The benefits and implementation of performance transparency: The why and how of letting your customers ‘see through’ your business

While some organizations swear by the benefits of transparency and are eager to learn and implement transparency practices, many managers are still reluctant or even afraid to use them. Our research reveals that only a few innovative companies have taken steps to leverage a potentially useful form of transparency: the provision of accessible and objective information to customers (e.g., sharing unbiased benchmark data, publishing unfiltered customer comments, or providing candid product reviews that may praise but also criticize the company’s products). Our study also shows that many companies remain wary and view greater calls for transparency as a challenge to be managed rather than an opportunity to be traded upon. This is partly due to limited research into the performance benefits of giving customers access to objective information, and lack of practical guidelines on how to actually implement it. This article addresses these shortcomings. First, we investigate whether performance transparency leads to customer outcomes that can be profitable for an organization and, second, we analyze the characteristics of successful transparency initiatives in a wide range of industries. Our research shows that customers exhibit more trust and are willing to pay a premium to deal with transparent businesses. Also, it uncovers seven effective strategies to leverage transparency. This article provides convincing empirical evidence for the benefits of performance transparency and the ways in which management may implement it successfully.     

The effects of entrepreneurial orientation, market orientation, and marketing subunit influence on firm performance

The study investigates how an organization’s entrepreneurial orientation moderates the interplay between market orientation and marketing subunit influence on firm performance. The hypothesized model predicts that the positive interaction between market orientation and marketing subunit influence has a weaker effect on firm performance under conditions of high entrepreneurial orientation. The regression and supplementary analyses provide support for most predictions and, most importantly, for a negative three-way interaction effect: At higher levels of entrepreneurial orientation, the positive moderating effect of marketing subunit influence on the market orientation–business performance relationship is reduced. The authors discuss the managerial and theoretical implications of their findings and provide a number of directions for further research.

The Interactive Effect of Internal and External Factors on a Proactive Environmental Strategy and its Influence on a Firm's Performance

While the literature on the effective management of business and natural environment interfaces is rich and growing, there are still two questions regarding which the literature has yet to reach a definitive conclusion: (1) what is the interactive effect between internal and external drivers on a proactive environmental strategy (PES)? and (2) does a PES influence firm's performance? Drawing on the resource-based view for the internal drivers’ perspective and institutional and legitimacy theories for the external drivers’ perspective, this study suggests that the effect of entrepreneurial orientation on a PES is moderated by the intensity of government regulations and customers’ sensitivity to environmental issues. The authors also examine the relationship between the PES and a firm's performance in terms of sales and profit growth. Implications are discussed regarding the role of a PES in achieving a competitive advantage in the marketplace.     

The asymmetric moderating role of market orientation on the ambidexterity-firm performance relationship for prospectors and defenders

Drawing on the resource-based view of the firm and, in particular, the capabilities perspective of firm performance, the authors examine the relationship between ambidexterity and firm performance for two strategy typologies: prospectors and defenders. Ambidexterity, defined as the combination of two discrete capabilities (exploration and exploitation), should have a less negative effect on firm performance among prospectors that add exploitation to exploration than among defenders who add exploration to exploitation. Hence, this research predicts an asymmetric effect of ambidexterity on firm performance for prospectors and defenders. The authors further posit that a boundary-spanning culture, such as market orientation, can function as a metaculture by integrating the subunit cultures generated by exploration and exploitation. As a result, market orientation should mitigate the negative effect of ambidexterity on firm performance, albeit differently for prospectors and defenders, and thus point to an asymmetric moderating role of market orientation. The findings provide mixed results, which the authors discuss along with some theoretical and managerial implications.     

Unpacking the relationship between empowering leadership and service-oriented citizenship behaviors: a multilevel approach

Drawing on empowerment theory, this study examines the effect of empowering leadership on frontline employees’ service-oriented citizenship behaviors and the process by which this effect occurs. The authors conceptualize empowering leadership at two levels: individual level and group level. Using multi- and cross-level modeling based on multi-source data (frontline employees and their supervisors) from a national automobile dealership at two different time points, this study finds that group-level empowering leadership explains unique variance in service-oriented citizenship behaviors above and beyond what is explained by individual-level empowering leadership. Further, psychological empowerment and customer learning climate partially mediate the empowering leadership–service-oriented citizenship behaviors relationship at the individual and group levels, respectively. Finally, the results indicate that a climate for customer learning accentuates the positive effect of psychological empowerment on service-oriented citizenship behaviors. Theoretical and practical implications for improving frontline employee’s service-oriented citizenship behaviors are discussed along with directions for future research.     

When and how does sales team conflict affect sales team performance?

Drawing on information processing theory, this study integrates the conflict and learning literatures to examine an under-examined area in sales research: When do sales team task and relationship conflicts influence sales team performance, and what is the underlying process by which this occurs? Although there is burgeoning interest in sales research at the team level, very few empirical studies have shed light on sales team dynamics such as conflict and how they impact sales team performance. This study attempts to address this gap by developing a mediated moderation model and finds that (a) task and relationship conflicts have negative impacts on sales team performance, (b) team information exchange and information interpretation/implementation mediate the negative relationship between task and relationship conflicts and sales team performance, and (c) task and relationship conflicts stifle sales team performance when the team makes little use of a collaborative conflict handling style because this interactive combination (task/relationship conflict–low collaborative conflict handling style) hinders team information exchange and interpretation/implementation. Implications for conflict management in sales teams are discussed.     

Customer relationship dynamics: Service quality and customer loyalty in the context of varying levels of customer expertise and switching costs

As customer-organization relationships deepen, consumers increase their expertise in the firm’s product line and industry and develop increased switching costs. This study investigates the effects of customer investment expertise and perceived switching costs on the relationships between technical and functional service quality and customer loyalty. Technical service quality is hypothesized to be a more important determinant of customer loyalty than functional service quality as expertise increases. Both technical and functional service quality are hypothesized to have a reduced relationship with customer loyalty as perceived switching costs increase. Three-way interactions between the main effects of service quality, customer expertise, and perceived switching costs yield additional insight into the change in relative importance of technical and functional service quality in customers’ decision to be loyal. Six of eight hypotheses receive support. Implications are discussed for customer relationship management over the relationship life cycle. Simon J. Bell (s.bell@jims.cam.ac.uk; Ph.D., University of Melbourne) is a university lecturer in marketing at the Judge Institute of Management, the business school of the University of Cambridge. His research has appeared in theJournal of the Academy of Marketing Science, the Journal of Retailing, theJournal of Business Research, Industrial Marketing Management, andMarketing Theory, among others. His.areas of research interest include organizational learning, sales force management and internal marketing, services and relationship marketing, and corporate social responsibility. Seigyoung Auh (sauh@brocku.ca; Ph.D., University of Michigan) is an assistant professor of marketing at Brock University, Ontario, Canada. His research has been published in theJournal of Economic Psychology, theJournal of Business to Business Marketing, theJournal of Services Marketing, theJournal of Marketing Management, Industrial Marketing Management, and others. His research interests are in application of a resource-based view to marketing strategy, top management team diversity and marketing strategy, customer orientation (customer satisfaction) and loyalty, interface between marketing and entrepreneurship, and services and relationship marketing. Karen Smalley (B.Comm. Hons, University of Melbourne) is an honors graduate in marketing at the University of Melbourne.     

Top management team diversity and innovativeness: The moderating role of interfunctional coordination

Top management team (TMT) diversity has received considerable attention in the academic literature as well as in the corporate arena. Our paper develops a contingent model on how top management team diversity acts as a form of human capital and can have a positive effect on innovativeness when it is effectively leveraged with favorable social capital. Our theoretical underpinning rests on the argument that greater interfunctional coordination is a source of internal social capital, which mitigates the costs while at the same time highlights the benefits associated with TMT diversity. By testing our model with TMT executives, the results generally supported our hypothesis in that the effect of TMT diversity on innovativeness was positive as interfunctional coordination increased. Implications for marketing theory and practice are discussed.     

The role of climate: implications for service employee engagement and customer service performance

This research attempts to challenge the resource–engagement and engagement–performance linkage of the job demands–resources model by testing these links under the moderating role of two climates: performance-focused and service failure recovery. Two studies test a model on the boundary conditions of the linkages across four service industries. The results suggest that whether a resource (i.e., self-efficacy and job autonomy) positively or negatively affects engagement depends on whether (1) a climate is appraised as a challenge or hindrance demand and (2) a climate is deemed a complementary or compensatory resource. Using multi-respondent data from customer service employees and their supervisors in the health care industry, Study 1 conceptualizes climate as organizational climate and finds that performance-focused climate strengthens (weakens) the positive effect of self-efficacy (job autonomy) on engagement while service failure recovery climate weakens the positive impact of self-efficacy on engagement. Study 2 generalizes the findings from Study 1 and provides broad support by testing the model using psychological climate in the financial services, tourism and hospitality, and retailing industries. This study closes with a configuration approach to climate research by discussing when multiple climates can co-exist under different types of resources.     

Customer and Supplier Involvement in Design: The Moderating Role of Incremental and Radical Innovation Capability

More and more firms are leveraging design as a resource to gain the upper hand in today's competitive business market. To this end, this study draws on the resource‐based view (RBV) of the firm to examine the relationship between customer and supplier involvement in the design process and new product performance. The research also extends the RBV to a contingency lens by introducing product innovation capability (incremental and radical) as a moderator to draw the boundary conditions of the impact of customer/supplier involvement in design on new product performance. Using data collected from Canadian high‐tech companies, the findings provide strong support for the hypotheses in that customer involvement in design helps new product performance under high incremental innovation capability but harms new product performance under high radical innovation capability. In contrast, supplier involvement in design was beneficial to new product performance under both high incremental and radical innovation capability. The managerial implications for the role of design under different innovation capabilities are discussed.