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Linking organizational service orientation to retailer profitability: Insights from the service-profit chain

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  • Briggs, Elten
  • Deretti, Sandro
  • Kato, Heitor Takashi

Abstract

This study examines how service orientation influences profitability in retail trade contexts. The authors develop a conceptual model based on the service-profit chain (SPC) framework suggesting that employee satisfaction and customer relationship performance (i.e., customer satisfaction, customer loyalty, and store image building) function as intermediate steps linking service orientation to retailer profitability. The model is tested with a matched sample of retail managers and employees from Brazil. Results demonstrate that service orientation directly influences employee satisfaction and customer relationship performance. Consistent with the traditional SPC framework, the analyses did not support a direct relationship between employee satisfaction and customer relationship performance when controlling for the effects of service orientation. Finally, customer relationship performance fully mediated the influence of service orientation on retailer profitability. Collectively, study findings support the notion that service orientation is reflective of both internal and external service quality. Managerial recommendations for implementing a service orientation are provided.

Suggested Citation

  • Briggs, Elten & Deretti, Sandro & Kato, Heitor Takashi, 2020. "Linking organizational service orientation to retailer profitability: Insights from the service-profit chain," Journal of Business Research, Elsevier, vol. 107(C), pages 271-278.
    • Handle: RePEc:eee:jbrese:v:107:y:2020:i:c:p:271-278
    DOI: 10.1016/j.jbusres.2018.08.038
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    References listed on IDEAS

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    1. Yong Yang & Fan Yang & Jingzhu Cao & Bo Feng, 2020. "The Multilevel Mechanism of Multifoci Service Orientation on Emotional Labor: Based on the Chinese Hospitality Industry," IJERPH, MDPI, vol. 17(12), pages 1-21, June.
    2. Agus Usman & Yudi Azis & Budi Harsanto & Anton Mulyono Azis, 2023. "The Impact of Service Orientation and Airport Service Quality on Passenger Satisfaction and Image: Evidence from Indonesia," Logistics, MDPI, vol. 7(4), pages 1-18, December.
    3. Adnan A. S. Alali, 2023. "Stimuli of Organization Citizenship Behavior and Performance: The Moderating Role of Organizational Strategy Awareness," International Journal of Business and Management, Canadian Center of Science and Education, vol. 18(1), pages 1-26, February.
    4. Murrar, Abdullah & Paz, Veronica & Yerger, David & Batra, Madan, 2024. "Enhancing financial efficiency and receivable collection in the water sector: Insights from structural equation modeling," Utilities Policy, Elsevier, vol. 87(C).
    5. Ashill, Nick & Abuelsamen, Amjad & Gibbs, Tanya & Semaan, Rania W., 2022. "Understanding organization-customer links in a service setting in Russia," Journal of Retailing and Consumer Services, Elsevier, vol. 66(C).
    6. Makarius, Erin E. & Mukherjee, Debmalya & Fox, Joseph D. & Fox, Alexa K., 2020. "Rising with the machines: A sociotechnical framework for bringing artificial intelligence into the organization," Journal of Business Research, Elsevier, vol. 120(C), pages 262-273.
    7. Lambert, Abbie & Jones, Robert Paul & Clinton, Suzanne, 2021. "Employee engagement and the service profit chain in a quick-service restaurant organization," Journal of Business Research, Elsevier, vol. 135(C), pages 214-225.

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