Investigating the Strategic Influence of Customer and Employee Satisfaction on Firm Financial Performance

Dotson, Jeffrey P.; Allenby, Greg M.

doi:10.1287/mksc.1100.0584

Cited by 38 publications

(22 citation statements)

References 28 publications

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“…Furthermore, satisfied and engaged employees tend to genuinely support and share corporate objectives; they operate more efficiently, so they provide a constructive contribution to the company's global performance and value creation potential [141][142][143], especially in the long term. For this reason, companies make an effort to protect their employees' economic and social expectations, to inform them about the responsible practices adopted [144], and prevent grievances and disloyalty.…”

Section: Employeesmentioning

confidence: 99%

Sustainability and Convergence: The Future of Corporate Governance Systems?

2016

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In today's world, a sustainable approach to corporate governance can be a source of competitive advantage and a long-term success factor for any firm. Sustainable governance requires that the board of directors considers economic, social and environmental expectations in an integrated way, no matter what ownership structure and formal rules of corporate governance apply to the company: this mitigates the traditional differences between insider and outsider systems of corporate governance. Previous studies failed to consider the contribution of sustainability in the process of corporate governance convergence. Therefore, the aim of this article is to fill the gap in the existing literature by means of a qualitative analysis, supporting the international debate about convergence of corporate governance systems. The article describes the evolution of outsider and insider systems in the light of the increasing importance of sustainability in the board's decision-making and firm's operation to satisfy the needs of all the company's stakeholders. According to this, a qualitative content analysis developed with a directed approach completes the theoretical discussion, demonstrating that sustainability can bring de facto convergence between outsider and insider corporate governance systems. The article aims to be a theoretical starting point for future research, the findings of which could also have practical implications: the study encourages the policy makers to translate the sustainable business best practices into laws and recommendations, strengthening the mutual influence between formal and substantial convergence.

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Section: Employeesmentioning

confidence: 99%

Sustainability and Convergence: The Future of Corporate Governance Systems?

2016

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“…Further, even econometric methods that have been developed to accommodate endogeneity (i.e., instrumental variables or selection methods) are ineffectual under the conditions of essential heterogeneity (Bascle, ; Heckman et al , ). We resolve this issue by explicitly modeling the joint impact of diversification on both performance and the choice to diversify (Dotson and Allenby, ; Nandialath, Dotson, and Durand, ). This is accomplished by first specifying a function for the value, V it , that the firm derives from diversification:

V_{it} = α_{0} + α_{1} ((), β_{D i} true/ ((), 1 - ρ_{i})) + true \underset{k}{truefalse\sum} δ_{k} x_{k i t} + ξ_{it} .

…”

Section: Methodsmentioning

confidence: 99%

Corporate diversification and the value of individual firms: A Bayesian approach

Mackey

Barney

Dotson

2016

Strategic Management Journal

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Research summary: Prior theory suggests that the performance effects of a firm's diversification strategy depend on a firm's individual resources and capabilities and the setting within which it is operating. However, prior tests of this theory have examined the average diversification‐performance relationship across all firms, instead of estimating the diversification‐performance relationship at the individual firm level. Efforts to estimate this average relationship are inconsistent with a central assumption of much of strategic management theory—that firms maximize value by choosing strategies that exploit their heterogeneous resources and individual situation. By adopting an approach that allows an evaluation of the diversification‐performance relationship for individual firms, this article shows that firms, both focused and diversified, tend to choose that diversification strategy—focus, related diversification, or unrelated diversification—that maximizes value. Managerial summary: Instead of a universal diversification discount or premium, this article shows that the effect of diversification on performance is heterogeneously distributed across firms and that firms tend to be rational in their diversification decisions. Copyright © 2015 John Wiley & Sons, Ltd.

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“…Work is also needed on utility functions that can represent complementarity at the product category level while retaining the additive separable assumption for brands within each category. Dotson and Allenby (2010) and Satomura et al (2011) expand the analysis of models of goal-directed behavior to include aspects of the budget constraint. Alternative constraint specifications are studied by Dotson and Allenby (2010) that imply different locations of managerial control of budgets in a study of consumer satisfaction on firm financial performance.…”

Section: Extensionsmentioning

confidence: 99%

“…Dotson and Allenby (2010) and Satomura et al (2011) expand the analysis of models of goal-directed behavior to include aspects of the budget constraint. Alternative constraint specifications are studied by Dotson and Allenby (2010) that imply different locations of managerial control of budgets in a study of consumer satisfaction on firm financial performance. A direct utility model with multiple binding constraints is developed by Satomura et al (2011) to reflect choices that are more constraint-influenced than in models with only a budgetary constraint present.…”

Section: Extensionsmentioning

confidence: 99%

Modeling marketplace behavior

Allenby

2011

J. of the Acad. Mark. Sci.

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Marketplace behavior refers to aspects of the purchase behavior of individuals and firms that leads to marketplace demand. It is characterized by the presence of many variables, most of which have nothing to do with a specific venture or specific consumer. This paper discusses three challenges of analysis commonly found in quantitative models of marketplace data: heterogeneous consumers, goal-directed behaviors, and the selective attention to some but not all variables in extended models of behavior. Bayesian solutions to these challenges are discussed.

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Investigating the Strategic Influence of Customer and Employee Satisfaction on Firm Financial Performance

Cited by 38 publications

References 28 publications

Sustainability and Convergence: The Future of Corporate Governance Systems?

Sustainability and Convergence: The Future of Corporate Governance Systems?

Corporate diversification and the value of individual firms: A Bayesian approach

Modeling marketplace behavior

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