Impact of Firm’s Customer Orientation on Performance: The Moderating Role of Interfunctional Coordination and Employee Commitment

The effect of a firm’s strategic orientation, such as customer orientation, on performance has received research attention; however, knowledge regarding its specific effect on the customer-related performance measures is very limited. Most of the previous attempts have focused on developing a direct relationship with a firm’s financial performance, which contradicts with the central tenet of customer orientation. In addition, in this context, the role of employees’ committed behavior, customer contact time and a firm’s emphasis on interfunctional coordination for the efficacy of customer orientation have received little research attention. Drawing on dynamic capability theory and service climate theory, this study addresses how employees and a firm’s interfunctional coordination play a key role in the firm’s customer orientation to drive its customer-related performance. Based on a sample from the UK’s service industry, the findings support the arguments. The findings also offer new insights into the interplay of different strategic orientations and employees’ role in driving superior performance through customer orientation.