IMPACT OF CUSTOMER ORIENTATION TO OPERATIONAL STAFF AND ORGANIZATION PERFORMANCE Muneeb Ghafar muneeb.ghafar@yahoo.

com NCBA&E, Lahore

Abstract: Purpose: The purpose of this study is to explore the impact of providing Customer Orientation to the operational staff and the organizational growth. If there is development of customer oriented approach in operation department through customer orientation training then the service provider organization will be in a position to increase their operational as well as financial performance. Need of study: There is a lack of understanding of the sales importance towards operational staff. The operational staff is not aware of how their activities are effecting on sales. There is a need that operational staff should understand what actions they take will influence the sales of the service provider organizations. For the purpose of enhancing understanding and importance of sales, it can be beneficial to provide Customer Orientation (CO) to operational staff. Design/ Methodology: To test the hypothesis we used a mixed method approach. First two hypotheses are tested on the basis of literature and we found an empirical evidence to support these hypotheses as shown in the studies. For third hypothesis a framework is designed which shows the relationship between Customer Orientation of operations staff and performance of service organization. Findings: This study will add in literature a new area of integration and cross training functions significance. If this idea will work there will be no need of putting more effort for sales and capturing markets and it will make the organization go in swift growth regime. Originality: Till now according to the prior knowledge this angle of study is unseen or uncovered. This is an intuition that it can significantly increase organization growth by better understanding and by providing a new idea of exploring this particular area.

Keywords:

Customer Orientation (CO), Operational Staff, Service Organization Growth, Cross training.

1.

Introduction

In current business era the organizations are focusing on sales department and operations department separately. Operational staff is giving process training while sales team is getting customer orientation or sales training. Both of these are dealt in different ways and are having separate objectives and importance. Moreover the sales are highly influenced by operation departments actions; they dont have any know how about the results of their actions on sales. There are many opportunities of capturing and retaining customers by cooperation of operational department. If there is development of customer oriented approach in operation department through customer orientation training then the service provider organization will be in a position to increase their operational as well as financial performance. The purpose of this study is to explore the impact of providing customer orientation to the operational staff and the organizational growth. This study will add in literature a new area of integration and cross training functions significance. If this idea will work there will be no need of putting more effort for sales and capturing markets and it will make the organization go in swift growth regime. There is a lack of understanding of the sales importance towards operational staff. The operational staff is not aware of how their activities are effecting on sales. There is a need that operational staff should understand what actions they take will affect on sales as well. The reason behind it is that they are highly influencing the sales of the service provider organizations. For the purpose of enhancing understanding of importance and influence of sales to operational staff, it can be beneficial to provide Customer Orientation (CO) to operational staff. This study will be done in a developing country where there is a very tough competition among service providers to enhance their market share. The focus of this research will be to control the switching customer, which is the one of the important problems facing by the service providers. In this new environment, customer-oriented behaviors, such as identifying customer needs and adapting the offer, have become key elements in building relationships (Steenkamp 2007). However, todays emphasis on establishing sustainable long-term business relationships between buyer firms and supplier firms has created an environment that also nurtures the development of strong personal relationships between salespeople and customers (Price and Arnould 1999). Therefore, in many interactions with their customers, salespeople also play the role of a friend in addition to their traditional role as a businessperson. Recently a few studies on customer orientation, mostly originating from the services literature, have started to acknowledge this development. Customer Orientation also comprises behaviors aiming at establishing a personal relationship with the customer, such as getting to know a customer personally. We will refer to these behaviors as relational customer orientation (Donavan et al. 2004). Customer orientation at micro level depicts in the behavior of individual salesperson and customer service representative. Customer-oriented sales person make their customer aware of

what their needs and wants are and how that can be satisfied with a given set of products or services. Customer oriented sales persons avoid all the efforts which may cause annoyance of dissatisfaction of the customer (Michaels and Day, 1985). When goods are produced with the aim to satisfy customers needs and wants, is termed as customer orientation. Customer oriented companies train their employees to help their customers in purchase decisions by understanding their needs and wants and selecting best possible solution, which may maximize their level of satisfaction and trust on the company (Saxe and Weitz 1982) 2. Literature Review

2.1 Customer Orientation In the marketing literature, Saxe and Weitz (1982), defines the Customer Orientation as a behavioral phenomenon representing the practice of the marketing concept at the level of the individual salesperson and customer. While Brown et al.s (2002) conceptualize Customer Orientation as an employees tendency or predisposition to meet customer needs in an on-thejob context. Customer orientation has become a key construct in the marketing literature. On the one hand, researchers have studied the customer orientation of firms. In this research, it is often considered under the larger concept of market orientation (Kohli and Jaworski 1990). On the other hand, many studies examine the customer orientation of individual employees, especially salespeople (Franke and Park 2006). 2.2 H1: Salespersons CO to Organization Performance Salespersons customer orientation has a positive and significant effect on organization performance

The customer orientation of customer contact employees or sales people is very important to the implementation of the marketing concept. A rich stream of research provides evidence that it positively affects outcomes such as employee performance (Siders et al. 2001), customer satisfaction (Brady and Cronin 2001), and customer trust (Williams 1998). Alex R. Zablah et al (2012), in their study from more than 300 samples of boundary-spanning employees indicate that customer orientation influences job outcomes for those in sales and service roles. Thus, the results of this study highlight the merits of a psychological perspective on the customer orientation phenomenon that recognizes that customer orientation leads to improved job outcomes, not simply because it is a better way to do business but because it confers employees with important psychological benefits as well. Using triadic data from a cross-industry survey of 56 sales managers, 195 sales representatives, and 538 customers, the authors provide strong empirical support for a curvilinear, inverted U-

shaped effect of a salespersons customer orientation on sales performance, whereas the effect of customer orientation on customer attitudes is continuously positive (Homburg et al. 2011). 2.3 H2: Employees Operations Training to Organization Performance Employees operational training has a positive and significant effect on organization performance

In the development of organizations, training plays a vital role, improving performance as well as increasing productivity, and eventually putting companies in the best position to face competition and stay at the top. Training is a type of activity which is planned, systematic and it results in enhanced level of skill, knowledge and competency that are necessary to perform work effectively (Gordon, 1992). There exists a positive association between training and employee performance. Training generates benefits for the employee as well as for the organization by positively influencing employee performance through the development of employee knowledge, skills, ability, competencies and behavior (April, 2010). Performance can be defined as the achievement of specified task measured against predetermined or identified standards of accuracy, completeness, cost and speed. In an employment contract, performance is deemed to be the accomplishment of a commitment in such a manner that releases the performer from all liabilities laid down under the contract. Efficiency and effectiveness are ingredients of performance apart from competitiveness and productivity and training is a way of increasing individuals performance (Cooke, 2000). There is a positive relationship between training and employee performance. In the study of Hassan et al. (2012) the results reveals positive correlation between training and operational performance. There is a meaningful relationship among operational factors, increasing job skills, increasing the speed of daily things, increasing the quality of offering service, and improving individual relationships with in-service training. 2.4 Organizational Performance

Generally, organizational performance can be conceptualized by using either financial performance, or operational performances, or a combination of both. Financial performance typically include indicators measuring sales in terms of sales volume, and profitability in terms of return on investment (ROI), return on sales (ROS), return on equity ratios (ROE), and earnings per share (EPS) (March & Sutton, 1997). Other financial indicators used by researchers are market and value based measurements. Unlike financial indicators, the common measurements for operational performance indicators are market share, productivity, new product introduction, product and service quality, marketing effectiveness, value-added manufacturing outputs, and technological efficiency (Venkartraman & Ramanujam, 1986).

Although there are various stakeholders in an organization, the chief strategic goal of any business is higher financial performance or maximization of wealth for the shareholders (Becker & Huselid, 1998). Financial performance of an organization depends to a large extent on effective operational performance. The operational performance of an organization is a function of people, process and technology (Curtis, Hefley, & Miller, 1995). For effective interaction of people with technology and process, the people in the organization have to be competent enough, with the required knowledge, skill and abilities. Competence of the individual is an important factor that decides operational effectiveness in terms of providing quality products and services within a short time (Wynekoop & Walz, 2000) . Research Question What is the impact of providing Customer Orientation to the operations staff on the growth of service organization? Hypothesis H1: Salespersons customer orientation has a positive and significant effect on organization performance Employees operational training has a positive and significant effect on organization performance

H2:

Incorporating the Customer Orientation training to operational staff for enhancing organization performance. H3: Customer Orientation to Operational staff increases the organization performance more effectively

Customer Orientation

Sales Staff H3

H1

Organization Performance
Financial Operating

H2 Operations Training Operational Staff

Fig 1: Hypothesis framework

3.

Methodology

To test the above hypothesis we used a mixed method approach. First two hypotheses are tested on the basis of literature and we found an empirical evidence to support these hypotheses as shown in the studies. For third hypothesis a framework is designed which shows the relationship between Customer Orientation of operations staff and performance of service organization.

Individual factors
Org commitment self-monitoring intrinsic motivation CO attitude Cust-driven quality Immediate response Full participation

Organization Performance

Customer Orientation
ORG factors
Cust-Oriented Culture Long-Term Orientation Functional Role Clarity Leadership Public responsibility Cont improvement

Operational Staff

Financial Growth in sale ROI Market value Operating

Emp retention Emp productivity Product quality Speed of delivery Operating cost

Fig 2: CO Framework for Service Organization

To test the theoretical framework, sample will be drawn from banking service providers. Random sampling technique will be used to collect the data from operational staff and branch managers of banks. The SOCO questionnaire developed by (saxe and weitz) will be used to measure the customer orientation. All the items are measured using a five point likert scale ranging from strongly disagree to strongly agree.

4.

References

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