Customer-focused performance and its key resource-based determinants in turbulent environments : evidence from China

Abstract

This dissertation investigates the concept of customer-focused performance and its key determinants in the perspective of resource-based theory. It aims at integrating service marketing literature with that of strategic management by understanding how firms build and leverage their distinctive competences, their capabilities of organizational learning and their strategic flexibility in order to achieve superior customer-focused performance. The first objective of this study is to conceptualize customer-focused performance, its connotations and key dimensions, and the interactive relationships among these key dimensions. The second objective is to identify the key determinants of customer-focused performance and their interactive relationships, and analyze the contribution of these distinctive determinants to the key dimensions of customer-focused performance. This is done by taking a disaggregated approach in linking service marketing studies with strategic management research. Through a comprehensive literature review, field interviews and a customer survey, the key dimensions of customer-focused performance are identified; these are customer perceived service quality, customer perceived value and customer satisfaction. The interactive relationships of these dimensions and their impacts on other dimensions of business performance, such as financial and operational, are discussed. Furthermore, the key determinants of customer-focused performance are analyzed in terms of a resource-based view; these factors are further classified as organizational learning, core competences constituted by technological competences, marketing competences and integrative competences, and strategic flexibility. Much attention is paid to the interactive relationships among these key resource-based determinants and to their decomposed influences on the key dimensions of customer-focused performance. The behavioural results (behavioural intentions of customers) of customer-focused performance are also examined and tested. In addition, increasing technological and market changes have led to environmental turbulence; this, with its moderating effects, is discussed and examined conceptually and empirically in this study. For example, the moderating role of technological turbulence and market turbulence in the relationships of customer-focused performance and strategic flexibility and the three key constituents of core competences are examined and tested by developing structural equation models with PLS-Graph software. Based on data collected from businesses in three major cities, Beijing, Tianjin and Shenzhen (the firm survey) and their customers (the customer survey), several structural equation models are developed, the empirical results of which strongly support most of the propositions in this study. In addition, the results support that key resource-based determinants such as organizational learning, technological competences, marketing competences, integrative competences and strategic flexibility have significant impacts on different dimensions of customer-focused performance, directly or indirectly. Obtained through a disaggregated approach, the results of the structural equation models developed from the customer survey data indicate that, among the five service quality-related factors, four factors have significant but differentiated impacts on customer perceived service quality, with reliability an exception. Furthermore, it is also found that almost all the five service-related factors have significant but differentiated effects on each dimension of customer perceived value, with the impact of reliability on perceived sacrifice as the only exception. In comparison, it is found that only customer satisfaction and social value have significantly direct influences on behavioural intentions of customers. On the other hand, the structural equation models developed from the senior manager survey data show that not all dimensions of organizational learning have impacts on the constituents of core competences that are found to significantly affect strategic flexibility and customer-focused performance (customer perceived service quality and customer perceived value). Furthermore, consistent with contingent views and related literature, environmental turbulence is shown to moderate the impacts of strategic flexibility and of key constituents of core competences on customer-focused performance. However, no statistical evidence is found to support the moderating effects of market turbulence on the relationship between integrative competences and customer perceived service quality and customer perceived value. No moderating effects of technological turbulence are found on the relationship between marketing competences and customer perceived service quality and customer perceived value. More interesting is that the results of the study fail to support the moderating effect of technological turbulence on the relationship between technological competences and customer-perceived value. In addition, perception gaps are found to exist between the performance perceptions of senior managers and their customers. This dissertation is organized as follows: The first chapter presents the objectives and significance of this research and provides a brief explanation of the terms discussed in the study. The second chapter introduces the concept of customer-focused performance, discusses its relationship with other dimensions of firm performance, and gives an extensive and comprehensive literature review of the determinants of firm performance. The third chapter consists of the conceptual framework of this study and an intensive literature review of customer-focused performance and the key resource-based determinants such as organizational learning, core competences and strategic flexibility. The fourth chapter reports the methodology of this research; that is, sample selection, data collection, measurement development, data analysis method and information about response rates and respondent profiles. In chapter five, the construct validation is conducted, structural equation models are built and propositions are tested. The sixth chapter contains the discussions and conclusions along with the limitations of the research. its implications, and directions for future research.