The Role of Leaders in Internal Marketing

There is little empirical research on internal marketing despite its intuitive appeal and anecdotal accounts of its benefits. Adopting a social identity theory perspective, the authors propose that internal marketing is fundamentally a process in which leaders instill into followers a sense of oneness with the organization, formally known as “organizational identification” (OI). The authors test the OI-transfer research model in two multinational studies using multilevel and multisource data. Hierarchical linear modeling analyses show that the OI-transfer process takes place in the relationships between business unit managers and salespeople and between regional directors and business unit managers. Furthermore, both leader-follower dyadic tenure and charismatic leadership moderate this cascading effect. Leaders with a mismatch between their charisma and OI ultimately impair followers’ OI. In turn, customer-contact employees’ OI strongly predicts their sales performance. Finally, both employees’ and sales managers’ OI are positively related to their business units’ financial performance. The study provides empirical evidence for the role of leaders, especially middle managers, in building member identification that lays the foundation for internal marketing.