Customer orientation and financial performance relationship: the mediating role of innovative capability

Abstract

Existing research establishes customer orientation (CO) per se as insufficient to achieve higher levels of financial performance (FP). Such reasoning suggests the need for additional skills and capabilities, such as, innovative capability (IC). In addition, environmental variables (e.g., Technological Turbulence – TT) affect these relationships. This paper explores the relationships and effects of CO and IC on FP under different TT conditions. A research framework and hypotheses were developed. The framework captures the following relationships: (i) the direct influence of CO on FP; (ii) the mediating role of IC on the CO/FP relationship; (iii) the moderating role of TT over the mediation of IC on the CO/FP relationship. The fieldwork included an exploratory stage, followed by a cross-sectional survey applied to managers in medium-sized companies in Brazil. Findings revealed that IC partially mediates the relationship between CO and FP, in particular in high TT environments. Managerial implications and avenues for future research are presented.

The effectiveness of improvisational behavior on sales performance during the COVID-19 pandemic: the moderating effect of functional customer orientation

“…Liu et al (2019) report that salespeople's functional customer orientation promotes customers' repurchase intention, thereby making their sales performance higher. Santos et al (2020) also support that functional customer orientation of salespeople is an essential factor that helps sales organizations to gain a competitive advantage over their rivals. Considering all supporting argument about the benefits of functional customer orientation, we propose the following hypothesis:…”

The impact of customer-focus on the performance of business organizations: evidence from SMEs in an emerging West African economy

“…Previous empirical evidence has found a positive association between customer-focus and financial performance (e.g. Santos et al, 2020;Islam and Zhe, 2022;and Chaudhry et al, 2019). Therefore, based on the preceding discussion and empirical indication, this study posits that: H1.…”

“…Previous studies (Flight and Mudiyanselage, 2021;Kang et al, 2021;Kaburu et al, 2021) even consider customer-focus more superior than the external resources of business organization when it comes to the generation of competitive advantage and performance. According to Santos et al (2020), this may be related to the ripple effect that originates from obtaining customer-focus advantage, which enables the development of competitive superiority, for example, cost, context-based product/service functionality, pricing and other extra and auxiliary service value. Customerfocus advantage is unique to business organizations and integrates resources such as cocreation, network ties, customer insight or knowledge, and AIM in order to support enterprise strategy and objectives (Donnellan and Rutledge, 2019).…”

“…The concept of customer-focus has received attention in extant literature, and its effect has been extensively explored (Flight and Mudiyanselage, 2021;van Assen, 2021;Marta et al, 2021;Santos et al, 2020). Despite the numerous contributions in recent years, the argument about customer-focus has fundamentally been led by propositions made by Narver and Slater (1990), Deshpand e et al (1993) and Bartley et al (2007).…”

“…SMEs should seek to convert customer insight and knowledge into innovative products or processes such that both expressed and Impact of customer-focus on SME performance latent needs of the market are met (Yulianthini et al, 2021). The innovative capability derived by SMEs as a result of customer-focus practices encapsulates the SMEs capability to generate, create and develop innovations (Santos et al, 2020). The fundamental purpose is to harness customer-focus capabilities and competence to explore market opportunity in an efficient way.…”