International Journal of Quality & Reliability Management

Reliability of the internal service encounter

Gamini Gunawardane

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Gamini Gunawardane, (2011),"Reliability of the internal service encounter", International Journal of Quality
& Reliability Management, Vol. 28 Iss 9 pp. 1003 - 1018
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RELIABILITY PAPER

Reliability of the internal service

encounter
Gamini Gunawardane
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College of Business and Economics, California State University, Fullerton,

California, USA

Reliability of the
internal service
encounter
1003
Received June 2010
Revised June 2011
Accepted June 2011

Abstract
Purpose Service quality has been an active area of research during the last two decades. In this
research, typically, service quality is considered from the viewpoint of the customer who is the
recipient of the service, i.e. the external customer, and the research efforts have focused on
identifying the dimensions of quality in this external service encounter. In the majority of these
studies, reliability has been identified as the most prominent dimension among the various
dimensions of the external service encounter. In recent times, researchers have also highlighted the
importance of internal customers and the existence of an internal service encounter. The objectives
of the research project reported here were: to investigate whether reliability is perceived as an
important dimension in the internal service encounter as well, and, if so, to ascertain how service
managers define reliability in the internal service encounter; and to examine whether the perceived
importance of reliability in the internal service encounter varies with the type of the internal service
encounter.
Design/methodology/approach Literature review and manager interviews were used to
ascertain the role and meaning of reliability in the internal service encounter and different types
of internal service encounters. A field study in the health care industry was performed to examine
whether the relative importance of reliability in the internal service encounter, vis-a`-vis other
dimensions, varies in different types of internal service encounters.
Findings As with the external service encounter, reliability emerges as a key dimension in
evaluating the quality of an internal service encounter. The meaning assigned to reliability in the
internal service encounter is similar to that established for the external service encounter in that
both focus on the accuracy of the outcome and dependability. A new dimension of reliability that
became apparent was the need for flexibility, communication and problem-solving support. This is
probably due to the time-consuming project nature of the internal service encounter, where the
internal customer feels the need to be able to openly discuss its needs with the internal service
provider and the latters flexibility and patience in attending to these needs. The importance of
reliability vis-a`-vis other dimensions of internal service quality does vary with the type of internal
service encounter.
Practical implications The study and its findings highlight possible actions managers can adopt
to improve the quality and effectiveness of a variety of internal service encounter types.
Originality/value As research on the role of reliability as a dimension of internal service quality
is rare, this paper presents a novel effort, i.e. a combination of various interpretations of reliability of
the internal service encounter in the limited literature and views of managers of a large industry, to
identify the role and meaning of reliability in the internal service encounter. There is no report in the
literature of any previous efforts to investigate whether the importance attached by managers to
reliability (as a factor of internal service quality) varies with the type of internal service encounter.
The paper also proposes a novel typology for classifying internal service encounters.
Keywords Internal service encounter, Quality, Reliability management
Paper type Research paper

International Journal of Quality

& Reliability Management
Vol. 28 No. 9, 2011
pp. 1003-1018
q Emerald Group Publishing Limited
0265-671X
DOI 10.1108/02656711111172559

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1004

1. Introduction
Service quality has been an active area of research during the last two decades. A
recent article in this journal (Seth et al., 2005) identified as many as 19 models that have
been developed to explain the dimensions of service quality. We omit a detailed
discussion of the well-established concept of service quality and refer the reader to this
article and its comprehensive list of references.
In all these models, service quality is considered from the view point of the customer
who is the recipient of the service, i.e. the external customer, and the efforts have
focused on identifying the dimensions of this external service encounter, i.e. the
factors the customer considers in evaluating the quality of a service. The dominant
model of the customers cognitive process of evaluating service quality is the
disconfirmation of expectations model (Oliver, 1980) which has been operationalized
by Parasuraman et al. (1988) with the SERVQUAL method of measuring service
quality. In this method, two questionnaires, each with 22 statements, based on five
dimensions of service quality are used. The first questionnaire is given to customers
before the service to record expectations and the second is given after the service to
record perceptions. Based on a survey of a large number of customers from five
nationally known companies, they claimed that the five dimensions of service quality
on which customers focus are:
(1) Reliability (the ability to perform the promised service dependably and
accurately).
(2) Responsiveness (willingness to help customers and provide prompt services).
(3) Assurance (knowledge and courtesy of employees and their ability to convey
trust and confidence).
(4) Empathy (caring and individualized attention provided to the customer).
(5) Tangibles (appearance of physical facilities, equipment, personnel and
communication materials).
Central to this method is the view that service quality, from the customers perspective,
is the difference between their post-service perceptions and pre-service expectations. If
the numerical score, on a Likert scale, for perceptions exceeded the score for
expectations, the customer satisfaction was deemed to be positive. Although there has
been criticisms of this perceptions v. expectations model (Cronin and Taylor, 1992;
Robledo, 2001; Brown et al., 1993), SERVQUAL has remained the dominant model used
to explain the customers cognitive process of evaluating service quality and has been
used to measure service quality in a variety of service contexts (citations omitted for
the sake of brevity) such as health care services, professional services, public recreation
programs, retail settings, public services, food services, hair salons, information
systems, higher education, university computer labs, hotels, transport services, tourist
industry and banking. In the majority of these studies, customers have placed
reliability of the service as the most important dimension they focus on.
In recent times, researchers have also highlighted the existence and the importance
of internal customers and the need to identify the dimensions of the internal service
encounter, e.g. Reynoso and Moores (1995) (study in two UK hospitals showed that
hospital ward staff perceive the quality of support they receive from other units on a
set of specific factors/dimensions); Vandermerwe and Gilbert (1991) (a survey of 1,500

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executives of international corporations showed that internal customers ranked some

SERVQUAL type dimensions as more important than others), Paraskevas (2001a, b)
(interpersonal relations affect internal service encounters in a hotel), Kuei (1999)
(a survey of 341 internal customers about service they received from their purchasing
department revealed that perceived quality oriented climate, consisting of on time
performance, courtesy and personal attention, is the most important factor for
determining the perceived internal service quality); Pfau et al. (1991) (reports on a study
of 50 corporate MIS departments and 25 purchasing departments of industrial, finance
and service companies that showed internal service quality was related to financial and
operational control); Gremler et al. (1994) (critical incident technique study in a large US
bank indicates that key dimensions of internal service quality are recovery,
adaptability and spontaneity); Kang et al. (2002) (a modified SERVQUAL instrument
was found to be suitable to measure internal service quality at a university in Korea);
Voss et al. (2005) (in distribution centers, inter departmental customer orientation had a
positive effect on center performance); Frost and Kumar (2000) (study at Singapore
Airlines found that expectations and perceptions of front line staff as internal
customers and support staff as internal suppliers play a major role in recognizing the
perceived internal service quality); Marshall et al. (1998) (in a manufacturing company,
a six factor/dimension study of internal service quality of purchasing department
indicated that technical internal customers and administrative internal customers
focused on different factors); Bruhn (2003) (study in a global industrial company
indicated that internal service quality is related to internal customer satisfaction and
retention); Boshoff and Mels (1995) (survey of sales force in an insurance company on
the quality of service they receive from support staff, using a short version of the
SERVQUAL five dimension instrument, showed that organizational commitment
exerts a strong positive influence on internal service quality); Auty and Long (1999)
(a survey of 20 managers in a service industry showed that a modified SERVQUAL
dimensions are valid to measure internal service quality); Forst (2002) (internal
customers should not be treated merely as fellow employees. Internal customer
satisfaction must be surveyed); Farmer et al. (2001) (at a food and grocery wholesaler,
sales associates who perceived higher levels of internal service responsiveness were
associated with customers who felt they were receiving better service); Soteriou and
Stavrinides (2000) (a data envelopment analysis model applied in a bank helped
managers identify key factors of internal service quality); Gilbert (2000) (in a study of
the accounting department as the internal supplier at an administrative office setting,
technical competence and personal service were recognized by internal customer
departments as most important); Mudie (2003) (conceptual paper claimed that
traditional customer quality dimensions may not be appropriate to be used as internal
customer quality dimensions); McDermott and Emerson (1991) (conceptually identifies
ten dimensions, including reliability, of internal service quality. Reliability is defined as
consistency in the service delivery); Hauser et al. (1996) (Conceptualizes two systems to
reward internal suppliers to motivate them); Chaston (1994) (survey of UK
manufacturing managers using a SERVQUAL type questionnaire indicated the
existence of gaps in internal service quality similar to gaps identified previously in
external customer service quality); Seibert and Lingle (2007) (a survey of 1,200 firms
showed that internal service quality has improved during the last decade and
management and employee recognition of the concept contributed to this increase);

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internal service
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Albrecht (1990) (internal service quality is most important but least understood); Berry
and Parasuraman (1991) (conceptualizes that employees satisfied with internal service
quality provide better service to external customers); Gummeson (1987) (identification
of the internal customer concept and managerial action to improve communication
between internal units helped Ericsson, a major Swedish communications firm, to
increase productivity by forty percent in a circuit board factory). The basic tenet of the
internal customer service concept is that each department (or sometimes individual
employees) of an organization either receives work from and/or performs work for
another department (or another employee). The department or individual performing
the work is the internal service producer and the receiving department or individual
is the internal customer. Their interaction is the internal service encounter. These
definitions are consistent with those established in the literature such as Nagel and
Cilliers (1990) (internal customer as anyone in the organization who is supplied with
products or services by others in the organization) and Gremler et al. (1994) (internal
service encounter as the dyadic interaction between an internal customer and an
internal service provider). Examples of internal service providers are staff units such
as R&D, accounting, administration, human resources and MIS/IT. It is estimated that
such internal services constitute an increasing proportion of a business activity and
that internal services proportion of total product costs, in industrialized countries,
have increased from 50 percent in the 1960s to 70 percent by the 1980s (Vandermerwe
and Gilbert, 1991).
This recent interest in the internal service encounter motivated us to this research,
where our objectives were:
(1) to investigate whether reliability is perceived as an important dimension in
the internal service encounter as well and, if so;
(2) to ascertain how service managers define reliability in the internal service
encounter; and
(3) to examine whether the perceived importance of reliability in the internal
service encounter varies with the type of the internal service encounter.
First, we surveyed the literature for dimensions of quality of the internal service
encounter to see whether reliability occupies a position as important as it does in the
dimensions of quality of the external service encounter. These findings are presented in
section 2. Then, we analyzed in detail the publications listing reliability as an
important element in the internal service encounter to ascertain the meaning assigned
to the concept. The outcome of this analysis is reported in section 3. Finally, we
conducted a study in the health care management industry to investigate whether the
importance of reliability, in the eyes of the internal customer, varies with the type of
relationship between the internal service provider and internal customer. This study
and findings are presented in section 4. Section 5 will discuss managerial implications
and limitations of the findings.
2. Reliability as a dimension of quality of the internal service encounter
In recent times, researchers have focused on the quality of the internal service
encounter (Internal Service Quality or internal service quality) as well. The importance
of studying the internal service encounter is that the quality of the service to the
external customer is highly dependent on the quality of the internal service encounter

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(Bouranta et al., 2009; Farmer et al., 2001; Heskett et al., 1994; George, 1990;
Vandermerwe and Gilbert, 1991). Empirical work has also shown that poor internal
service quality is likely to have a negative impact on the quality of services provided to
external customers (McDermott and Emerson, 1991; Pfau et al., 1991), and that the
quality of the service to the external customer can be guaranteed only after internal
performance has been optimized (Boshoff and Mels, 1995). Studies indicate that, in
general, the quality of the internal service encounter is not satisfactory. In a 1989 study
of 300 internal service users in UK, Trondsen and Edfelt (1989) reported that only 20
percent were very satisfied with their company internal service providers. They
claimed that the internal service providers focused on operational efficiencies and cost
rather than the internal user needs. In a recent article, Seibert and Lingle (2007) report a
1993 study showing only a 32 percent favorable internal customer satisfaction rating
and a comparison survey in 2006 of 1,266 American Society of Quality (ASQ) members
still showing only a 48 percent satisfaction rating. In both surveys over 80 percent of
respondents agreed that high levels of internal customer service are important to their
business success.
Table I summarizes the dimensions of internal service quality identified in the
literature.
It could be seen that reliability is indeed identified as a dimension of internal
service quality in the vast majority of these studies. The original dimensions of
external service quality, namely reliability, responsiveness, assurance, empathy and
tangibles also appear as dimension of quality in the internal service encounter. Notable
new elements in the internal service encounter are flexibility and communication
indicating the internal customers need to be able to openly discuss needs and problems
with the internal service provider and the latters patience, professionalism and
flexibility in addressing these needs and problems.
3. The meaning of reliability in the internal service encounter
To ascertain this, we analyzed in detail the meaning assigned to the concept of
reliability in the studies reported in Table I. Table II summarizes how these studies
have described reliability in the internal service encounter.
As with the external service encounter, the meaning assigned to reliability in the
internal service encounter also seems to focus primarily on the timeliness and accuracy
of the outcome, and dependability. Also apparent is need for communication and
problem solving support. This is probably due to the time consuming project nature of
the internal service encounter where the internal customer feels the need to be able to
openly discuss its needs with the internal service provider and the latters flexibility
and patience in attending to these needs.
4. Variation of the relative importance of reliability in the internal service
encounter with the type of internal service encounter
Typologies to classify the service encounter between the external customer and the
service provider (external service encounter) has received considerable attention in the
literature. The most well known of these that appears in many service management
texts is that introduced by Schmenner (2004). This typology introduces a Service
Process Matrix classifying services in to Service Factory, Service Shop, Mass Services
or Professional Services depending on degree of customization and degree of labor

Reliability of the
internal service
encounter
1007

IJQRM
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1008

Study

Dimensions

Bouranta et al. (2009)

Reliability, responsiveness, empathy, safety, tangibles,

professionalism, and interest
Reliability, assurance, tangibles, empathy, and responsiveness
Tangibles, reliability, promptness, flexibility, confidentiality,
professionalism, helpfulness, communication, consideration, and
preparedness
Reliability, responsiveness, credibility, competence, courtesy,
communication, understanding, access, proactive decision making,
and attention to detail
Reliability, willingness to help, prompt service, conveys trust and
confidence, tangibles, caring, and individualized attention
Recovery, adaptability, and spontaneity
Tangibles, reliability, responsiveness, assurance, and empathy
Public image, reliability, responsiveness, confidence in, sensitivity and
empathy
Attentiveness, responsiveness, care, availability, reliability, integrity,
courtesy, friendliness, communication, competence, functionality,
commitment, access, flexibility, and security
Reliability and responsiveness
Competence, reliability, accessibility, friendliness, reaction speed, time
to provide the service, flexibility, customization, added value
generated, cost-benefit ratio, transparency in services offered, and cost
transparency
Tangibles, reliability, responsiveness, assurance, and empathy
Tangibles, reliability, responsiveness, assurance, and empathy
Professionalism, dependability, conscientiousness, communication,
and consideration
Reliability, responsiveness, assurance, and empathy
Treat with respect, delivering value, problem-solving ability, do job
promptly and correctly, conscientiousness (quick response; keeping
promises on due dates), and checking with users before making
changes
Personal service and technical competence

Kang et al. (2002)

Reynoso and Moores (1995)

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Lings and Brooks (1998)

Chaston (1994)
Gremler et al. (1994)
Young and Varble (1997)
Edvardsson et al. (1997)
Croom and Johnston (2003)

Farmer et al. (2001))

Bruhn (2003)

Boshoff and Mels (1995)

Frost and Kumar (2000)
Paraskevas (2001b)
Kuei (1999)
Marshall et al. (1998)
Table I.
Dimensions of internal
service quality reported
in the literature

Gilbert (2000)

intensity. Other well-known classification schemes include Shostack (1977: tangible vs

intangible services), Lovelock (1983: potential for customization and employee
discretion), Bowen (1990: level of contact and customization), and Silvestro et al. (1992:
volume of customers per unit time v. contact time, customization and discretion). For
excellent summaries on research on classifying the external service encounter, see
Cook et al. (1999, p. 39, somewhat overlapping classification schemes) and Shafti et al.
(2007).
Research on classification systems for the internal service encounter, however, is
sparse. The only such typologies we found in the literature were those of Sayles (1964)
and Davis (1992). Sayles distinguished internal organizational linkages into workflow

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Elements

Study

Ability to complete tasks accurately and

dependably (Parasuraman et al.s original
definition for external customer reliability)
Dependable
Provision of service that is promised. Honoring
commitments
Provision of service by promised time

Chaston (1994); Farmer et al. (2001); Boshoff and

Mels (1995)

Provision of service correctly (first time). Errorfree records

Provision of necessary and accurate information
Ability/willingness to solve problems

Gilbert (2000)
Kang et al. (2002); Paraskevas (2001b);
Edvardsson et al. (1997)
Young and Varble (1997); Reynoso and Moores
(1995); Gilbert (2000)
Kang et al. (2002); Reynoso and Moores (1995);
Young and Varble (1997); Edvardsson et al. (1997)
Kang et al. (2002); Reynoso and Moores (1995);
Paraskevas (2001b)
Kang et al. (2002); Edvardsson et al. (1997); Young
and Varble (1997)

relationships and service relationships. In the first type, workflow stages are
sequential and the internal customer receives the completed work of the internal
supplier and proceeds to perform the next processing activity. In the latter, the service
relationships involve multiple interfaces and do not directly influence the workflow
stages. Davis extended the service relationships into two further types and proposed
a three type classification: workflow encounters, support and advice encounters
and audit/evaluative encounters. Following our discussions with the management
and staff of the organizations in our study, we identified, and thus used in our study,
three types of internal service relationships:
(1) Workflow sequential encounters (one where the internal customer
department has to deal with only one internal supplier department).
(2) Multiple support encounters (involving one internal customer department and
multiple support departments).
(3) A variation of the work flow sequential form, where the two departments
were engaged in continuous consultation and advice while the internal service
was being designed and provided.
In fact, this is a hybrid of Davis (1992) work flow and support and advice
encounters. Therefore, we called this third type work flow support and advice. It is
worth noting at this point, the apparent similarity of these classifications to the classic
technology classifications in the organizational theory literature such as those
attributed to Thompson (1967). Thompson classified departmental interdependence in
organized as pooled, sequential and reciprocal and argued that the management
requirements varied with these types of interdependence.
Our study was conducted in four health care management organizations in
Southern California serving approximately 300,000 managed health care customers
using similar processes. The largest organization served approximately 150,000
customers while the smallest served approximately 10,000. From the multiple internal
processes in the organizations, four key processes were selected in consultation with

Reliability of the
internal service
encounter
1009

Table II.
The concept of reliability
in the internal service
encounter reported in the
literature

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1010

management. A total of 96 staff members in the four processes (internal customers)

took part in the study. Table III summarizes the study plan.
Process A: The call centers receive approximately 1,500 calls per day from
customers ranging from minor inquiries to major complaints regarding services. The
focus in our study was on complaints where the call center staff has to depend on two
or more departments to resolve the problem. Typical of this would be complaints that
the customer was overcharged by a medical provider. Call center staff will then have to
work with the department dealing with medical providers (called the provider relations
department which will investigate the case with the medical provider) and with the
accounting department (to get the customer refunded and provider charged) thus
forming a multiple support type internal service encounter. The ability of the call
center staff to provide good service to customers depends on the quality of support
they get from both the provider relations and accounting departments. This is different
from the situation described in the following for Process B where the internal service
customer depends on the quality of support from one internal support department in a
chain or sequential relationship.
Process B: Medical providers who have complaints about the payments they have
received from the company would write to the provider appeals department which then
has to work with the claims payment department to resolve the complaint thus forming
a Workflow sequential type internal service encounter. Here, the ability of the
provider appeals department to provide good service to customers depends on the
quality of support they get only from the claims payment department forming a
uni-directional sequential relationship. This is different from the situation described
earlier Process A where the internal service customer depends on the quality of support
from multiple (in this case two) internal support departments.
Process C 1: Contracting department negotiates new and existing contracts with
medical providers. Every finalized negotiation requires review and drafting of
documents by the legal department. The two departments engage in continuous
consultations until a final draft of a contract is arrived at thus forming a Workflow
support and advice type internal service encounter. Note that this situation is different
from Process B. In Process B the relationship between the two departments was
uni-directional. Here, the quality of support the internal customer department
(contracting department) receives from its internal service supplier (the legal
department) is not uni-directional. There is numerous back and forth consultations,
arguments and compromises made between the two departments, leading to labeling
the relationship as Workflow support and advice.
Process C 2: The compliance department submits regular and ad-hoc reports to
various governmental organizations. Just as in Process C 1, continuous consultation
and advice takes place between the compliance department and the IT department on
report design and data extraction thus forming another Workflow support and
advice type internal service encounter. Except for the differences in work, the
relationship between these two department and the two departments in Process C 1 is
the same.
Preliminary discussions with the managers in these companies involved with these
processes resulted in the general agreement that the dimensions of the internal service
important to them were reliability, empathy, communication, responsiveness and
flexibility each of which is fully explained in the Appendix. A SERVQUAL type

Internal customer
Call center
Provider Appeals
Department
Provider
contracting
department
Compliance
department

Process

A. Member complaint resolution

B. Provider appeals

C 1. Provider contracting
C 2. Reporting to governmental entities

Legal department
IT department

Claims payment department

Multiple departments
(depending on the complaint)

Internal supplier

Workflow (support
and advice)
Workflow (support
and advice)

Workflow
(sequential)

Multiple support

Type of internal
service encounter

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18
15

31

32

Number of staff from internal

customer participating in
study

Reliability of the
internal service
encounter
1011

Table III.
Internal processes in the
health care management
organizations selected for
the study

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1012

questionnaire based on these dimensions was distributed to the 96 staff members. The
questionnaire provided 15 statements (see the Appendix) and asked the respondents to
express their views on a Likert scale (5-1) ranging from Very important, Somewhat
important, Not sure, Not so important to Not important at all as they relate to the
quality of the service they would like to receive from the particular internal service
supplier department. 90 usable questionnaires were returned. Though the respondents
were not identifiable, the encounter type involved was identified in the questionnaire.
Follow up interviews were conducted with the management to report and gain further
insight into the findings.
The responses were analyzed using SPSS 13 for Windows. Data from responses on
the 15 items was tested for internal consistency/reliability. Cronbachs alpha was 0.73
(should be greater than 0.7). A factor analysis of the five factors was also performed
using Varimax rotation. This yielded a determinant of 0.212 (should be greater than
0.0001), Kaiser-Meyer-Olkin measure of sampling adequacy of 0.81 (should be greater
than 0.70), and a Bartletts test of sphericity significance of 0.000 (should be less than
0.05). Table IV shows the mean scores of each dimension by type of service encounter.
Overall scores: As in almost all surveys of external and internal service quality,
Reliability and Responsiveness turned out to be the overall significantly leading
factors in internal service quality from the internal customer point of view. Table V
shows results of t-tests for differences in these overall main scores. These results
indicate that differences in overall scores of Reliability and Responsiveness differ
significantly from mean scores of the other three dimensions.

Internal service quality

dimension
Table IV.
Mean survey responses
(5 very important to
1 not important at all)

Overall
score
(n 90)

Workflow
sequential
(n 30)

Workflow support and

advice
(n 29)

Multiple
support
(n 31)

4.73
4.28
4.42
4.69
4.21

4.80
4.00
3.80
4.70
4.11

4.60
4.40
4.85
4.58
4.83

4.78
4.45
4.60
4.68
3.70

Reliability
Empathy
Communication
Responsiveness
Flexibility

Reliability
Reliability
Empathy
Communication
Table V.
Tests of differences
between mean overall
scores

Responsiveness
Note: *Significant at 0.01 level

Empathy

Communication

Responsiveness

Flexibility

t 8:05
p 0:0001*

t 5:74
p 0:0001*

t 0:7061
p 0:4810*

t 9:30
p 0:0001*

t 2:47
p 0:0144

t 7:24
p 0:0001*

t 1:24
p 0:2182

t 5:75
p 0:0001*

t 3:71
p 0:0003*
t 8:47
p 0:0001*

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This was true also for Workflow Sequential and Multiple Support type of
encounters. The differences between Reliability and Responsiveness scores and scores
for the other three dimensions for each of these two types of encounters exhibited
identical results. In Workflow Sequential Process, difference in Reliability vs
Flexibility scores yielded t 7.56, p 0.0001 (significant at 0.01 level). The differences
between Reliability score and scores for Empathy, Communication and Responsibility
were also significant at 0.01 level. The difference in Responsiveness score and
Flexibility score yielded t 6.08, p 0.0001 (again, significant at 0.01 level). The
differences between Responsiveness score and scores for Empathy, Communication
and Responsibility were also significant at 0.01 level. Results of t-tests for differences
in means for Multiple Support type encounters also displayed similar results. For
brevity, we omit two additional comprehensive tables like Table V.
This outcome, i.e. placing a high emphasis on Reliability and Responsiveness, in
sequential workflows is possibly due to the emphasis on cycle time, accuracy and
efficiency inherent in encounters involving sequential workflow and is consistent with
findings of Thompson (1967).
The findings for Workflow Support and Advice type encounters were different,
As seen in Table IV, the key dimensions in these encounters were Communication
and Flexibility. Table VI shows results of t-tests of mean differences between the
dimensions for Workflow Support and Advice type encounters.
Mean Communication score was significantly different from Reliability and
Responsiveness scores at 0.05 level and with Empathy score at 0.01 level. Mean
Flexibility score was significantly different from Responsiveness and nearly so from
Reliability at 0.05 level. This is the most significant finding of our study, i.e. that in
Workflow Support and Advice type of encounters, while Reliability and
Responsiveness are considered important by internal customers, their major
emphasis is on the flexibility and adaptability of the service provider, and how well
the two groups can communicate and work together.
An additional observation was that Multiple Support encounters scored
significantly (at 0.01 level) higher on Communication over the straight Workflow
Sequential encounters (t 8:3; p 0:0001). This indicates the higher need for
coordination and communication when services from two departments are needed by
the internal customer to perform its own task.
Reliability
Reliability
Empathy

Empathy

Communication

Responsiveness

Flexibility

t 1:86
p 0:0686

t 2:32
p 0:0239* *

t 0:19
p 0:8534

t 2:14
p 0:0371

t 4:28
p 0:0001*

t 1:67
p 0:1003

t 1:24
p 0:2182

t 0:206
p 0:0151* *

t 0:18
p 0:8615

Communication
Responsiveness
Notes: *Significant at 0.01 level. * *Significant at 0.05 level

t 2:32
p 0:023* *

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Table VI.
Tests of differences
between mean scores for
workflow support and
advice encounters

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Factor rotation found two factors. Reliability, Responsiveness and Empathy formed
one single factor. This is consistent with findings of Harrison-Walker (2000) that
reliability, assurance, empathy and responsiveness formed one single factor in his
SERVQUAL type external service quality dimension studies. Flexibility and
Communication formed the second factor indicating the high correlation between
these two dimensions in the minds of the internal service customers.
In summary, this exploratory study has found initial evidence that dimensions in
the internal service encounter important for the internal customer varies with the type
of internal service encounter. While Reliability and Responsiveness seems important in
all types of internal service encounters, internal customers seem to place a heavy
emphasis on Communication and Flexibility in internal service encounters where
significant consultation and compromise between the two internal customer
department and the internal supplier department is necessary. In situations where
straight one-way sequential workflow from one or more departments to the internal
customer takes place, the emphasis seems to be on Reliability and Responsiveness
(accuracy, prompt service and availability).
5. Managerial implications and limitations
This study identified that dimensions of internal service quality, as viewed by
departments and employees providing services to external customers, vary according to
the type of internal service relationship they have with departments and employees
supplying them with products or services internally. This implies that managers should
focus on the type of relationship between internal departments when attempting to
improve the quality of internal service within the firm because one single mechanism for
improving the internal service quality will not fit all types of internal service
relationships. In straight Workflow Sequential type encounters (where Reliability and
Responsiveness was identified as most important), management efforts should be on
standardizing and simplifying processes and eliminating duplicating and unnecessary
steps to improve efficiency and accuracy of the internal service. When services from
multiple departments are involved (as in the Multiple Support type encounters),
simplifications by way of rules and standard procedures, and improvements in
communication via coordinating mechanisms, would be necessary. These suggestions are
consistent with classic organization theoretic analyses of Thompson (1967). In internal
service encounters of Support and Advice type, internal coordinators/mediators to
improve communications and flexibility, and team building training to promote mutual
adjustment, would be useful. In fact, following managements review of our observations,
the largest of the firms in the study established a regular weekly meeting between the
Medicare reports unit and the IT department to improve communication and understand
each others limitations and flexibility. A similar meeting between Legal and Contracting
departments is being considered. Team building exercises involving supervisors and
staffs of key Support and Advice encounters are also being planned.
This study, however, has several limitations. It covered only one industry in one
geographical region. Another main weakness is the small sample sizes used. Therefore,
the results here cannot be accepted as generally valid but only appreciated as a
preliminary exploratory effort. The typology of service relationships was limited to
what seemed suitable for this industry. A more comprehensive survey of a larger
number of service organizations is being undertaken to better understand the type of

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internal service relationships. Further studies across other types of service firms using
larger samples, expanded service relationship types, and more extensive research
methods are obviously needed.
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Appendix
Five dimension internal service quality statements used in the survey
(1) Reliability:
.
performing the service right the first time;
.
keeping to promised delivery dates; and
.
providing necessary and accurate information.
(2) Empathy:
.
sincere display of willingness to assist;
.
genuinely trying to understand our needs and problems; and
.
understanding our urgency.

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(3) Communication:
.
makes it easy for us to explain our needs;
.
respects our opinion/criticism is constructive; and
.
making good suggestions to handle our needs.
(4) Responsiveness:
.
keeps us informed of progress;
.
available when we have urgent needs; and
.
prompt and timely in providing service.
(5) Flexibility:
.
willing to accommodate our special needs;
.
willing to accommodate changes in our needs; and
.
willing to change their practices to meet our needs.
About the author
Gamini Gunawardane holds an MBA and a PhD from the Graduate School of Business,
University of Chicago and is currently Professor of Management at California State University at
Fullerton, California, USA. He has previous publications in this journal as well as in
Mathematical Programming, European Journal of Operational Research, IIE Transactions,
Robotica, International Journal of Mathematical Education, Interfaces, and California Journal of
Operations Management. He is also an active Consultant in the health care industry in Southern
California. Gamini Gunawardane can be contacted at: ggunawardane@fullerton.edu

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