goal is ‘profitability’ measured

in terms of ‘high yield on equity’. In order to maintain profitability, ‘we have to be efficient

within the company as well as in relation to our customers’. Formally, profitability entails

both control of customer orientation and efficiency. According to the head of the consumer

division, this goal applies to the FLEs directly: ‘profitability is measured on the customer

representative level… they [the FLEs] are the ones responsible for sales and profitability’.

Measurement of results and feedback. At the FI, the profitability goal is translated into

specific formal goals and rules pertaining to FLEs which are measured weekly. Examples of

measures include the total value of loans issued, the number of calls taken and the number of

home insurance policies sold. Most of the FLEs argue that the former is the most important

one. One of the states, ‘at the end of the day, the total amount of [home] loans approved, in

monetary terms, is what counts’. This is also emphasized by the team-leaders and exemplified

by one of them thus: ‘in order to get new volumes, new customers, sales [of home loans] are

very, very much in focus’. Another team-leader corroborated that thus: ‘the most obvious

thing is, of course, how much money they [the FLEs] have lent…based on that, it’s very easy

to know what the company gets back’.

9
 Some FLEs found the measurement and the feedback they obtained from their

respective team-leaders stimulating, ‘to me, my figures are a tool, they spur me on to do a

better job’ said one FLE. Two colleagues corroborated that thus, ‘I’m competitive. My

numbers spur me on to do even better’. ‘If…my sales increase, I know that I’m on the right

track’. Others found the measurement of results stressful. One FLE said: ‘All these sales

statistics, I find it stressful. I’m tired of it’. One of her colleagues made a similar point: ‘I

could do without this measurement [of sales]. At one point, I found it really stressful, but I’ve

learnt to live with it’. Others had mixed feelings: ‘Sometimes, there’s just too much

measurement. It forces you to work with several things simultaneously and that is

stressful….on the other hand, you need a carrot. It’s nice to have your sales figures in black

and white’. Even though not all the FLEs liked the measurement and feedback concerning

sales, it still affected them. It made them work more efficiently, they ‘pushed harder’ as one

FLE put it, because they all knew that there was a direct link between sales and salary.

The credit review system (CRS). The CRS was referred to by several FLEs as ‘our

tool’, used to investigate whether customers are eligible for loans or not. Important

improvements of the CRS have been made during the last ten years: ‘Previously, reviewing

applications was more of a craft. Today, we have the CRS which you feeds the necessary

information in and gets a green, yellow, or red light’ said one FLE. As several FLEs pointed

out, the formal ‘instructions [or rules] are built into the system’, regulating what information

is needed from customers and ensuring that the handling process is dealt with efficiently by

the FLEs. As one of the interviewees put it: ‘previously, you were supposed to have all the

rules in your head…now the system remembers the rules for you’.

All the FLEs and managers interviewed argue that the CRS has increased the efficiency

of work, as exemplified by one employee who had advanced from FLE to team-leader: ‘the

speed of the handling process has increased enormously’. Several FLEs believed that the

1
increased level of efficiency had led to increased control. One FLE said: ‘When I started

working here [in 1996], you had rules for how loan reviews were to be done…but you were

not under the control of the CRS system so much’. The CRS can be perceived as a form of

‘machinery’ or ‘tool’, as several of the FLEs put it. As such it controls for efficiency, both

input-wise – through regulating what information to obtain from the customers – and output-

wise – through the decision that the CRS makes, which is the basis for the feedback given to

the customers by the FLEs; i.e. a ‘red, green or yellow light’.

Recruitment and selection. The striking thing about the FLEs at the FI is that they have

very varied backgrounds: ‘we have everything from ex pre-school teachers, to ex sole

proprietors, to ex housewives’ said one team-leader. It is not always a merit to have ‘a very

good education or experience of banking’ inferred one employee. Rather, what makes the

difference is, according to the HRM-manager ‘the personality, the personal qualities, the

character…these things are hard to articulate, but I think most of us can determine who is an

‘FI person’ and who is not. You can hear that expression occasionally – this is an ‘FI person’’.

The interviews describes the ‘FI person’ using the following terms: ‘communicative’, ‘easy

going’, ‘socially competent with a positive attitude’, ‘someone with a nice telephone voice’,

‘nobody who likes to be on top, but somebody who invites participation and is capable of

action’. People with these types of qualities are selected for employment at the FI.

However, it is important to put the selection of the FLEs in a historical perspective. Up

until around 2003, the FI was enjoying a very favorable market position. ‘Applications were

pouring in’, as one of the interviewees put it. In order to ensure efficiency, handling abilities

were highly valued when selecting employees. However, once the FI had lost its favorable

market position, a higher ‘selling profile’, as several of the managers put it, was needed. One

team-leader said: ‘When we hire now, we look more at selling skills than administrative

skills. This has changed over the years’. In addition to changes in market position,

1
development of the CRS has diminished the need for technical skill and left space for

customer orientation skills.

Service marketing

The FI utilized three control practices associated with service marketing research:

measurement of service quality, coaching and relationship marketing.

Measurement of service quality. The literature on service quality emphasizes human

factors – so called quality factors – e.g. reliability, responsiveness, empathy, assurance,

attitudes, appearance, behavior, and the expertise of the personnel – as accounting for service

quality. An important point of departure is that customers evaluate the level of the service

quality delivered. The customer orientation of the personnel is thus built into the foundations

of service quality tools. In order to achieve customer orientation, models have been developed

which are associated with standardized surveys for measuring service quality, as well as

management instructions for changing the underlying factors of service quality (see, for

instance, Schneider and White, 2004), in cases were there is a gap between the level of service

quality customers expect and what they perceive.

The measurement of service quality at the FI lead to one important conclusion,

described by one of the managers thus: ‘The only general criticism we’ve had in the service

quality surveys is that we aren’t proactive enough’. The result was taken as fact by the

managers. The managers became convinced that the FLEs, in particular, were too reactive

when dealing with customers and that they needed to become more proactive.

Coaching. The problem was how to close the gap identified by the service quality

measurement. One way of doing that recommended by the service marketing literature is the

adoption of coaching as a leadership style. Middle managers, in particular, should operate

ascoaches, implying that they need to have the ‘ability to coach, communicate, or model a

1
service ethic’ (Zeithaml et al., 1990: 139). Many of the middle managers at the FI perceived

themselves to be coaches, which was exemplified by one who said: ‘The FI is a coaching

corporation’. An HRM official made a representative description of coaching:

To me, coaching is feedback…according to my philosophy about leadership, I as a leader am the

tool in my own leadership. As an administrator [FLE], it is a similar situation, I myself am the
tool that I have to use on the customers since I’m working with that relationship. If I’m to be
able to develop as a leader, or as an administrator [FLE], I’ll need to have feedback about how
my behavior is perceived by others. When I’ve received such feedback, I can choose whether to
change myself or to continue to be the same as I’ve always been. It’s up to me. But if I choose to
continue to behave in such a way that I cause irritation among colleagues and customers, then
I’ll need to be ready to face the consequences. So, if I get feedback informing me that I’m doing
things in a way that doesn’t really create the best results, then it’s only natural for me to choose
to change myself. I, at least, am of the opinion that all of us want to do our best.

The most practiced form of coaching at the FI is the tele-coaching that the team-leaders have

with their FLEs. Tele-coaching entails that the team-leader sits and listens to the FLEs while

they talk on the phone and then gives them feedback once they have finished the call, or

alternatively, as one FLE put it, ‘we tape-record my interactions with the customers which I

and the team-leader then listen to and evaluate together’. One of the FLEs made a

representative description of what coaching was about: ‘the feedback we get from the team-

leaders centers on how we have treated the customers and particularly how proactive you

have been’. The quote suggest that the coaching conducted by the team-leaders can be

interpreted as aimed at making the FLEs present a more proactive aspect of themselves

Coaching implies guiding the FLEs in a detailed way, as the following representative quote

from a team-leader suggests:

Add-ons have been in focus lately because none [of the FLEs] deliver on target. [In order to
change that] I started drilling some phrases [into the FLEs]…taken from the few that did very

1
 well…I started to talk to them [FLEs] about it: “What do you think it is that the others do which
makes them so very successful? Why are they doing so well?”. Often, they [the FLEs] have the
answer themselves but they haven’t started trying it out in reality yet. [In such cases I ask]:
“How do you think it would feel to do that?”. “Does that feel okay?”. No one turns that down.
They usually think that it’s okay to try.

Most of the 20 FLEs interviewed think that the coaching has affected how they handle

customer interaction in ways that can be interpreted as becoming more proactive during

interactions with customers. One of the FLEs who was hired to administrate loans in 1992

said: ‘Let’s give you an example of what I’ve learnt from coaching: I get a call from a

customer. The customer wants to fixate his or her adjustable mortgage. He or she is a bit

worried and etc etc. Now we’re talking security. This might be a good time to talk about

payment protection insurance, because fixation of mortgages is a security issue. Previously I

never took these kinds of initiatives’.

More particularly, it is possible to interpret the coaching performed at the FI as fostering

self-control. One of the team-leaders describes coaching as ‘help to self help which I, with my

question, can use to make a co-worker [FLE] discover that s/he will develop and evolve and

do things differently’. Several of the FLEs report that they have regulated themselves towards

a more proactive behavior as an effect of coaching. One FLE recalls a phone conversation

with a man which she tape-recorded and listened to together with her team-leader. ‘I rambled

on about evaluating houses for a long time and I said to my team-leader “I don’t think he

understands what I am saying”…the team-leader didn’t need to make any suggestions about

how I was supposed to act…I heard myself that I’d given too long an explanation about a

thing that he hadn’t asked for, and probably didn’t need’. Since the customer did not need that

information, the FLE was deviating away from the proactive way of being because

proactivity, as one FLE put it, entails ‘knowing about the customers’ needs before they do’.

1
 Relationship marketing. Another way to promote the form of customer orientation that

proactivity represents is to utilize relationship marketing (RM), which is associated with

service marketing research. RM departs from the belief that long-lasting relationships with

customers, under many circumstances, are more profitable and better realize customer

orientation than does transaction marketing focused on finding new customers (Grönroos,

1994). Through proactive behavior (Dibb and Meadows, 2001), before customers become

dissatisfied or disloyal, or consider switching, FLEs are able to prevent them from going to

competitors.

The implementation of RM was divided up in two phases. In the first phase, the FLEs

were involved in developing ‘new ways of working’ in line with the prerogatives of RM. One

of the FLEs recalled: ‘Through our discussions within the group, it became evident that many

of us had experienced that customers whom we didn’t contact directly, after they’d applied for

a loan, often chose another bank before we had a chance to contact them…we realized that

this wasn’t beneficial to us’. This quote suggests that the process started by the FLEs realizing

that they had previously been working in ways incongruent with RM and thus the ideal of

proactivity and that this was negative for the FI. Based on this understanding, the FLEs

developed more proactive ways of working, guided by the project managers. One of the FLEs

made a typical statement: ‘We realized that…we needed to be more active with the

customers…we needed to ask questions which establish what needs the customers have…we

made checklists about how to work this way’. Some, but not all, of the FLEs adapted to the

new and ‘right’ way of being: ‘Now, I assume responsibility and call up customers who have

made a loan application and ask if they have any questions…previously I never did that’ one

FLE said.

During the second phase an RM IT system was implemented. From a control

perspective, the aim of the RM IT system – referred to as the Customer Care System (CCS) –

1
is to control the FLEs’ interactions with customers. One of the FLEs put it like this: ‘We do

everything pertaining to customer communication in the CCS as soon as we’ve finished with

the credit review in the CRS’. Several FLEs argued that ‘you make all contact with the

customers via the CCS. You can e-mail or send an SMS to the customer. Then, other

administrators [FLEs] will have access to this communication. It’s open’. In addition, work

orders can be fed into the system which the FLEs become responsible for carrying out which

might entail contacting 20 customers about a home insurance offer. The work orders might be

fed into the system for anyone to act upon, but they might also be given to a particular person.

Says one manager: ‘When you log on to the CCS in the morning, you get a what-to-do list.

This might entail offering customers payment protection insurances or sending loan

documents or anything at all. This offers us new possibilities’. The analysis suggests that the

CCS controls efficiency. But the intention of the managers was that the system should also

control customer orientation, and thus how the personnel present themselves to the customers.

As one of the managers put it, the CCS would ‘force’ the FLEs to work in accordance with

‘the proactivity and customer care built into such systems’. In order to control verbal

communication with the customers, short lists of ‘proactive’ phrases were built into and

associated with the system, but these were not used by the FLEs. In addition, in order to

control written communication, the CRS has templates available for use in emails and SMSs ,

but few FLEs use them. As one of them put it: ‘you lose too much of the personal touch’.

DISCUSSION AND ANALYSIS

The empirical findings suggest that the control theme ‘goals and results’ foster efficiency and

that the control theme ‘service marketing’ foster customer orientation. Efficiency has been a

central concern of general management theory and customer orientation has been the central

concern of marketing, at least since the introduction of the marketing concept.

1
 Based on the empirical findings it is possible to address the two concerns pertaining to

service marketing research that were raised in the introduction of the paper. The first concern

addressed the fact that service marketing research has focused on developing and prescribing

control practices to organizations but has failed to systematically study the effects of its

prescriptions on practice. By studying control practices associated with service marketing

empirically the paper addresses this issue. The findings reported above, which are supported

by previous conceptual research (see, e.g., Skålén et al., 2008), suggest that the control

practices associated with the service marketing theme – measurement of service quality,

coaching and relationship marketing – seems to control for the customer orientation of the

human resources (and only to a very minor extent for efficiency). Service marketing, based on

the present study, seems to have a significant influence on controlling for the customer

orientation of the human resources. The present study thus suggests that service marketing

practices largely fulfill the need for control that they are designed to do: they facilitate the

customer orientation of organizational members (see introduction).

The second concern raised in the introduction addressed the fact that service marketing

research has neglected to utilize the control theory of organization studies to analyze what

type of control its practices foster and consequently that it has failed to study how service

marketing control as a social practice heuristically relates to other types of control. The

present paper provides an opportunity to address this second issue by analyzing the empirical

findings through drawing on Labour process theory (LPT) and Foucauldian organization

theory (FOT).

Control and labor process theory

As explained in the section entitled ‘Control’ above, the notion of control in LPT starts out

from the works of Marx. Accordingly, the need for control in organizations is seen as

1
stemming from the structural conflict between capital and labor in market economies

(Braverman, 1974), entailing that the work behavior that managers seek to obtain from

workers is not always in the interests of the worker. Thus, managers need to rely on control

initiatives in order to ‘obtain desired work behavior from workers’ (Edwards, 1979: 17).

Technical control. Edwards (1979), in his groundbreaking work on organizational

control, made a distinction between three types of control, two of which – technical and

bureaucratic control – are of interest to the present paper. ‘Technical control involves

designing machinery and planning the flow of work to minimize the problem of transforming

labor power into labor’ (Edwards, 1979: 112). Technical control influences work behavior as

an effect of the physical design of work. It has obvious relevance to manufacturing work but it

is also, as previous research has shown (Callaghan and Thompson, 2001) a relevant analytical

concept to service work.

At the FI, technical control is provided by the CRS and the CCS. The FLEs are forced

to carry out the credit reviews that they have to make for each and every loan application by

using the CRS. Previously, when no CRS existed, individual differences in the review process

were much greater. With the CRS, the credit review process is more standardized and

controlled – there is simply no other way of carrying out the necessary operations than those

given by the CRS. This has ensured increased efficiency in the credit review process, which is

one of the FLEs’ two major duties. The CCS is designed to ensure technical control of the

FLEs other major duty: interacting with the customers. The CCS has been in operation for a

shorter period of time and does not seem to have affected the labor process as deeply as the

CRS, but it ‘offers’, as one of the managers put it, ‘new possibilities’ of controlling the FLEs

by feeding work orders into the CCS system, making sure that the ‘right’ customer is given

the ‘right’ services and checking that the work orders really are carried out within a given

timeframe. In this way, managers can make sure that interactions with customers are handled

1
efficiently by the FLEs. In sum, the analysis thus suggests that technical control accounts for

the control of efficiency but not for customer orientation to any great extent. Technical control

does not explain the customer orientation type of control imposed by practices associated with

service marketing upon the human resources. However, the findings suggests that in

organizations were relationship marketing IT systems controls the customer orientation of the

employees such systems should at least partly be treated as a form of technical control.

Bureaucratic control. While technical control is an effect of the physical structure of

the organization, bureaucratic control is embedded in the formal social structure. Scott (2003:

20) defines a formal social structure as ‘one in which the social positions and the relationships

among them have been explicitly specified and are defined independently of the personal

characteristics and relations of the participants occupying these positions’. Accordingly,

Edwards (1979: 131) argues that ‘bureaucratic control establishes the impersonal force of

“company rules” or “company policy” as the basis for control’. Bureaucratic control is

relevant to analyzing control in service firms because bureaucratic rules ‘give supervisors

specific criteria against which to evaluate workers’ (Callaghan and Thompson, 2001: 24),

fostering efficiency. But bureaucratic rules can also be transformed into norms and values

controlling the social aspects of work, e.g. customer orientation. At the FI, bureaucratic

control is exercised by means of the measurement of goals and the feedback given to the

FLEs. The major goal against which workers are evaluated is the number of home loans

approved which, as the section on the ‘measurement of goals and feedback’ suggests, makes

the FLEs work more efficiently. However, the data does not suggest that bureaucratic control

fosters customer orientation by affecting the norms and values of the FLEs. Accordingly,

bureaucratic control does not in the present case shed light on how service marketing

practices control the customer orientation of the human resources.

1
 Normative control. In elaborating further on Edwards (1979), Callaghan and Thompson

(2001) argue that LPT needs to account for normative control better. They argue that

Hochschild’s notion; ‘emotional labour is a useful addition, bringing a dimension of

normative control into the picture’ (p. 26). Hochschild (1983: 7) defined ‘emotional labour’ as

‘the management of feeling to create a publicly observable and bodily display’. According to

Hochschild, service firms control the ‘management of feeling’ conducted by their personnel

by means of similar control practices to those utilized by the management of the FI; i.e.

recruitment, selection, and training.

As the section on ‘recruitment and selection’ shows, the FI, at different points in time,

has recruited people with different abilities. Up until approximately 2003, when the FI had a

very favourable market position and efficient administrators were being recruited and

selected. When the competition became stiffer after 2003, a higher ‘selling profile’ – known

as the ‘FI person’ – was needed. This suggests that normative control, through the recruitment

and selection of employees, controls both for the efficiency and customer orientation of the

employees. However, since neither recruitment nor selection is associated with service

marketing discourse, but rather with human resource management discourse, these findings do

not suggest that normative control is able to explain the control of the human resources

fostered by the service marketing practices studied here. It is, on the other hand, possible to

interpret the very detailed coaching given to the FLEs, by the team-leaders, as a form of

training that involves the team-leaders listening to the FLEs while these interact with the

customers, giving the FLEs instant feedback; or the team-leaders listen to recorded

interactions with customers together with the FLEs and jointly evaluate it. Since coaching is

one of the control practices associated with service marketing that the FI utilizes and since

coaching accomplishes customer orientation of the employees it logically follows that

2
normative control to some degree explains how service marketing controls for the customer

orientation of the human resources.

In sum, two of the three control types of LPT – technical and bureaucratic control –

explain control of efficiency but not customer orientation in the present case. Accordingly,

neither technical control nor bureaucratic control explains the customer orientation of the

human resources fostered by the control practices associated with service marketing.

Normative control, on the other hand, accounts for control of customer orientation through

training, recruitment and coaching. Since the latter control practice is associated with service

marketing discourse, normative control is to some extent able to explain how service

marketing works as a control discourse. But only to a limited extent though. Normative

control does not explain how the two additional control practices associated with service

marketing – measurement of service quality and relationship marketing – that FI utilizes

controls for the customer orientation of the human resources. Furthermore, as will be

suggested in the next section, normative control does not explain fully the control imposed by

coaching.

Control and Foucauldian organization theory

FOT was the other main theoretical perspective on control in organizations introduced in the

section on control. According to this perspective (see e.g., Covaleski et al., 1998; Foucault,

1977; 2007; Quist et al., 2007) control is exercised through the imposition of primarily two

types of power/knowledge: disciplinary and pastoral power which will be referred to as

control types here (following a similar logic of treating technical, bureaucratic and normative

control as control types).

Disciplinary control. Disciplinary control makes people visible, detectable, and known

objectively. By putting people under the spotlight of the power/knowledge of a particular

2
discourse, disciplinary control frames people’s actions and perceptions. But this

objectification also produces knowledge about the collective of people that is targeted and

coloured by the norms and ideals built into the discourse(s) governing the particular social

domain (Townley, 1994). In this way, disciplinary control, based on the norms built into the

discourse it is embedded in, detects for a collective of persons their present state and their

ideal state. Disciplinary control fosters the closure of such gaps between the present and the

ideal (Foucualt, 1977; 1981).

In the present case, the FLEs and their managers are objectified by the norms of

customer orientation built into the service marketing discourse and, more particularly, by the

norms built into the models used at the FI for measuring service quality. By interpreting the

results of the quality surveys, the managers become convinced that the FLEs are reactive

while they need to be proactive. The reason why the managers are so convinced is that their

interpretation of the surveys is informed by the power/knowledge of the service quality

discourse which creates what can be called a truth effect: e.g. that the managers believe that

the results of the surveys converge with the objective social reality. Thus, disciplinary control

explains how the measurement of service quality controls the human resources at the FI. A

similar claim has been put forward in previous conceptual analysis of service quality

measurement practices (see Skålén and Fougère, 2007).

Pastoral control. In pastoral control, different kinds of ‘pastors’ – in organizations

usually referred to as managers but could also be informal leaders – guide, lead, and manage a

collective of people in line with the prerogatives of an external power/knowledge (Foucault,

2007). Rather than starting to operate on the person(s) who is/are the target of control from

the position of an externality, as in disciplinary control, pastoral control takes its starting point

in the innermost thoughts of the controlled subject, which are externalized through the

invocation of confessional practices. The avowal these confessions generate is compared to

2
the discourse governing the specific control situation (Covaleski et al., 1998). If a pastor finds

that a person diverges from the imperatives of the discourse, the pastor will try to explain to

that person that he or she is not behaving in the most adequate way and try to convince him or

her to act and think otherwise. If pastoral control is effective, the person will make the

normativity guiding it an imperative for self-control.

The notion of pastoral control shed light on how two control practices associated with

service marketing works: coaching and relationship marketing. As explained earlier,

coaching at the FI is carried out either by means of the team-leaders listening to the

interaction between the FLEs and the customers in real time or by means of the team-leaders

and the FLEs jointly listening to recorded customer interactions. This way of coaching can be

perceived as a confessional practice. The FLEs interactions with the customers are their

avowals, their confessional speech. Furthermore, the team-leaders can be positioned as

pastors who guide and lead the FLEs who can be seen as the team-leaders’ flock of sheep. By

interacting with the customers, the FLEs provide their team-leaders with information about

how they are as FLEs. Based on that information or knowledge, the team-leaders guide the

FLEs, during the coaching sessions, towards proactive behavior. The relationship marketing

project can also be understood from the perspective of pastoral power. During that project, the

FLEs, guided by the project managers, confirmed their current ways of working, recognizing

that they had deviated from the norms of proactivity.

Furthermore, under the guidance of the project management, the FLEs derived new and

more proactive ways of working. In addition, analyzing the control of customer orientation of

the human resources that service marketing practices accomplishes, from the perspective of

pastoral control, also contributes toward understanding how self-control works. When

employees confess how they relate to their customers, they will change themselves, if they

have accepted the norms governing the control situation, so that their actions are more in line

2
with the norms given by discourse. The findings suggest (see the sections on ‘coaching’ and

‘relationship marketing’ in particular) several instances of this type of self-control where the

FLEs regulate themselves towards the norm of proactivity.

In sum, the control types of FOT are able to explain more fully then those of LPT how

service marketing practices imposes control upon people. By perceiving service marketing

control practices as representations of disciplinary and pastoral control the bulk of the control

of the customer orientation of the human resources service marketing practices foster can be

explained.

CONCLUSIONS, CONTRIBUTIONS, AND FURTHER RESEARCH

The present paper contributes to critical marketing research in two major ways. Firstly, the

empirical finding suggests that service marketing practices controls the human resources by

making their behaviors more customer oriented. This is a fundamental aim of service

marketing research but a topic that have been given cursory attention in previous empirical

research. Secondly, by drawing on LPT and FOT the analysis of the present paper suggest that

control practices associated with service marketing mainly are representations of disciplinary

and pastoral control. Put otherwise, service marketing practices controls for the customer

orientation of the human resources largely by fostering pastoral and disciplinary control.

Thus, despite that the paper also indicates that service marketing control practices to some

extent can be treated as forms of normative control the form of control associated with service

marketing discourse can largely be explained through relying on FOT. In addition, the

analysis suggests that the control practices that foster efficiency can be explained by drawing

on LPT. Thus, if control in service firms is going to be understood fully, both FOT and LPT

have to be drawn on. Further research needs to investigate if it is possible to transcend the

epistemological and ontological differences between the two perspectives.

2
 The present paper also contributes to qualitative marketing research with an analytical

perspective informed by practice theory (Reckwitz, 2002). Practice theory has informed

strategic management research extensively during the last ten year period (Wittington, 2006).

By studying how strategy work is constituted by micro practices strategy-as-practice research

has contributed to understanding the strategy process and how it is constituted. By adopting a

practice perspective to marketing understandings regarding how marketing is accomplished

and implemented can be enhanced. This requires us to re-think qualitative marketing research

from a managerial to a sociological discipline – a repositioning that some marketing scholars

might have a hard time to digest.

In addition, the present paper has contributed to managerial insights. It suggests that

managers cannot rely on traditional – that is bureaucratic and technical – forms of control and

the coercive forms of power informing them in order to make the employees act in a customer

oriented way. It rather suggests that managers need to focus on making the knowledge

structures of individuals align with discourses fostering customer orientation – e.g., service

marketing – by relying on pastoral and disciplinary power inherent to service marketing and

other managerial practices. Doing this implies a management that relies on a more facilitative

type of power.

The present paper suffers from some limitations which pave the way for further

research. It is based on a single case study. A much broader empirical sample is needed in

order to make predictable generalizations about service marketing control as practice. The aim

of the present paper, however, was not statistical but analytical generalization (Yin, 1984).

Another limitation is that the paper focuses only on control. From a Foucauldian perspective

the control that a discourse is imposing upon people usually is associated with subjectification

and/or resistance. Thus, the study can be extended by empirically studying the forms of

subjectivity and resistance that service marketing practices gives rise to.

2
NOTES

1
Unless otherwise stated, the abbreviation FI henceforth refers to the consumer loans division.

2
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