Organizational Dynamics (2014) 43, 303311

Available online at www.sciencedirect.com

ScienceDirect
journal homepage: www.elsevier.com/locate/orgdyn

Finding strategic human resource advantage

from building an effective internship
capability
Carl P. Maertz Jr.a,*, Philipp A. Stoeberl a, Peter Magnusson b
a

Department of Management, John Cook School of Business, Saint Louis University, 3674 Lindell Blvd.,
St. Louis, MO 63108, United States
b
Department of Marketing, Florida International University, 11200 S.W. 8th St, RB 307B, Miami, FL 33199,
United States

The recent low-growth economic environment has made

management decisions about the appropriate human
resource levels extremely challenging. Complicating these
decisions further, organizations are often reluctant to budget
for expansion of full-time employees (FTEs) when employment costs are rising due to increased employment regulation. All this uncertainty can understandably lead to a certain
paralysis when it comes to making new investments in human
resources.
Yet, firm needs, risks, and opportunities are still continuously evolving. Managers wishing to gain competitive advantage through human resources (HR) cannot afford to simply
take a wait and see approach. Success for many firms in
this volatile environment, then, requires flexibility in human
resource capacity rather than paralysis, but flexibility that
also has an eye to future strategic needs for quantity, quality,
and type of human resources.
The need for human resource flexibility was articulated
by Todd Ostrowski, owner of Midwest Imports, a specialty
food importer headquartered near Chicago. He asked one
author, somewhat sarcastically we suspect, How do I get
skilled, motivated, loyal people that I can also get rid of
easily if they dont work out . . . or if my orders drop? The

* Corresponding author. Tel.: +1 314 977 3604.

E-mail addresses: maertzcp@slu.edu (C.P. Maertz Jr.),
stoeberl@slu.edu (P.A. Stoeberl), pmagnuss@fiu.edu (P. Magnusson).
http://dx.doi.org/10.1016/j.orgdyn.2014.09.007
0090-2616/# 2014 Elsevier Inc. All rights reserved.

only helpful response to this improbable request that we

could muster was, Utilize internships to their fullest potential. This paper offers managers a general roadmap of how
to do this.

THE NATURE AND VALUE OF INTERNSHIPS

The nature of internship experiences varies tremendously
across organizations and industries. Even their value
for the intern and for society at large has been recently
debated. For example, Perlins popular book from
2012 characterizes internships as often exploitive and
of questionable learning or career value to interns, for
example, Still, theres no pretense that Disney interns
will ever be able to work for the company, or even in
the hospitality industry more generally, given the gulf
between menial theme-park work and well-paid jobs in
management.
In sharp contrast, a 2013 article from HR Magazine quotes
Edwin W. Koc, director of strategic and foundation research
at the National Association of Colleges and Employers
(NACE): These days the internship is essentially seen as a
probationary period in which the student is evaluated as a
potential full time hire and is treated that way. In many
fields, like MIS (management information systems) and
accounting for example, internship experience has been
found to be a key predictor of getting a job offer after
graduation.

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What is an internship exactly?

Despite this wide variety in the nature and valuation of
internships, a definition with some boundaries is still necessary to differentiate internships from other part-time W2
employees, 1099 contractors, or probationary hires.
Here we define internships as part-time (or full-time with
a pre-limited duration) work relationships with learning
focus. Under this definition, it is unclear whether the Disney
workers described above would be considered interns.
Moreover, within this paper, we take a strategic HR perspective, focusing on the most strategically relevant forms
of internships within this broad definition, namely, those
including meaningful work and some potential for full-time
employment.

Taking a strategic HR approach

In an interview on Bloomberg news, Susan Lyne, chairman of
Gilt Groupe, an e-commerce leader, suggested that their
key competitive challenge for HR managers was talent
acquisition, for what we will be, rather than what we
are now. In her view, despite uncertainties, successful
companies need to assess and prepare for future strategic
human resource needs. Most HR managers can see the
potential value of a low-cost intern, but the strategic value
of internships for human resources means considering
the big picture of how they may contribute to competitive
advantage.
Yet most prior research on internships has primarily taken
an interns perspective, a university perspective, and occasionally, an internship supervisors perspective. Here, we
shift the focus toward a strategic HR perspective and contend
that building an internship capability can simultaneously help
to meet goals of low cost, flexibility, and malleability of labor
to meet both current and future needs. In these ways, an
effective internship capability can contribute to competitive
advantage. After presenting this argument in more detail, we
offer advice for building and managing an effective internship capability.

INTERNSHIPS AND POTENTIAL STRATEGIC HR

ADVANTAGE
Even managers who support and utilize internships may still
wonder if interns can really be a source of competitive
advantage. Work on strategic agility identifies resource fluidity, defined as the internal capability to reconfigure business
systems and redeploy resources rapidly, as a source of competitive advantage. Here we posit that human resource
fluidity can produce competitive advantage.
For example, Eric Schmidt, chairman at Google, was
interviewed by Marc Benioff of Salesforce.com about success
in the turbulent tech industry. Schmidt credited being able
to get the best talent in their data centers (i.e., at lower
organization levels) as a key element to implementing their
dual strategy of technical advancement and monetization.
Schmidt went on to state that, as a result of having superior
talent, Google was able to move more quickly toward this
new competitive model than their less agile competitor,
Microsoft.

C.P. Maertz Jr. et al.

How can internships increase human resource

fluidity?
We next argue that internships potentially contribute to
increasing human resource fluidity. There are actually five
mechanisms by which internships may increase a firms capability to reconfigure and redeploy human resources rapidly
and efficiently:
1. Low cost laborA well-established global trend is the use
of contractors, which provide considerable benefits in
flexibility and cost efficiencies over FTEs. While relatively low-cost labor can generally be obtained through
contractors compared with FTEs, interns are often paid
even less than many contract workers. Obviously, lowcost labor sources add to a managers ability to grow
workforce capacity, even in times of strained personnel
budgets. This cost advantage can extend beyond current
work. Interns can implement value-added back-burner
projects that would not otherwise be done by contractors, except for highly paid consultants. This promotes
progress toward future goals, while allowing more central FTEs to focus on current priorities. Finally, sourcing
interns can often be accomplished by relying on relatively
eager educational institutions, rather than using additional resources of the firm. Interns can often be
attracted readily through their schools internship offices
or faculty contacts with no out-of-pocket costs.
2. Flexibility in labor capacityBesides the low compensation costs of interns, the number of interns utilized can be
raised and lowered quickly and at relatively low cost
compared with more regulated FTEs. Even regular nonintern contractors are more likely to have written contracts that can restrict changing their numbers quickly.
Dropping interns has few such costs, besides some possible lost goodwill and relationship quality with certain
educational institutions; whereas, dropping sources of
contractors (e.g., temp agencies) may be contractually
forbidden or costly. Thus, changing the number of interns
should be a quicker and cheaper process on average than
changing the number of FTEs.
3. Flexibility in type of labor capacityIf a manager can
conceive of a type of work, there is likely some educational institution with a relevant training program from
which to draw interns, not to mention professional or
industry-related training sources. All these various institutions and their students/members are often actively
seeking internships in a variety of organizations and
industries.
We acknowledge that interns would not make sense for all
types of work. Strategic planning and proprietary workings of
the firm would not typically be shared with interns. However,
there are some notable exceptions. For example, Snapple/
Dr. Pepper has experimented with letting MBA interns from
the University of Texas take over brand management duties
for the product Yoo-Hoo.
The depth and breadth of the talent pool available for
internships is larger in todays weak labor market than it used
to be. Although students or recent graduates are traditionally
associated with internships, a bleak employment picture has
sent many laid-off or underemployed workers looking for

Finding strategic human resource advantage from building an effective internship capability
internships as a path back to employment. This relatively
more experienced intern labor market expands the possible
types of projects that interns can successfully perform,
including high-level work functions. Further, when a company
engages interns in meaningful work, their faculty coaches/
mentors are often engaged through guiding these efforts.
This must also be considered as a potential source of highlevel consulting help in conjunction with some internships.
4. Flexibility in where labor capacity is sourced or
deployedIn terms of geographical location, there are
schools in every state in the U.S. and around the world
with programs preparing people for a myriad of internships. Firms can start a meaningful internship program
almost anywhere within 100 miles of a major metropolitan area or a sizable university. This flexibility also
extends to international usage of interns. For example,
TVS Motor, a Deming Prize winner and one of the largest
two-wheel vehicle manufacturers in India, sponsors the
International India Internship Program.
In comparison with FTEs and domestic contractors, there
is often more flexibility in deploying student interns internationally because they are able to travel on more abundant
student visas. Further, current interns can be quickly moved
from one area of the company to another with less disruption
cost than would be incurred in quickly reassigning most FTEs.
Finally, interns can be usefully deployed in organizations
of all sizes, not simply large corporations. Mark Babbitt, who
is a writer for Intern Advocate, points out several types of
work for which small businesses can garner meaningful help
from student interns, including administrative and account
management tasks, traditional marketing functions, and
social media marketing. This benefit from interns could even
be more important for smaller organizations without large
staffing or compensation budgets.
5. Best single targeted talent acquisition methodIf seeking talent through Facebook, LinkedIn, or job search sites
(e.g., Monster, Hot Jobs, The Ladders) for applicants is
the modern shotgun approach to talent acquisition,
the internship is still the smart bomb. Both approaches
are typically warranted, but targeted talent acquisition
that addresses specific and changing needs for human
competencies is more important for most firms achieving
a competitive HR advantage. For example, the CPA Journal reports, Summer internships can be an excellent way
to develop a competitive recruiting edge over other
firms.
For such targeted recruiting, internships also have some
major advantages over other alternatives such as headhunters. The latter typically provide service more narrowly
for professional and executive jobs. Yet compensation and
hiring costs for interns are normally a fraction of those for
FTEs delivered by headhunter agencies.
More important, managers get a close, focused look at the
intern candidate performing actual work before making any
commitment, which headhunters can never provide. Also,
internships are essentially extended work sample tests,
which are historically among the most valid predictors of
job performance. An internship gives managers the first

305

opportunity to hire potentially top talent at the earliest

possible moment and based on valid evidence, a source of
advantage over labor market competitors.
Additionally, once hired to a full-time position, former
interns do not need the same amount of socialization, training, and adjustment time as most new hires, and are thereby
more likely to fit within the organization in terms of values
and culture than most fresh hires. An employer can better
place an intern hire in a position that will best suit the
companys objectives and get contributions from that candidate more quickly. The intern can also bring new ideas or
perspectives to the work directly from their academic studies, which more experienced hires may not.
Finally, internship experiences can be instrumental in
many students career success by giving them their big
break in the field. For this reason, hiring of interns (vs.
candidates working for other firms) can act to increase
feelings of loyalty and obligation. Although research has
yet to confirm whether this loyalty bump actually contributes to lower turnover among intern hires long-term,
these recruits should certainly find it easier to identify with
and become emotionally attached to the organization, key
historical drivers of retention.
Even interns who are not hired as FTEs may still become
ambassadors and positive PR agents for the organization,
especially if they had a satisfying internship or made friends
at the organization. These former interns may even recruit
other interns to the firm through their social networks.
In sum, internships can increase human resource fluidity in
a number of ways that can produce competitive advantage
for the firm that can harness it. Further support for their
importance is indicated by attention to internships in business publications. For example, Forbes and Business Week
compile rankings of the Best Internship Programs.
However, there are also no guarantees that a firm will gain
strategic HR advantage simply by employing interns. Some
fixed costs exist and things can still go wrong in terms of poor
return on manager time or dissatisfaction. Managers must
first minimize the common pitfalls of individual internships,
and then maximize their potential HR strategic advantage.
We next offer advice on how managers can accomplish both
of these goals.

BUILDING AN EFFECTIVE INTERNSHIP

CAPABILITY
In this section, we first recognize that without multiple,
successful individual internships no successful organizational-level internship capability is possible. To aid managers, we synthesize the best-supported success factors
from the research literature and practicing experts. We then
define an internship capability and identify its main structural elements. Finally, we outline a process for managing an
effective internship capability.

Individual internship success factors

Although internships vary greatly, as we noted earlier, there
are many scattered sources that suggest success factors to
help avoid problems with and maximize the value of internships. We synthesized these from a review of the internship

306
literature and an interview with Richard Bottner, founder and
president of the consultancy, Intern Bridge, who has advised
hundreds of internship managers at firms of all sizes. These
sources all seem to agree on three success factors, and a
strong suggestion:
1. Engaged supervisor/mentorAn actively engaged and
competent supervisor/mentor is clearly a major driver
of successful internships. Organizations should strive to
assign interns a specific supervisor/mentor rather than
letting multiple managers simply assign work arbitrarily.
In the latter case, there is a greater possibility of a
rogue manager emerging, possibly increasing harassment and other legal risks. The most important criterion
for selecting and assigning intern supervisors/mentors is
their having some minimum amount of time to spend with
the intern (e.g., one-hour meeting each week). Besides
the ability and willingness to spend sufficient time and
effort, supervisors should provide goals, ongoing feedback, respectful treatment, and include the interns
in meetings or other developmental activities when
possible.
2. Quality On-boarding experienceManagers and other
staff should provide an on-boarding experience for
interns. Due to the relative inexperience of most interns
in the workforce, this on-boarding process should be at
least as carefully constructed as that provided to FTEs.
On-boarding means allowing that the first day of an
internship, at least, should be free of immediate
task expectations. This should involve a facility tour,
introductions to staff, and familiarization with common
practices and policies (e.g., lunch customs, off-time
activities). To promote smooth on-boarding, the internship must also have clear goals and expectations, preferably with some input from the intern. Harmonizing
expectations will require some planning by management,
and perhaps even discussion about whether post-internship employment is a possibility. If it is, then communicating this during on-boarding provides more potential
leverage to motivate high intern work performance.
3. Meaningful workFrom the firms perspective, managers
would normally want to maximize the practical value-add
of intern work. Internship task design characteristics that
maximize value as well as intern acceptance include:
challenging, non-routine tasks; project-related work
where the intern can do a whole set of tasks from start
to finish; work requiring broad exposure to personnel
across functions/areas of the business; or work providing
a truly realistic preview of the particular organization
and/or career. Other widely endorsed internship design
characteristics include requiring interns to formally present work products and lessons to management.
In our interview, Richard Bottner stressed that the failure
of an internship is not cost free in an age of viral social
networks on campus. One hundred potential interns may
quickly hear about the candidates negative experiences
on Twitter, possibly poisoning intern sources for the firm
going forward. Therefore, intern program managers should
abide by these strongly supported success factors and should
probably refrain from growing their internship capability
when these elements cannot be provided.

C.P. Maertz Jr. et al.

A strong suggestion: Avoid unpaid internships

To these three basic success factors Bottner added another
strong admonition, All interns should be paid . . . We would
add that to comply with the Fair Labor Standards Act (FLSA)
regarding unpaid interns, a firm must meet six limiting
criteria: (a) the intern cannot displace a regular employee,
(b) the intern is not guaranteed a job at the end of the
internship, (c) all parties to the internship know that
the intern is not entitled to wages, (d) the intern must
receive training from the company, (e) the training must
be similar to that offered by a vocational school, and (f) the
training must primarily benefit the intern.
In most cases, these restrictions make the small savings of
intern pay not worth the compliance risk and the limitations
imposed on intern utilization. With recent lawsuits against
Harpers Bazaar and Fox Searchlight Productions by unpaid
interns, a USA TODAY article from 2012 reports that unpaid
internships are under further legal threat lately. Nonetheless, in the same article Michael Aitken of the Society for
Human Resource Management warns that, if no pay is possible, precluding all unpaid internships reflexively is a lost
opportunity for students. In such cases where the choice is
truly between no interns or unpaid interns, we would recommend that school course credit be part of the internship to
better ensure that learning goals are formally set and monitored outside the firm, thereby facilitating FLSA compliance.

From internships to a strategic internship

capability
Beyond these basics of internship program management, our
contention here is that to gain the full benefits of human
resource fluidity from internships, organizations must conceive and manage them as a strategic capability. The first
definitive characteristic of an internship capability is that its
structural elements are at a higher level of aggregation and
must be collectively conceptualized as a portfolio of programs and resources.
The second definitive characteristic is that managers
regularly and carefully plan and set longer-term goals for
internships, and thereafter assess, analyze, and revise these
in a systematic way to support organization-wide objectives,
rather than on an ad-hoc basis.
Further, the development of an internship capability
requires managing several structural elements: competencies, relationships, programs, and other resources. Table 1
contains definitions, dimensions, example assessments, and
management activities implied by these six main structural
elements.
1. Manager competencies and capacityIn addition to the
total management work hours devoted to internships,
there are key manager competencies required for success. Supervisory competency includes monitoring intern
work and giving performance feedback and coaching.
Mentoring competency includes sponsorship, providing
exposure and visibility for the intern to others in the
organization, coaching, protection, challenging assignments, acceptance, counseling, and friendship. Relationship management competency includes building and

Finding strategic human resource advantage from building an effective internship capability
Table 1

307

Structural elements of an internship capability.

Structural element

Definition/dimensions

Example assessments

Example management
activity

Manager competencies
and capacity

 Supervisory/coaching
competency
 Psycho-social mentoring
competency Career
development mentoring
competency
 Relationship management
competency
 Strategic internship
competency
 Total current intern
competencies
 New competencies or
opportunities that can be
developed w/interns or by
hiring interns as FTEs

1. Total supervisor hours

available/yr
2. Supervisor performance
evaluations on intern
development
3. Intern satisfaction with
supervisor
4. Assessment centers for
intern managers

-Select managers with these

competencies
-Develop managers to grow
competencies as needed

1. Number of interns per work

type
2. Intern performance
appraisals
3. Intern development
potential written tests
4. Simulations/puzzles
1. Amount and quality of
information shared
2. Rate of sharing
3. Quality of data & feedback
from joint participant
meetings
1. Number of on-going source
relationships
2. Number of contacts with
each source
3. Avg. time to fill
internships/success
4. Intern conversion %
5. Intern source survey
1. Usefulness of reports
generated by technology
2. Integration with other org.
data systems
3. Intern survey of adequacy
1. Participant surveys
2. Program and capability
goal-progress assessments

-Match future strategic needs

for competencies with intern
development goals in the
relevant functional areas or
programs

Intern competencies
and capacity

Functionality of internal
relationships among
participants

Current quality of
relationships among
participants: interns,
supervisors/mentors,
program managers, and HR

Functionality of external
relationships with
intern sources

Current number and

effectiveness/yield of
relationships between the
firm and intern sources

Tangibleresources

 Physical space
 Technology hardware
 HRIS and/or project
management software

Programs

Units into which internship

assignments are organized,
usually by project or type of
work

maintaining relationships with intern sources like educational institutions and faculty. Strategic internship competency includes early talent recognition and acquisition.
According to George Anders recent book, this involves
knowing what shortcomings dont matter and which flaws
can be overlooked among young prospects.
Manager competencies also include skill in: the optimal deployment of interns, (i.e., maximizing intern challenge and organizational value, while not sacrificing work
quality nor throwing the intern under the bus), detecting opportunities (e.g., a new academic program starts
nearby), recognizing threats (e.g., a new labor market
competitor for interns), and balancing current use of
existing competencies with development of new competencies (i.e., exploitation vs. exploration) for both mentors and interns.

-Incentivize, facilitate, and

reward cooperation and
sharing of information

-Encourage partner
educational institutions
sources to actively seek to
meet intern needs
-Seek new internship sources

-Update resources
-Evaluate how to best shift
resources across programs

-Search for and evaluate

synergies between programs

2. Intern competencies and capacityFirst, this involves

the current total of intern competencies and capacity
(e.g., how many interns with paralegal competencies do
we have). Second, this involves the future potential to
develop competencies among interns (e.g., possibility of
building a new lab run by research interns) later after
they are hired as FTEs. This element is the primary human
capital at the heart of an internship capability.
3. Functionality of internal relationshipsThis element
concerns the quality of relationships among the organizational participants in internships: mentors, intern program
managers, human resources staff, and the interns
themselves. This can be conceived of as the quality of
relationships, the number of relevant communication connections, as well as the level of potential support available
through each of these relationships. In particular, the

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C.P. Maertz Jr. et al.

extent to which participants share needed data and encourage each other is a vital part of an internship capability. This can certainly change and vary across mentors and
across internship programs, and therefore should be
assessed broadly and more regularly than the other structural elements.
4. Functionality of external relationshipsThis is the quality of relationships between the firm and typical sources
of interns, in particular, educational institutions and their
internship/placement offices, laboratories, academic
centers, and faculty members. Forming and maintaining
these external relationships between the firm and these
outside entities are vital management activities for having a lower-cost and abundant in-flow of intern candidates. More recently, these sources extend to regional
and industry-based intern search sites. Managers can now
ramp up their intern capacity quickly without necessarily
having to have long-term relationships in place with many
different schools. Ideally, these relationships would be so
close and well established with some set of institutions
that the outside institutions themselves would actively
promote the firms internships to talented students.
Thus, the number and effectiveness of all these relationships is another important indicator of the human capital
value of an internship capability.
5. Tangible resourcesBesides the minimum physical space
requirements for interns, the main resources within an
internship capability are the business technology hardware and software used in the firm. For example, HRIS
software that is equipped for easily handling an expanding internship capability is a facilitator no matter what
types of interns are employed. This allows housing crucial
intern data and program data, while easily analyzing and
reporting key metrics in reports or dashboards. The online social networks of managers and the presence of the
organization itself plays an increasingly important role in
the firms internship capability. Project management

software may be needed as well to manage multiple

intern projects as a true portfolio. Depending on the
type of work assigned, providing resources may also
require additional investments in hardware and software.
The adequacy and value of these assets must be considered in any capability assessment.
6. Internship programsInternship assignments are usually
organized into programs by type of work (e.g., accounting, marketing), area of the organization (e.g., production floor, call center), or by project (e.g., research,
product release). These programs rely on each of the
previous structural elements. They are probably the most
recognizable higher-level structural elements in an internship capability to manage. As in project portfolio
management, searching for synergies and efficiencies
among these various programs, as well as among the
programs and the other five structural elements in furtherance of the firms strategic HR goals, is a complex but
critical aspect of managing an internship capability.

The internship capability management process

Beyond this conception of higher-level structural elements,
managers need a process framework for maximizing the
effectiveness of the internship capability and improving it
over time. Fig. 1 depicts such a management process in
5 phases.
First, there are several metrics proposed to assess the
overall internship capability. Diana Johnson, diversity staffing manager at Texas Instruments, mentions intern conversion (to full-time employees) as one of their key recruiting
metrics to help determine their return on investment (ROI).
Garmin, a GPS communication company with a Forbes toprated program, converts as many as 90 percent of their
interns into FTEs.
Yet, Richard Bottner criticizes lists like the Forbes
and Business Week rankings for their over-reliance on this

Assessments

Structural Element Assessment

o Strengths
o Weaknesses
Annual and 5-Year Goal Progress
Structural Element and Program Goal
Progress
Operational Problems for Analysis
Success Factor Criteria

Goal Setting

Analysis

Intern Capability SWOT Analysis

Structural Element Needs Analysis
Program Needs Analysis
Operational Problem Analysis

Set Annual Goals:

o Capability-wide
o Structural
element/program
o Operational
Set or Revise 5-Year Plan
for the Capability

Implementation

Activities to Improve Level or

Alignment of Structural
Elements and Meet Goals
Activities to Improve Program
Effectiveness and Meet Goals
Activities to Improve
Operational Effectiveness and
Meet Annual Goals

Consider Organizational Strategic

Initiatives and Scan External Intern Market

Strategic Goal Implications

Labor demand forecast
Competency demand forecast
Opportunities and Threats
o Intern labor supply forecast
o Other external factors (e.g., availability of a
new type of intern, regulation)
o
o

Fig. 1

Overall process of internship capability management.

Finding strategic human resource advantage from building an effective internship capability
internship conversion metric in formulating their ratings.
Instead, a strategic internship capability evaluation should
be based upon the specific goals and objectives of the firm.
Many programs do not have the goal of hiring many interns as
FTEs, making it inappropriate to evaluate these programs or
capabilities on this criterion. Thus, the internship capability
should be assessed against firm goals and competitiveness
metrics rather than by any universal benchmark.
Individual structural elements discussed before should
each be assessed (see examples in Table 1). Such assessments
extend down to the program level because different programs often have distinct goals. Some ongoing assessment
should also occur at the operational/tactical level (i.e.,
ensuring that the three main success factors are present)
by mentor intern supervisors, department heads, other
employees, and the interns themselves. The main output
of this phase in the process is data-driven knowledge about
the overall strengths and weaknesses of the structural elements of the internship capability, as well as some information feedback about how the process of managing the overall
capability is currently proceeding.
Second, strategically managing the internship capability
requires managers to carefully consider the organizations
competitive priorities and planned strategic initiatives. This
leads to a primary output of forecasts for how many interns,
of what type, and with what competencies would be useful in
the future. In addition, HR managers must scan the environment to determine labor market and other externalities that
can affect the firms current ability and future potential to
acquire desired interns. The purpose is to determine threats
to internships (e.g., decreased supply) and opportunities
(e.g., new sources of interns emerging). This opportunity
and threat identification is another main output of this
phase.
Third, the outputs of the strategy and scanning phase and
the first assessment phase combine to become inputs to this
assessment phase. Specifically, a SWOT analysis should
be done annually to facilitate strategic goal setting for the
internship capability. The idea is finding ways to pursue
opportunities and leverage strengths (e.g., seeking additional uses for interns or exploring grant opportunities to
fund new internships), while minimizing the impact of
threats and addressing current weaknesses in the capability.
This ultimately involves deciding how each structural element should grow or be changed to best collectively aid
strategic goals. Further, managers should do formal needs
analyses to understand the state of the structural elements,
each program, and operational internship relationships.
These needs analyses should be the immediate precursor
to setting specific goals to pursue in replenishing/updating
these aspects in the coming year.
Fourth, driven directly by this analysis phase, managers
should create annual internship goals and a five-year plan/
revision. Generic categories of such goals are increasing labor
capacity, starting a new program, and increasing a new
type of competency through internships. These goals should
obviously be supportive, or at least consistent with businesslevel strategic goals. In order to formulate annual structural
element, program, and operational goals, functional managers should suggest supporting instrumental steps at the
lower levels, and these should be integrated with data from
the needs analyses performed in the previous phase.

309

Fifth, goals at these various levels must be pursued and

implemented on the ground. While this may encompass a
huge variety of management activities (see Table 1), there
are some general categories, including actions to improve or
better align structural elements with goals (e.g., acquiring
more resources or fast-tracking approvals for new supervisormentors); actions to improve or better align individual programs with goals (e.g., growing or shrinking a program,
adding a new metric for program evaluation); and actions
to meet operational goals (e.g., adding a fuller on-boarding
experience, verifying that all interns have an assigned supervisor/mentor).
Finally, as reflected by the feedback loops in Fig. 1,
managers must continue intern, mentor, program, and overall assessments in order to apply feedback mechanisms for
future system improvement. Management should generally
strive for continuous data-driven improvement in selecting,
on-boarding, mentoring, maintaining elements and programs, as well as improvement in the process of managing
the capability overall.

TWO MODERN EXAMPLES AND THE TAKEHOME MESSAGE

Taking into account the modern needs for an increasingly
global workforce and the pervasiveness of the Internet-based
economy, we conclude by presenting two examples of organizations that have developed internship capabilities not only
to solve immediate short-term needs for cheap labor, but also
to generate a talent pool to fill future FTE openings. Contrary
to some common stereotypes about interns doing menial
tasks or running errands, both examples involve high-level,
value-added work of the kind that could benefit most any
firm.

TVS Motor
TVS Motor, one of the largest manufacturers of two-wheelers
(i.e., motorcycles and scooters) in the world has developed a
cross-cultural internship capability in collaboration with the
Krannert Graduate School of Management at Purdue University. The program was started in 2006, and to date, over
100 Purdue students have participated in this internship
program. The program accomplishes two objectives for
TVS. First, the internship program allows TVS to allocate
short-term resources toward addressing current challenges
the company is facing. For example, past projects include
understanding trends in U.S. teen marketing for their
Scooty brand, developing a simulation to better forecast
volatility in distribution channels, and an analysis of spare
parts profitability. In addition, the internship program is used
as a development program for culturally sensitive FTEs who
are prepared for the global market place. As the company
and its subsidiaries have employment opportunities across
the globe, they are more able to connect to a pool of known,
proven candidates through the program.
TVS Motor works closely with Purdue University in the
development of its internship capability. The university coordinator conducts the first set of interviews of prospective
participants to assess their goals and interests, as well as the
experiences and competencies that they bring to the table.

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Then, cross-functional and cross-cultural problem-solving
teams are formed and long-distance conference calls are
held during the academic semester, supported by both
faculty and project mentors in India. The experience culminates with a short-term (three weeks) on-site project in India
during the month of May, in which participants conclude by
presenting recommendations to TVS executives on their
assigned problem.
The ongoing success of the project depends on a close
collaboration between university coordinators and TVS
internship managers, which is often the case for successful
internship programs. Student intern Austin Owens (MBA class
of 2012) notes that the interns were able to be successful
because TVS provided . . . more support and encouragement
than we could have possibly hoped for, as TVS mentors met
with teams on a daily basis for the three-week period. As the
internship program matures, it also allows mentors and staff
at both TVS and the university to enhance their internship
management competencies, resulting in a continuously
improving internship capability.
This extremely compact model for short-term, high-level
internships could be replicated within most business schools
and firms. In fact, the Katz School at the University of
Pittsburgh has teams doing such project-based MBA work
domestically, with 10 projects over six years at Westinghouse
Electric. An alumni or faculty connection with a top firm
manager, as in these examples, is often helpful, at least in
the beginning, to strengthen the bond between university
and firm. Most firms can likely arrange new partnerships like
these, with the many up-and-coming MBA programs around
the world looking for international industry partnerships for
their students.

Facebooks puzzle solvers

Our second example involves Facebook. Faced with an intensely competitive talent acquisition struggle with other hightech firms, such as Google and Microsoft, Facebook was
scrambling and often ending up on the losing side. The
old-fashioned hiring channels were just not paying off fast
enough. Something quicker and more nimble was needed.
Facebooks fortunes turned around when Chief Technology
Officer Adam DAngelo suggested that they publish gnarly
programming challenges and invite engineers anywhere to
solve them. These programming puzzles have helped propel
a culture where an estimated 20 percent of engineers have
come to the company through solving programming puzzles.
Facebook now sponsors hackathon events five times per
year at a remarkably low expense. At one, the prize was $500
and a chance to meet Mark Zuckerberg. Two brothers from
University of Illinois designed the winning smart phone app
named Airchalk, and were then both hired as summer
interns. This is an even more cautious and exacting trial
process than immediately hiring the producers of winning
puzzle solutions as FTEs. Facebook gets an even closer look at

C.P. Maertz Jr. et al.

two proven candidates throughout the internship, meanwhile
getting real problems solved at relatively low cost. This
suggests an intern development model for any organization
or type of work that can be framed as contests or other
discrete problem-solving tasks (e.g., simulations) with intrinsic interest value for candidates. Based on performance in
such tasks, interns can be selected, and there is work content
from which to judge potential future contributions, all before
any long-term commitment to the intern is required. This
allows the hiring organization to be especially sure about the
interns value and where he/she can best help the organization. It may even be possible that these could be virtual
internships where most tasks and communications are
accomplished at a distance with no on-site time or resources
required.
There are takeaway lessons from this example beyond just
innovative and efficient ways to recruit programmers. Many
of these puzzles entailed an immediate value-added benefit
for the company. We suggest that this concept of using workrelated problem-solving through internships epitomizes the
modern human resource fluidity concept. There may even be
new types of employment relationships beyond internships
that emerge through this concept, evident in the current
trend of on-line crowd sourcing.

CONCLUSION
Firms like TVS Motor and Facebook have been able to increase
human resource fluidity through use of their internship capability to enhance talent acquisition, talent development,
and flexibility. Yet, as a final question in our interview with
Richard Bottner, we asked if he knew of any organizations
that have taken full advantage of their internship capability
to promote HR advantage. Somewhat surprisingly, he replied,
No. Rather than a threat, we see this as an opportunity and
a call to action for firms seeking a true competitive advantage through HR.
In this vein, we have offered a framework for beginning to
conceptualize a strategic internship capability. We offered
advice about the structural elements and the big picture
steps of managing such a capability. Future practical research
should focus on how to best manage individual structural and
process aspects of an internship capability directly, and HR
managers should customize the framework presented here to
fit the strategic goals of their firms. Overall, we conclude
that people managers owe it to their companies and themselves to consider how they may initiate or expand their
internship capability in order to be more competitive through
HR. Toward this end, our framework and recommendations
should provide managers a way forward.

Finding strategic human resource advantage from building an effective internship capability

311

SELECTED BIBLIOGRAPHY
We have written more about the need to build successful
internships, combining the perspectives of the intern, the
university and the employer in C.P. Maertz, Jr., P.A. Stoeberl,
J. Marks, Building successful internships: lessons from the
research for interns, schools, and employers, Career Development International, 2014, 19(1), 123142.
For a discussion of the creation of effective internship
programs, we recommend M.D. Ames, How to design a
college student internship program, Production and Inventory Management, 1986, 27(spring), 113118; G. Anders,
The Rare Find: Spotting Exceptional Talent Before Everyone
Else (London, UK: Penguin Publishing, 2011); C.P. DAbate,
M.A. Youndt, and K.E. Wenzel, Making the most of an internship: an empirical study of internship satisfaction, Academy
of Management: Learning and Education, 2009, 8(fall),
527539; V.K. Narayanan, P.M. Olk, and C.V. Fukami, Determinants of internship effectiveness: an exploratory model,
Academy of Management: Learning and Educations, 2010, 9,
6168; and J.C. Phillips, D.M. Szymanski, J.J. Ozegovic, and
M. Briggs-Phillips, Preliminary examination and measurement of the internship research raining environment, Journal
of Counseling Psychology, 2004, 51, 240248.
In contrast, others have provided rich discussions on
internship program pitfalls, for example D. Meinert, Fresh
faces: a well-planned internship program can energize your

enterprise, HR Magazine, 2013 (November) 2328; and R.

Perlin, Intern Nation: How to Earn Nothing and Learn Little in
the Brave New Economy (Verso: London, 2012). Further, the
article by P. Davidson, Fewer unpaid internships in works,
USA TODAY, 8 March 2012, provides support for the recommendation to avoid unpaid internships.
For a better understanding of employee turnover and its
deleterious effect on the organization, the following articles
provide interesting insights and empirical evidence: C.P Maertz
and R.W. Griffeth, Eight motivational forces and voluntary
turnover: a theoretical synthesis with implications for
research, Journal of Management, 2004, 30, 667683, and
C.A. OReilly and J. Chatman Organizational commitment and
psychological attachment: the effects of compliance, identification, and internalization on prosocial behavior, Journal of
Applied Psychology, 1986, 71, 492499.
Finally, for a focused discussion on the current environments demand for firms to be strategically agile, and the role
of human resources in creating a flexible organization that can
respond to challenges in real time, we recommend reading H.
Bahrami and S. Evans, Super-flexibility for real-time adaptation: perspectives from Silicon Valley, California Management Review, 2011, 53(spring), 2139; and Y.L. Doz and M.
Kosonen, Fast Strategy: How Strategic Agility Will Help You
Stay Ahead of the Game (Wharton School Press, 2008).

Carl P. Maertz, Jr. is a professor of management in the John Cook School of Business at Saint Louis University. His
work has appeared in Academy of Management Journal, Journal of Applied Psychology, Psychological Bulletin, and
Journal of Management, among others. Email: maertzcp@slu.edu.

Philipp A. Stoeberl is the Mary Louise Murray Endowed Professor in Management in the John Cook School of
Business at Saint Louis University. His work has appeared in Journal of Business and Psychology, International
Journal of Human Resource Management, Journal of Management Studies, Journal of Business Ethics, and
Benchmarking: An International Journal among others. Email: stoeberl@slu.edu.

Peter Magnusson is an assistant professor of marketing at Florida International University. His research specializes
in the area of international marketing strategy. It has appeared in the Journal of the Academy of Marketing
Science, Journal of International Marketing, Organizational Behavior and Human Decision Processes, and
International Marketing Review among others. Email: pmagnuss@fiu.edu.