MANAGEMENT – RESEARCH PAPERS

 

Analysis of corporate volunteering in internal market orientation and its effect on job satisfaction

 

Análisis del voluntariado corporativo en la orientación al marketing interno y su efecto sobre la satisfacción laboral

 

 

José Luis Ruizalba Robledo¹; María Vallespín Arán²; José Luis González Porras³

¹University of West London, The Claude Littner Business School, Boston Manor Road, Brentford. Middlesex. TW8 9GA, United Kingdom, jose.ruizalba@uwl.ac.uk
²University of Málaga, Department of Economics and Business Administration, Facultad de Comercio y Gestión, 29071 Málaga, Spain, mvallespin@uma.es
³University of Málaga, Facultad de Ciencias Económicas y Empresariales, 29071 Málaga, Spain, joseluis.gp@hotmail.es

 

 

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ABSTRACT

This study analyses some of the factors comprising Internal Market Orientation (IMO) in family businesses in Andalusia (Spain): Management Concern, Training and Work-Family-Balance. Corporate Volunteering (CV) has been incorporated for the first time in IMO. A statistical analysis shows that CV can be inserted within the dimension of response to internal market intelligence and, its incorporation is proposed for future IMO models as a part of Corporate Social Responsibility (CSR). The impact of some factors on Job Satisfaction has also been considered. The two most influential factors on Job Satisfaction are CV and Work-Family-Balance.

Keywords: Internal marketing orientation, corporate volunteering, RSC, job satisfaction.

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RESUMEN

Esta investigación analiza algunos de los factores que componen la Orientación al Marketing Interno (OMI) en empresas familiares de Andalucía (España): Interés de la Dirección, Entrenamiento y Conciliación entre la vida profesional y familiar. El Voluntariado Corporativo (VC) se ha incorporado por primera vez a la OMI. Los análisis estadísticos realizados muestran que el VC se puede insertar con una dimensión de respuesta a la inteligencia del mercado y se propone su incorporación a futuros modelos de OMI como parte de la Responsabilidad Social Corporativa (RSC). También se ha estudiado el impacto de estos factores sobre la Satisfacción Laboral. Los factores con mayor influencia sobre la Satisfacción Laboral han sido el VC y la Conciliación entre la vida profesional y familiar.

Palabras clave: Orientación al marketing interno, voluntariado corporativo, RSC, satisfacción laboral.

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1.       Introduction

According to Porter and Kramer (2011), a close vision showed capitalism as a system that only contributed to society by creating employment, salaries and investment, and by paying taxes. From this perspective, companies wanted customers to consume in order to maintain revenues that would indirectly contribute to society. However, as they point out, those communities served by the companies received few direct revenues, nor was their development promoted. Over the years, the incorporation of Corporate Social Responsibility policies (hereinafter CSR) facilitated a direct contribution to society. To some, it seemed a positive social contribution whereas others saw them as mere cosmetic and image operations. In any case, CSR has made a social contribution to a certain extent. Porter and Kramer (2011) have recently proposed the introduction of Creation of Shared Value by means of policies and practices that: 1) go beyond CSR; 2) encourage competitiveness; and 3) aim to advance improvements in the economic and social conditions of the communities in which they operate. Companies are not isolated from their social environments and those that promote Corporate Volunteering (hereinafter CV) as a part of their CSR are becoming increasingly common.

Following this line of thinking in this research, CV is analysed in family businesses of Andalusia (Spain). According to Benavides, Guzmán and Quintana (2011), there is scant research on marketing in family businesses. Besides, as these authors point out, CSR represents a dimension of interest within the context of family businesses not yet well researched. For that reason, this study, from the perspective of the internal market, attempts to shed light on the presence of CV in family businesses as a part of CSR and its possible involvement with other business results.

The objectives of this research are: first, to analyse the presence of CV in family businesses in Andalusia; second, to study the CV along with other IMO factors and investigate its potential fit in any of its dimensions and to propose its inclusion in IMO constructs if applicable; and thirdly, to see whether CV has some influence on Job Satisfaction.

In order to develop these objectives, this research first shows the theoretical framework of family businesses and their definition, and explains the criteria chosen in order to identify the sample. Secondly, the IMO theoretical framework and the justification that proposes the possible incorporation of CV to its construct are discussed. Thirdly, CV and its position within CSR are examined. Then, research methodology is presented together with its results, constraints as well as academic and business practice proposals.

 

2.       Review of the literature

Aldrich and Cliff (2003) define family businesses as those companies where influence and control are in the hands of one or more families. Professionalism in management, however, has shown evidence ‘externals’ having been given entrance due to the need for incorporating innovation and entrepreneurship processes (Nordqvist and Melin, 2010). Many definitions and trends can be found when conceptualizing family business but the proposals by Handler (1989) and Daily and Dollinger (1992) are accepted, among others. These three proposals offer three different definition criteria: that most capital stock shares belong to one family; that management control is exerted by a family; or that some family member runs some management body. As will be explained, it has been included control variables in relation to these criteria in the empirical part, what has allowed us to discriminate and to avoid any doubt on the part of the companies surveyed about being family businesses or not, since they had to restrict themselves to select if they fulfilled these three criteria without further interpretation.

According to the Family Business Institute, a family business is identified by inherent distinctive traits: firstly, the majority of voting shares is owned by the founders of the company; secondly, regarding control, the majority of the votes can be either direct or indirect; thirdly, at least one of the family representatives must be part of the company management.

2.1     Internal market orientation

Employees’ needs must occupy an essential place in any company’s strategy. Understanding what its employees appreciate should be one of any company’s priorities. In order to achieve this, the company has to collect information on its employees, turn it into internal market intelligence and pass it on in order to try, as far as it can, to respond by developing political and action plans in line with the strategy.

Over 50 years ago, Levitt (1960) stated that the concept of marketing was to revolve around customer needs and that companies should focus their business strategies on that purpose. Certain parallels can be drawn with internal customers since, as Piercy (1995) states, the rules of the external market do not have to be substantially different from those of the internal market, in what he designated symmetrical orientation. Piercy and Morgan (1991) had previously proposed to use the same marketing tactics with both external customers and employees alike. After all, both internal as well as external customers are all individuals with specific needs and wishes. Client orientation, both internal and external, involves a previous awareness of the customer’s needs and preferences, subject to internal and external dynamics (Narver and Slater, 1990). Mohr-Jackson (1991) pointed out the risk of keeping the focus on external customers without taking internal customers (employees) needs into account.

The Market Orientation (MO) paradigm proposes focusing on customer needs for what certain corporate values need to be developed. One line of thinking considers MO a business philosophy that represents the concept of marketing (Webster, 1992) while another is more focused on a behavioural approach (Kohli and Jaworski, 1990; Narver and Slater, 1990). This study will follow the behavioural line in accordance with the proposals of Gounaris (2008) and Lings and Greenley (2010).

In this sense, three dimensions have been used as the adaptation of MO to IMO (Kohli and Jaworski, 1990): market intelligence generation, intelligence dissemination and response to market intelligence. They have been adapted to internal marketing, composed of what Berry (1981) called internal customers in order to refer to employees. IMO includes three essential activities: (1) understanding employees’ needs; (2) spreading that information among departments; (3) increasing employee benefits for them to move to external customers. In this regard, Lings (2004) contends that the role of IMO insofar as it eases the interrelation between company and employees is a necessary condition in order to improve the relationship between those employees and its external customers. Hence, to a large extent, the importance of IMO, which according to Gounaris (2008) refers to orientation of the company to its employees’ market would show management’s level of commitment to them. In a word, IMO promotes the need for planning and building effective relationships between the company and its employees (Rafiq and Ahmed, 1993). Since then, several models have been developed and subjected to empirical research (Lings and Greenley, 2005; Gounaris, 2008; Ruizalba, Bermúdez, Rodríguez and Blanca, 2014).

In another recent study (Boukis and Gounaris, 2014), the positive role of IMO has been highlighted for making it easier for employees to fit in with their supervisors and the environment in which they operate. In that sense, three different dimensions are analysed in the model proposed by Ruizalba et al. (2014): 1st dimension (generating internal market intelligence), composed of two different factors: value exchange between company and employees and internal segmentation; 2nd dimension (internal market intelligence communication); 3rd dimension (response to internal market intelligence), with three factors: training, management concern and work-family-balance. This last factor was a contribution since it was the first time it was incorporated into an IMO model. The result of that incorporation was positive and relied on the fact that employees’ needs cannot be said to be fully addressed if the balance between professional and family life easier are ignored. This was carried out within the Spanish hotel sector based on the proposal of Lings and Greenley (2005), who pointed out that the third dimension of response to internal market intelligence could incorporate other dimensions, based on what they considered “social aspects”.

On the other hand, on the basis of the growing need for companies to respond to so many social needs, CV activities where employees have the opportunity to contribute to projects of a social nature are being set in motion more and more often by means of CSR and Shared Value Creation. Consequently, in the same way that it cannot be said that employees’ needs are taken into account if the issues related to Work-Family-Balance are not rigorously dealt with (Ruizalba et al., 2014), it can be suggested that a more complete way to meet employees’ needs is to make it easier for them to participate in several CV activities. In fact, Lings and Greenley (2010) have already pointed out that IMO makes the so-called “extra-role” activities easier, by which they mean that employees decide to do more than what they are strictly expected to according to their position.  In this sense, Sánchez-Hernández and Miranda (2011) have suggested that the introduction of corporate volunteering programs would lead to changes in the way of running companies and its proceedings and could imply success insofar an IMO philosophy was applied. Regarding CV as part of CSR, this study will analyse if it is possible to propose its incorporation into the IMO construct by measuring this new factor within the empirical research it has been carried out.

2.2     Corporate Volunteering

CV could be defined according to Peterson (2004), who picks up Wild’s (1993) definition, which considers it any formal support from the company to make devoting time and skills to some type of community service easier for employees and their families. Moreover, it is proved by the literature that companies which have set CSR policies such as CV in motion have developed sustainable competitive advantages over their main competitors (Weber, 2008; Sánchez-Hernández and Gallardo-Vázquez, 2013). Companies applying CSR policies achieve more sustainability, from both a socioeconomic, cultural and environmental perspective, therefore the concept of benefit is becoming replaced by “responsible profit” (Jesus and Batista, 2014).

In a study conducted in Spain by the Corporate Volunteering Observatory (Gómez, Lumbreras and García, 2014) aimed at 2500 companies (response rate: 4,7%)  from 19 different areas, it was shown that 69% companies participating in the study have implemented CV programs. Among the objectives they pursued by introducing them, were: promoting a sense of belonging, having a positive impact on solutions to a wide range of social needs, improving brand reputation and encouraging a more appropriate working environment. Apart from the different objectives pursued by different companies, the way the environment rewards the company reflects on the benefits it obtains for its social, economic and environmental behaviour. According to Sanz, Cordobés and Calvet (2012), these benefits can be of three different kinds: benefits for the employees, for the company and for the community.

2.2.1     Benefits for the employees

Corporate Volunteering seems to have an impact on employees’ satisfaction, happiness, commitment and productivity, generally improving their attitude to their job (Frank-Alston, 2001). Several authors have mentioned that volunteering activities are positively related to individuals’ satisfaction and comfort (Do Paco, 2013). Moreover, CV improves solidarity, which has an effect not only on the company, but also on employees’ homes and social circles, and boosts moral, generating in them a feeling of satisfaction by helping others (Sanz et al. 2012).

2.2.2     Benefits for the company

The company can benefit from its support towards corporate volunteering in several ways. CV can improve its public reputation, relationships with customers and with the community (Basil, Runte, Basil and Usher, 2009). In addition, the positive impact that CV programs have on employees, to the point that many prefer to work in companies involved in improving the community (Caurdon, 1994) so that it claims responsibility for talent recruitment, has been analysed in multiple studies. On the other hand, and in the same way that individuals benefit from CV activities, companies also get some advantages from the situation, and there may even be a correlation between satisfaction obtained from volunteer work and positive economic performance. Besides, the literature also highlights the sense of self-satisfaction and belonging it generates in employees and the fact that it makes the bond between the company and the community where it carries its activity out stronger.

2.2.3     Benefits for the community.

Volunteering can be useful for companies in improving their relationship with customers and making them look at the company from a positive point of view, which would help to improve brand image. Undoubtedly, if customers come into contact with volunteering activities thanks to the company, they would be offered a rewarding experience (Pine and Gilmore, 1998) and, as these same authors point out, in many cases it would be a direct opportunity for personal transformation or personal development. On the other hand, the benefits society derives are a combination of all the above since community is, in the end, an amalgamation of all those factors and events that take place inside it.

Sánchez-Hernández and Gallardo-Vázquez (2013) considered CV as closely connected to the Stakeholder Theory, Corporate Social Responsibility and Social Exchange Theory. We have incorporated the vision of the IMO emerging paradigm to this theoretical framework as previously argued.

Consequently Internal Market Orientation can contribute to the other mentioned theories in order to consider Corporate Volunteering activities in a broader scope that facilitate the connection with the needs of employees and promote a positive impact on Job Satisfaction (See Figure 1).

 

 

 

3.       Methodology

3.1     Research objectives and plan

This research aims to analyse, using a binary logistic regression model, the relationship existing between employees’ level of satisfaction (dichotomous dependent variable) and a set of independent variables closely related to IMO. To this end, the company’s level of involvement in “Corporate Volunteering” activities is proposed to be integrated as a factor within the sub dimension Response to Internal Intelligence and distinct from the other factors “Management Concern”, “Training” and “Work-Family-Balance”.

The specific objectives that are established in this work are the following:

a)   Analysing the presence of CV programs or activities in family businesses from Andalusia (Spain).

b)   Checking if CV can be part of the Response to Internal Market Intelligence in IMO models.

c)   Determining the existence or absence of a relationship between the selected independent variables and the dependent variable Job Satisfaction.

d) Analysing the sign of such relationships, verifying the theoretical approaches established in the preceding sections.

e) Observing the satisfaction ratio in terms of the values the independent variables take.

3.2     Sample and data collection

A survey has been the quantitative technique used in order to carry out this research. The online questionnaire, supported with phone calls, was sent to key informants from Andalusian family businesses. The decision to choose a key informant comes from the fact that it is a manager with a global view of the company and the ability to answer the questions in the questionnaire properly. In order to collect the information, an e-mail with a link to the online questionnaire, in some cases with the support of phone calls, was sent. Table 1 shows the specifications of the fieldwork carried out.

 

 

Family businesses in Spain represent 85% of the total number of companies and account for 70% GDP and private employment (Family Business Institute). To find the total population of family businesses in Andalusia we obtain information partly from the Dirce (2012) database and Family Business Institute’s estimated data that 85% Spanish companies are family businesses. From that data and keeping the same family business proportion for each of the provinces over total companies (according to the Dirce), we would get the following distribution of family businesses by Andalusian provinces: Almería (9%), Cádiz (13%), Córdoba (10%), Granada (11%), Huelva (5%), Jaén (7%), Málaga (22%) and Sevilla (23%). This proportion, and despite being a non-probability sampling, is what was reflected in our sample.

In order to ensure that they were family businesses, including generic questions such as whether you are a family business was avoided, since in our opinion it would lack exactitude and would not allow verification. To avoid this, three control questions with a yes/no dichotomous answer were included at the beginning of the questionnaire: 1) In this company most of voting shares are currently owned by one or more families; 2) The company’s strategic control belongs to one or more families; 3) At least one of the family representatives or relatives takes part in company management or governance. Although we thought that surveys positively pointing out two criteria could have been accepted, in order to increase exactitude and avoid interpretations, we only accepted for the sample those that answered positively to all of the three criteria so, of the 241 surveys received (30% response ratio), we rejected those 21 that did not fulfil the three mentioned criteria, with the final sample consisting of 220, which represents 27.5 % of the chosen population.

3.3     Questionnaire and scales

The questionnaire includes 15 questions regarding IMO, specifically those measuring the Response to Internal Intelligence (5 questions to measure Management Concern, 3 to measure the company’s employee Training, 3 to measure the Work-Family-Balance and 4 for CV activities). There are also 3 questions to determine the level of employees’ Job Satisfaction, defined as an emotional, agreeable or positive state as a result of evaluating one’s job or of the experiences resulting from work (Locke, 1976).

Variables are set out as 7 point Likert scale statements ranging from 1 (totally disagree) to 7 (totally agree) about which the key informant is asked for information. Previous works resulting from the theoretical review carried out have been taken as a reference in order to create the questionnaire. The main works taken as a reference are those of Clark (2001), Gounaris, (2008), Hartline and Ferrel (1996), Kossek and Nichol (1992), Meyer and Allen (1991) and Ruizalba at al. (2014). Finally, and in order to ensure the suitability of our questionnaire, a pre-test was conducted where 5 family businesses owner employers with more than 10 years’ experience and 7 academics expert in the research area in question were selected.

 

4.       Results

The results of the statistical analysis carried out using the SPSS20 statistical program are now exposed. Data shown in Table 2, the percentage of analysed companies with CV programs for both employees and customers, are particularly noteworthy. It shows that 32.3 % of companies have introduced it at a medium-high level for employees (showing an introduction level of more than 4 in the 7 Likert scale) while 32.8% have introduced it for their customers.

 

 

4.1     Scale dimensionality and reliability

The first step consisted of carrying out an exploratory analysis to study scale reliability and dimensionality by means of two principal components: Factor Analysis and Varimax rotation. Table 3 shows the results obtained for the scale concerning the Response to Internal Intelligence. The value of the KMO measure of sampling adequacy, 0.863, together with Cronbach Alpha coefficients, show that the results now analysed are adequate and so, the 15 variables may be summarized across five different dimensions. In this way, the items are grouped into five dimensions that explain 80.22% of the total variance. The first factor Management Concern (MC) consists of 5 items related to the interest management shows in satisfying its employees’ needs as well as the policies carried out, and time or money invested. The second Future Involvement in Corporate Volunteering (FICV) combines 2 items related to the company’s future intention to promote CV. The third one Work-Family Balance (WFB) groups three items related to the level of ease in reconciling both family and work life which employees are offered by the company. The fourth concept Training (TRN) consists of 3 different items related to the company’s concern for educating and/or training its employees. Finally, the fifth concept Current Involvement in Corporate Volunteering (CICV) refers to the company’s current involvement in providing CV to both its employees and customers.

 

 

On the other hand, Table 4 shows the results obtained for the scale concerning employee Job Satisfaction. The value of the KMO measure of sampling adequacy, 0.683, together with Cronbach Alpha coefficients suggests the dimensionality of the Satisfaction construct. In the same way, communalities (over 0.5 for all variables) point out the right representation of the variables within the factor space, clustering on a dimension that explains the 76.881% total variance.

 

 

4.2     Multivariate logistic regression model estimation

The methodology used in order to fulfil the objectives of this work is based on the binary logistic regression model, a particular case of the so-called regression models with dichotomous response. This statistical technique is used to determine the probability (p) of occurrence of the investigated event – a “high” level of employee Job Satisfaction - facing the probability of occurrence of the opposing event (1-p), i.e. “non high” employee Job Satisfaction levels.

As stated above, our dependent variable is Job Satisfaction. In our research it is measured by means of 3 different items, so a cluster analysis is carried out in order to group interviewees together according to their Job Satisfaction level. In order to select the definitive cluster solution, and following Hair et al. (2007), we used both hierarchical and non-hierarchical methods so as to obtain the benefits from each of them. In this way, and using square Euclidean distance as a metric and Ward’s method as a hierarchical procedure, we concluded that the proper number of clusters is 2. On the one hand, 155 key informants, who show a significantly higher appreciation of their satisfaction i.e. employees with a high satisfaction since they show a punctuation of around 6, are included within the first cluster. On the other hand, there are 60 key informants within cluster 2, whose variables take average values of around 4, so it would represent employees who are neither satisfied nor unsatisfied with their job or employees with medium-low Job Satisfaction. In addition, Multivariate Analysis of Variance (MANOVA) and Univariate Analysis of Variance (ANOVA) are recurrently applied in order to identify significant differences between these 2 clusters. As can be observed in Table 5, item averages show a significant difference between both of the identified groups within a significance level of 99%.

 

 

Once the presence of 2 different groups of employees according to their satisfaction level is detected, the multivariate logistic regression model is estimated. Given the presence of multicollinearity between independent variables and in order to avoid estimating biased coefficients and high standard errors, we opted to use the factors based on factor analysis estimation as input variables within regression (Hair el al, 2007). In Table 6 the results of the estimation are presented using multivariate logistic regression once non-significant variables have been removed (future implication in CV) and using the insert method. It is noted that goodness of fit (i.e. the fact that the employee shows a higher or lower level of job satisfaction) can be explained by the combination of variables taken into account, and points out that there are enough reasons to accept its validity, just by observing the similarity between the expected values and the ones observed in Hosmer and Lemeshow’s procedure (Hosmer-Lemeshow statistical goodnes of fit is not used since more than 20% expected values are under 5) (Hosmer, and Lemeshow, 1989). Moreover, it is interesting to point out this model’s capacity to correctly classify job satisfaction. In this way, 77.9% of the cases taken under consideration were well classified.

 

 

All the estimated logistic regression model results are now interpreted. Positive results are visible i.e. all the included variables directly and positively affect Job Satisfaction (0=Cluster 2; 1= Cluster 1). However, it is observed that an important effect of the value “Current Involvement in CV”, in this sense, a unit increase of current involvement in CV will cause a multiplicative increase by a 2.677 factor in the advantage of the option “high satisfaction”. Secondly, it is observed that with the influence of “Work-Family-Balance”, a unit increase of this variable will cause a multiplicative increase by a 2.435 factor in the advantage of the option “high satisfaction”. Although smaller, it is also observed the effect on Job Satisfaction that Management Concern and Training policies cause.

 

5.       Discussion, consequences and limitations

This research provides useful practical implications for those companies that design CSR programmes since they may consider incorporating CV as a possible positive contribution to Job Satisfaction. This was anticipated by Mattila and Hanks (2013).

The purpose of this research has been, starting from the IMO paradigm, to study the pertinence of adding, as a novelty, a 4th factor (Involvement in CV) to its sub dimension “Response to Intelligence” and also analysing its impact on Job Satisfaction. The potential influencing factors regarding Job Satisfaction in relation to the IMO Response to Internal Intelligence have been grouped together into five: Management Concern, Future involvement in CV, Work-Family-Balance, Training and Current Involvement in CV. In this way, which of these factors included within this sub dimension have an impact on the probability of reaching a higher level of Job Satisfaction has been defined. Additionally, each factor’s impact on satisfaction has been assessed.

In conclusion, it is pointed out that, except for Future Implication in CV, all the analysed factors have a positive influence on Job Satisfaction. A company’s future intentions do not seem to have a significant impact on Job Satisfaction. Secondly, the relationship found between these factors and Job Satisfaction is positive: the higher the level of response to their needs, the higher the satisfaction. It is demonstrated that a higher degree of involvement by the company in responding to its employees’ needs results in greater employee Job Satisfaction. Thirdly, it is shown that the factor that affects satisfaction the most is the presence of CV programmes or activities, followed by Work-Family-Balance. Both policies and behaviours on behalf of the management do not require a large investment of financial resources. Practical implications for companies can therefore be deduced from this: they can improve the quality of service with scarce financial resources. The empirical evidence shows (Lillo, Ramón and Sevilla, 2007) that it is necessary to be able to rely on satisfied, motivated employees in order for them to provide quality service that has an impact on external client satisfaction. Therefore, the presence of CV in family businesses in Andalusia seems a positive contributing factor in improving Job Satisfaction, which has being scarcely implemented so far.

One of the limitations is the fact that the research sample has been with family businesses in Andalusia, though it would be desirable to extend the analysis to other geographical areas in the future in order to conduct a comparative analysis. Another limitation is that it has been addressed only to managers and it would be interesting to carry out a dyadic research which sought to contrast both manager’s and employees’ perceptions, as Sánchez-Hernández and Gallardo-Vázquez (2013) have already proposed.

In addition, CV in general has been analysed, making no distinction between the natures of the implanted projects, and it would be desirable to identify in detail which types of volunteering activities are more frequently used. So, in the future it would be interesting to analyse the nature of existing programmes in order to classify them: for example, care, environmental, food collecting, health, educational, etc., and to examine, if applicable, possible differences regarding Job Satisfaction.

Another possible line of research would be to conduct a comparative study between family and non-family businesses since Graaafland (2002) showed that the level of concern about CSR is larger in family businesses. It would also be appropriate, following the research Mattila and Hanks (2013) have carried out, to analyse the impact that CV programs have on customer perception.

 

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Article history:
Received: 02 June 2014
Accepted: 28 October 2014