Organisational Culture and the Communication of Loyalty: An ethnography

Transcription

1 Organisational Culture and the Communication of Loyalty: An ethnography Master s Thesis by Research, Communication Studies University of Canberra By Sophia Mawani Gilmour June 2006 Sophia Mawani Gilmour

2 Abstract Loyalty management has emerged over recent years as a topic of significant importance in both academic and practitioner discourse, articulating the benefits of an extended relationship with key stakeholders including, but not limited to, customers, employees and shareholders. This research explores the theory and practice of loyalty management from a communications perspective. The thesis attempted to discover how the integration or non-integration of internal and external communication affects the communication of loyalty, in addition to how loyalty management contributes towards the organisation s perceived creation of value. In doing so, it also examines how the practice of customer relationship management (CRM), integrated marketing communication (IMC) and the use of information and communication technology (ICT) plays a role in the communication of loyalty. The research entailed a three-year ethnographic study of a business-to-business financial services organisation specialising in vehicle fleet leasing and management services, comprising a review of relevant academic literature; and participant observation, focus group studies, qualitative surveys and document analysis. Besides evaluating loyalty management from a communications perspective, the thesis contributes towards the body of knowledge on Australian organisations from an organisational culture perspective, as well as exploring communication beyond the traditional boundary of within the organisation itself. Unlike most loyalty management approaches, the holistic stance considers other stakeholders besides customers, in detail. The study does not seek to establish validity and generalisability. Rather, the mainly interpretist approach preserves the form and content of human behaviour by detailing descriptions of the concrete experience of life within a particular culture and of the social rules, patterns and perceptions that constitute it. The findings showed that organisational communication has to be integrated and cohesive to enable the effective management of loyalty. Furthermore, the results confirm that the notion of organisational boundaries comprising internal and external communication is limited. Involved protagonists, acting together from within and external to an organisation, create, sustain and manage meanings through the use of signs and symbols within a particular context to form a unique culture or community. In addition, the notion of loyalty and the creation of value for the consequent success of the organisation is an important and valid perception for most of the stakeholders. For this organisation, the use of ICT and practice of CRM and IMC has varying degrees of impact, mainly enhancing the communication of loyalty. The detraction of value is caused primarily by the fragmentation of communication between the stakeholders, in addition to the existence of sub-cultures with conflicting needs. Organisational Culture and the Communication of Loyalty: An ethnography Page 3

3 Acknowledgements My profound thanks to my family in Australia, Kenya and Canada for living through this experience with me. My especial gratitude to my husband David Gilmour for his enduring encouragement and loyalty, my mother Zarina Mawani for her du a, and my mother-in-law Mary Gilmour for her unrelenting support. I am very much loved! My appreciation to my secondary supervisor Leanne Glenny for being my constant and invaluable link. Leanne s unwavering support with concepts and theories within the thesis, as well as general administration has been wonderful. My thanks also to Dr Glen Lewis for starting me off, Dr Trish Milne for finishing with me, and Dr Warwick Blood for being in the background. And finally, my gratitude to Greg Maimur, Bruce Lewis and the entire team at LeasePlan Australia, without whom this four-year study would not have been possible. Asante sana. Organisational Culture and the Communication of Loyalty: An ethnography Page 5

4 Table of Contents Abstract...3 Certificate of Authorship of Thesis...4 Acknowledgements...5 Chapter One: The Relationship of Organisational Communication, ICT, Loyalty Management and Marketing Introduction Organisation-centrism - internal and external communication Information and Communication Technology in Organisations The Networked Organisation and ICT The Uptake of Information and Communication Technology Loyalty Management The loyalty stakeholders and creation of value The employee perspective The shareholder perspective The customer perspective The formation of loyalty, and partnership collaboration Loyal to whom? Customer-centricism Relationship Marketing the customer is king Integrated Marketing Communication (IMC) focus on the message Conclusion...54 Chapter Two: Framework for an Ethnographic Perspective of the Communication of Loyalty Introduction Methodology Choices A quantitative approach A qualitative preference A communication discipline approach My choice of methodology Purpose and significance of the study Ethics The aim of the research study and research questions Overarching questions LeasePlan specific questions Details of chapters An overview of the research approach Model for research Organisational Culture Organisational Climate Organisations as Patterns of Communication Method Participant observation and ethnohistoric research Focus group interviews involving the three key stakeholders of organisations Open ended question surveying all LeasePlan s customers Pre-Session During the session...76 Organisational Culture and the Communication of Loyalty: An ethnography Page 6

5 The questions and discussion Telling the story Conclusion...79 Chapter 3: LeasePlan s Culture and Communication Introduction Culture Environment and Marketplace Values Symbols Settings/proxemics and objects/artifacts Melbourne Sydney Canberra Brisbane, Adelaide and Perth Other Non-verbal Communication Rites and rituals Formal Committees Departmental and Inter-departmental Meetings Company performance reviews Social and sporting activities Taboos Informal End of month drinks Departmental rituals Interdepartmental rituals Cultural network Learning and Development Job function needs Corporate Orientation Program Language Internal External Organisational Climate Organisational structure Constraints Responsibility and risk-taking Warmth and support Reward and punishment Performance standards and expectations Organisational identity and group loyalty Other Climate Indicators LeasePlan as Patterns of Communication Conclusion Chapter Four: A Stakeholders Perspective of the Practice of Loyalty Management Introduction The Customer Perspective of Loyalty Management Focus Group Sessions How does LeasePlan provide value? How do you form relationships with LeasePlan? Organisational Culture and the Communication of Loyalty: An ethnography Page 7

6 Is ICT at LeasePlan contributing towards the development of value? Communicating with LeasePlan Is communication integrated at LeasePlan? Open Ended Question Surveying all LeasePlan s Customers The Employee Perspective of Loyalty Management Are the principles of loyalty management being practiced at LeasePlan? Does LeasePlan s culture contribute towards effective loyalty management? Is the practice of loyalty management contributing to LeasePlan s creation of value, and therefore success? Is ICT at LeasePlan contributing towards the effective communication of loyalty? Is communication integrated at LeasePlan? The Directors Perspective of Loyalty Management Are the principles of loyalty management being practiced at LeasePlan? Does LeasePlan s culture contribute towards effective loyalty management? Is the practice of loyalty management contributing to LeasePlan s creation of value? Is the ICT at LeasePlan contributing towards the effective communication of loyalty? Is communication integrated at LeasePlan? Chapter Five: Loyalty Management and the Integration of Communication Introduction Analysis of Research Findings Loyalty Management Loyalty as a topic of significant practitioner discourse Value vs profit as motive The illogicality of profit Long-term customers more profitable Loyalty does exist Profit is obligatory The loyalty stakeholders and creation of value An employee perspective on loyalty The productivity of loyal employees Employees learn the company s product and services well over time Providing customers with superior value Cross-selling and bundling Ambassadorship Increased efficiency, lower costs Demoralising through redundancies Relationships Pruning of unproductive employees Loyalty, self-interest and the object of loyalty Factors influencing employee commitment A culture of failure The shareholder perspective Loyal investors behave like partners The customer perspective As customers get to know a business, they learn to be efficient Patience with errors Service empathy Organisational Culture and the Communication of Loyalty: An ethnography Page 8

7 Customer ambassadorship Disloyal and defecting customers demoralise employees Seek the right customer The formation of loyalty, and partnership collaboration The evolution of loyalty over time Excellence and fulfilling commitments Goal congruence Impact with productivity and profitability Strategic alliances A plethora of expectations Database management Customer blue-printing Critical incidents Loyal to whom? Technology the be all and end all? Technological and other exit barriers Customising channels of communication Customer-centricism Relationship Marketing Conquestor perspective Post-sales care Integrated Marketing Communication (IMC) Personalised marketing The marketing mix The review posits that IMC has four main objectives Integration of the message Conflicts of interest Information and Communication Technology in Organisations Networked organisations Information is the trade Increase in use of ICT The Networked Organisation and ICT ICT and organisational structure On-line, real-time systems The Uptake of Information and Communication Technology CRM and customer satisfaction Self-service with technology Computerisation and reduced productivity Cost-cutting though ICT ICT and culture The Integration of Communication at LeasePlan Conclusion Porus organisational boundaries and a thus shared culture Message cohesion Organisation-centrism - internal and external communication Final Comments and Recommendations References Organisational Culture and the Communication of Loyalty: An ethnography Page 9

8 Appendices Appendix 1 Focus Group Questions A1.1 Customer Focus Group Questions for Discussion A1.1.1 How does LeasePlan provide value? A1.1.2 How do you form relationships with LeasePlan? A1.1.3 Is Information & Communication Technology (ICT) at LeasePlan contributing towards the development of value? A1.1.4 Communicating with LeasePlan A1.1.5 Is communication integrated at LeasePlan? A1.2 Questions for Employees and Management/Shareholders Focus Group Study A1.2.1 Are the principles of loyalty management being practiced at LeasePlan? A1.2.2 Does LeasePlan s culture contribute towards effective loyalty management?181 A1.2.3 Is the practice of loyalty management contributing to LeasePlan s creation of value and, therefore, success? A1.2.4 Is Information & Communication Technology (ICT) at LeasePlan contributing towards the effective communication of loyalty? A1.2.5 Is communication integrated at LeasePlan? Appendix 2 Participant Observation and Ethnohistoric Research: LeasePlan s environment183 A2.1 Environment and Marketplace A2.1.1 Global and National Standing A2.1.2 Market Trends and Key Segments A Novated leasing and salary packaging A Corporate A SME A Government A International and Global A2.1.3 Market Share A LeasePlan A Custom Fleet/Hertz/Fleet Systems A Orix A GE Fleet A Esanda A Commonwealth Bank Fleet Leasing (CBFL) A Other Novated lease providers A Others A2.1.4 Products and Services A Fully disclosed operating leases - Open Calculation A Fleet Management Services A Contract Hire A Fleet Sale and Lease-back A Trucks and Equipment A Novated Leases/Salary Packaging A Fleet Management and Leasing for Small Businesses A2.1.5 Support Structures/Suppliers A2.1.6 Information and Communication Technology A LANs and WANs A Applications systems A Telephony A Internets and extranets Appendix 3 Participant Observation and Ethnohistoric Research: LeasePlan s values Organisational Culture and the Communication of Loyalty: An ethnography Page 10

9 A3.1 International Vision and Mission A3.2 Practice of Values in Australia A3.3 Customer Loyalty Management A3.4 Strategic Framework Appendix 4 Participant Observation and Ethnohistoric Research: LeasePlan s Symbols A4.1 Settings/proxemics and objects/artifacts A4.1.1 Melbourne A4.1.2 Sydney A4.1.3 Canberra A4.1.4 Brisbane, Adelaide and Perth Appendix 5 Participant Observation and Ethnohistoric Research: LeasePlan s Rites and Rituals 210 A5.1 Formal A5.1.1 Committees A Monthly Review Committee A Strategy Council A Tender Committee A Business Development Committee A Product Committee A Residual Values Committee A Credit Committee A Interest Committee A Superannuation Committee A5.1.2 Departmental and Inter-departmental Meetings A Strategic Framework Conference A Scheduled meetings A Co-Ops A Ad-hoc sessions A Company performance reviews A Social and sporting activities A Taboos A5.2 Informal A5.2.1 End of month drinks A5.2.2 Departmental rituals A5.2.3 Interdepartmental rituals Appendix 6 Participant Observation and Ethnohistoric Research: LeasePlan s Cultural Network A6.1 Learning and Development A6.1.1 Job function needs A Induction programs A Product, process, systems and software knowledge and skills A Morning Learning Sessions A6.1.2 Individual-specific needs A6.1.3 Team needs A6.1.4 Mentoring A6.1.5 Corporate Orientation Program Appendix 7 Participant Observation and Ethnohistoric Research: LeasePlan s Language.224 A7.1 Internal A7.2 External Organisational Culture and the Communication of Loyalty: An ethnography Page 11

10 Appendix 8 Participant Observation and Ethnohistoric Research: LeasePlan s Organisational Structure A8.1 Business Development Division A8.2 Commercial Division A8.3 Finance Division A8.4 Operations and IT A8.5 People & Business Excellence Appendix 9 A Stakeholders Perspective of the Practice of Loyalty Management: The Customer Focus Group Sessions A9.1 How does LeasePlan provide value? A9.2 How do you form relationships with LeasePlan? A9.3 Is Information & Communication Technology (ICT) at LeasePlan contributing towards the development of value? A9.4 Communicating with LeasePlan A9.5 Is communication integrated at LeasePlan? Appendix 10 A Stakeholders Perspective of the Practice of Loyalty Management: The Open Ended Question Customer Survey A10.1 Expertise A Positive comments A Criticisms A10.2 Cost Management A Positive comments A Criticisms A10.3 Service A General A Positive comments A Criticisms A Novation and Call Centres A Positive comments A Criticisms A Quotes, orders and delivery A Criticisms A Fuel, registration and on-road services A Positive comments A Criticisms A Finance A Criticisms A Reporting and online services A Positive comments A Criticisms A Relationships A Positive comments A Criticisms Appendix 11 A Stakeholders Perspective of the Practice of Loyalty Management: The Employee Perspective of Loyalty Management A11.1 Are the principles of loyalty management being practiced at LeasePlan? A Canberra A Sydney A Melbourne A11.2 Does LeasePlan s culture contribute towards effective loyalty management? Organisational Culture and the Communication of Loyalty: An ethnography Page 12

11 A Canberra A Sydney A Melbourne A11.3 Is the practice of loyalty management contributing to LeasePlan s creation of value and, therefore, success? A Canberra A Sydney A Melbourne A11.4 Is information and communication technology (ICT) at LeasePlan contributing towards the effective communication of loyalty? A Canberra A Sydney A Melbourne A11.5 Is communication integrated at LeasePlan? A Canberra A Sydney A Melbourne Appendix 12 A Stakeholders Perspective of the Practice of Loyalty Management: The Directors Perspective of Loyalty Management A12.1 Are the principles of loyalty management being practiced at LeasePlan? A12.2 Does LeasePlan s culture contribute towards effective loyalty management? A12.3 Is the practice of loyalty management contributing to LeasePlan s creation of value and, therefore, success? A12.4 Is ICT at LeasePlan contributing towards the effective communication of loyalty? A12.5 Is communication integrated at LeasePlan? List of Tables and Figures Table 1: Research Questions...68 Table 2: Chapter Outline...69 Figure 1: Strategic Framework, Initial Format...86 Figure 2: Strategic Framework, Initial Format Converted to Poster Format...87 Figure 3: LeasePlan Organisational Chart Organisational Culture and the Communication of Loyalty: An ethnography Page 13