Strategic Determinants of Service Quality and Performance: Evidence from the Banking Industry

Abstract

This paper focuses on an important new service management strategy: the operations capabilities-service quality-performance (C-SQ-P) triad. In order to understand what generic operations capabilities influence the strategic behavior of high performing service firms, we explore three related questions: What generic operations capabilities are among the strategic determinants of service quality? Does service quality affect market performance? How is market conduct related to the C-SQ-P triad? These questions are investigated using a stylized capabilities-based model of service quality that simultaneously assesses their impact upon a firm's market performance. Several insights emerge from our research: a) generic operations capabilities affect service quality and performance, although not all relationships are direct; b) service quality know-how and innovations can be directly observed and imitated; c) the effects of technological leadership and market acuity on service quality are moderated by the absorptive capacity of employees to recognize and exploit their potential, and hence, investments in people are critical to success; d) market conduct influences the generic capabilities of the firm more than market performance, ceteris paribus; and e) total factor productivity and service quality are negatively correlated.operations strategy, capabilities-based competition, absorptive capacity, resource based view, competitive advantage, service management performance

Managing innovation through customer coproduced knowledge in electronic services: An exploratory study

“…Consistent with existing literature, more knowledgeable employees better deliver services that match customer needs (Roth and Jackson 1995), help reduce organizational uncertainty, decrease process variability, and advance a firm's ability to adjust to new conditions. Furthermore, when customers coproduce knowledge, they feel like part of the service and closer to the organization.…”

The contingent influence of organizational capabilities on proactive environmental strategy in the service sector: An analysis of North American and European ski resorts

“…Others consist more of routines and processes to generate and diffuse knowledge and learning within the organization to increase effi ciencies, improve products, and reduce costs. This categorization is similar to "inside-out" and "outside-in" capabilities (Moorman & Slotegraaf, 1999), internal and external learning (e.g., Bierly & Chakrabarti, 1996;Roth & Jackson, 1995), fan-out and fan-in capabilities (Hart & Sharma, 2004), and external and internal integrative capabilities (Verona, 1999) discussed in the literature.…”

Customer Efficiency, Channel Usage, and Firm Performance in Retail Banking

“…Apte and Vepsalainen (1993) examined the tradeoff between using "high tech" versus "high touch" channels and argued that the former is effective for cost reduction and the latter is more effective for relationship building. Roth and Jackson III (1995) found a negative correlation between total factor productivity and service quality, which underscores the importance of cost-benefit tradeoffs in service design. Menor et al (2001) showed that operations agility, which is defined as the ability to excel simultaneously on operations capabilities of quality, delivery, flexibility and cost, is as vital for retail banks' performance as it is for manufacturing firms.…”