Internal Quality Management in Service Organizations: a theoretical approach

Abstract: Service industry or service economy is now taking a big part of the whole economy. Service sector is still a fast growing market over the world, especially in the developing countries. The adoption of Total Quality Management (TQM), which focuses on customer satisfaction, was widely accepted by most service organization. However, very few organizations and researchers have paid attention to employees’ satisfaction. Especially in some developing countries, like China, government owned companies are the monopolists in the domestic market. Employee’s satisfaction is mostly not an element of business strategy. In recent years, some service organizations found that employees’ satisfaction has significant influences on customers’ satisfaction. Satisfying employees by providing internal quality services is now becoming apart of company’s strategy. Service organizations realized that they should treat their employees as internal customers and delivery quality services to them as to external customers. The purpose of this study is to introduce and illustrate the concept of internal service as well as internal customer, to help service organizations to implement an internal customer-oriented management philosophy and to establish an internal quality management system from a theoretical perspective. As Chinese market is more and more open, the competition in service sector, e.g. bank, insurance and hotel, will be extremely strong without a doubt. So, this study can also used by service organizations to gain competitive advantages by building and redesigning service production processes.