Relational capital, service quality and organizational performance in the Egyptian telecommunication sector

Abstract

PurposeThe purpose of this paper is to empirically investigate the mediating effect of service quality (SQ) in the relationship between relational capital (RC) and organizational performance (OP) within the Egyptian mobile telecommunication setting.Design/methodology/approachA valid research instrument was utilized to conduct a survey of 384 top- middle- and supervisory- level managers from three Egyptian mobile telecommunications companies. The hypothesized direct relationships were tested through multiple linear regression, and the mediating effect was tested using a structural equation modeling technique.FindingsThe results revealed that the firm's “customer and supplier relations” and “marketing capability” positively affect both OP and SQ, “customer knowledge” positively affects SQ only, while “strategic alliances, licensing and agreements” do not have an association with SQ or OP. Moreover, SQ was found fully mediating the effect of RC on OP.Research limitations/implicationsThis is an empirical research applied in the Egyptian telecommunication setting. Its results need further investigation in other settings and countries. Also, traditional limitations of a cross-sectional study apply with respect to the attribution of causality and the time lag effects.Practical implicationsThe optimal procedure for the Egyptian telecommunications companies is to focus their efforts on leveraging all four components of RC in order to improve SQ and consequently enhance their OP. The telecommunications companies must do all they can to connect the unconnected. As the current COVID-19 pandemic crisis has shown, connectivity is a public good.Originality/valueThis is the first research that merges the concepts of RC, SQ and OP in an integrated model, and tests this model empirically in the Egyptian mobile telecommunications setting.

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“…Relational capital (RC) is commonly defined as knowledge embedded in relationships with stakeholders such as customers, suppliers, regulators, communities, pressure groups, and intermediaries (Roos et al, 1997 ; Vrontis et al, 2021 ; Cosma et al, 2019 ; Bontis, 1999 ). RC is a valuable knowledge resource that contributes to creating value and leading the overall performance and success of the organization (Abd-Elrahman and Kamal, 2020 ; Catanzaro et al, 2019 ; Kohtamäki et al, 2012 ). Owing to such positive interrelatedness, prior research has shown that the extent of mutual trust, licensing agreements, and formal contracts with third parties facilitates the knowledge integration process (Zahoor & Gerged, 2021 ; Bhatti et al, 2020 ; Roos et al, 1997 ) and consequently leads the performance of the organization (Yayla et al, 2018 ; Hult et al, 2004 ).…”

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