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The service organization: Climate is crucial

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Abstract

These results may be summarized as follows: When branch employees perceive a strong service orientation in their branch, the customers of those branches report not only that they receive generally superior service, but that specific facets of service are handled in a superior manner. In addition, employees themselves experience less negative consequences at work when their branch has more of an enthusiastic orientation to service. Thus, employees are less dissatisfied and frustrated, more likely to plan to remain in their branch, and they experience less role conflict and role ambiguity when the branch is more like employees feel it should be— that is, more enthusiastic in its approach to service.

A major conclusion from this study: Employees and customers of service organizations will each experience positive outcomes when the organization operates with a customer service orientation. This orientation seems to result in superior service practices and procedures that are observable by customers and that seem to fit employee views of the appropriate style for dealing with customers.

More specifically, this research supports the following assumptions:

  • ⊎ Employees perceive themselves to be more enthusiastic and management to be more bureaucratic in service orientation. This suggests gaps between the goals of employees vis-à-vis service and the management goals that employees perceive. It is important for organizations to be aware of where these differences exist so they can take steps to remedy them. Figure 8 pinpointed these differences for the branch employees in this study and, thus, where the bank needed to change to be more congruent with the employees' more enthusiastic, less bureaucratic orientation to service.

  • ⊎ Employees who work in settings that are more congruent with their own service orientation experience less role ambiguity and role conflict and, as a result, are generally more satisfied, experience less frustration in their efforts to give good service, and are more likely to report they intend to keep working for the organization. This assumption was clearly supported; it also suggests that what management frequently perceives as employee disinterest or lack of motivation is really employees' lack of enthusiasm for carrying out management policies that are incongruent with their own desires. In fact, employees in this study seemed very interested in meeting customer service needs, but less interested in satisfying management's bureaucratic needs.

  • ⊎ Even though they view service from a different perspective, employee and customer perceptions of organizational effectiveness are positively related. Support for this assumption was quite strong; that is, when employees report that their branch emphasized service by word and deed, customers report superior banking experiences. These data, and my earlier work with bank customers also show that customers who report a more positive service climate are less likely to switch their accounts to other banks. These findings clearly indicate that management emphasis in a service organization cannot be hidden from those who are served: climate shows in service organizations.

This idea of an organization's climate being apparent to customers goes to the heart of issues presented in the introduction about the determination of organizational effectiveness. A finance-oriented conspiracy seems to promote a short-run productivity orientation rather than a more long-term, wholistic perspective to determine organizational effectiveness. A more succinct way of summarizing this issue is through he concept of “good will.”

An organization accrues good will over long periods of time by varied behaviors. Good will is reflected in the way people who have direct (that is, employees), indirect (that is, employees' families), and in-between (that is, customers, suppliers) contact with an organization think and speak about it; goodwill is the organization's reputation —that is, the way it is viewed by the multiple constituencies it affects and by which it is affected.

While the present study concentrated on the good-will perceptions of customers, there probably would have been similar results from research concentrated on other branch constituencies. Thus suppliers to the branches could have been asked for their opinions about the branch, and branch employees could have been asked about how suppliers are treated. Or employees' families could have reported their opinions about the way the bank affects their spouse/parent and so on, and employees might have reported on the general quality of consideration given them as employees. Perhaps more interestingly, potential branch employees could have been surveyed about what they think it would be like to work in a particular branch, and those perceptions could have been related to what incumbents report it is like to work there.

In each of these hypothetical research efforts, the interesting issue would be the way in which climates created in the branch are “picked up” by the various groups important to the long-term survival of the organization. I suspect these questions are infrequently asked, and rarely if ever pursued systematically. Yet, organizations need the good will of families when an employee is making turnover decisions; they need to have a positive reputation as a place to work in order to attract good employees; and, especially in a time of strife (for example, in a situation like that of the Chrysler Corporation), they need the good will of suppliers.

A very general conclusion, then, culled from this research effort: It is just as important for an organization to be interested in its relationships with the many groups that affect its long-term viability as it is for it to be concerned with the short-run financial considerations affecting stockholders and creditors, and so on.

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