20107907

Running head: THE IMPACT OF INTERNAL MARKETING ON EMPLOYEE
ENGAGEMENT
THE IMPACT OF INTERNAL MARKETING ON EMPLOYEE ENGAGEMENT
IN INNOVATIVE ORGANIZATIONS
A Thesis
Presented to the Faculty
ISM University of Management and Economics
in Partial Fulfillment of the Requirements for the Degree of
Master of Innovation Management
by
Laura Bojarskytė
January 9, 2017
THE IMPACT OF INTERNAL MARKETING ON EMPLOYEE ENGAGEMENT 2
Bojarskytė, L., The Impact of Internal Marketing on Employee Engagement in Innovative
Organizations. [Manuscript]: Master thesis: Innovation Management. Vilnius, ISM University of
Management and Economics, 2017.
Abstract
The purpose of this thesis is to investigate the relationship between internal marketing
practices and engaged employees’ behaviours in the context of innovative organizations.
Extensive literature review of the concepts allowed to create a conceptual research model, which
measures the relationship between internal communication, training and internal market research
as three-dimensional internal marketing practices concept and engaged employees’ behaviours:
retention, efforts, advocacy and passion. Quantitative research, using primary data gathered by
surveying innovative organizations from Lithuania, revealed that positive relationship between
the variables exists, except for the relationship between internal communication and employees’
efforts. Additionally, the qualitative research, in which employee engagement experts were
surveyed, complemented quantitative research results and explained weak relationships among
some variables due to the differences in employees’ needs and expectations towards
organizations. This research expanded the current knowledge on internal marketing practices in
relation to engaged employees’ behaviours and the findings suggested that innovative
organizations should seek to design specific internal marketing programs if they want to
influence specific engaged employees’ behaviours. As study has some limitations such as small
sample size and geographical limitations, future research should apply the conceptual model on
larger population.
Keywords: internal marketing, employee engagement, innovative organization,
behavioural innovativeness
Table of contents
List of Figures ..................................................................................................................... 6
List of Tables ...................................................................................................................... 7
Introduction ......................................................................................................................... 8
Relevance of the Topic ................................................................................................... 8
Research Question, Aim and Objectives ........................................................................ 9
Objectives of the Thesis. ........................................................................................... 10
Research Design............................................................................................................ 10
Sequence of the Thesis.................................................................................................. 10
Literature Review.............................................................................................................. 11
Internal Marketing Practices ......................................................................................... 12
Engaged Employees’ Behaviours ................................................................................. 19
Innovative Organizations .............................................................................................. 24
Empirical Justification for Relationship and Indications for Further Research ............ 25
Summary of Literature Review ..................................................................................... 29
Research Methodology ..................................................................................................... 31
Research Aim and Objectives ....................................................................................... 31
Quantitative Research ................................................................................................... 32
Research Design........................................................................................................ 32
Conceptual Research Model. .................................................................................... 33

Hypotheses Development. ........................................................................................ 35
Research Instrument.................................................................................................. 36
Research Sample ....................................................................................................... 39
Data Collection Method. ........................................................................................... 43
Data Analysis Methods. ............................................................................................ 44
Qualitative Research ..................................................................................................... 45
Research Instrument.................................................................................................. 45
Research Sample. ...................................................................................................... 46
Data Collection Method.. .......................................................................................... 46
Data Analysis Method............................................................................................... 46
Summary of Research Methodology ............................................................................ 47
Empirical Research Results .............................................................................................. 50
The Results of Quantitative Research ........................................................................... 50
Descriptive Analysis of Quantitative Research. ....................................................... 50
Reliability Analysis of Quantitative Research. ......................................................... 51
Hypotheses Testing. .................................................................................................. 52
Differences in Sample Groups. ................................................................................. 66
The Results of Qualitative Research ............................................................................. 70
Descriptive Analysis of Qualitative Research. ......................................................... 70
Qualitative Data Analysis. ........................................................................................ 71

Summary of Empirical Research .................................................................................. 73
Discussion ......................................................................................................................... 76
Implications for Current Theory ................................................................................... 76
Managerial Implications ............................................................................................... 83
Internal Communication. .......................................................................................... 84
Training. .................................................................................................................... 85
Internal Market Research. ......................................................................................... 86
Limitations and Recommendations for Future Research .............................................. 87
Conclusion ........................................................................................................................ 89
References ......................................................................................................................... 91
Appendices ...................................................................................................................... 101

List of Figures
Figure 1. Internal Marketing Practices .............................................................................. 18
Figure 2. Engaged employees’ behaviours. ...................................................................... 24
Figure 3. Conceptual research model ................................................................................ 33
Figure 4. Correlation results between Internal communication and Retention ................. 54
Figure 5. Correlation results between Internal communication and Efforts ..................... 55
Figure 6. Correlation results between Internal communication and Advocacy ................ 56
Figure 7. Correlation results between Internal communication and Passion .................... 57
Figure 8. Correlation results between Training and Retention ......................................... 58
Figure 9. Correlation results between Training and Efforts .............................................. 59
Figure 10. Correlation results between Training and Advocacy....................................... 60
Figure 11. Correlation results between Training and Passion........................................... 61
Figure 12. Correlation results between Internal market research and Retention .............. 62
Figure 13. Correlation results between Internal market research and Efforts................... 63
Figure 14. Correlation results between Internal market research and Advocacy ............. 64
Figure 15. Correlation results between Internal market research and Passion ................. 65
Figure 16. Comparison of mean values for dependent variables by employment length. 67
Figure 17. Comparison of mean values for dependent variables by employment title ..... 68
Figure 18. Comparison of mean values for internal marketing variables by the size of
organization ....................................................................................................................... 69
List of Tables
Table 1. Internal Marketing Practices ............................................................................... 13
Table 2. Engaged Employee’s Behaviours ....................................................................... 20
Table 3. Hypotheses for relationship between employee engagement and internal
marketing (communications, branding, brand management) concepts ............................. 26
Table 4. Research instrument ............................................................................................ 37
Table 5. Innovative organizations in Lithuania................................................................. 41
Table 6. Internal consistency and reliability test results ................................................... 51
Table 7. Strength of correlation in Spearman’s correlation test........................................ 53
Table 8. Summary of hypotheses testing results ............................................................... 65

Introduction
Relevance of the Topic
The key success factor of an innovative organization is employees that strive for the
organization’s goals. McKinsey research showed that 94% of senior executives say that people
are the most important drivers of innovation (Barsh, Capozzi, & Davidson, 2008). In order to
drive innovation and move the organization forward, employees have to be engaged – work with
passion and feel a profound connection to their company (Gallup, Inc., 2013). However, different
studies have shown that organizations struggle to engage employees, for example, Aon Hewitt
reports that global employee engagement level is 62% (Aon Hewitt, 2015) and Gallup survey
shows that only 13% of global workforce is highly engaged (Gallup, Inc., 2013). In 2015
employee engagement became the No. 1 challenge around the world and made organizations
treat employees like customers, consider them volunteers, not just workers (Deloitte, 2015).
Therefore, innovative organizations that want to achieve their strategic goals need to seek and
employ different practices to foster employee engagement.
Until recently employees’ attraction, engagement and retention was considered as a
human resource management responsibility (Nazemetz & Ruch, 2012). However, there is an
increasing dispute in academic literature that the role of internal marketing is gradually
becoming more important in human resource management field. Today’s organizations have to
change the way of how they motivate and communicate with employees as new technologies,
social media and immediate public exposure have reshaped the job market and shifted the power
from the employer to the employee in the new era of transparency (Nazemetz & Ruch, 2012;
Deloitte, 2015).
First proposed as a way to deliver high levels of quality in service industries, nowadays
internal marketing is considered a paradigm of organizational change, management and
implementation strategies (Ahmed & Rafiq, 2002). In relation to human capital, internal
marketing is described as a philosophy for managing the organization’s human resources based
on marketing (Alencar de Farias, 2010), in other words, internal marketing describes the
application of marketing internally within the organization (Alencar de Farias, 2010), which
means that employees are regarded as internal customers. Treating both employees and
customers with the same total dedication to satisfy their needs, enables the organization to
inspire employees to do extra work beyond the call of duty and help to build and sustain a great
organization (Vazifehdoost & Hooshmand, 2012). This means that internal marketing is a core
tool to motivate, and retain the employees and to create strong employee engagement
(Czaplewski, Ferguson, & Milliman, 2001) in organizations.
The relevance of internal marketing to service operations increased emphasis on service
quality in customer oriented corporations (Davis, 2005), and there are many studies dedicated to
internal marketing practices in service companies. However, the relationship between internal
marketing practices and employee engagement has not been widely researched, particularly in
innovative organizations, which usually are the first movers in implementing new ways of
engaging employees.
Research Question, Aim and Objectives
The research question of this thesis is how internal marketing practices influence engaged
employees’ behaviours in innovative organizations.
Therefore, the aim of this thesis is to investigate the relationship between different
internal marketing practices and engaged employees’ behaviours in innovative organizations.

Objectives of the Thesis.
1. To examine the conceptualizations of internal marketing practices, engaged employees’
behaviours and innovative organizations in academic literature.
2. To develop a conceptual model for measuring the relationship between internal
marketing practices and engaged employees’ behaviour elements in innovative organizations.
3. To empirically evaluate the relationship between internal marketing practices and
engaged employees’ behaviour elements in innovative organizations.
4. To compare the results of the empirical research with the results of previous studies.
5. Based on the findings, provide theoretical and managerial implications how to improve
internal marketing practices in innovative organizations to foster engaged employees’ behaviours.
Research Design
Quantitative research method was selected to conduct this research, which is aimed at
evaluating the relationship between internal marketing practices and engaged employees’
behaviours in innovative organizations. As this method allows to maximize objectivity,
generalizability and reliability of findings and leads to general inferences about characteristics of
a population (Conrad & Serlin, 2011), the results as well as theoretical and managerial
implications can be applied to the majority of innovative organizations. In addition, qualitative
research method was applied to complement the quantitative research results by surveying
employee engagement experts. Mixed research method allowed to elaborate and clarify the
research results.
Sequence of the Thesis
The thesis is structured as follows:

1. Literature review part, in which the conceptualizations of internal marketing practices,
engaged employees’ behaviours and innovative organization are discussed, gaps in the current
literature are identified and the significance of this research is defined.
2. Research methodology part, in which research aims, objectives, design are defined,
conceptual research model, hypotheses, research instrument and sample are presented, data
selection and analysis methods are described for quantitative and qualitative research.
3. Empirical research results part, in which quantitative and qualitative research data is
analysed and hypotheses are tested using relevant statistical methods.
4. Discussion part, in which empirical research results are analysed in comparison to
previous studies, theoretical as well as managerial implications are provided and research
limitations are discussed.
Each part of the thesis is concluded with a detailed summary.
Literature Review
This section of the thesis is an overview of academic literature that is relevant to internal
marketing practices, engaged employees’ behaviours and innovative organizations concepts. The
main goal of this part is to analyse previous research on these concepts, establish a theoretical
framework and provide a strong background for further empirical research.
Firstly, the concept of internal marketing is analysed and internal marketing practices are
described based on existing research. Secondly, employee engagement concept is explored and
engaged employees’ behaviours are defined based on existing academic sources. Thirdly, as the
research is aimed at investigating the relationship between internal marketing practices and
engaged employees’ behaviours particularly in innovative organizations, the concept of
innovative organization is reviewed. Lastly, the conclusion is drawn, which provides the
empirical justification for the relationship between the concepts based on previous studies and
implications for further research.
Some studies explain the relationship between internal marketing practices and engaged
employees’ behaviours, claiming that internal marketing is a core tool to create strong employee
engagement (Shahzad & Naeem, 2013). However, there is a lack of an agreed upon definition of
internal marketing, measurement of its practices, clarity regarding functional responsibility for
its implementation in organizational context, therefore, internal marketing is a neglected area in
companies (Ahmed & Rafiq, 2000). In addition, the lack of measurement tools creates
difficulties in evaluating the relationship between internal marketing practices and engaged
employees’ behaviours. Therefore, the internal marketing concept will be analysed at first and
the most prominent practices will be defined in order to evaluate the relationship between
internal marketing practices and engaged employees’ behaviours on a measurable scale.
Internal Marketing Practices
Internal marketing is definitely not a new concept nor in academic literature, neither in
organizational practice. It was originally introduced in 1976 by Sasser and Arbeit, who stated
that “personnel is the first market of a service company”, and in 1981 was further developed by
Grönroos, who noted that “the objective of internal marketing is to get motivated and customer
conscious personnel” (Saad, Ahmed, & Rafiq, 2002). Different definitions of internal marketing
have been developed during four decades since the first mention, and different internal marketing
practices were discussed in academic studies researching different organizational fields.
However, the diversity of interpretations and definitions has made internal marketing difficult to
implement and adopt in practice as well as research empirically (Ahmed & Rafiq, 2000). This
literature review on internal marketing practices is focused particularly on those studies of

internal marketing field that are the most relevant to the concept of engaged employees’
behaviours in organizations.
In 1991 Collins and Payne stated that internal marketing “relates to all function within the
organization, but it is vitally concerned with the management of human resources” (Alencar de
Farias, 2010). Applying internal marketing practices in organization means that employees are
regarded as internal customers. Vazifehdoost & Hooshmand (2012) argued that treating
employees as internal customers motivate employees to give extra effort in order to reach for
organization’s goals, which is also one of the most important behavioural trait of an engaged
employee.
Since the introduction, internal marketing was researched by scholars in different
contexts and organizational fields and different measurements of internal marketing practices in
organizations were created. Apart from internal marketing concept definition, different authors
approach internal marketing differently, indicating that internal marketing is a philosophy or a
way of thinking, a strategic approach that can guide managerial decision making or a set of
initiatives and activities for implementation (Huang & Rundle-Thiele, 2015). This literature
review concentrates on viewing internal marketing as a set of initiatives and activities for
implementation, which, according to Huang & Rundle-Thiele (2015), is referred as “internal
marketing practice” in practitioner community.
The Table 1 summarizes how different authors defined internal marketing practices in
organizations.
Table 1
Author Internal Marketing Practices

Foreman & Money
Vision, Development, Rewards
(1995)
Communication, Staff training, Appraisal and feedback,

Hogg (1998)
Customer consciousness
Employment security, Extensive training, Generous rewards,
Bansal, Mendelson, &
Sharing information, Employee empowerment, Reduced status
Sharma (2001)
distinctions
Strategic rewards, Internal communications, Training and
development, Organizational structure, Senior leadership, Physical
Ahmed, Rafiq & Saad
environment, Staffing, selection and succession, Interfunctional co-
(2003)
ordination, Incentive systems, Empowerment, Operational/process
changes
Panigyrakis & Formal interaction, Reward systems, Feedback, Internal
Theodoridis (2009) procedure and policies, Internal customer orientation
Alhakimi & Alhariry Communication, Supervision, Intangible benefits, Compensation,
(2014) Intermediary
Internal communication, Employee recruitment, Employee training,
Torfeh, Ghadim &
Employee empowerment, Internal market research and
Khamisabadi (2015)
segmentation
Internal communication, Training (cultural change mechanisms),
Huang & Rundle-Thiele
Internal market research (requisite for understanding employees’
(2015)
needs and wants)
Note. Compiled by author
The overview of previous internal marketing studies shows that there is a wide range of
internal marketing practices that can be measured in organizations. Although differences
between the measures exist, all authors agree that internal marketing is a multi-dimensional
concept (Huang & Rundle-Thiele, 2015).
Bansal, Mendelson & Sharma in their research (2001) suggested that there is a direct
relationship between company’s financial results and its commitment to internal marketing
practices that treat employees like assets. They proposed six key internal marketing practices,
which are linked to external marketing outcomes. Their framework consists of employment
security (committing to employees guarantees their commitment), extensive training (ensuring
that employees are reacting to unexpected changes, anticipating challenges, using opportunities),
generous rewards (contingent rewards that are linked to performance), sharing information,
(transparency on strategy, financial performance, salaries, etc.), employee empowerment

(decentralizing decision making power, minimizing rules and regulations) and reduced status
distinctions (wage equity, open and fair communication), which were proved to ensure the well-
being of the internal customer.
Internal marketing mix, which can be used to influence employees’ motivation and lead
to business performance, was proposed by Ahmed, Rafiq & Saad (2003). All major hypotheses
were supported and marketing mix of elements, namely strategic rewards, internal
communications, training and development, senior leadership, physical environment, staffing,
selection and succession, interfunctional co-ordination, incentive systems, empowerment,
operational/process changes (excluding organizational structure) were proven to have an effect
on business performance. Authors suggested to view internal marketing as a means of creating
and enhancing competencies in organization, which means that the proposed internal marketing
mix affects business performance through organizational competencies.
Another study by Panigyrakis & Theodoridis (2009) suggested five measurements of
internal marketing: formal interaction, reward systems, feedback, internal procedure and policies,
and internal customer orientation. Authors put the most emphasis on the importance of treating
employees as internal customers and that everyone in the organizational value chain are held
internal supplier and customer. The most important internal marketing practice that they
suggested was internal customer orientation, which highlights the importance of first satisfying
the internal customer in order to ensure the quality provided to the external customer
(Panigyrakis & Theodoridis, 2009).
Alhakimi & Alhariry (2014) defined five internal marketing practices: communication,
supervision (the role of supervisor), intangible benefits (respect, talent development, working
environment), compensation (incentive programs, salary and benefits scale), and intermediary
(channels for filling complaints, sponsoring employees group activities).
Due to the limitations and little agreement on what mix of internal marketing practices
can be used to influence employees’ motivation, Torfeh, Ghadim & Khamisabadi (2015)
analyzed the affective factors on internal marketing in organizations. They surveyed 53 experts
and supervisors of internal marketing field, and proved that internal communication, employee
recruitment, employee training, employee empowerment, internal market research and
segmentation are affective factors on internal marketing.
Research paper by Huang & Rundle-Thiele (2015) presented a holistic diagnostic tool,
which measures the degree that internal marketing has been applied (or not) inside the
organization. They emphasized the importance of internal communication, its impact on
employee development and proved that it is the most commonly measured practice of internal
marketing. Further, they described the importance of training as a process of aligning employees’
know-how and autonomy to ensure that their needs and wants are met. They divided training
component into four categories, namely service standards, training, development programmes
and rewards. Lastly, they presented internal market research as a core tool to analyse the types of
employees and to understand their needs and wants. The unique contribution of their paper was
the development and validation of internal marketing practice scale that includes a wide range of
items that have previously been used in internal marketing research.
Diverse perspectives on internal marketing resulted in plenty of measures making it
difficult to understand, which items are clear and valid indicators of internal marketing (Huang
& Rundle-Thiele, 2015). The overview of the previous studies confirmed that different internal
marketing practices are found in academic literature. Without clear definition what internal
marketing practices should be measured in organization, it is impossible to empirically evaluate
their existence and draw conclusions. Therefore, an initial set of internal marketing practices
proposed by Huang & Rundle-Thiele (2015) is used further in this research as a diagnostic tool
for measuring internal marketing practices. These internal marketing practices include internal
communication, training and internal market research. In addition, the analysis of academic
literature substantiated the proposed diagnostic tool as all studies were mentioning the same
internal marketing practices as important. Firstly, the analysis showed that one of the most
common internal marketing practices is internal communication. It includes different aspects of
communication: feedback, sharing information, clarity of communication, availability of
information to employees at different levels, etc. By creating different messages for different
employees segments, which are appealing to the emotions, internal marketing can provide firms
with a rich source of advantage (Ahmed & Rafiq, 2003). Secondly, analysis supported the
importance of training (or development) as an internal marketing practice as it was widely
discussed in the majority of studies. Training is mainly viewed as a proactive effort of the
organization to develop employee’s skills and knowledge on a continuous basis in order to
support his or her development and achieve organizational goals. Ahmed & Rafiq (2000)
explained that employees need the right type and level of training to meet their needs in seeking
to perform their jobs. Lastly, internal market research, which allows to analyse the different
types of employees in order to understand their needs and wants (Huang & Rundle-Thiele, 2015),
was also mentioned in the majority of studies. It is an important practice that helps to define the
first two – communication and training – because if companies do not appreciate the existence of
different employee segments and their different needs they will continue to produce messages
that hold little meaning for the targeted segments (Ahmed & Rafiq, 2003). Mitchell (2002) noted
that market research is done for “any external consumer marketing campaign, but companies
seldom invest in such research when their employees are the audience”. The author suggested
different tools that are often used for consumers (in-depth interviews, focus groups, interviews
and surveys) to be used for employees. The main goal of such internal market research should be
company’s effort to understand employees’ needs so that they, as internal customers, could
receive a better service (Salem, 2013). Such improvement of the job characteristics motivate
employees to perform better, they more loyal and less likely to change jobs (Salem, 2013), which
is an element of engaged behaviour.
After analyzing measures used in previous studies, this research further defines internal
marketing practice as a three-dimensional concept consisting of internal communication, training
and internal market research based on the model proposed by Huang & Rundle-Thiele (2015).
Internal Communication
Internal Marketing Practices Training
Internal Market Research
Figure 1. Internal Marketing Practices. From “A holistic management tool for measuring internal
marketing activities” by Y. Huang & S. Rundle-Thiele, 2015, Journal of Services Marketing,
29(6/7), p. 574.
The relationship between these internal marketing practices and engaged employees’
behaviours in innovative organizations will be further researched in this paper.

Engaged Employees’ Behaviours
The concept of employee engagement was first introduced by Kahn in 1990 (Choo, Mat,
& Al-Omari, 2013). According to Kahn (1990), employee engagement is defined as “the
harnessing of organization members’ selves to their work roles; in engagement, people employ
and express themselves physically, cognitively, and emotionally during role performances”,
which means that engaged employee is psychologically as well as physically present when
occupying and performing an organizational role (Kular, Gatenby, Rees, E., & Truss, 2008). In
2015 employee engagement became the No. 1 challenge around the world (Deloitte, 2015) and in
2016 85% of executives still ranked engagement as a top priority (Deloitte, 2016).
Despite the increase in interest due to recognized importance of employee engagement,
there is still a lack of consensus about the concept of engagement itself (Alexandre & Tkachenko,
2014; Choo, Mat, & Al-Omari, 2013). It is variously conceived as a psychological or affective
state (for example, commitment, involvement, attachment, etc.), a performance construct (for
example, role performance, effort, observable behaviour, organisational citizenship behaviour,
etc.) or an attitude (Robertson-Smith & Markwick, 2009). In addition, the most frequent
confusion is noticed between the evidence of employee engagement in organization and the
factors that drive engagement (Mayo, 2016). The engagement can be approached from different
perspectives: researching antecedents that create employees’ engagement, types of employees’
engagement or engagement outcomes. In order to evaluate the evidence of the existence of
employee engagement in an organization, it is necessary to understand the types of employees’
engagement. According to Gallup, as cited in Balain & Sparrow (2009), there are three types of
employees: (1) engaged – who work with passion and feel profound connection to their
organization; (2) not engaged – who do just enough to fulfil their job requirements, feel
uninspired and lacking motivation; (3) actively disengaged – who are unhappy about their work
and are intent on acting out their unhappiness. The further analysis will be focused on exploring
the first type – an engaged employee. To approach this concept, it is important to note that
engagement can be defined on the basis of what it ‘is’ (psychological state), the basis of the
behaviours it produces (behavioural) and as an attitude towards one’s work (trait) (Robertson-
Smith & Markwick, 2009). There are a lot of models and studies found in academic literature
that analyses employee engagement from these three perspectives, however, this academic
literature review aims to investigate the behavioural approach to engagement and define
measures for engaged behaviour, which serves the purpose of this thesis.
According to various authors, engaged behaviour is referred as employee’s cognitive,
emotional, and physical state that is influenced by certain antecedents (Kahn, 1990; Alexandre &
Tkachenko, 2014; Feather, 2007; Balain & Sparrow, 2009; Aon Hewitt, 2015). The Table 2
summarizes results of different studies that researched engaged employees’ behaviour elements.
Table 2
Engaged Employee’s Behaviours
Behaviour Retention Effort Advocacy Passion
Author
Feather Desire to stay Motivation to Mindset to Feeling an
(2007) with the give more than actively emotional
organization (I is required (I recommend the connection, even
want to stay). will give more company as a “love” for the
than is required great place to organization (I care
– go the extra work (I will about what we are
mile when recommend my trying to do).
needed). company to
others).
Corporate Affective, Inspiration to go A positive
Leadership normative and above and emotional
Council continual beyond the call connection to an
(2004) commitment. of duty to help employee’s work.
meet business
goals.
Mayo I will go the I care about what
(2012) extra mile if we are trying to
necessary to achieve.
ensure success.
Mayo If I had a better I am personally I am proud to I really care about
(2016) opportunity to go motivated to work for this the future of my
elsewhere over help my organization. I company.
the next three company be regularly
months, it is small successful. champion and
likelihood I promote my
would take it. organization in
social situations.
Aon Hewitt Stay – having an Strive – being Speaking
(2013) intense sense of motivated and positively about
belonging and exerting effort the organization
desire to be part toward success to colleagues,
of an in their job and potential future
organization. for the colleagues and
company. customers.
Gallup Engaged
(2013) employees work
with passion and
feel a profound
connection to their
company.
BlesssingW Engaged Engaged
hite (2013) employees are employees
committed. When contribute fully
recruiters call, to the success of
they cordially cut the organization
the conversation and find great
short. satisfaction in
their work.
Towers Willingness to Emotional Belief in company
Watson give extra effortconnection (pride, goals and
(2012) to support would objectives.
success. recommend
employer).
Robinson, An A positive Belief in the
Perryman, understanding of attitude towards, organization’s
Hayday the bigger and pride in, the products/services.
(2004) picture and a organization A willingness to
willingness to behave
go beyond the altruistically and be
requirements of a good team-
the job. player.

People Engaged Engaged Engaged Engaged
metrics employees intend employees are employees employees say they
(2011) to stay with their motivated to recommend their love their current
employer. give extra effort. current company organization.
as a great place to
work.
Researchers describe the same behaviours demonstrated by engaged employees using
different wording, however, they can be summarized into four main behaviours: retention, effort,
advocacy and passion. The extent to which employees demonstrates these behaviours is a good
indicator to measure organizational levels of engagement and is a predictor of important business
outcomes (Aon Hewitt, 2015).
Retention. Retention is described as an intent, desire to stay and commitment to the
organization. Engagement and retention correlates as the “intent to stay,” or an employee’s stated
desire to remain with the current employer, is a strong predictor of actual turnover
(BlesssingWhite, 2013). There is evidence that engaged employees express much lower desire to
leave the organization, for example, “organizations can expect an 87% reduction in employees’
probability of departure” (Corporate Leadership Council, 2004). Therefore, engaged employees
demonstrate long-term commitment to the employer and behave in a way that creates no
uncertainty for the employer.
Efforts. The majority of the studies proves that engaged employees demonstrate extra
efforts to help the organization to reach its goals. As opposed to committed employees, who do
not necessarily perform beyond the requirements of the job, engaged employees do not only
show a commitment to the organization, but also a desire for business appreciation (Balain &
Sparrow, 2009). By increasing the level of engaged behaviours, organizations can expect an
increase in performance of up to 20% (Corporate Leadership Council, 2004). Such employees

understand how their performance makes an impact on organization’s performance, they
constantly search for the new or more effective ways to achieve the company’s goals, they are
concerned not only about their job responsibilities, but about overall performance of the
company, thus they are willing to help others and achieve more than expected from them.
Advocacy. Engaged employees act as advocates of the employer and demonstrate a
profound pride in the organization they work for. They are willing to share their experience,
speak positively about the employer and recommend the employer outside the organization.
Advocacy is highly related to effort that engaged employees demonstrate – if employees speak
positively about the organization, it is more likely that they demonstrate extra efforts to strive for
organization’s goals. Aon Hewitt research (2013) defines advocacy as “the extent to which
employees believe that their organization is one of the best places for someone with similar skills
and experiences”.
Passion. Passion, demonstrated by engaged employees, is expressed by deep emotional
connection to an organization. Some authors even describe it as “love” (Feather, 2007; People
Metrics, 2011), which differs from commitment as it creates higher emotional involvement.
Passionate employees also express genuine belief in a company and altruistic, not egoistic
willingness to help the organization to achieve its goals. The characteristics of such behaviour
are very similar to the person’s, who feels love for the other person. Passionate employees feel a
sense of attachment towards their organisation, investing themselves not only in their role, but in
the organisation as a whole (Robertson-Smith & Markwick, 2009).
To summarize, based on the previous studies, four main behaviours of engaged
employees were identified and will be further used in the research. Figure 2 depicts the
behaviours that engaged employees have to be positive on. Combining both emotional and
functional behaviours and attitudes, the presented framework can work as a tool for measuring
the level of engaged employees’ behaviours in organization.
Retention
Efforts
Engaged Employees’
Behaviours
Advocacy
Passion
Figure 2. Engaged employees’ behaviours. From “Helping HR to measure up: arming the “soft”
function with hard metrics” by K. Feather, 2007, Strategic HR Review, 7(1), p. 29.
This framework of engaged employees’ behaviours will be used in further research.
Innovative Organizations
Innovation is not a new term in academic literature. A decade ago the definition of
innovation was more associated with investment in R&D, the number of products introduced in
the market and patents, the number of adopted innovations (Ackermann, Stephan, & Penrose,
2015; Cornell University, INSEAD, WIPO, 2016). Nowadays innovation is more general and
horizontal in nature, it includes social, business model, technical innovations (Cornell University,
INSEAD, WIPO, 2016).
Innovative organization masters the ability and capacity to innovate, which is defined as
organizational innovativeness. The term itself describes the culture of an organization and
reflects its potential to generate innovations (Ackermann, Stephan, & Penrose, 2015), which can
be categorized as product or process innovation, radical or incremental innovation,

administrative or technological innovation (Wang & Ahmed, 2004). There are many different
methods and models, which measure organizational innovativeness, however, this research relies
upon existing evaluations of innovative organizations, which are reliable due to their longevity
and methodology and are applicable to the target population of this research. The innovativeness
of organizations in this research is measured by evaluating their business strategy, innovation
activities during 3 recent years, the impact of innovation activities, innovation management,
innovation potential, innovation communication and partnerships, 3 years perspective on
innovation development (Lithuanian Innovation Centre, 2015). This evaluation method is used in
“Innovation prize” competition organized by Lithuanian Innovation Centre and Lithuanian
Confederation of Industrialists. The criteria are further explained and the list of innovative
organizations from the past 5 years is provided in the Research Methodology part.
Empirical Justification for Relationship and Indications for Further Research
While most organizations engage the workers through pay or through their minds and
intellect, successful internal marketing offers a vision to create a sense of spirit and emotion that
engages not just the mind, but also the heart of the employee (Czaplewski, Ferguson, & Milliman,
2001). Surprisingly, internal marketing practices have not been adequately researched in relation
to behaviours of engaged employees. This may be due to the confusion concerning the internal
marketing concept as it overlaps with other concepts such as internal communications, internal
branding and internal brand management. Although only one research was found that directly
proves the relationship between internal marketing practices and employee engagement, there are
other studies that investigate the relationship between employee engagement and similar
concepts of internal communications, internal branding, and internal brand management. As
internal marketing is a multidimensional concept and there are various ways to approach it, the
studies on similar concepts, which are usually treated as a part of internal marketing, suggest that
this relationship exists.
Therefore, this thesis will contribute to existing studies in the field by exploring the
relationship between internal marketing practices and engaged employees behaviours. As the
research is limited to innovative organizations, it will fill the gap in existing literature as to the
author’s knowledge, innovative organizations were not used as a target population in previous
studies.
The Table 3 summarizes different studies that explored the relationship between internal
marketing (and related concepts) and employee engagement.
Table 3
Hypotheses for relationship between employee engagement and internal marketing
(communications, branding, brand management) concepts
Author Variables Hypotheses Results

Shahzad & Employee H1: Internal Marketing is H1 – accepted
Naeem engagement; positively related with the H2 – accepted
(2013) Internal Employee engagement. H3 – accepted
marketing; H2: Employee engagement is H4 – accepted
Job satisfaction positively related with the
customer satisfaction.
H3: Internal Marketing is
positively related with the Job
satisfaction.
H4: Employee engagement
mediates the relationship
between the internal marketing
dimensions and the Job
Satisfaction.
Hayase Employee H2a: There is a positive H2a – partially
(2009) engagement; relationship between the quality supported
Internal of communication and employee H2b – accepted
communication engagement. H2c – partially
H2b: Employees who are supported
satisfied with the
communication channel utilized
by their organization will
experience higher levels of
engagement.
H2c: Organizations that utilize a
mixture of traditional and new
media communication channels
will experience higher levels of
engagement.
Khan Employee H1: Internal branding has a H1 – accepted
(2014) engagement; positive relationship with brand H2 – accepted
Internal experience. H3 – accepted
branding; H2: Internal branding has a H4 – accepted
Brand positive relationship with
experience employee engagement.
H3: Employee engagement has a
significant positive relationship
with brand experience.
H4: Employee engagement plays
a mediating role in the
relationship of internal branding
and brand experience.
Shahzad & Naemm (2013) research proved that internal marketing is positively related to
job satisfaction. Although their main goal was to analyse whether internal marketing practices
are positively related to job satisfaction, they used employee engagement as mediator that leads
to job satisfaction, therefore, at the same time they have proven positive relationship between the
two concepts.
Another study by Hayase (2009) researched the relationship between internal
communication and employee engagement. As internal communication is among most measured
practices of internal marketing as stated in academic literature analysis part, this research is
highly associated with internal marketing. Hayase (2009) proved that internal communication is
positively related to employee engagement (commitment, effort, and meaningful work). The
results showed that organizations can improve internal communication to foster employee
engagement, particularly by selecting communication channels and their combinations that
satisfy employees.
While internal marketing is a strategic management approach which attracts, develops,
motivates, and maintains employees by providing work products satisfying employees’ needs,
internal branding is a part of internal marketing, as discussed in research done by Khan (2014).
Often confused with employer branding, internal branding is essentially about how companies do
branding internally towards employees to make them “live the brand”, believe in it in order to
deliver positive customer experience externally (Khan, 2014). The research showed positive
relationship between internal branding and employee engagement, therefore, as internal branding
is a part of internal marketing, it leads to an assumption that positive relationship between
employee engagement and internal marketing exists as well.
In 2001 Czaplewskim et al. noted that internal marketing is the core tool to motivate, and
retain the employees and to create strong employee engagement in them (Czaplewski, Ferguson,
& Milliman, 2001). Although internal marketing or similar concepts such as internal
communication and internal branding are widely discussed as means to improve employee
engagement, there is little research what relationship between specific internal marketing
practices on engaged employees’ behaviours exists. The approach of using internal marketing
practices to foster engaged behaviours is relatively new and lacks research, especially in the new
era of technological advancement and innovations. In order to create internal marketing
programs, organizations need to know the importance of different internal marketing practices
and target them at specific behaviours.
To author’s knowledge, studies that explore the relationship between the combination of
indicated internal marketing practices and engaged employees’ behaviour elements particularly
in innovative organizations are not existent, therefore, this research will fill an existing gap and
will add value to the fields of studies on internal marketing and employee engagement.
Summary of Literature Review
The main goal of the literature review part was to analyse previous research on internal
marketing practices, engaged employees’ behaviours and innovative organizations concepts,
establish a theoretical framework by justifying the relationship between constructs and identify
gaps in existing academic literature.
Exploring the studies on internal marketing, it was found that it is a multi-dimensional
concept, with an employee as internal customer at the centre of it. After discussing different
approaches to internal marketing, it was decided to view it as a set of initiatives and activities for
implementation, namely internal marketing practices. The analysis of the previous studies
confirmed that many different internal marketing practices are found in academic literature and
there is no single measure to evaluate its existence in organization. Therefore, very precise and
clear diagnostic tool proposed by Huang & Rundle-Thiele (2015), which measures internal
communication, training and internal market research as three-dimensional internal marketing
practices, was selected as it was developed and validated based on a wide range of internal
marketing practices used in other studies.
Different approaches to employee engagement were reviewed as well as frequent
confusions that are found in literature. To serve the objective of the research, engaged employees
behaviours were selected to be further analysed. After analysing different studies, engaged
behaviours were determined: retention, effort, advocacy and passion. These behaviours will be
further used in the analysis.

A short overview of innovative organization concept was made, defining different types
of innovations and basic criteria of innovative organization. The concept will be further applied
to target population of this research in the following sections of the thesis.
The last part of literature analysis provided a strong background for further empirical
research as it identified main gaps in academic literature related to internal marketing, employee
engagement fields, especially in the context of innovative organizations. Surprisingly, internal
marketing practices have not been adequately researched in relation to engaged employees’
behaviours, while more researched concepts were parts of internal marketing, namely internal
branding and internal communication.

Research Methodology
In this section, the selected methodological approach and its appropriateness for the
thesis aim is explained and justified. Firstly, the aim and objectives of the research are defined.
Secondly, quantitative research design, the conceptual research model based on academic
literature review and hypotheses are provided, research instrument and research sample are
defined and the reasoning for data collection and analysis methods is given. Thirdly, qualitative
research design, research instrument, research sample are described and data collection and
analysis methods are provided. Lastly, research methodology section is summarized.
Research Aim and Objectives
This research aims to measure the relationship between internal marketing practices and
engaged employees’ behaviour elements in innovative organizations based on the conceptual
research model. The research objectives are the following:
1. Based on academic literature review, to develop the conceptual research model for
measuring the relationship between internal marketing dimensions and engaged employees’
behaviour elements in innovative organizations.
2. To conduct quantitative empirical research to evaluate the relationship between
internal marketing practices and engaged employees’ behaviour elements in innovative
organizations.
3. To survey experts in the employee engagement field in a qualitative research to
elaborate and complement the research results.
4. Based on the findings, to provide theoretical and managerial implications how to
improve internal marketing practices in innovative organizations to foster engaged employees’
behaviours.
Quantitative Research
Research Design. Quantitative research method was selected to conduct this research,
which aims to evaluate the relationship between internal marketing practices and engaged
employees’ behaviours in innovative organizations. The selection of this method is based on the
fact that data collected using standardized quantitative research methods can be replicated and
analyzed using sophisticated statistical techniques, which is more objective and provides more
accurate information (Westat, 2002). As quantitative method allows to maximize objectivity,
generalizability and reliability of findings and leads to general inferences about characteristics of
a population (Conrad & Serlin, 2011), the research results as well as theoretical and managerial
implications can be applied to the majority of innovative organizations, which serves the aim of
this thesis. There are two types of quantitative research, experimental and non-experimental,
which further suggest data collection and analysis methods. While experimental research design
establishes cause and effect relationship, non-experimental design allows to test for significant
association between two factors (Gaur & Gaur, 2009), which in this research are internal
marketing practices and engaged employees behaviours, therefore, non-experimental design is
more appropriate. Based on the type of data used in the research, quantitative research is also
classified as primary and secondary data research (Gaur & Gaur, 2009). This research uses
primary data as answers are collected directly from the respondents.
To collect data for the research, standardized survey was selected, which is widely used
as a quantitative research instrument and is particularly useful for non-experimental descriptive
designs, which seek to describe reality (Mathers, Fox, & Hunn, 2007). The survey approach does
not only create a representative picture of the research problem, but is also frequently used to
collect information on attitudes and behaviour (Mathers, Fox, & Hunn, 2007), therefore, it is the
most suitable instrument for this research as it aims to investigate employees’ attitudes towards
internal marketing practices and explore behaviours of engaged employees in innovative
organizations. In addition, survey was selected because of its efficiency – relatively small sample
sizes can be used to draw conclusions for overall population (Mathers, Fox, & Hunn, 2007). The
survey used in this research is correlational because by using data of the survey, relationships
between different variables will be explored (Mathers, Fox, & Hunn, 2007).
Conceptual Research Model. Conceptual research model with variables and hypotheses
is represented in Figure 3. Based on the analysis of academic literature, the internal marketing
practices construct will be measured through three independent variables, namely Internal
communication, Training and Internal market research, while engaged employees’ behaviours
will be measured through dependent variables, namely Retention, Efforts, Advocacy and Passion.
These variables are limited to certain population – innovative organizations – that were described
in literature review section and will be defined in the research sample section.
Retention
Engaged Employees‘ Behaviours

H1a
Internal Communication H1b
H1c
H1d
Efforts
H2a
Training H2b
H2c
H2d
H3a Advocacy
H3b
Internal Market Research H3c
H3d
Passion
INNOVATIVE ORGANIZATIONS
Figure 3. Conceptual research model. Compiled by author based on “Helping HR to measure up:
arming the “soft” function with hard metrics” by K. Feather, 2007, Strategic HR Review, 7(1), p.
29 and “A holistic management tool for measuring internal marketing activities” by Y. Huang &
S. Rundle-Thiele, 2015, Journal of Services Marketing, 29(6/7), p. 574
Internal marketing practices construct will be measured through three independent
variables:
 Internal communication, defined as an effective exchange of information
between management and employees (Hayase, 2009). This variable is measured by items
1 to 6 on the research instrument.
 Training, defined as a proactive effort of the organization to develop employee’s
skills and knowledge on a continuous basis in order to support his or her development
and achieve organizational goals. This variable is measured by items 7 to 12 on the
research instrument.
 Internal market research, defined as an important element, which helps to
understand different types of employees and implement internal marketing measures to
different segments (Huang & Rundle-Thiele, 2015). This variable is measured by items
13 to 18 on the research instrument.
Engaged employees’ behaviours construct will be measured through four dependent
variables:
 Retention, when employees demonstrate an intent, desire to stay and commitment
to the organization. This variable is measured by items 19 to 21 on the research
instrument.
 Efforts, when employees demonstrate extra efforts to help the organization to
reach its goals. This variable is measured by items 22 to 24 on the research instrument.
 Advocacy, when employees act as advocates of the employer and demonstrate a
profound pride in the organization they work for. This variable is measured by items 25
to 27 on the research instrument.

 Passion, when employees express deep emotional connection to an organization.
This variable is measured by items 28 to 30 on the research instrument.
Hypotheses Development. Based on the academic literature review and the conceptual
model as its outcome, hypotheses were formulated for further research. Each hypothesis was
aimed at measuring the relationship between three-dimensional internal marketing practices and
behaviours of engaged employees in innovative organizations.
H1a. There is a positive relationship between internal communication and employees’
retention in innovative organizations.
H1b. There is a positive relationship between internal communication and employees’
efforts in innovative organizations.
H1c. There is a positive relationship between internal communication and employees’
advocacy in innovative organizations.
H1d. There is a positive relationship between internal communication and employees’
passion in innovative organizations.
H2a. There is a positive relationship between training and employees’ retention in
innovative organizations.
H2b. There is a positive relationship between training and employees’ efforts in
H2c. There is a positive relationship between training and employees’ advocacy in
H2d. There is a positive relationship between training and employees’ passion in
H3a. There is a positive relationship between internal market research and employees’
retention in innovative organizations.
H3b. There is a positive relationship between internal market research and employees’
efforts in innovative organizations.
H3c. There is a positive relationship between internal market research and employees’
advocacy in innovative organizations.
H3d. There is a positive relationship between internal market research and employees’
passion in innovative organizations.
Research Instrument. Research instrument was developed as a structured questionnaire
based on two studies found in academic literature. The first part of the questionnaire was
designed to explore which internal marketing practices are applied in organizations (Huang &
Rundle-Thiele, 2015). It is composed out of 18 items across three dimensions (Internal
communication, Training, Internal market research). The second part of the questionnaire was
designed to evaluate engaged employees’ behaviours in organizations. It is composed of 12 items
across four behaviours (Retention, Efforts, Advocacy, Passion). Items of the first and the second
part of the questionnaire were measured on ordinal Likert scale (from 1 – strongly disagree, to 5
– strongly agree), which means that respondents were asked to express their level of agreement
with a statement. The third part of the questionnaire consisted of three control questions with the
aim to define organizational or employee’s characteristics such as employment length,
employment title and the size of the organization. They were measured through
multichotomous items. Questionnaire included no negatively worded or reversed questions,
which would require to be adapted in the data analysis part.
Research instrument that was designed for this thesis is presented in the Table 4 below.
Table 4
Research instrument
Construct Questions
Internal marketing Internal communication
practices (Huang & 1. My organization communicates a clear brand image to me
Rundle-Thiele, 2. There is an internal communication program for all employees
2015) in my organization
3. All communication materials reflect a consistent style in my
organization
4. Employees at all levels understand the direction and key
priorities of my organization
5. In my organization, communications are appropriate
6. Messages that I receive are aligned with business wide
communication
Training
7. My organization focuses efforts on training employees
8. My organization provided an orientation program for me
9. The training in my organization has enabled me to do my job
well
10. My organization teaches me why I should do things
11. Skill and knowledge development happens as an ongoing
process in my organization
12. My organization provides support to develop my
communication skills in order to achieve organization goals
Internal market research
13. My organization gathers employee feedback
14. My organization regularly seeks employee suggestions
15. My organization collects data on employee complaints
16. My organization does a lot of internal marketing research
17. My organization talks with me to identify issues that I may
have
18. My organization surveys employees at least once a year to
assess the quality of employment
Engaged Retention
employees’ 19. It would take a lot to get me to leave this organization
behaviours (adapted 20. I rarely think to leave this organization to work somewhere
from Aon Hewitt else
(2015), Mayo 21. If I had a better opportunity to go elsewhere over the next
(2016), Robinson, three months, it is small likelihood I would take it
Perryman, & Hayday Efforts
(2004) 22. I always do more than is actually required
23. I volunteer to do things outside my job that contribute to the
organization’s objectives
24. I frequently make suggestions to improve the work of my
team/department/service
Advocacy
25. I speak highly of this organization to my co-workers, potential
employees, customers
26. I am proud to tell others I am part of this organization
27. I would not hesitate to recommend this organization to a
friend seeking employment
Passion
28. I really care about the future of my organization
29. This organization really inspires the very best in me
30. I believe in my organization’s goals and objectives
Control questions 31. I work in this organization for
a. 0-1 years
b. 1-3 years
c. 3-5 years
d. 5-10 years
e. 10 and more years
32. My role in this organization is
a. assistant
b. manager / specialist
c. project manager
d. head of team / department
c. senior executive
33. The number of employees in this organization
a. 1-9
b. 10-49
c. 50-249
d. 250 and more
As the research instrument was designed based on several different studies, sets of
questions (scales) were tested for reliability and internal consistency using Cronbach alpha (Gaur
& Gaur, 2009). The results of the test were interpreted in the following way – if Cronbach alpha
is above 0.70, the scale is internally consistent and reliable.
As reliability of an instrument does not warranty its validity (Gaur & Gaur, 2009),
therefore, the face validity test was conducted by showing the research instrument to an expert.
The goal of the face validity test is to confirm that the instrument measures what it is supposed to
measure. There are other types of validity, namely content, criterion-related and construct
validity, however, content and criterion-related validity are limited and hardly applicable in
social sciences because it is impossible to define the specific extent to which an empirical
measure can be considered as content valid and there are no known criterion variables against
which theoretical concepts can be compared (Carmines & Zeller, 1979). Construct validity,
which focuses on the extent to which an empirical measure performs in accordance with
theoretical expectations (Carmines & Zeller, 1979), was evaluated by examining whether
empirical research results is consistent with theoretical expectations that are defined in
conceptual research model.
Research Sample. The research population, also known as a well-defined collection of
individuals or objects known to have similar characteristics, was innovative organizations that
were described in literature review part. Due to time and geographical accessibility limitations,
innovative organizations in Lithuania were selected as research population. Certain criteria that
differentiate innovative organizations and the list of innovative organizations that participated in
the research are listed in the next section of the thesis.
Innovative Organizations in Lithuania. On a country level, Lithuania demonstrates
gradual increase in organizational innovativeness. It is currently ranked as 36th according to
Global Innovation Index, when compared to 2012 when it was ranked as 39th (Cornell
University, INSEAD, WIPO, 2016). Lithuania has mostly grown in “Human capital & Research”
and “Investment” fields (Agency for Science, Innovation and Technology, 2016). Innovation
activities were registered in 82.5% of large organizations (250 employees and more), 53.1% in
medium-sized organizations (from 50 to 249 employees) and in 30.3% small enterprises (from
10 to 49 employees) in Lithuania from 2012 to 2014. The innovations adopted in Lithuanian
organizations were product (18.4%), process (24.7%), both product and process (15.1%), non-
technological – organizational performance and (or) marketing (21.2%), both technological and
non-technological (15%) (Department of Statistics Lithuania, 2016).
Lithuanian organizations are ranked by their innovativeness since 2005 in “Innovation
prize” competition organized by Lithuanian Innovation Centre and Lithuanian Confederation of
Industrialists. The ranking is done by evaluating organizations according to a set of criteria:
business strategy, innovation activities during 3 recent years, the impact of innovation activities,
innovation management, innovation potential, innovation communication and partnerships, 3
years perspective on innovation development (Lithuanian Innovation Centre, 2015). Business
strategy criterion evaluates if organization is operating according to its prepared strategy,
whether that strategy is focused on development of innovation activities, continuous changes in
the industry and the organization itself. Innovation activities criterion evaluates product, process,
organizational and marketing innovation during the last three years. The impact of innovation
activities criterion measures the improvement in competitiveness (quality improvement, costs
reduction, compliance with standards, market position improvement, increase in productivity)
due to innovation activities and the quantitative improvement (turnover, profit, new markets,
added value). Innovation management criterion assesses organization’s project management
structure and how organization applies innovation management and creativity enhancement
methods. Innovation potential criterion evaluates the presence and development of technological
innovations, human resource management innovations and the percentage from income that is
dedicated to the development of innovation activities. Innovation communication criterion
assesses the effectiveness of internal and external (partnerships with academic institutions, public
institutions, consumers) communication about innovation activities. Perspective on innovation

development criterion evaluates the directions of innovation development in the organization and
the projected impact of innovation activities to organization’s competitiveness in the market.
The Table 5 below summarizes data about innovative organizations in Lithuania that
were ranked as innovative from the year 2010 to 2015. Innovative organizations are categorized
according to sector (private or public), industry, size (micro – 1-9 employees, small – 10-49
employees, medium-sized – 50-249 employees, large – 250 and more employees) and year in
which it was ranked as an innovative organization in Lithuania. The majority of organizations
belongs to manufacturing category (67.86%), the second biggest group is in information and
communication category (14.29%), followed by construction category (10.71%), while
electricity, gas, stream and air conditioning and water supply, sewerage, waste management and
remediation categories are represented by one company (3.57%). The majority of innovative
organizations are private (92.86%), and there are two organizations that represent public sector
(7.14%). Therefore, the research results will be mainly applicable to organizations that operate in
private sector.
Table 5
Innovative organizations in Lithuania
Category (Statistics Year of

No. Organization Title Sector Size
Lithuania, 2008) Ranking
1 Enerstena, UAB Private Manufacturing Medium- 2015
sized
2 Aurika, UAB Private Manufacturing Large 2015, 2010
3 IOCO Packaging, UAB Private Manufacturing Medium- 2014
(previously Panoden, sized
UAB)
4 Balto Trader, UAB Private Manufacturing Micro 2014
5 Juodeliai, UAB Private Manufacturing Large 2014
6 Lietuvos energija, AB Public Electricity, gas, Large 2014, 2012
stream and air
conditioning
7 Kaišiadorių Private Manufacturing Large 2013
paukštynas, AB
8 Schmitz Cargobull Private Manufacturing Large 2013

Baltic, UAB
9 Snaigė, AB Private Manufacturing Large 2013
10 Terekas, UAB Private Manufacturing Medium- 2013
sized
11 Doclogix, UAB Private Information and Medium- 2013
communication sized
12 Biržų duona, UAB Private Manufacturing Large 2012
13 Daumantai LT, UAB Private Manufacturing Medium- 2012
sized
14 Teltonika, UAB Private Information and Large 2012
communication
15 Kelprojektas, UAB Private Construction Medium- 2012
sized
16 Ekspla, UAB Private Manufacturing Medium- 2012
sized
17 Precizika Metrology, Private Manufacturing Medium- 2011
UAB sized
18 Algoritmų sistemos, Private Information and Medium- 2011
UAB communication sized
19 Selteka, UAB Private Manufacturing Large 2011
20 Panevėžio keliai, AB Private Construction Large 2011
21 Astra, AB Private Manufacturing Medium- 2011
sized
22 Elektros zona, UAB Private Construction Medium- 2011
sized
23 Traidenis, UAB Private Water supply, Medium- 2010
sewerage, waste sized
management and
remediation
24 Arginta, UAB Private Manufacturing Small 2010
25 Lietuvos radijo ir Public Information and Large 2010
televizijos centras, AB communication
26 Garlita, UAB Private Manufacturing Medium- 2010
sized
27 Naujoji Ringuva, UAB Private Manufacturing Medium- 2010
sized
28 Baltec CNC Private Manufacturing Medium- 2010
Technologies, UAB sized
Population does not necessarily mean a number of people, because it can also refer to
total quantity of the things or cases which are the subject of our study, which in this research are
innovative organizations (Farrokhi & Mahmoudi-Hamidabad, 2012). Although the population of

this research is not too large to test the entire population, it was impossible to ensure that each
innovative organization agrees to participate in the research. Therefore, the selected sampling
technique used in this research was convenience sampling, which means that the respondents
were selected based on their accessibility and availability. Convenience sampling is a kind of
nonrandom sampling technique in which the members of the population, in this case – innovative
organizations, are selected when they meet certain practical criteria, such as geographical
proximity, availability at a certain time, easy accessibility, or the willingness to volunteer
(Farrokhi & Mahmoudi-Hamidabad, 2012). The main criteria for selecting members of the
population in this research were their representation of the defined innovative organizations and
their willingness to volunteer.
Data Collection Method. Online data collection method was selected in order to have a
convenient web-based survey tool to the respondents and receive survey results on time.
Collecting data online takes less time and is a less expensive method for researching basic
human attitudes, opinions and behaviours (Weber & Bradley, 2006). According to Statistics
Lithuania (2016), 100% of Lithuanian organizations had computers and internet availability in
2016, therefore, each innovative organization can be reached through internet.
The contact details of either marketing or human resource management field managers
were searched on the Internet (company’s webpage, other webpages, LinkedIn) and through
professional associations (Lithuanian Marketing Association, LiMA). The search was successful
as contact details of either one or two people from each organization were found. A short e-mail
explaining the purpose of the research was sent to either marketing or human resource
management field manager and in some cases the e-mail was followed by a phone call to ensure
the higher involvement in the research, when telephone number of the potential respondent was
available. Managers were asked to send a similar e-mail with the link to questionnaire to other
members of the organization in order to have accessibility to all employees and ensure higher
participation rate. To encourage organizations to participate in the research, anonymity and
presentation of the research results was promised to them. However, it was difficult to convince
managers to share the questionnaire link with employees; many of them claimed that they can
answer the questions as they have necessary knowledge and information. Therefore, the data
collection process was difficult and the response rate was lower than expected.
Data Collection Sequence.
1. Uploading the final version of the questionnaire and to a web-based survey tool.
2. Preparing a personalized cover letter with explanation why the organization was
selected to participate in the research, with the purpose of the research and the link to the web-
based questionnaire.
3. Sending a personalized cover letter to a manager working in marketing or human
resource management field who supposed to have interest in the survey and the right to spread
the questionnaire to other employees. If possible, following the e-mail by a phone call.
4. Preparing a reminder about the questionnaire and sending to the contact person after a
certain time (10 days).
Data collection lasted for 14 days. The most active participation was after the initial e-
mail and the reminded after 10 days. All respondents fully completed the questionnaire without
any missing answers, therefore, the completion rate was 100%.
Data Analysis Methods. Quantitative data collected during the survey will be analysed
using SPSS software (IBM SPPS Statistics 20). The data analysis will be performed in the
following sequence:
1. Descriptive analysis will be performed to summarize the basic data of the research.
2. Reliability analysis will be done to test scales for internal consistency and reliability.
3. Shapiro-Wilk test will be done to check the normality of data distribution.
4. Spearman or Pearson correlation tests will be performed to test hypotheses depending
on the normality of distribution.
5. Differences in data according to different data cuts will be analysed.
Qualitative Research
In addition to quantitative research of innovative organizations based on the proposed
research instrument, qualitative research surveying experts in the field will be done. Such mixed
research methods are defined as a technique that “mixes or combines quantitative and qualitative
research techniques, methods, approaches, concepts or language into a single study (Muskat,
Blackman, & Muskat, 2012). The main goal of the qualitative research is to get expert comments
and evaluation of the results after analyzing the quantitative research data. This type of mixed
research method is defined as complementary when the author is seeking for elaboration,
enhancement and clarification of the results from another method (Muskat, Blackman, & Muskat,
2012), in this case – quantitative research.
Research Instrument. Research instrument for qualitative research was designed as an
open-ended questionnaire after the results of quantitative research was received and analyzed
using statistical methods. As this research was complementary, experts were asked only about
those results of the quantitative research, which differed from the previous studies by showing
weak relationship between variables. The questionnaire was composed out of eight open-ended
questions: the first two questions were dedicated to general information about respondents’ job
title and experience in the field, the following four questions were aimed at getting experts’
comments on the specific quantitative research results and the last two questions were
formulated to get experts’ inferences about the importance internal marketing practices in
organizations. The main advantages of open-ended questions are that they evoke responses that
are unanticipated by the researcher and rich and explanatory in nature (Mack, Woodsong,
Macqueen, Guest, & Namey, 2005). The qualitative research instrument is provided in Appendix
A.
Research Sample. To select interviewees, purposive sampling technique was applied.
Purposive sampling is one of the most frequently used sampling techniques when participants are
chosen according to preselected criteria relevant to a particular research question (Mack,
Woodsong, Macqueen, Guest, & Namey, 2005). Criteria for selecting participants were their
specialization in employee engagement surveys, their work experience and their knowledge
about the organizations from geographical perspective.
Data Collection Method. Due to time limitation, experts were asked to fill in online
questionnaire. Online quantitative research has become accepted and widely prevalent due to the
fast turnaround of raw results; “since everything is documented in digital format, transcripts can
be provided immediately” (Balden & Wittman, 2008). Prior to sending the link to the
questionnaire and the explanation about the research in an e-mail, experts were contacted by
telephone call and the purpose of the survey was explained to them.
Data Analysis Method. “Systematically comparing and analyzing qualitative data in raw
form is challenging” (Mack, Woodsong, Macqueen, Guest, & Namey, 2005), however, as only
two experts were surveyed and their answers to the same questions were documented in written
format, data analysis process was smooth. In addition, experts’ answers were used as
complementary data to quantitative research results, therefore, the aim was to clarify the results
and not to find out new information.
Summary of Research Methodology
Definition of the research aims and objectives showed that empirical research consists of
quantitative and qualitative research methods. The quantitative research method was selected to
effectively address research problem by surveying innovative organizations and qualitative
research method was selected to complement the results of quantitative research by surveying
experts.
As the application of the data analysis results to general population was an important
criteria in selecting research method, quantitative method and non-experimental design, which is
the most appropriate for making inferences about behaviours and attitudes from primary data,
were selected. Following the same logic, standardized survey was selected as data collection
method as it allows collecting information on attitudes and behaviour and is efficient with
relatively small sample sizes.
Based on the academic literature review, conceptual model was presented including
constructs of internal marketing practices and engaged employees’ behaviours. The internal
marketing practices construct was defined as a set of independent variables (Internal
communication, Training, Internal market research), each measured through six items on the
research instrument. Engaged employees’ behaviours construct was defined as a set of dependent
variables (Retention, Efforts, Advocacy, Passion), each measured through three items on the
research instrument. The composition of the conceptual research model allowed to formulate
hypotheses, which will be empirically evaluated and either accepted or rejected based on
statistical analysis of the primary data gathered during the survey.

Research instrument, including three main parts and consisting of 33 questions, was
presented. The first two parts are measuring independent and dependent variables, namely
internal marketing practices and engaged employees’ behaviours, on a 5-point Likert scale (from
1 – strongly disagree, to 5 – strongly agree). The third part includes organizational questions for
comparing different data cuts and is measured through multichotomous items.
Defining target population allowed to decide on the most appropriate sampling technique.
Research sample was defined using convenience sampling technique because the main criteria
were respondents’ representation of the defined population and their willingness to volunteer. In
addition, the analysis of innovative organizations in Lithuania revealed that the most
organizations represent private sector and manufacturing category. The most representative
group of the organizations was medium-sized, therefore, it must be considered when making
general inferences after the empirical evaluation of the results.
Next, online data collection method was selected as the most appropriate for this type of
research due to its time and cost effectiveness. The difficulties in data collection were identified
as they can influence the results of the research. Difficulties included complex communication
with potential respondents through either marketing or human resource field managers, who
stated that they are capable of answering the questions without spreading questionnaire further to
the employees. Finally, step by step data analysis methods, which will be further used in the
research, were named.
Qualitative research method was selected as a complementary method, which allows
elaborating and clarifying the results from quantitative research. Open-ended questionnaire,
composed out of eight questions, was design with the aim to get comments of the experts on the
research results that were questionable. By applying purposive sampling technique, experts were
selected based on their specialization in employee engagement surveys, their work experience
and their knowledge about the organizations from geographical perspective. Two experts with
extensive experience in the field were found and agreed to participate in the research. Experts
were asked to fill in online questionnaire and their answers were documented in digital format.
The next section of the thesis analyzes the results of the empirical research.
Empirical Research Results
This section includes the analysis and the summary of the both quantitative and
qualitative empirical research results. Firstly, descriptive analysis of quantitative research is
performed to describe the basic characteristics of the research. Secondly, reliability analysis of
quantitative research is conducted to ensure that the data is internally consistent and reliable.
Thirdly, normality of the distribution is tested and, based on the results, hypotheses are tested
using appropriate statistical analysis methods and either accepted or rejected. Lastly, the analysis
of qualitative research results is performed.
The online questionnaire of quantitative research is presented in Appendix B. The
questionnaire was used to survey the respondents from innovative organizations in Lithuania. To
analyze the primary data gathered during the survey, SPSS software (IBM SPPS Statistics 20)
was used.
The Results of Quantitative Research
Descriptive Analysis of Quantitative Research. Sample size of the research was N=40.
The majority of the respondents (45%) were from large organizations that employ 250 and more
employees. Respondents that work in small organizations (10-49 employees) represented the
second largest group in the research, namely 27.5%. The third group of employees of medium-
sized organizations represented 22.5% and there were 2 employees (representing 5%) from
micro organizations (1-9 employees).
Regarding the length of employment in the organizations, it was varying from 0-1 years
to 10 years and more. 30% of the study participants were employed for 3-5 years, the second
largest group (25%) were working for 5-10 years, the third group worked for 1-3 years and
represented 20%. The smallest groups were those working for 0-1 years (17.5%) and 10 years
and more (7.5%).
The most representative group of the respondents worked as a head of team or
department (37.5%). Other two large groups were managers / specialists and project managers
(25% and 22.5%, respectively). The smallest groups were assistants and highest-level executives,
each group covered 7.5% of the study participants.
In summary, study participants widely represent organizations of different sizes; they
differ in length of employment and cover a wide range of the organizational titles. However, the
least representative groups are employees from micro organizations, employees that work for 10
years and more, and the ones who work as either assistants or highest-level executives.
Reliability Analysis of Quantitative Research. In order to ensure the internal
consistency and reliability of the sets of questions in the research questionnaire, one the most
commonly used technique – Cronbach alpha – was selected (Gaur & Gaur, 2009). For
confirming the internal consistency and reliability of the scale, Cronbach alpha has to be above
0.70. Test results for each variable are represented in Appendix C and Table 6 provides the
summary of the results.
Table 6
Internal consistency and reliability test results
Construct Variable Number of items Cronbach alpha

Internal communication 6 0.857
Internal Marketing Training 6 0.889
Internal market research 6 0.873
Retention 3 0.858
Engaged
Efforts 3 0.741
Employees’
Advocacy 3 0.866
Behaviour
Passion 3 0.873
Internal communication variable was measured through six items in the questionnaire.
The Cronbach alpha coefficient was sufficiently high – 0.857. As the value of Cronbach alpha
above 0.70 can be used as a reasonable test of scale reliability, it confirmed that all items used to
measure this variable are consistent and reliable. Training variable measured through six items in
the questionnaire scored 0.889, which shows even higher internal consistency and reliability
according to the test. Internal market research variable was also measured through six items in
the questionnaire. It scored 0.873, which is also a high coefficient for ensuring internal
consistency and reliability of the scale.
All variables measuring the engaged employees’ behaviour scored sufficiently high to
fulfil the required value of Cronbach alpha. Retention variable measured through 3 items in the
questionnaire scored 0.858. Efforts variable scored the lowest coefficient – 0.741 – however, it
was also acknowledged as reliable and internally consistent. Both Advocacy and Passion
variables measured through 3 items in the questionnaire were above 0.8 (0.866 and 0.873
respectively), which showed relatively high reliability and internal consistency.
Therefore, all variables that measure both internal marketing practices and engaged
employees’ behaviours constructs in the organizations were proved to be highly consistent and
reliable.
Hypotheses Testing. The scores in the sample needed to be compared to a normally
distributed set of scores in order to choose the most relevant test for hypotheses testing. The most
commonly used normality test among researchers (Ghasemi & Zahediasl, 2012) – Shapiro-Wilk
– was selected. The test results are presented in Appendix D. P value (marked as Sig. in SPSS) of
three out of four dependent variables scored lower than 0.05 (Efforts p=0.041, Advocacy –
p=0.001, Passion – p=0.005), which is considered not normal distribution. With the exception of
Retention variable, which scored higher than 0.05 and was equal to p=0.093, most of the
collected data was not normally distributed. As it failed to fulfil the requirements for Pearson’s
correlation test for normally distributed data, the Spearman correlation test was selected for
hypotheses testing.
To measure the strength of relationship among dependent and independent variables, one-
tailed Spearman’s correlation test was selected as the alternative hypotheses were formulated as
directional assuming that there is a positive relationship between the variables. The Table 7 was
used for interpretation of the tests results.
Table 7
Strength of correlation in Spearman’s correlation test
r-value Interpretation
.00-.19 Very weak
.20-.39 Weak
.40-.59 Moderate
.60-.79 Strong
.80-1.0 Very strong
Note. Adapted from “Statistical Methods for Practice and Research: A guide to data analysis
using SPSS” by A. S. Gaur & A. A. (2009)
When testing H1a that assumed positive relationship between Internal communication
and Retention, Spearman correlation test showed weak positive relationship between variables (ρ
= 0.274). Detailed results are presented in Appendix E. Scatter plot for the correlation between
two variables results is presented in Figure 4 below.

Figure 4. Correlation results between Internal communication and Retention. From SPSS
analysis based on research results
R2, which stands for the coefficient of determination, showed that only 7.5% of the
variability of Retention can be determined by its relationship to Internal communication and the
remaining 92.5% are determined by other factors. As can be noted from the Figure 4, there is no
clear trend how the dependent variable changes in relation to the independent variable.
By assessing p values, the significance of the results was determined (see Appendix E,
where p value is marked as sig.) and interpreted as follows: the null hypothesis should be
rejected when p<α, the researcher fails to reject the null hypothesis when p≥ α. Since the p value
(ρ = 0.044) was lower than alpha level (0.05), the null hypothesis was rejected and H1a was
confirmed. Therefore, positive relationship between Internal communication and Retention was
concluded as statistically significant.
Spearman correlation test also showed weak positive relationship between variables (ρ =
0.247) for H1b, which assumed positive relationship between Internal communication and
Efforts. Appendix E represents detailed results of the test. Scatter plot for the correlation between
two variables results is presented in Figure 5 below.
Figure 5. Correlation results between Internal communication and Efforts. From SPSS analysis
based on research results
The coefficient of determination R2 showed that 10.5% of the variability in Efforts can be
determined by Internal communication and 89.5% can be determined by other factors. The same
conclusion can be drawn from the Figure 5 as there is no clear trend how the dependent variable
changes in reaction to the changes in the independent variable.
As the p value is higher than alpha level (ρ = 0.062), the null hypothesis cannot be
rejected and H1b cannot be accepted, which means that there is no statistical significance
between Internal communication and Efforts.
When testing H1c, which assumed positive relationship between Internal communication
and Advocacy, Spearman correlation test demonstrated moderate positive relationship between
variables (ρ = 0.452). Detailed results are presented in Appendix E. Scatter plot for the
correlation between two variables results is presented in Figure 6 below.

Figure 6. Correlation results between Internal communication and Advocacy. From SPSS
The coefficient of determination R2 showed that 24.4% of the variability in Advocacy can
be determined by Internal communication, while 75.6% can be determined by other factors.
The p value (ρ = 0.002) indicates that there is statistically significant relationship between
Internal communication and Advocacy as is it lower than alpha level (0.01). Therefore, the null
hypothesis was rejected and H1c was accepted.
Spearman correlation test results demonstrated moderate positive relationship between
variables (ρ = 0.412) for H1d, which assumed positive relationship between Internal
communication and Passion. Appendix E represents detailed results of the test. Scatter plot for
the correlation between two variables results is presented in Figure 7 below.

Figure 7. Correlation results between Internal communication and Passion. From SPSS analysis
Based on the coefficient of determination R2, it can be concluded that 22.4% of the
variability in Passion can be determined by Internal communication, while 77.6% can be
determined by other factors.
As the p value (ρ = 0.002) is lower than alpha level, it shows that there is statistically
significant relationship between Internal communication and Passion. Therefore, the null
hypothesis was rejected and H1d was accepted.
When testing H2a, which assumed positive relationship between Training and Retention,
Spearman correlation test demonstrated weak positive relationship between variables (ρ = 0.265).
Detailed results are presented in Appendix E. Scatter plot for the correlation between two
variables results is presented in Figure 8 below.

Figure 8. Correlation results between Training and Retention. From SPSS analysis based on
research results
The coefficient of determination R2 showed that only 7.8% of the variability in Retention
can be determined by Training, while 92.2% can be influenced by other factors.
Spearman correlation test showed statistically significant relationship between Training
and Retention as p value (ρ = 0.049) is lower than alpha level. Therefore, the null hypothesis was
rejected and H2a was accepted.
variables (ρ = 0.527) for H2b, which assumed positive relationship between Training and Efforts.
Appendix E represents detailed results of the test. Scatter plot for the correlation between two

Figure 9. Correlation results between Training and Efforts. From SPSS analysis based on
research results
variability in Efforts can be determined by Training, while 62.4% can be determined by other
factors.
significant relationship between Training and Efforts. Therefore, the null hypothesis was rejected
and H2b was accepted.
When testing H2c, which assumed positive relationship between Training and Advocacy,
Spearman correlation test demonstrated moderate positive relationship between variables (ρ =
0.484). Detailed results are presented in Appendix E. Scatter plot for the correlation between two

Figure 10. Correlation results between Training and Advocacy. From SPSS analysis based on
research results
be determined by Training, while 78.2% can be influenced by other factors.
Spearman correlation test showed statistically significant relationship between Training
and Advocacy as p value (ρ = 0.001) is lower than alpha level. Therefore, the null hypothesis
was rejected and H2c was accepted.
Spearman correlation test results demonstrated strong positive relationship between
variables (ρ = 0.606) for H2d, which assumed positive relationship between Training and
Passion variables (detailed results are represented in Appendix E). Scatter plot for the correlation
between two variables results is presented in Figure 11 below.

Figure 11. Correlation results between Training and Passion. From SPSS analysis based on
research results
Evaluating the coefficient of determination R2, it can be concluded that 36.8% of the
variability in Passion can be determined by Training, while 63.2% can be determined by other
factors.
significant relationship between Training and Passion. Therefore, the null hypothesis was
rejected and H2d was accepted.
When testing H3a, which assumed positive relationship between Internal market research
and Retention variables, Spearman correlation test showed weak positive relationship between
variables (ρ = 0.385). Detailed results are presented in Appendix E. Scatter plot for the

Figure 12. Correlation results between Internal market research and Retention. From SPSS
The coefficient of determination R2 showed that only 12.1% of the variability in
Retention can be determined by Internal market research, while 87.9% can be influenced by
other factors.
Spearman correlation test showed statistically significant relationship between Internal
market research and Retention as p value (ρ = 0.007) is lower than alpha level. Therefore, the
null hypothesis was rejected and H3a was accepted.
variables (ρ = 0.409) for H3b, which assumed positive relationship between Internal market
research and Efforts. Appendix E represents detailed results of the test. Scatter plot for the

Figure 13. Correlation results between Internal market research and Efforts. From SPSS analysis
variability in Efforts can be determined by Internal market research, while 74.4% can be
significant relationship between Internal market research and Efforts. Therefore, the null
hypothesis was rejected and H3b was accepted.
When testing H3c, which assumed positive relationship between Internal market research
and Advocacy variables, the results of Spearman correlation test showed moderate positive
relationship between variables (ρ = 0.521). Detailed results are presented in Appendix E. Scatter
plot for the correlation between two variables results is presented in Figure 14 below.
Figure 14. Correlation results between Internal market research and Advocacy. From SPSS
be determined by Internal market research, while 78.2% can be influenced by other factors.
Spearman correlation test showed statistically significant relationship between Internal
market research and Advocacy as p value (ρ = 0.000) is lower than alpha level. Therefore, the
null hypothesis was rejected and H3c was accepted.
Spearman correlation test results demonstrated strong positive relationship between
variables (ρ = 0.605) for H3d, which assumed positive relationship between Internal market
research and Passion (detailed results are represented in Appendix E). Scatter plot for the

Figure 15. Correlation results between Internal market research and Passion. From SPSS
variability in Passion can be determined by Internal market research, while 67.8% can be
significant relationship between Internal market research and Passion. Therefore, the null
hypothesis was rejected and H3d was accepted.
Table 8 below summarizes Spearman correlation test results for hypotheses testing and
the strength of relationship between variables.
Table 8
Summary of hypotheses testing results
Hypothesis Variables Relationship between Hypothesis

variables testing results
H1a Internal communication and Retention Weak Accepted
H1b Internal communication and Efforts Weak Rejected
H1c Internal communication and Advocacy Moderate Accepted
H1d Internal communication and Passion Moderate Accepted
H2a Training and Retention Weak Accepted

H2b Training and Efforts Moderate Accepted
H2c Training and Advocacy Moderate Accepted
H2d Training and Passion Strong Accepted
H3a Internal market research and Retention Weak Accepted
H3b Internal market research and Efforts Moderate Accepted
H3c Internal market research and Advocacy Moderate Accepted
H3d Internal market research and Passion Strong Accepted
As can be seen from the table, most of the hypotheses were accepted. Therefore, as
empirical research results are mostly consistent with theoretical expectations that are defined in
conceptual research model, the construct is proved to be valid. However, the strength of the
relationship varies significantly across variables. Only two pairs out of twelve are strongly
related – Training and passion, Internal market research and Passion. Moderately strong
relationship was identified for Internal communication and Advocacy, Internal communication
and Passion, Training and Efforts, Training and Advocacy, Internal market research and Efforts,
Internal market research and Advocacy. Relationship among other pairs of variables was weak.
Due to the relatively small sample size, the research results concerning the weak relationship
among some variables was further researched by surveying employee engagement experts.
Differences in Sample Groups. As high percentage in variability of the majority of
dependent variables were determined by other factors than independent variables when testing
hypotheses, detailed comparison of mean values for all dependent variables was performed to see
the differences between respondents groups according to their employment length and title
(detailed results are represented in Appendix F). Analysis showed differences in engaged
behaviour and trends among different employees groups, which complement the research results.
Differences by Employment Length. Comparisons of mean values for all dependent
variables in terms of employment length is presented in the Figure 16 below.

5,00
4,50
4,00
3,50
3,00 Retention
2,50 Efforts
2,00 Advocacy
1,50 Passion
1,00
0,50
0,00
0-1 years 1-3 years 3-5 years 5-10 years 10 years and
more
Figure 16. Comparison of mean values for dependent variables by employment length. Compiled
by author
As can be seen from the figure above, the least differences among employees groups
were noticed in Efforts variable. Except for employees working from 3 to 5 years, who put the
most efforts in their work, other groups demonstrated very similar mean values, which means
that employment length does not have significant impact on Efforts.
In terms of Retention, the results varied significantly among employees groups.
Employees who work in the organization for the longest period of time (10 years and more)
demonstrated the greatest commitment and desire to stay in organization. The second most
committed group was employees who work from 3 to 5 years. Interestingly, the least committed
group appeared to be employees who work in the organization from 1 to 3 years and those who
work less than a year demonstrated not very high desire to stay in the organization.
There were high differences in the mean values of Advocacy variable. The highest mean
was among employees who work less than a year. Advocacy drops significantly during the first
and third year of employment. Following groups (working from 3 to 10 and more years)
demonstrate similar Advocacy levels, meaning that employees, who remain in organization after
3 years, are proud to work in it and would recommend the employer to others.
Regarding Passion that employees demonstrate, it is the highest after 10 years of
employment, but it is also at its peak up to the first year of employment. Such employees believe
in organization’s goals and really care about its future. Passion is also peaking during the third to
fifth year of employment, however, it drops during the first to third years of employment.
Differences by Employment Title. Comparisons of mean values for all dependent
variables in terms of employment title is presented in the Figure 17 below.
5,00
4,50
4,00
3,50
3,00
Retention
2,50
Efforts
2,00
Advocacy
1,50
Passion
1,00
0,50
0,00
assistant specialist / project team / senior
manager manager department manager
manager
Figure 17. Comparison of mean values for dependent variables by employment title. Compiled
by author
As can be seen from the figure above, the general tendency is that the higher
organizational title employee represents the more engaged behaviour he or she demonstrates.
Retention is a perfect example when the higher organizational title impacts employee’s
commitment to organization – the least committed are assistants and the most committed are
senior managers. Employees with organizational titles in between those two groups, demonstrate
proportionally higher commitment with every next group.

In terms of Efforts, the main differences appear among those employees groups who
either have or do not have subordinates. Team or department managers and senior managers
demonstrate higher efforts than other groups of employees, which means that the more
responsibilities employee has or the more expectations are placed on him or her, the more efforts
he or she demonstrates.
With the exception of Advocacy and Passion demonstrated by assistants group, both
behaviours tend to increase with organizational title, meaning that the more higher in the
hierarchical organizational structure employee is, the more positively he speaks about the
organization and the stronger belief in it he or she has. However, as only 7.5% of respondents
represented assistants, little inferences can be made about this exception.
Internal Marketing Practices Dependency on Organization’s Size. Generally, the bigger
the organization, the more organizational processes and practices it implements when compared
to small organizations. Comparisons of mean values for internal marketing practices variables in
terms of size of the organization (detailed results are represented in Appendix G), presented in
the Figure 18 below, reflects similar tendency with some exceptions.
5,00
4,50
4,00
3,50
3,00 Internal communication
2,50 Training
2,00
1,50
1,00
0,50
0,00
1-9 10-49 50-249 250 and more
Figure 18. Comparison of mean values for internal marketing variables by the size of
organization. Compiled by author
Existence of Internal communication practices such as clear communication of brand
image, existence of internal communication program, consistency in organizational materials,
communication of organizational direction and priorities to employees at all levels and general
alignment of internal and external communication messages appeared to increase with the
organization’s size. However, employees of micro organizations (1-9 employees) evaluated those
practices at the same level as employees who work in medium-sized organizations. This might
be influenced by the fact that in such small organizations communication is always less
complicated as there is not as much hierarchical structures and complex organizational processes.
It is important to mention that only 5% of respondents were representatives of micro
organizations, therefore, the inferences might not be representative.
The highest evaluations for Training and Internal market research variables were given
by employees who work in medium-sized organizations, which highlights the presence and
strength of internal marketing practices in organizations that have from 50 to 249 employees.
Organizations that have from 10 to 49 employees scored the lowest evaluation in Internal market
research, which means that small organizations invest less in the assessment of the quality of
employment and are not that strong in giving and gathering feedback.
The Results of Qualitative Research
Descriptive Analysis of Qualitative Research. Based on purposive sampling technique
and criteria for respondents, two experts were surveyed. Both experts are currently working in
business consulting industry and execute employee engagement studies in Lithuanian
organizations based on Aon Hewitt’s Employee Engagement model since 2012. During those
five years, they have performed the employee engagement studies in 169 organizations. In
addition, they consult organizations and management on the ways how to strengthen employee
engagement, create engaging culture in organizations, attract and maintain engaged employees
and promote engaged behaviour. Therefore, the experts have comprehensive experience in the
field of this study.
Qualitative Data Analysis. This section is aimed at analyzing the data gathered from
surveying the experts. As the aim of the qualitative research was to complement quantitative
research results, the results will be analyzed in the context of quantitative research results. Data
will be analyzed question by question. The transcript of the survey is provided in Appendices H
and I.
After introductory questions, experts were asked to provide their comments on the
specific quantitative research results, which differed from previous studies and demonstrated
weak relationship among variables.
Firstly, experts where asked to evaluate the weak relationship between Internal
communication and Retention variables, which was determined by analyzing the qualitative
research results. Both experts claimed that Internal communication is an important aspect in
retaining employees in the organization. However, they specified different reasons why this
study did not recognize this relationship as strong. The first expert claimed that Internal
communication variable in this study is presented by a very narrow part of the potential needs of
an employee regarding internal communication. The respondent argued employee’s retention is
usually determined by the realization of his or her basic needs, therefore, internal communication
can have a strong relationship with employee’s retention only when employee’s needs are
satisfied on a level that is appropriate for him or her. The second expert stated that the weak
relationship between Internal communication and Retention variables in this study might be
conditioned by the small sample size. Although exchanging information is a continuous process
and inevitable part of the job, in expert’s opinion, all employees have different experiences,
come from different organizations, have different expectations towards the employer, therefore,
their answers might vary significantly.
Secondly, experts were asked to evaluate why the research results showed no relationship
between Internal communication and Efforts variables. Both experts confirmed that internal
communication is important for employee’s efforts; however, not a guarantee. As employee’s
efforts are conditioned by other organizational factors (according to one of the experts it might
be affected by remuneration, recognition, autonomy, work tasks, etc.), effective communication
process might improve employee’s satisfaction but not necessarily his or her efforts. In addition,
one expert claimed that the improvement of communication between the management and
employees, which was not defined in this study, is one of the most successful practices in
strengthening employees’ efforts.
Thirdly, experts were asked to evaluate the weak relationship between Training and
Retention variables. Both experts verified the finding that this relationship might be weak or
even negative because of several reasons. Firstly, employees usually view training and
development programs as a natural and obligatory job aspect, therefore, it does not make
difference in their decision to stay or leave the organization. On the other hand, when employer
does not adequately manage and change training and development programs over time with the
growth of employee’s competencies, job responsibilities and scope, employee outgrows the
position and might leave the organization. In addition, according to the experts, communication
about training and development programs is also an important aspect as sometimes employees do
not even know that such possibilities exist and it might affect their attitude towards organization.
Next, experts were asked to evaluate the weak relationship between Internal market
research and Retention variables. Both experts agreed on the importance of specifically designed
internal market research tools to show attention to people and give them platform to give their
opinion and position, however, they specified that the real impact is achieved by the actions
taken after the evaluation. They explained the weak relationship by the fact that only 20% of the
organizations know how to effectively analyze internal market research data and select
appropriate ways how to work with people afterwards. This relationship might even become
negative if organizations take no actions after the research or when the actions do not comply
with employees’ expectations.
The last two questions of the survey were formulated to get experts’ inferences about the
importance internal marketing practices in organizations.
According to the experts, the importance of internal marketing practices on strengthening
engaged behaviour is beyond doubt, especially when organizations struggle to attract and retain
the right employees. One expert claimed that the most important practices are those, which allow
to find out the needs, expectations of employees and their opinions about the organization, in this
case, internal market research. However, both experts add up that organizations should view
internal marketing practices as a whole. The importance of each practice and their impact on
engaged employees’ behaviours might significantly differ in different organizations, therefore,
organizations should design specific internal marketing programs based on internal market
research.
Summary of Empirical Research
Descriptive analysis revealed that sample of the research (N=40) represents a wide range
of organizations in terms of their size, length of employment and organizational titles. The most
representative groups were from large, small and medium-sized organizations, working either for
3-5 years, 5-10 years or 1-3 years and representing either a head of team or department, project
manager or manager / specialist. The least representative groups were employees from micro
organizations, employees that work for 10 years and more, and the ones who work as either
assistants or senior executives.
Performing Cronbach alpha reliability test proved that all variables that measure both
internal marketing practices and engaged employees’ behaviours constructs are highly consistent
and reliable.
Shapiro-Wilk test for normality of distribution showed that with the exception of one
variable, data was not normally distributed. Therefore, Spearman correlation test was selected for
hypotheses testing as it is suitable for testing not normally distributed data.
After performing Spearman correlation test for all hypotheses and checking the
significance of the relationship among variables, most of the hypotheses were accepted, except
for the one that measured relationship between Internal communication and Efforts variables.
Therefore, the conceptual research model was proved to be valid as the research results were
highly consistent with the theoretical assumptions. Evaluating the strength of the relationship
revealed that only two variables were strongly related, namely Training and Passion, Internal
market research and Passion. Other variables were either moderately or weakly related. None of
the variables demonstrated very weak or very strong relationship.
When analysing data from dependent variables according to different sample groups by
employment length and organizational title, some differences were observed. Employment length
made the most substantial impact on Retention, Advocacy and Passion, while Efforts variable
was less influenced. Regarding organizational title, the general trend was noticed that the higher
the organizational title, the more engaged behaviour employee is demonstrating. While most of
the behaviours tend to be demonstrated more with higher organizational title, Efforts mainly vary
among those employees’ groups, who either have or do not have subordinates – responsibility for
other employees’ performance tend to positively impact effortful behaviour.
When analysing internal marketing practices dependence on organization’s size, Internal
communication, Training and Internal market research variables appeared to increase with the
organization’s size, which is normal considering that larger organizations have more complex
processes and organizational practices. However, there was an exception with micro
organizations, which demonstrated the same level of one of the most important internal
marketing practices – Internal communication – presence as medium-sized organizations.
However, due to the small representation of micro organizations in the sample, the conclusions
about this exception should not be made.
Qualitative research was performed to complement quantitative research results and
explain weak relationships among some variables. Two employee engagement experts were
selected based on purposive sampling criteria and the analysis of their answers was provided.
The analysis showed that weak relationships might be explained by various reasons as different
employees have different needs and expectations towards organizations. Based on studies and
organizational practices, experts provided substantial arguments that complemented the
quantitative research results, which will be further discussed in the next part of the thesis.
Discussion
This part of the thesis analyses the empirical research results and compares it to the
previous studies in internal marketing and employees’ engagement field. Based on the
interpretation of results and findings, theoretical as well as managerial implications are provided.
The aim of the research was to investigate the impact of internal marketing practices on
engaged employees’ behaviour in innovative organizations. Quantitative research results
substantiated the proposed conceptual model, which suggested that positive relationship between
internal marketing practices and engaged employees’ behaviours exists in innovative
organizations. Qualitative research results of the employee engagement experts complemented
the study with the explanations why some variables might be weakly related. Results from both
quantitative and qualitative research are discussed jointly.
Implications for Current Theory
The major finding of the research is empirically supported relationship among the
majority of variables, which proves that internal marketing practices is related to engaged
employees’ behaviours. This finding could be aligned with the research by Shahzad & Naeem
results (2013), which demonstrated strong significant relationship between all internal marketing
dimensions and employee engagement and only the training, which the employees received, had
less significant result. However, the previous study did not investigate what specific engaged
employees behaviours are related to internal marketing practices. This research examined the
relationship between each of three-dimensional internal marketing practices with defined and
measurable engaged employees’ behaviours, namely Retention, Efforts, Advocacy and Passion.
Therefore, it provides more insights for organizations that seek to design specific internal
marketing programs targeted to specific behaviours of employees.

The Internal communication construct appeared to be the least related to engaged
employees behaviours. The quantitative research results contradicted the fact that internal
communication is one of the most important drivers of engaged behaviour, which was also
confirmed by qualitative research results. The study by Kalani & Hayase (2009) found that
internal communication is linked to the factors of engagement that were used in the study,
namely commitment, discretionary effort, and meaningful work. They researched the Superior-
Subordinate Communication, Quality of information, Opportunities for Upward Communication,
and Reliability of Information factors in their research. This study considered broader concept of
internal communication as a part of internal marketing defined as an effective exchange of
information between management and employees. Weak relationship between internal
communication and retention might suggest that employees’ willingness to stay in the
organization and commitment cannot be influenced by internal communication programs. While
the way employee acts as an advocate of organization by proudly recommending it to others
(advocacy) and how passionately he or she believes in organization’s goals and cares for its
future (passion) appeared to be moderately related to internal communication. The relationship
between extra efforts that employee demonstrates in addition to his or her responsibilities was
not proved to be related to internal communication at all. Employee engagement experts,
however, argued that internal communication is important for employee’s efforts, but not a
guarantee. According to the experts, as employee’s efforts are determined by many other factors,
successful internal communication can increase employee’s satisfaction, but not necessarily
efforts. Therefore, they partially supported the research results. The main limitation of findings
about the relationship between internal communication and engaged employees’ behaviours is
that the research instrument provided mainly formal attributes of communication, such as
alignment of internal and external communication, clear communication tone, consistency in
communication materials and communication of organization’s strategic objectives. However,
the research instrument failed to measure communication aspects such as trust and openness, the
predominance of either upward or downward communication type, communication styles in
superior-subordinate relationship and among co-workers. This limitation was also approved by
employee engagement experts surveyed in qualitative research. According to them, internal
communication variable presents the potential needs of an employee regarding internal
communication very narrowly. Therefore, it explains the weak relationship determined in this
research as internal communication can have a strong relationship with employee’s retention
only when employee’s needs are satisfied on a level that is appropriate for him or her. In addition,
such results, according to the experts, might have been conditioned by the small sample size. As
all employees come from different organizations, have different experiences and different
expectations towards the employer, their answers might vary significantly and create significant
outliers.
The relationship between training and all engaged employees’ behaviours was found to
be positive. This finding partially supports results from a study conducted by Joung, Goh,
Huffman, Yuan & Surles (2015), who proved that organizations, which provide job training and
development program to employees, are appreciated by employees in a way that they feel
indebted and are obligated to remain with the organization. By receiving the right type and level
of training, employees do not only meet their needs to perform their jobs, but also show extra
efforts in seeking organizational goals. Although this study confirms the relationship between
training and retention, it was determined as weak in the quantitative research. Employee
engagement experts, surveyed in the qualitative research, agree that that this relationship might
be weak or even negative. According to them, when employees take training and development
programs for granted, their presence does not affect their decision to stay or leave the
organization, and that is a usual situation in today’s organizations. Another possible reason
explaining the weak relationship is employer’s inability to adequately manage and change
training and development programs over time with the growth of employee’s competencies, job
responsibilities and scope. Experts claim that when employee outgrows the position, he or she
might leave the organization. Moderately strong relationship between training and advocacy
variables was discovered in the research, which means that employer, which invests into training
and development of an employee, is highly appreciated not only internally, but also externally
and employee tends to recommend it to people outside the organization. The same finding was
discovered in terms of training and passion. The more organization focuses on ongoing training
of employees and teaches why employee should do things, the more he or she believes in
organization’s goals and cares about its future.
The relationship between internal market research and engaged employees’ behaviours
proved to be positive. Internal market research and retention variables were found to be weakly
related, which is supported by a study conducted by Salem (2013). He concluded that the
organization has no such significant influence to attract and retain the employees extrinsically or
intrinsically by implementing the tool of internal market research. However, he agrees that the
recognition of specific internal segments of employees with different characteristics and needs is
important in the organization to design proper internal communication and training programs.
According to Salem (2013), internal market research is the way to recognize specific internal
segments of employees with different characteristics and needs to design strategies for internal-
market. This study is also supported by experts, who participated in qualitative research. Experts
agreed that specifically designed internal market research tools are important as a way to show
attention to people and give them platform to give their opinion and position. However, in
addition to Salem’s study, they claim that the real impact is achieved after the evaluation of
research results and the selection of action plan to address the problems. Furthermore, according
to the experts, 80% of the organizations lack knowledge and skills to effectively analyze internal
market research data and select appropriate ways how to work with people after the internal
market research, which can also explain the weak relationship between variables. Experts warned
that this relationship might even become negative if organizations take no actions after the
research or when the actions do not comply with employees’ expectations. As Huang & Rundle-
Thiele (2015) summarize, internal market research is an important element in understanding how
to implement both marketing-like and human resource management approaches. As internal
market research highly influences other internal marketing practices, namely internal
communication and training, the individual approach to employee is still related to other engaged
behaviours, especially with passion, which showed strong relationship with internal market
research in the quantitative study.
Analysing the differences in engaged behaviour and trends among different employees
groups (by employment length and title) complemented the research results. The commitment
and desire to stay in organization (retention) highly varied among employees by their
employment length. The least committed group were employees who work in the organization
from 1 to 3 years and those who work less than a year. Their low desire to stay in the
organization might reflect that they do not feel affection to organization in the first three years of
employment and are more subject to leave the organization. This early turnover is highly
researched in academic literature because of its effect on organizational performance due to high
investments in recruiting, training, and socialization, which do not pay off (Holtom, Mitchell,
Lee, & Eberly, 2008). This proves that engagement levels can vary according to different
biographical and personality characteristics, for example, younger employees may be positive
when they first join an organisation, but can quickly become disengaged and quit their job
(Robertson-Smith & Markwick, 2009). After a peak of commitment in the third to fifth year of
employment, it drops significantly for those who work from 5 to 10 years. It might be explained
by employee tenure trends, which shows that the median tenure of employees has stayed at
approximately five years over the past thirty years (Copeland, 2015). The greatest commitment
and desire to stay in organization was expressed by employees who work in the organization for
the longest period of time (10 years and more). The second most committed group was
employees who work from 3 to 5 years. This finding is supported by the study by Kaur &
Sandhu (2010), who found that employees at mid and late-career stage exhibited higher
commitment than early-career stage employees. Authors explain that the expectations of
employees change with experience and this might influence how they perceive organizational
commitment. Regarding advocacy it was the highest among employees who work less than a
year. It might be related to the new employee’s perception of employer’s brand image, therefore,
in the first year of employment, employee speaks highly of the organization and is proud to tell
others about his employment. Advocacy drops significantly during the first and third year of
employment, which suggests that employee’s expectations were not met or that the external
employer’s brand image appeared to be better than internal. Following groups (working from 3
to 10 and more years) demonstrate similar advocacy levels, meaning that employees, who remain
in organization after 3 years, are proud to work in it and would recommend the employer to
others. Regarding passion, the most passionate employees become after 10 years of employment,
but also during the first year of employment. As passion drops significantly during the first to
third years of employment, it can be concluded that in the beginning of employment strong
demonstration of passion is mostly related to employee’s desire to be noticed and acknowledged
by the employer. On the contrary, after working in the organization for 10 years, passion
becomes genuine as employee starts really caring about organization’s future. Passion is also
peaking during the third to fifth year of employment, which can be associated with career
aspirations. Usually, after such period of time, employee expects to be promoted or is promoted,
therefore, he or she returns to the same level of passion demonstrated in the beginning of
employment.
Engaged behaviour also varied among employees groups according to organizational title.
The analysis revealed that higher organizational title is related to more engaged behaviour.
Robertson-Smith & Markwick (2009) argues that the more senior an individual’s role, the greater
the chance of being engaged. Presidents, managers, operational and hands on staff tend to be the
most engaged, professionals and support staff the least, but this varies between organisations
(Robertson-Smith & Markwick, 2009). In terms of retention, the analysis proved that employees
with higher organizational title are more committed. Research by Kaur & Sandhu (2010)
supports this finding by stating that higher positions, greater prestige and importance are
associated with longer age and experience which might be the reason for higher organizational
commitment. In terms of efforts, the main differences appear among those employees groups
who either have or do not have subordinates. Team or department managers and senior managers
demonstrates higher efforts than other groups of employees, which means that the more
responsibilities employee has or the more expectations are placed on him or her, the more efforts
he or she demonstrates. However, Gallup experts (Royal & Sorenson, 2015) claim that
employees are responsible for their engaged behaviour and efforts and the efforts of their
organizations, leaders and managers may have a limited effect on improving engagement.
The differences of internal marketing practices by organization’s size, revealed a trend
that internal marketing is more developed at bigger organizations. This finding is supported by
the research conducted by (Ribeiro, Borges, & Rodrigues (2013), who found that the existence of
internal marketing depends on the organization size and concluded that small and medium-sized
organizations should not underestimate the importance of internal marketing as it may lead to
slower growth and progress. Authors argued that the managers of small and medium-sized
organizations are directly responsible for the prevention of the inexistence of internal marketing
(Ribeiro, Borges, & Rodrigues, 2013).
Managerial Implications
“Engaging the right employees in demonstrating the right behaviours remains a critical
ingredient for organizations, particularly in today’s economic situation” (Aon Hewitt, 2013),
therefore, it is significantly important for organizations to identify what behaviours are the most
important for them and what internal marketing practices can be applied for the effective results.
Using marketing-like approach for fostering engaged employees’ behaviours cannot rely
on traditional human resource strategies and instruments (Ahmed & Rafiq, 2000), it should
rather be approached as inter-functional strategy. Internal marketing should incorporate not only
human resource management theories, technologies and principles, but also external marketing,
management, quality control, communications (Salem, 2013). Evaluating each organization’s
maturity, level of engagement and organizational goals, management should carefully examine
which internal marketing practices are appropriate and how they will be adapted in the
organization’s context across different functions (Ahmed & Rafiq, 2000). When internal
marketing is seen as an integrative process within a system for fostering positive working
relationships “in a developmental way in a climate of co-operation and achievement, the internal-
external boundary becomes blurred” (Varey & Lewis, 1999) and employees become internal
customers treated with the same dedication and respect. Analysis of the qualitative research
results showed that employee engagement experts also suggest view internal marketing practices
as a whole. According to them, the importance of each practice and their impact on engaged
employees’ behaviours might significantly differ in different organizations, therefore,
organizations should design specific internal marketing programs based on internal market
research.
Analysis of different studies proved that internal marketing is frequently overlooked and
more efforts are concentrated on external marketing instead of putting the internal customer in
the focus of attention. Although it is important for the organization to satisfy employees’ needs
before the company can satisfy the needs of its customers (Salem, 2013), the management is
more focused on the external customers and the employees’ needs are not given required
attention. Managers of the organizations should be educated about the outcomes of internal
marketing, which proposes that internal market orientation makes employees to be customer-
orientated and care for organization’s goals and put extra efforts to achieve them. Such
behaviours demonstrated by employees directly translate to better business results.
Internal Communication. As internal communication is moderately related to
passionate behaviour of engaged employees, it can be concluded that the belief in organization’s
goals and objectives depends on the internal communication. “Senior leaders and line managers
both play a critical role in connecting employees to organisational purpose, communicating the
strategy and translating it into action” (Smith & Wright, 2016), Therefore, managers of
innovative organizations should put more emphasis to the communication of organizational
strategies and objectives to employees so that they would understand their role and importance in
the implementation of organizational objectives (Ahmed & Rafiq, 2000).
In terms of advocacy, which is also moderately related to internal communication as an
internal marketing practice, it is important for organizations that employees would speak
positively about it to their co-workers, potential employees and customers and would proudly
recommend the organization externally. Organizations should concentrate on communicating
desirable values and goals so that employees would identify with the organization and them in
turn would speak positively about it and influence other stakeholders (White, Vanc, & Stafford,
2010).
Regarding the type of communication, it is important that it would be two-way
communication as it allows the employee to suggest ideas, while at the same time keep
employees informed about the things that are relevant to them (Robinson, Perryman, & Hayday,
2004).
Training. As employee training brings about a permanent change in employee behaviour
(Azeem, Rubina, & Paracha, 2013), it is an important internal marketing practice that can
influence engaged employees’ behaviours. When organization offers employees training and
learning development programmes, their confidence improves in the area of training and it
motivates them to be more engaged in their job (Anitha, 2014). This proves that training is
related to efforts that employee demonstrates, which was also discussed in the results of the
empirical research. Therefore, it is important for innovative organization to identify what training
and development programs should be offered to their employees in order to strengthen the extra
efforts that they put in their work apart from job characteristics. In addition, organizations should
create such training and development programmes that would be personalized to different
employees. According to Robinson, Perryman, & Hayday (2004), employees who have a
personal development plan are significantly more engaged than those who do not. When
employees feel that organization cares about them, they feel passion for it and demonstrate the
highest levels of engagement. Treating employees like internal customers and taking a long-term
view of their value, delivers both the training they need now and fair access to development
opportunities (Robinson, Perryman, & Hayday, 2004). Authors suggest that development of
employees should be not only based on occasional trainings, but rather be systematic, including
job related skill development, career development, internal mobility and performance
management.
Internal Market Research. Internal market research is a critical factor and condition for
effectively implementing other internal marketing practices. When the organizations are not
focusing on different employee segments and their needs, their internal communication and
training activities are of little value. Employees appreciate individual approach to their needs,
therefore, organization that seeks to foster engaged employees’ behaviours, should be flexible
and in favour towards employees (Robinson, Perryman, & Hayday, 2004). Scholars argue that
the majority of organizations were not able to implement internal marketing practices because
they lacked understanding of different segments of employees. Internal market environment is as
important as external, especially when organizations seek to treat employees like customers,
therefore, they should consistently conduct internal market research and use the data for
implementing personalized internal marketing practices. Organizations should focus on the
understanding of the internal market environment, the approach of employees towards internal
marketing, the motivation of employees, the building blocks of internal marketing and only then
on the implementation of internal marketing activities (Roberts-Lombard, 2010).
Limitations and Recommendations for Future Research
A potential limitation of the research is small sample size (N=40). Difficulties in reaching
potential respondents from innovative organizations made it difficult to survey more employees.
Therefore, due to convenience sampling generalizations about the research results are limited.
Preferably, such research should have a bigger sample size.
Another potential limitation is that most of the organizations that participated in the study
operate in manufacturing industry, followed by communication and construction industries,
therefore, the results can be different in other industries. In addition, almost half of the
respondents that participated in the study came from large organizations, therefore, the research
results is less applicable to medium-sized, small and micro organizations. As the vast majority of
organizations represented private sector, the research results could be different in public sector,
therefore, the results is mainly applicable to organizations that operate in private sector.
Furthermore, as the definition of innovative organizations is very broad and criteria for
selecting innovative organizations for this research was based on only one method, research
results could vary in different types of innovative organizations, selected by other criteria. In
addition, the research participants were geographically limited to Lithuania, therefore, for the
future research the selection of organizations should be geographically expanded.
Moreover, the conceptual model of the research measuring these specific internal
marketing practices and engaged employees’ behaviours was never researched before, therefore,
the results were difficult to compare to past studies.

This research will assist future research to examine the relationship between internal
marketing practices and engaged employees’ behaviours in both innovative and other
organizations as valid, consistent and reliable research instrument was developed. Based on the
research results and limitations, future research should apply the conceptual model on larger
population. Future researchers could study the relationship between internal marketing practices
and engaged employees’ behaviours in other countries and based on other innovatiness criteria.
In addition, it would be interesting to do longitudinal study to compare the results in relation to
engaged employees’ behaviours before and after organizations apply internal marketing practices,
based on managerial implications provided in this study.

Conclusion
This part summarizes each section of the thesis by highlighting the main findings.
After analysing previous studies on internal marketing practices and engaged employees’
behaviours constructs in the literature review part, it was found that there is no single tool or
measure to test the relationship between the concepts. Based on the comprehensive analysis of
academic literature, internal marketing practices were defined as three-dimensional concept
consisting of internal communication, training and internal market research and engaged
employees’ behaviours were determined as retention, effort, advocacy and passion. The
overview of existing studies provided a strong background for further empirical research as it
identified a gap in academic literature related to internal marketing practices and engaged
employees’ behaviour elements particularly in the context of innovative organizations.
The quantitative empirical research conducted in innovative organizations in Lithuania
provided strong support for the conceptual research model as most of the hypotheses were
supported, except for the one which assumed positive relationship between internal
communication and efforts. The strongest relationship was determined between Training and
Passion, Internal market research and Passion variables. The qualitative research, in which
employee engagement experts were surveyed, complemented quantitative research results by
explaining that the weakest relationships among some variables were caused by the differences
in employees’ needs and expectations towards organizations. As the research used quantitative
survey followed by qualitative expert survey, which complemented the results, the research
results demonstrated overall consistency.
All the empirical research results and findings were supported by other studies in the
implications for current theory part and managerial implications were provided further to
help innovative organizations foster engaged employees’ behaviours by implementing internal
marketing practices. The main recommendation for organizations was that they should identify
what specific engaged employees’ behaviours they want to influence and then design specific
internal marketing programs based on internal market research.
The main contribution of this thesis to the internal marketing and employee engagement
fields by developing a valid, consistent and reliable research instrument, which can be further
used in future studies. As the main limitation of the research was small sample size, future
research should apply the conceptual research model on larger population and, preferably, to
wider geographical area.

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Appendices
Appendix A
Questionnaire for Experts
Questions
General questions
1. What is your name, surname and job title?
2. What is your experience in working with employee engagement?
Questions about the research results
3. Why, in your opinion, the relationship between internal communication and retention
in innovative organizations might be weak?
4. Why, in your opinion, there is no relationship between internal communication and
employee’s efforts in innovative organizations?
5. Why, in your opinion, the relationship between training and retention in innovative
organizations might be weak?
6. Why, in your opinion, the relationship between internal market research and retention
7. Which internal marketing practice has the biggest influence on engaged employees’
behaviour? Why?
8. What is your general opinion about the importance of internal marketing in the
context of employees’ engagement?
Appendix B
Online Questionnaire
Appendix C
Internal Consistency and Reliability Test Results
Internal communication
Reliability Statistics
Cronbach's N of Items
Alpha
,857 6
Training
Alpha
,889 6

Alpha
,873 6
Retention
Alpha
,858 3
Efforts
Alpha
,741 3
Advocacy
Alpha
,866 3
Passion
Alpha
,873 3
Appendix D
Normality of Distribution Test Results
Tests of Normality
Kolmogorov-Smirnova Shapiro-Wilk
Statistic df Sig. Statistic df Sig.
Retention_average ,105 40 ,200* ,953 40 ,093

Efforts_average ,195 40 ,001 ,942 40 ,041
Advocacy_average ,164 40 ,009 ,891 40 ,001
Passion_average ,165 40 ,008 ,914 40 ,005
*. This is a lower bound of the true significance.
a. Lilliefors Significance Correction
Appendix E
Spearman Correlation Test Results
Table E1
Spearman Correlation Test Results for H1a
Correlations
Internal Retention_aver
communication age
_average
Correlation Coefficient 1,000 ,274*

Internal
Sig. (1-tailed) . ,044
communication_average
N 40 40
Spearman's rho
Correlation Coefficient ,274* 1,000
Retention_average Sig. (1-tailed) ,044 .
N 40 40
*. Correlation is significant at the 0.05 level (1-tailed).
Table E2
Spearman correlation test results for H1b
Correlations
Internal Efforts_average
communication
_average
Correlation Coefficient 1,000 ,247

Internal
N 40 40
Spearman's rho
Correlation Coefficient ,247 1,000
Efforts_average Sig. (1-tailed) ,062 .
N 40 40
Table E3
Spearman correlation test results for H1c
Correlations
Internal Advocacy_aver
communication age
_average
Correlation Coefficient 1,000 ,452**

Internal
N 40 40
Spearman's rho
Correlation Coefficient ,452** 1,000
Advocacy_average Sig. (1-tailed) ,002 .
N 40 40
**. Correlation is significant at the 0.01 level (1-tailed).
Table E4
Spearman correlation test results for H1d
Correlations
Internal Passion_averag
communication e
_average

Internal
N 40 40
Spearman's rho
Passion_average Sig. (1-tailed) ,004 .
N 40 40

Table E5
Spearman correlation test results for H2a
Correlations
Training_averag Retention_aver
e age
Correlation Coefficient 1,000 ,265*
Training_average Sig. (1-tailed) . ,049
N 40 40
Spearman's rho
Correlation Coefficient ,265* 1,000
N 40 40
*. Correlation is significant at the 0.05 level (1-tailed).
Table E6
Correlations
Training_averag Efforts_average
e
N 40 40
Spearman's rho
N 40 40
Table E7
Correlations
Training_averag Advocacy_aver
e age
Spearman's rho Training_average
N 40 40
N 40 40
Table E8
Correlations
Training_averag Passion_averag
e e
N 40 40
Spearman's rho
N 40 40
Table E9
Spearman correlation test results for H3a
Correlations
Internal market Retention_aver

research_avera age
ge

Internal market
research_average
N 40 40
Spearman's rho
N 40 40

Table E10
Correlations
Internal market Efforts_average

research_avera
ge

Internal market
research_average
N 40 40
Spearman's rho
N 40 40
Table E11
Correlations
Internal market Advocacy_aver

research_avera age
ge

Internal market
research_average
N 40 40
Spearman's rho
N 40 40

Table E12
Correlations
Internal market Passion_averag

research_avera e
ge

Internal market
research_average
N 40 40
Spearman's rho
N 40 40

Appendix F
Comparison of Mean Values for Dependent Variables by Employment
Length and Employment Title
Descriptives
I work in this organization for Statistic Std. Error
Mean 3,5238 ,37696
95% Confidence Interval for Lower Bound 2,6014

Mean Upper Bound 4,4462
5% Trimmed Mean 3,5079
Median 3,3333
Variance ,995
0-1 years Std. Deviation ,99735
Minimum 2,33
Maximum 5,00
Range 2,67
Interquartile Range 2,00
Skewness ,528 ,794
Kurtosis -1,117 1,587
Mean 3,3333 ,15430
Retention_average 95% Confidence Interval for Lower Bound 2,9685

Median 3,3333
Variance ,190
Minimum 2,67
Maximum 4,00
Range 1,33
Interquartile Range ,67
Skewness ,000 ,752
Kurtosis -,700 1,481
Mean 3,7778 ,33165
3-5 years 95% Confidence Interval for Lower Bound 3,0478

Median 4,0000
Variance 1,320
Std. Deviation 1,14885
Minimum 1,67
Maximum 5,00
Range 3,33
Skewness -,690 ,637
Mean 3,4667 ,31895

Median 3,8333
Variance 1,017
5-10 years Std. Deviation 1,00860
Minimum 1,67
Maximum 5,00
Range 3,33
Skewness -,359 ,687
Mean 3,8889 ,58794

5% Trimmed Mean .
Median 3,6667
Variance 1,037
10 and more years Std. Deviation 1,01835
Minimum 3,00
Maximum 5,00
Range 2,00
Interquartile Range .
Skewness ,935 1,225
Kurtosis . .
Mean 3,8095 ,20389

Median 4,0000
Variance ,291
Minimum 3,00
Maximum 4,67
Range 1,67
Skewness ,013 ,794
Kurtosis ,249 1,587
Mean 3,8333 ,17817
Median 4,0000
Variance ,254
Efforts_average
Minimum 3,00
Maximum 4,67
Range 1,67
Skewness -,165 ,752
Kurtosis ,580 1,481
Mean 4,2778 ,16834
Median 4,1667
Variance ,340
Minimum 3,00
Maximum 5,00
Range 2,00
Skewness -,552 ,637
Kurtosis ,783 1,232
5-10 years Mean 3,5333 ,31505

Median 3,5000
Variance ,993
Std. Deviation ,99629
Minimum 2,00
Maximum 5,00
Range 3,00
Skewness -,109 ,687
Kurtosis -1,038 1,334
Mean 3,6667 ,19245
5% Trimmed Mean .
Median 3,6667
Variance ,111
10 and more years Std. Deviation ,33333
Minimum 3,33
Maximum 4,00
Range ,67
Skewness ,000 1,225
Kurtosis . .
Mean 4,4286 ,18848
Median 4,3333
Variance ,249
Advocacy_average Minimum 3,67
Maximum 5,00
Range 1,33
Skewness -,256 ,794
Mean 3,8333 ,31497
1-3 years

Median 3,6667
Variance ,794
Minimum 2,33
Maximum 5,00
Range 2,67
Skewness -,239 ,752
Mean 4,2500 ,24661
Median 4,5000
Variance ,730
Minimum 2,67
Maximum 5,00
Range 2,33
Skewness -1,106 ,637
Kurtosis ,113 1,232
Mean 4,1667 ,24969
Median 4,1667
Variance ,623
Minimum 2,67
Maximum 5,00
Range 2,33
Skewness -,627 ,687
Mean 4,2222 ,40062
10 and more years 95% Confidence Interval for Lower Bound 2,4985
5% Trimmed Mean .
Median 4,0000
Variance ,481
Minimum 3,67
Maximum 5,00
Range 1,33
Skewness 1,293 1,225
Kurtosis . .
Mean 4,0952 ,25937

Median 4,0000
Variance ,471
Minimum 3,33
Maximum 5,00
Range 1,67
Skewness ,108 ,794
Kurtosis -2,051 1,587
Passion_average Mean 3,9167 ,29378


Median 4,3333
Variance ,690
Minimum 2,67
Maximum 4,67
Range 2,00
Skewness -,950 ,752

3-5 years Mean 4,1111 ,29964


Median 4,3333
Variance 1,077
Minimum 2,00
Maximum 5,00
Range 3,00
Kurtosis ,421 1,232
Mean 3,9667 ,23544

Median 4,0000
Variance ,554
Minimum 2,67
Maximum 5,00
Range 2,33
Skewness -,144 ,687
Mean 4,2222 ,40062

5% Trimmed Mean .
Median 4,0000
10 and more years Variance ,481
Minimum 3,67
Maximum 5,00
Range 1,33
Skewness 1,293 1,225
Kurtosis . .
Descriptives
My title is Statistic Std. Error
Mean 3,0000 ,38490
95% Confidence Lower Bound 1,3439

Interval for Mean Upper Bound 4,6561
5% Trimmed Mean .
Median 3,0000
Variance ,444
assistant Std. Deviation ,66667
Minimum 2,33
Maximum 3,67
Range 1,33
Skewness ,000 1,225
Kurtosis . .
Mean 3,2333 ,29418

Retention_average
Median 3,0000
Variance ,865
specialist / manager Std. Deviation ,93029
Minimum 1,67
Maximum 5,00
Range 3,33
Skewness ,462 ,687
Kurtosis ,755 1,334
Mean 3,4815 ,30987

project manager
Median 3,6667
Variance ,864
Minimum 1,67
Maximum 5,00
Range 3,33
Skewness -,546 ,717
Kurtosis 1,437 1,400
Mean 3,7778 ,23831

Median 4,0000
Variance ,852
team / department manager Std. Deviation ,92296
Minimum 2,00
Maximum 5,00
Range 3,00
Skewness -,423 ,580
Mean 4,5556 ,44444

5% Trimmed Mean .
Median 5,0000
Variance ,593
senior manager Std. Deviation ,76980
Minimum 3,67
Maximum 5,00
Range 1,33
Skewness -1,732 1,225
Kurtosis . .
Mean 3,6667 ,19245
Efforts_average assistant 95% Confidence Lower Bound 2,8386
5% Trimmed Mean .
Median 3,6667
Variance ,111
Minimum 3,33
Maximum 4,00
Range ,67
Skewness ,000 1,225
Kurtosis . .
Mean 3,5667 ,30651
Median 3,8333
Variance ,940
Minimum 2,00
Maximum 5,00
Range 3,00
Skewness -,239 ,687
Mean 3,7407 ,22067
Median 4,0000
Variance ,438
project manager Std. Deviation ,66202
Minimum 2,67
Maximum 5,00
Range 2,33
Skewness ,346 ,717
Kurtosis ,931 1,400
Mean 4,1111 ,14788
team / department manager
Median 4,0000
Variance ,328
Minimum 3,00
Maximum 5,00
Range 2,00
Skewness -,112 ,580
Mean 4,3333 ,19245
5% Trimmed Mean .
Median 4,3333
Variance ,111
Minimum 4,00
Maximum 4,67
Range ,67
Skewness ,000 1,225
Kurtosis . .
Mean 4,3333 ,19245
5% Trimmed Mean .
Median 4,3333
Variance ,111
Minimum 4,00
Maximum 4,67
Advocacy_average
Range ,67
Skewness ,000 1,225
Kurtosis . .
Mean 3,8000 ,29481
specialist / manager Interval for Mean Upper Bound 4,4669
Median 3,6667
Variance ,869
Minimum 2,33
Maximum 5,00
Range 2,67
Skewness -,096 ,687
Kurtosis -1,113 1,334
Mean 4,0370 ,23859
Median 4,3333
Variance ,512
project manager Std. Deviation ,71578
Minimum 2,67
Maximum 5,00
Range 2,33
Skewness -,768 ,717
Kurtosis ,358 1,400
Mean 4,3778 ,18649
Median 4,6667
Variance ,522
Minimum 2,67
Maximum 5,00
Range 2,33
Kurtosis ,390 1,121
Mean 4,6667 ,33333
senior manager
5% Trimmed Mean .
Median 5,0000
Variance ,333

Minimum 4,00
Maximum 5,00
Range 1,00
Skewness -1,732 1,225
Kurtosis . .
Mean 4,0000 ,38490

5% Trimmed Mean .
Median 4,0000
Variance ,444
Minimum 3,33
Maximum 4,67
Range 1,33
Skewness ,000 1,225
Kurtosis . .
Mean 3,7333 ,28889
Passion_average 95% Confidence Lower Bound 3,0798

Median 3,6667
Variance ,835
Minimum 2,00
Maximum 5,00
Range 3,00
Skewness -,585 ,687
Kurtosis ,029 1,334
Mean 3,8889 ,30932
project manager 95% Confidence Lower Bound 3,1756

Median 4,0000
Variance ,861
Minimum 2,67
Maximum 5,00
Range 2,33
Skewness -,139 ,717
Kurtosis -1,643 1,400
Mean 4,2222 ,18875

Median 4,3333
Variance ,534
Minimum 2,33
Maximum 5,00
Range 2,67
Mean 4,6667 ,19245

5% Trimmed Mean .
Median 4,6667
Variance ,111
Minimum 4,33
Maximum 5,00
Range ,67
Skewness ,000 1,225
Kurtosis . .
Appendix G
Comparison of mean values for internal marketing practices by the size of organization
Descriptives
Number of employees in our company Statistic Std. Error
Mean 3,6667 ,83333
95% Confidence Interval for Lower Bound -6,9218

5% Trimmed Mean .
Median 3,6667
Variance 1,389
1-9 Std. Deviation 1,17851
Minimum 2,83
Maximum 4,50
Range 1,67
Skewness . .
Kurtosis . .
Internal Mean 3,1061 ,11950

communication_average 95% Confidence Interval for Lower Bound 2,8398

Median 3,3333
Variance ,157
10-49 Std. Deviation ,39632
Minimum 2,50
Maximum 3,50
Range 1,00
Skewness -,616 ,661
Kurtosis -1,286 1,279
Mean 3,6481 ,26124

50-249
Median 3,8333
Variance ,614
Minimum 1,83
Maximum 4,50
Range 2,67
Mean 3,7963 ,20811

Median 4,0833
Variance ,780
250 and more Std. Deviation ,88295
Minimum 2,00
Maximum 5,00
Range 3,00
Skewness -,683 ,536

Mean 3,5833 1,25000
95% Confidence Interval for Lower Bound -12,2994
5% Trimmed Mean .
Median 3,5833
Variance 3,125
Training_average 1-9 Std. Deviation 1,76777
Minimum 2,33
Maximum 4,83
Range 2,50
Skewness . .
Kurtosis . .
Mean 3,4576 ,25816

Median 3,6667
Variance ,733
Minimum 2,00
Maximum 4,67
Range 2,67
Skewness -,353 ,661
Mean 3,9074 ,18863
Median 4,0000
Variance ,320
Minimum 2,67
Maximum 4,67
Range 2,00
Mean 3,7037 ,22488
Median 3,7500
Variance ,910
250 and more Std. Deviation ,95410
Minimum 1,67
Maximum 5,00
Range 3,33
Skewness -,443 ,536
Internal market 1-9 Mean 3,5000 ,83333
research_average 95% Confidence Interval for Lower Bound -7,0885

5% Trimmed Mean .
Median 3,5000
Variance 1,389
Minimum 2,67
Maximum 4,33
Range 1,67
Skewness . .
Kurtosis . .
Mean 3,1364 ,25007

Median 3,1667
Variance ,688
Minimum 1,83
Maximum 4,50
Range 2,67
Skewness ,007 ,661
Mean 3,9630 ,25273

Median 4,0000
50-249 Variance ,575
Minimum 2,50
Maximum 5,00
Range 2,50

Skewness -,542 ,717
Kurtosis ,526 1,400
Mean 3,4074 ,25573

Median 3,5833
Variance 1,177
250 and more Std. Deviation 1,08499
Minimum 1,00
Maximum 5,00
Range 4,00
Skewness -,619 ,536
Kurtosis ,276 1,038

Appendix H
Transcript of the Survey with the Expert No. 1
Questions
General questions
Almanta Jakštaitė Vinkuvienė, Partner and Engagement Solutions Leader at OVC
Consulting
5 years of experience working with engagement studies in public and private
organizations and consulting management teams about improving and maintaining the
level of employee engagement
Answer: Retaining an employee in the organization is usually determined by the
hierarchical realization of his or her basic needs (e.g. Maslow, Herzberg) in specific job
environment, or by the belief that the needs will be realized. Internal communication, as
defined in this study, is only a very narrow part of the potential needs of an employee.
Therefore, internal communication has a substantial relationship with employee
retention only when employee’s needs are satisfied on a level that is appropriate for him
or her.
Answer: This result is surprising because based on the practice in most of the
organizations one of the successful practices in strengthening employees’ efforts is
communication between management and employees improvement. In this case, it
might be that there is a substantial negative gap between employees’ expectations and
the realization of their needs or the internal communication itself does not cover specific
questions relevant for employees.
Answer: This relationship is weak and from specific moment in time it might even
become negative. It happens when employee’s competencies, qualification and
experience is not adequately managed, when his or her job responsibilities, scope, and
overall motivational and improvement perspectives are not changed respectively. In a
situation when an employee outgrows the position, his or her value in the market
increases and he or she usually leaves the organization.
Answer: It is an additional but very important factor in fostering engaged behaviour.
The weak relationship might be explained by the fact that only 20% of the organizations
effectively use the data of their internal market research. The part of organizations that
try to use the data still lacks knowledge and skills, management abilities when selecting
the most appropriate ways to work with people.
behaviour? Why?
Answer: In my opinion, the most important practices are those, which allow to find out
the needs, expectations of employees and their opinions about the organization. It can be
achieved by using appropriately designed internal studies. It is a slow but one of the
most effective ways in fostering engaged behaviour. Another important practice which
is more and more often applied in the organizations with the aim to manage employees’
expectations is the manager’s and subordinate’s direct communication based on trust
and openness. The role of the manager during these conversations is to precisely
communicate the strategically aligned messages relevant for the organization or
department and discuss about the questions relevant for the employee.
Answer: The role of internal marketing becomes exclusively important when
organizations struggle to attract and retain the right employees. However, it is only a set
of practices designed to communicate and remind Employee value proposition,
therefore, the most important aspect in fostering engaged behaviour is a complex, well-
thought through and honest EVP.
Appendix I
Transcript of the Survey with the Expert No. 2
Questions
General questions
Raimundas Dzimidas, Senior consultant at OVC Consulting
5 years of experience working with engagement studies in organizations, consulting
organizations about improving and maintaining the level of employee engagement,
trainings on the employee engagement practices
Answer: Different studies show that internal communication is one of the most
important aspects for employees’ retention. Exchanging the information is a continuous
process, inevitable part of the job. If this process is not smooth, employees are naturally
dissatisfied and in extreme cases they start to think about alternatives such as quitting
their job. From the other perspective, successful internal communication has a positive
relationship with employee’s decision to relate his or her future with the organization.
Effective internal communication helps to create and improve trust in management, in
colleagues, allows to prepare for changes. The weak relationship between internal
communication and retention in this study might be conditioned by the small sample
size (different experiences, different organizations, different expectations for the
organization).
Answer: Smooth internal communication is an important condition for employee’s
efforts; however, not a guarantee. Effective communication process might improve
employee’s satisfaction but not necessarily his or her efforts. Relationship between these
two variables is not always positive. Employee’s efforts (a very good reflector of the
engagement) are conditioned by many other factors, e.g. remuneration, recognition,
autonomy, work tasks. Evaluating efforts demonstrated by a specific employee, internal
communication can have more effect on one employee’s efforts, but for another person
it might be only one condition among other factors that influence his or her efforts.
Answer: Usually organizations heavily invest in the training and development of
employees and eventually they still leave. In general, employees take the training and
development as granted, as an obligatory and natural aspect of the job offering. Such
approach allows to assume that employees feel that the possibilities for them to grow
and develop are not adequately evaluated by the employer. Another aspect is insufficient
communication about the training and development possibilities as a part of unique
Employee value proposition.

Answer: Internal market research is the first stage in diagnosing the organizational
status quo, however, the most important are the real actions taken after the evaluation.
Internal market research show attention to people, give them platform to give their
opinion and position. However, if the results do not lead to actions, research does not
give the expected effect, then employees are dissatisfied with the situation and start to
doubt about the meaningfulness of the research.
behaviour? Why?
Answer: It depends on the context. Evaluating the organizational practice, the most
meaningful effect is reached with internal communication. However, organizations
should view internal marketing practices as a whole. All the practices are important,
however, their impact on engaged employees’ behaviours might significantly differ in
different organizations.
Answer: As many studies and organizational practices show, the importance of internal
marketing practices on strengthening engaged behaviour is beyond doubt. By investing
in the improvement of internal communication, employees’ training and development
and internal market research, organizations create an engaging atmosphere in which
employees feel not only satisfied, but also put extra efforts in reaching organizational
goals.

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Running head: THE IMPACT OF INTERNAL MARKETING ON EMPLOYEE

THE IMPACT OF INTERNAL MARKETING ON EMPLOYEE ENGAGEMENT

Presented to the Faculty

ISM University of Management and Economics

in Partial Fulfillment of the Requirements for the Degree of

Master of Innovation Management

Bojarskytė, L., The Impact of Internal Marketing on Employee Engagement in Innovative

Organizations. [Manuscript]: Master thesis: Innovation Management. Vilnius, ISM University of

Management and Economics, 2017.

practices and engaged employees’ behaviours in the context of innovative organizations.

as three-dimensional internal marketing practices concept and engaged employees’ behaviours:

Keywords: internal marketing, employee engagement, innovative organization,

List of Figures ..................................................................................................................... 6

List of Tables ...................................................................................................................... 7

Relevance of the Topic ................................................................................................... 8

Research Question, Aim and Objectives ........................................................................ 9

Objectives of the Thesis. ........................................................................................... 10

Sequence of the Thesis.................................................................................................. 10

Internal Marketing Practices ......................................................................................... 12

Engaged Employees’ Behaviours ................................................................................. 19

Innovative Organizations .............................................................................................. 24

Summary of Literature Review ..................................................................................... 29

Research Methodology ..................................................................................................... 31

Research Aim and Objectives ....................................................................................... 31

Quantitative Research ................................................................................................... 32

Conceptual Research Model. .................................................................................... 33

Hypotheses Development. ........................................................................................ 35

Research Sample ....................................................................................................... 39

Data Collection Method. ........................................................................................... 43

Data Analysis Methods. ............................................................................................ 44

Qualitative Research ..................................................................................................... 45

Research Sample. ...................................................................................................... 46

Data Collection Method.. .......................................................................................... 46

Data Analysis Method............................................................................................... 46

Summary of Research Methodology ............................................................................ 47

Empirical Research Results .............................................................................................. 50

The Results of Quantitative Research ........................................................................... 50

Descriptive Analysis of Quantitative Research. ....................................................... 50

Reliability Analysis of Quantitative Research. ......................................................... 51

Hypotheses Testing. .................................................................................................. 52

Differences in Sample Groups. ................................................................................. 66

The Results of Qualitative Research ............................................................................. 70

Descriptive Analysis of Qualitative Research. ......................................................... 70

Qualitative Data Analysis. ........................................................................................ 71

Summary of Empirical Research .................................................................................. 73

Implications for Current Theory ................................................................................... 76

Managerial Implications ............................................................................................... 83

Internal Communication. .......................................................................................... 84

Internal Market Research. ......................................................................................... 86

Limitations and Recommendations for Future Research .............................................. 87

Appendices ...................................................................................................................... 101

Figure 1. Internal Marketing Practices .............................................................................. 18

Figure 2. Engaged employees’ behaviours. ...................................................................... 24

Figure 3. Conceptual research model ................................................................................ 33

Figure 4. Correlation results between Internal communication and Retention ................. 54

Figure 5. Correlation results between Internal communication and Efforts ..................... 55

Figure 6. Correlation results between Internal communication and Advocacy ................ 56

Figure 7. Correlation results between Internal communication and Passion .................... 57

Figure 8. Correlation results between Training and Retention ......................................... 58

Figure 9. Correlation results between Training and Efforts .............................................. 59

Figure 10. Correlation results between Training and Advocacy....................................... 60

Figure 11. Correlation results between Training and Passion........................................... 61

Table 1. Internal Marketing Practices ............................................................................... 13

Table 2. Engaged Employee’s Behaviours ....................................................................... 20