Internal relationships Linking practitioner literature and relationship marketing theory Carmel Herington Griffith Business School, Griffith University, Gold Coast, Australia Lester W. Johnson Melbourne Business School, Carlton, Australia, and Don Scott Southern Cross University, Lismore, Australia Abstract Purpose – Practitioners argue that the way they treat their employees has an impact on firm success. However, they frequently do not equate this with relationship building. On the other hand, the academic relationship marketing literature does highlight internal relationships as having an important impact on external customer relationships. However, this relationship suffers from a lack of academic empirical evidence. Neither seems to recognize the knowledge of the other leading to incongruence between marketing theory and practice. The purpose of this paper is to bring the two literature streams together demonstrating that the practitioners are talking about, and practising, relationship marketing. Design/methodology/approach – Exploration and comparison of the academic and practitioner literature bases to elaborate on the value of relationship building within organizations. Findings – Competitive advantage can be attained through development of a relationship-building culture which includes building relationships inside the organization as well as customer relationships. In fact, successful customer relationships rely on successful internal relationships. Research implications/implications – A broad research agenda is outlined for understanding the nature of internal relationships and their impact on a firm’s success. Practical implications – Organizational success can be gained through building strong internal relationships and the development of a relationship-building organizational culture. Originality/value – Links practitioner cases and reflections to the concept of relationship marketing, demonstrating further how relationship marketing activities provide a competitive advantage. Keywords Relationship marketing, Competitive advantage, Market orientation, Employee relations, Customer relations Paper type General review One of the greatest challenges facing firms today is how to gain an advantage over competitors in satisfying customer needs (Kandampully, 1998). This is being driven primarily by more demanding customers (Buttle, 1996; Parvatiyar and Sheth, 2000). Hence, businesses need to be able to show more concern for customers than the competition in order to gain any competitive advantage (Sheth and Parvatiyar, 1995). A disparate group of leaders of successful firms have been reported as enjoying unique and sustained competitive advantage by showing greater concern for customers. This was achieved by focusing on building strong relationships. However, the main focus of these firms is not on the relationship between the organization and its customers, as one might anticipate from reading the academic literature (Garbarino and Johnson, 1999). In these The current issue and full text archive of this journal is available at www.emeraldinsight.com/0955-534X.htm EBR 18,5 364 European Business Review Vol. 18 No. 5, 2006 pp. 364-381 q Emerald Group Publishing Limited 0955-534X DOI 10.1108/09555340610686958