Market competitiveness and quality performance in high-contact service industries

• Published in: Industrial management + data systems Vol. 113; no. 4; pp. 573 - 588
• Main Authors: Yee, Rachel W.Y., Yeung, Andy C.L., Edwin Cheng, T.C., Lee, Peter K.C.
• Format: Journal Article
• Language: English
• Published: Wembley Emerald Group Publishing Limited 01.01.2013
• Subjects: Competition; Customer satisfaction; Customer services; Empirical analysis; Employee involvement; Employees; Financing; Human error; Hypotheses; Influence; Job satisfaction; Markets; Mathematical analysis; Operations management; Quality; Quality of service; Service industries; Studies; Hong Kong China; China; Customer services quality; Competitive strategy; Service industries; Hong Kong; Customer satisfaction; Market competitiveness; Employee satisfaction; Service quality
• ISSN: 0263-5577; 1758-5783
• DOI: 10.1108/02635571311322801

Purpose - The purpose of this paper is to explore conceptually and examine empirically the impact of market competitiveness on employee satisfaction, service quality, and customer satisfaction in high-contact service industries.Design methodology approach - An empirical study was conducted in high-contact service shops in Hong Kong. Dyadic data were collected from 210 high-contact service shops and were analysed using structural equation modelling.Findings - The results confirm that market competitiveness has a direct impact on service quality, not employee satisfaction. The findings also reveal that service quality affects customer satisfaction, which in turn leads to employee satisfaction, forming a "quality-customer satisfaction-employee satisfaction cycle".Practical implications - The results recommend that firms take a long-term perspective towards investment in understanding the competitiveness of the market. Such an understanding helps managers identify and implement appropriate quality-improvement activities, such as establishing quality standards, providing appropriate job description to service employees, and adopting a customer-oriented strategy, leading to enhanced customer satisfaction and employee satisfaction in a cyclic manner.Originality value - This study contributes to a detailed understanding of how service firms should strategically respond to market competitiveness.