Internal marketing as a strategic tool for social sustainability and competitiveness in European SMEs

Purpose This paper aims to investigate the extent to which the effective implementation of Internal Marketing (IM) within Small and Medium-sized Enterprises (SMEs) fosters social sustainability through its focus on the internal marketing. Design/methodology/approach The paper discusses the findings of an in-depth exploratory case study conducted within one of the largest eyecare service clinics, due to its high-contact service environment by collecting and analysing multiple data sources to ensure triangulation. Findings The findings demonstrate a strong relationship between the effective implementation of IM and social sustainability. IM acts as a catalyst for embedding social sustainability, customer orientation and service quality goals within the organisation by aligning personal and organisational goals as a mechanism to enhance organisational competitiveness. Research limitations/implications This study is based on a single service-based SME in Cyprus and therefore the findings should be interpreted within their specific organisational and national context. The use of focus groups may have been influenced by group dynamics and social desirability effects, while the ESG data relied on internally reported indicators that may limit comparability. Future research should examine multiple SMEs across sectors and countries to explore the transferability of the findings. Further studies could also investigate how Internal Marketing supports the environmental and governance dimensions of ESG and examine the factors that contribute to the gap between formal sustainability initiatives and employees’ lived experiences. Practical implications This study highlights that achieving social sustainability in SMEs requires more than the adoption of ESG policies or the reporting of positive social indicators. The findings suggest that Internal Marketing can serve as a practical mechanism for translating sustainability objectives into employees’ everyday experiences through transparent communication, equitable development opportunities, recognition and meaningful participation in decision-making. Importantly, the study reveals a potential gap between formal sustainability initiatives and employees’ perceptions of fairness and inclusion, indicating that positive organisational indicators alone may not guarantee positive employee outcomes. Addressing this gap can contribute to improved employee well-being, workplace equity, organisational resilience and service quality. Social implications This study highlights that social sustainability is not achieved solely through the adoption of ESG policies or the reporting of positive organisational indicators. The findings reveal a potential gap between formal sustainability commitments and employees’ lived experiences, particularly when access to development opportunities, communication and participation is perceived as unequal. These results suggest that employee perceptions of fairness, inclusion and transparency are critical to the success of social sustainability initiatives. By demonstrating how Internal Marketing can help bridge the gap between symbolic and lived sustainability, the study offers insights for organisations seeking to improve employee well-being, workplace equity and the quality of working life, thereby contributing to more socially responsible and sustainable business practices. Originality/value This study contributes to the limited empirical literature linking IM and social sustainability within high-contact service-based SMEs in the European Union by shedding light on how IM functions as an internal management mechanism to achieve social sustainability goals.