Effect of Internal Marketing on Processes of Knowledge Management System in Nasr-e-Esfahan Company

Implementation of internal marketing in organizations especially service organizations equips them with competencies and capabilities that will be led to their performance enhancement besides enjoying environmental opportunities. Therefore, it can be stated that successful implementation of internal marketing can pave the way for successful implementation of organizational processes such as processes of knowledge management system. Also organizations can develop, organize and share knowledge through internal marketing in order to achieve competitive advantage. The present study investigates the effect of internal marketing on processes of knowledge management system (knowledge creation, knowledge organization, knowledge formalization, knowledge transfer and knowledge application) in Nasr-e-Esfahan Company. Questionnaire was tool of data collection and the data were analyzed by means of Lisrel and Spss software. The findings revealed that the effect of internal marketing on each process of knowledge management system has been positive and significant and value of fitness indexes (GFI= 0.92, AGFI=0.91) in the model under study shows suitability of the model.


Introduction
Knowledge management has been considered as a concept to describe processes through which organizations develop, organize, and share the knowledge in order to achieve competitive advantage (Yarigar-Ravesh, 2006).On the other hand, there are various factors effective on establishment and utilization of knowledge management processes and organizations have to pay attention deeply to these factors to enjoy benefits of creating knowledge processes.Internal marketing is one of the most important factors, because it is an important activity in developing a customer-oriented organization by taking into account the employees as internal customers.Major aim of internal marketing is to develop awareness of internal customers and eliminate functional obstacles towards organizational effectiveness (Amiri et al, 2009).Besides, role of employees in the knowledge cycle, i.e. knowledge creation, knowledge organization, knowledge formalization, knowledge transfer and knowledge application is highly influential.Also, employees play a key role in external marketing and obtaining profit.The present study explored the effect of internal marketing on processes of knowledge management system in Nasr-e-Esfahan Company.

Research background Theoretical background
One of the alternatives to guarantee superior performance of organizations should be sought in successful role of human resource management.To achieve purposes of the organization in this sector, those who deal with customers' affairs should be considered.This aspect of activities of service organizations has proposed the topic of internal marketing.Nowadays, internal marketing has been known as a strategy to enhance performance of the organization.The related studies in this regard reveal that internal marketing activities improve competitiveness of the organization through influencing and motivating the employees and enhance competencies (Ahmed et al, 2003).On the other hand, successful utilization of knowledge management is one of the most critical success factors under competitive conditions in the knowledge era.The importance of this issue is to the extent that a number of organizations measure the existing knowledge and reflect it in their reports as intellectual capital of the organization as well as an index for ranking of organizations.These firms believe that establishment of knowledge management is essential as one part of the strategy of the organization (Yarigar-Ravesh, 2006).Given to the above-mentioned issues and lack of a study on the effect of internal marketing on processes of knowledge management system and its impact on gaining competitive advantage in organizations, the current study explored this effect and proposed a model which helps managers of organizations know the value of employees in implementing knowledge management system and its success for the organization.

Internal marketing
The core idea of internal marketing is on the basis that offering effective services requires having motivated employees who are aware of customers (Gronroos, 1981).The primary studies in this regard were in research literature of retail marketing and then it developed gradually and the relationship between employee satisfaction and customer satisfaction was emphasized according to the obtained arguments (Piercy & Harris, 1999).Subsequent studies not only were formed based on this basis but also brought about more development of the concept of internal marketing.For instance, Berry and Parasuraman have posed the idea that not only there is a relationship between employee satisfaction and customer satisfaction, but also employees are internal customers of a business firm.They define internal marketing as "considering the employees as internal customers, considering jobs as products which satisfy needs of internal customers" (Berry & Parasuraman, 1991).Other researchers went beyond it to support this idea and claimed that employees are internal customers and also they are the first market (Sasser & Arbeit, 1989).Tendency towards prioritization of employees and developing the range of the concept of internal marketing was developed by claims of Berry and Parasuraman regarding that domain of internal marketing should contain activities which have been fulfilled by employees' activities since the far past.According to them, internal marketing is the philosophy to deal with employees as customers and this is s strategy to form job products in order to adapt with employees' needs (Berry & Parasuraman, 1991).Flipo (2000) explained elements of internal marketing as follows based on Ahmed and Rafiq's viewpoint in 1995: product as job, price as opportunity cost of employment, workplace as a place where jobs are offered near living place of internal customers and promotion as communications and reward system (Flipo, 2000).

Knowledge management
Snowden has defined knowledge management as "determination and active management of intellectual properties either in the form of explicit knowledge that is maintained in knowledge transfer tools or in the form of tacit knowledge that belongs to people or communities".Explicit knowledge is optimized through compiling knowledge transfer tools and their accessibility and tacit knowledge is optimized through making relation to maintain, share and develop the tacit knowledge.Active management of intellectual properties is creation of managerial substructures and processes to collect knowledge transfer tools and communities in a common environment that is led to permanent creation, exploitation, and maintenance of intellectual capital (Rezaee, 2005).Lawson (2003) proposed a model via combination of processes of three models.It was the result of merging and filtration of knowledge management processes of three groups of researchers including Wiig (1997), Parikh (2001) and Horwitch and Armacost (2002).According to this model, knowledge management cycle is divided into six processes: A) knowledge creation B) knowledge acquisition C) knowledge organization D) knowledge storage E) knowledge dissemination and sharing and F) knowledge application.(Lawson, 2003))(Wiig,1997) ( (Parikh, 2001(.(Horwitch & Armacost, 2002) Empirical background In this regard, several studies have been carried out including: Kuah et al (2012) proposed a model to measure knowledge management performance in a random environment.To this end, they used data envelopment analysis, Monte Carlo simulation and Genetic Algorithm.They presented a comprehensive model of knowledge management in their study and proved the accuracy of model data via Genetic Algorithm.Then they evaluated productivity of knowledge management as well as knowledge management processes using Monte Carlo simulation and data envelopment analysis and finally, they used their suggested model to assess knowledge management performance in higher education institutions.The results of their model were employed to determine future strategies of knowledge management by managers.Abzari et al (2011) explored the relationship between internal marketing and organizational commitment from the viewpoint of market orientation in hotel industry in Iran.They analyzed the results of the questionnaires and concluded that internal marketing is effective on organizational commitment both directly and indirectly and through market orientation.Ting (2010) explored the effect of internal marketing on organizational commitment among teachers of elementary schools in Taiwan in a paper entitled the effect of internal marketing on organizational commitment, mediating effect of job satisfaction and job involvement.They concluded that internal marketing is effective on organizational commitment.Also it was determined that job satisfaction plays a partial mediating role in the relationship between internal marketing and organizational commitment.Liao (2009) studied the mediating role of organizational commitment in the relationship between internal marketing and customer orientation in banking industry in an article entitled the effect of internal marketing on customer orientation in banking industry.The researcher confirmed the effect of internal marketing on organizational commitment and concluded that organizational commitment plays a mediating role in the relationship between internal marketing and customer orientation.Nadeali et al (2013) analyzed the relation between organizational justice perception and establishment of knowledge management cycle from Nonaka and Takuchi's viewpoint in Isfahan Steel Mill Company and showed that there is a positive and significant relation between perception of organizational dimensions and processes of establishment of knowledge management cycle.Moreover, the relation between interactional justice and establishment of knowledge management cycle is more than other dimensions of organizational justice.Tabatabaee and Akhavan (2011) explored the effect of internal marketing on service quality among the employees of Keshavarzi Bank in Gilan province and confirmed positive effectiveness of internal marketing on service quality.Also, explanation of a clear perspective, improvement and development of employees and reward as representatives of internal marketing has a significant effect on service quality.Shami Zanjani and Rahimian (2011) found out that there is a positive and significant relation (70%) between organizational culture and establishment of knowledge management processes.Also there exists a positive and significant relation between each component of organizational culture and knowledge management processes.The result of simultaneous regression analysis revealed that only two components of performance orientation and social responsibility play an effective role in predicting the variable of establishment of knowledge management processes.Majidian and Zorufi (2010) carried out a study entitled exploring the relation between organizational culture and knowledge management in Iran Khodro Company.In order to test the hypotheses, the sample size included 230 managers, authorities and experts of Iran Khodro Company.The data were collected via researcher self-made questionnaire and its reliability was equal to 0.96.The obtained results disclosed that all hypotheses were confirmed and ranking of correlation coefficients showed that the highest relation exists between job involvement and knowledge transfer.This study was conducted using descriptive-field method.Three hundred questionnaires were distributed among the managers and experts and 250 questionnaires were returned which were then analyzed.The researcher operationalized six variables.Among the processes of knowledge management, five processes of the model proposed by Lawson in 2003 and dimensions of internal marketing based on Flipo's viewpoint (2000) and Ahmed and Rafiq's viewpoint (1995) were investigated.To determine validity, primary test of the questionnaire was conducted.Thus, the questionnaires were given to six experts and professors who had specialty in internal marketing and processes of knowledge management system.Having collected the questionnaires, irrelevant and ambiguous questions were identified and other questions were modified.Totally irrelevant questions were omitted.To calculate internal consistency of tools such as questionnaire or tests which measure various features, Cronbach's alpha coefficient is used.It was calculated equal to 85% by distributing 25 questionnaires in pre-test using SPSS software that is acceptable.Cronbach's alpha coefficients of variables are illustrated in the below table separately.

Findings
Multi-variable analysis is one of the most suitable and strongest analysis methods in behavioral and social sciences studies.It is applied to a series of analysis methods whose major characteristic is simultaneous investigation of K independent variables and N dependent variables.Analysis of covariance structures or causal modeling or structural equations model are one of the most principal analysis methods of complex data structures.Hence, as there are several dependent variables in the current study that the effect of the independent variable on these variables should be examined, it is essential to use structural equations model.To explore the proposed model, Lisrel software was used and the main model is as follows according to the output of this software in which relations among the variables and coefficients are shown.

Significance of relations
T statistic was used in order to show significance of parameters of the model.This statistic is obtained through the ratio of coefficient of each parameter that absolute value of t must be greater than 2 (abs (t) ≥ 2) in the test so that estimations become significant statistically.Given to the output of Lisrel software in Diagram 3, the calculated t is greater than 2 in all variables.Therefore, all estimations are significant statistically.The below table shows briefly that each variable and its relations are significant.
Seyed Javadin et al (2009) explored the mediating role of organizational citizenship behavior in the relation between internal marketing and service quality.The statistical population in their study included 850 employees of the Gas Company in Tehran province.The research was conducted using correlation-field method based on structural equations model.The results demonstrated that internal marketing actions in Gas Company in Tehran province have increased organizational citizenship behaviors of employees and finally service quality based on a conceptual model (path analysis).Conceptual model of the survey The hypotheses extracted from the conceptual model are as follows: Primary hypothesis: Internal marketing is effective on processes of knowledge management system in Nasr-e-Esfahan Company.Secondary hypotheses 1. Internal marketing is effective on knowledge creation in Nasr-e-Esfahan Company.2. Internal marketing is effective on knowledge organization in Nasr-e-Esfahan Company.3. Internal marketing is effective on knowledge formalization in Nasr-e-Esfahan Company.4. Internal marketing is effective on knowledge transfer in Nasr-e-Esfahan Company. 5. Internal marketing is effective on knowledge application in Nasr-e-Esfahan Company.The conceptual model containing research hypotheses is displayed in Diagram 1 Diagram 1:The conceptual model of research Methodology

Diagram 3 .
The modified index (t) model Diagram 3. The modified index (t) model

Table 1 .
Cronbach's alpha coefficient of variables

Journal of Academic Research in Economics and Management Sciences
Given to the accomplished studies, the proposed model is presented in Diagram 2.
marketing International

Table 3 .
Testing of hypothesis one

Table 8 .
Evaluating significance of relations in the model