ABSTRACT

The paper reports a study on internal customer satisfaction in an industry. In this paper, the student tries to answer such questions
or issues as: How the service and quality affects the internal customer’s satisfaction in an industry? What are the various methods
to monitor and measure customer satisfaction in an industry? What corrective actions are to be taken to eliminate causes of actual
nonconformities in order to prevent their recurrence? How to reduce the internal customer dissatisfaction?

Introduction
Typically, large business organisations essentially have a number of departmental or functional structures. A workflow is existent
from one point or workstation to the other, which is characterised by their interdependence on each other for their eventual delivery
to the customers. Occasionally, the organisational structuring and restructuring activities strive to align these departments and
functions with a view to elicit synergy and bolster productivity. But seldom is the customer viewpoint assimilated in such activities.
So far organisations had a stunted approach in addressing the issues of Internal Customer Satisfaction. Efforts were made either
half-heartedly or reluctantly. Though we conventionally think of "customer" as the organization or person who buys or
receives our goods and services, internal customer also exist. Customer focus must extrapolate to the internal
customers for any customer initiative to be successful, and the effort should fundamentally begin with the internal
customers. Caring for and satisfying internal customers announces the commencement of any customer
focus/customer care strategy. And delighting internal customers etches out the arc of phenomenal organizational
growth.

WHO IS AN INTERNAL CUSTOMER AND WHO IS ITS SUPPLIER?

An internal customer is defined as the associate or department that receives a product or service while the supplier is
the associate or department that supplies a product or service to other associates and departments within an
organization.

The concept of internal customer focuses on each and every incoming thing to which the job is subjected to and which
bears a direct relationship with what goes out of the job. If all the inputs supplied to the employees aid in performing
their jobs to the best of their ability, thereby producing a conforming output, then they are satisfied internal
customers.

To know whether one is a satisfied customer, he can ask the following questions to himself:

° “Can I do my job to the best of my ability?”

° “Am I allowed to do the job to the best of my ability?”

. “Am I allowed to innovate and be creative in my job?”

The first component is job related and centres around everything coming into the job that directly relates to what goes
out of the job. For instance, it includes providing the employee such things as training, proper equipment and tools,
the right and proper working environment.

The second component concerns the supervision provided to the employee. Employees must have the proper inputs to
do their jobs. For this they need the outputs from other employees in the form of information, assistance, materials,
etc.

The third component concerns the top managerial mindset and the degree of flexibility permitted. For this a firm
commitment to innovation must be made as well as be seen to be made.
ESSENCE OF INTERNAL CUSTOMER SATISFACTION

Most large organizations house a wealth of customers, and it is in such set-ups that the concept of customer
satisfaction is significantly important. Let us take the instance of a steel manufacturing unit. Nearly all the functional
areas such as Production, Maintenance, Project, Accounting, IT, HRD, Training, Marketing, etc. have several types of
customers. For instance, the Training Cell can offer many products (management development, an array of courses on
job skills, etc.) and has many customers (managers from different levels, staff from various departments, etc.). These
internal customers can identify ways to reduce costs, improve service and enhance their effectiveness. However,
capturing ideas for improvement does not happen impromptu. Most organizations require a particular system to
assimilate these ideas for innovation. And that is the essence of what Internal Customer Satisfaction is all about. It
leads to the development of value models that clearly recognize the customer’s key drivers of satisfaction. Knowledge
of the key drivers will enable an organization to channelize improvement efforts where they really matter, particularly
in the areas of importance to the internal customers. This in turn will pave the way for external customer satisfaction
and assure organizational success on a sustained basis.

IMPORTANCE OF INTERNAL CUSTOMER SATISFACTION SURVEY

Internal Customer Satisfaction measurement:

° Provides the key to External Customer Satisfaction.

° Helps in determining inter and intra departmental effectiveness in terms of communication, delivery, quality and
responsiveness.

° creates a customer focus and augments the quality of performance.

° determines interdependencies between functions /departments and elucidates related expectations in an integrated
manner;

° objectively determines the level of satisfaction of the internal customers with the internal vendor’s/supplier’s
support;

° facilitates the identification of the areas of strengths and weaknesses as these are a means of improving the support
where it is found necessary; and

° enables concentration on the primary issue and prioritizing the actions based on them.

In the present era of cut-throat competition, a distinguishing feature of a successful enterprise will be to manage its
Internal Customer Satisfaction with the same intensity as it manages the External Customer Satisfaction. An early
indicator of success will be when organizations target Internal Customer Satisfaction goals of 100 per cent.

Literature review

Several studies have tried to explicate work environment in different areas for instance employee turnover, job
satisfaction, employee turnover, job involvement and organizational commitment (Jong & Hartog, 2010). In
the study of Zeytinoglu and Denton (2005), it has been revealed that work environment is one of the aspects
that influence employees’ choice to stay with the business. Fay, Bjorkman and Pavlouskaya (2000) exclaimed
that it is very essential to identify the rising wants of people to keep them dedicated and provide the work
atmosphere when needed. Individuals like working and attempt to work in those companies that present
constructive work atmosphere where they consider they are making diversity and where most individuals in
the company are capable and pulling together to move the business forward (Milory, 2004). Workplace design
has a deep influence on employees and tends to stay with work as long as satisfied (Brown & Metz, 2009). To
retain employees, the workplace design should generate atmosphere that is supportive for employees of poor
eyesight, supply tools that require less strength and appropriate position for old employees (Samantha &
Dahling, 2009).
The value of service conveyed to external customer is often identified by the value of service that internal
customers give each other, (Connor, 2003). It is very essential to keep in mind that, every person within a firm
offers a service. There are internal as well as external customers. Internal customer is the employee in a
company who is responsible to manufacture products. Every employee obtains materials or services from
other employee in the procedure of manufacturing their own products. It is essential that, in order to satisfy
external customers, internal customers be delighted first. Customer service guides to customer satisfaction
whereas internal customer service guides to employee satisfaction.

In Total Quality Management systems, all employees are persuaded to observe each other like vital customers
during the manufacture and service delivery procedures (Marshall & Miller, 1991). In an organization, all
employees are both the receivers and providers of products or services. George (1994) exclaims that as several
workers do not make contact with external customers directly, so what they act or do not manipulate the
excellence of service rendered. In order to deal with this matter, the employees of such types want to
acknowledge value and treat other workers as internal customers.

On the other hand, it is essential to recognize that internal customers are as diverse and varied in their
personnel distinctiveness as external customers. While the common people may be a confusing generalization,
similarly it is significant to recognize and react optimistically to diversity in the interior customer foundation
(Joanna, Riordan, Peter & Humphreys, 2003). It is also declared that it is essential to recognize diverse forms
of internal customer service associations, some of which might be very vital and work important in their
disposition rather than others. Moreover, it is essential not to suppose that internal and external consumer
service associations are openly comparable in nature. For instance, internal customers are compensated
customers of the services they utilize. Because they are generally more knowledgeable and educated about the
services offered than external customers. Consequently, they might be added challenging consumers than
normal customers (Joanna, 2003).

Organizational effectiveness capture organizational performance advantage the countless internal performance
results generally linked with more effective or efficient processes and other external measures that transmit to
deliberations that are broader than those merely linked with economic evaluation (either by managers,
shareholders, and customers), for example corporate social responsibility (Richard, 2009).

Organizational effectiveness is an intangible notion and is principally not possible to measure. Rather than
measuring organizational effectiveness, the firms tend to determine proxy measure that will be utilized to
signify effectiveness. Proxy measures utilized might involve such matters like number of individuals served,
kinds and sizes of population fragments served, and the demand within those fragments for the services the
firm provides Organizational effectiveness refers to how a business accomplishes its tasks effectively.
Organizational effectiveness procedures are apprehensive with consideration the inimitable potentials that
firms build up to guarantee the achievement. This contains determining the worth of human resources of
organization (Jamrog & Overholt, 2004).
In the past, researchers tended to employ the phrase ‘organizational performance’ to signify monetary and
economic measures for example, revisit on investment, earnings per share, profitability, and almost
immediately (Harel,2003). Accordingly, company performance might be evaluated in conditions of their
involvement to biased psychosomatic well-being (commitment, attachment and happiness), relatively in
provisions of purposive criterion (Jansen, 2001), because the company utilizes not just one element of a an
individual but moderately the entire individual, as well as professional, personal and societal traits (Harnesk,
2004).

Internal customer satisfaction is an off shot of the general term customer satisfaction which is as a result of a
cognitive and affective evaluation, where some comparison standard is compared to the actual perceived
performance. It is described as the satisfaction derived by the internal customers within the organization.
Within the research domain, researchers have identified quite a number of tools essential for measuring
internal customer satisfaction. Most of these tools are: the use of surveys, the focus groups formation, and
one-on-one meetings schedule between managers in the respective departments and internal customers on a
regular basis. The choice of any of these tools depends on the advantage and disadvantage they offer.
However, it has been noted that among all other internal customer satisfaction tools, the use of internal
customer survey seems to be more important, less demanding and more comprehensive in achieving internal
customer satisfaction most especially when it is a priority for internal customer service to not hurt your
external customer.
OBJECTIVES OF THE STUDY
1. To study the personal profiles of the selected respondents and their association and significance
towards internal customer satisfaction.
2. To study the dimensions related to internal customer satisfaction.
3. To examine the employee perceptions in various department in the Steel Plant.
4. To identify the level of Internal Customer Satisfaction in the Steel Plant