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Applied Ergonomics 38 (2007) 307–315 www.elsevier.com/locate/apergo
Customer orientation among employees in public administration: A transnational, longitudinal study Christian Korunkaa,, Dieter Scharitzerb, Pascale Carayonc, Peter Hoonakkerc, Angelika Sonnekb, Francois Sainfortd b
a Faculty of Psychology, University of Vienna, Universita¨tsstraX e 7, A-1010 Vienna, Austria Department of Marketing, Vienna University of Economics and Business Administration, Austria c Center for Quality and Productivity Improvement, University of Wisconsin-Madison, USA d School of Industrial and Systems Engineering, Georgia Institute of Technology, Atlanta, USA
Received 14 December 2005; accepted 10 April 2006
Abstract The relation between ergonomic principles and quality management initiatives, both, in the private and public sector, has received increasing attention in the recent years. Customer orientation among employees is not only an important quality principle, but also an essential prerequisite for customer satisfaction, especially in service organizations. In this context, the objective of introducing new public management (NPM) in publicservice organizations is to increase customer orientation among employees who are at the forefront of service providing. In this study, we developed a short scale to measure perceived customer orientation. In two separate longitudinal studies carried out in Austria and the US, we analyzed changes in customer orientation resulting from the introduction of NPM. In both organizations, we observed a significant increase in customer orientation. Perceived customer orientation was related to job characteristics, organizational characteristics and employee quality of working life. Creating positive influences on these characteristics within the framework of an organizational change process has positive effects on employee customer orientation. r 2006 Elsevier Ltd. All rights reserved. Keywords: Macroergonomics; TQM; New public management
1. Introduction When the concept of total quality management (TQM) is transposed from the private sector to the public sector, new approaches to improving service quality and more efficient and effective service production can be expected (Bernhart, 1996). The application of TQM principles to the public sector is also known as new public management (NPM; Buda¨us and Gru¨ning, 1998; Rago, 1994; Swiss, 2001). An essential component of redesigning public administration on the basis of NPM principles is the idea that citizens are customers of the administration. Customer orientation of employees in the public sector has been Corresponding author. Tel.: +43 1 4277 47881; fax: +43 1 4277 47889.
E-mail address:
[email protected] (C. Korunka). 0003-6870/$ - see front matter r 2006 Elsevier Ltd. All rights reserved. doi:10.1016/j.apergo.2006.04.019
described as a cornerstone of the NPM approach (Wherli, 1996). Customer orientation is also part of the broader construct ‘‘service quality’’, which could be directly influenced by human factor dimensions (Drury, 2000). Until recently service quality is a somehow neglected concept from a macroergonomic perspective (Drury, 1997, 2000; Eklund, 1997, 2000; Taveira et al., 2003). Measuring the construct of customer orientation of employees has largely been neglected in research in both the private sector and the public sector. One objective of this study is to develop a short scale for measuring perceived customer orientation (from the employees point of view). Two longitudinal studies conducted in two public organizations allowed us to analyze changes in perceived customer orientation in the process of implementing NPM
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and the influence of job and organizational factors on perceived customer orientation. Knowledge of the factors that affect customer orientation can provide insight on how to improve the implementation of NPM. 1.1. Customer orientation in public administration In the context of quality improvement in the private service sector, citizen dissatisfaction with services offered by public organizations has grown in recent years. The demands of citizens have risen: they are less likely to accept suboptimal quality, even in public services. This situation can be exacerbated by bureaucratic and political sluggishness, which may be related to a loss of credibility of political and administrative officials. Moreover, administrations are confronted with all kinds of social transformation. They are no longer accepted as the ‘‘authority,’’ as citizens have become more critical and assertive (Hopp and Go¨bel, 1999). 1.2. A definition of ‘‘customer orientation’’ In both research and practice, the concept of customer orientation is often used as a synonym of market orientation (Brady and Cronin, 2001), or is a central part of a broader definition of market orientation (Kohli and Jaworski, 1990). On the other hand, Bruhn (1999) describes the differences between market and customer orientation: market orientation refers to the focus of an organization’s activities on all market participants and interest groups, while customer orientation is characterized by a bilateral relationship between the customer and the organization. Market orientation thus focuses on creating a general competitive edge, while the primary objective of customer orientation is to fulfill individual customer expectations and needs. Bruhn (1999) distinguishes among three forms of customer orientation, ranging from a very narrow to a broad, situation-based interpretation. The informationbased interpretation defines customer orientation in terms of the availability of customer information, i.e. the extent to which information on customer needs is collected and analyzed, and the extent to which this information is available in a company or public organization. The cultureand philosophy-based interpretation goes beyond the first interpretation: it defines a company’s customer orientation through the presence of certain elements in its general corporate philosophy, such as values, norms and convictions (see also Deshpande et al., 1993; Homburg and Pflesser, 2000). Thus, customer orientation is part of corporate culture and characterizes not only the company’s opinions but also its employees’ behavior in dealing with customers. The third form of customer orientation is service- and interaction-based customer orientation, which is mainly determined by the quality of the services provided. This view diverges from the first two forms of customer orientation. While the first two conceptualiza-
tions address customer orientation from the standpoint of the organization, the service- and interaction-based conceptualization considers the customer’s perspective. On the basis of these differing interpretations, it is important to adopt a broad definition of customer orientation that takes into account all three interpretations introduced by Bruhn (1999, p. 10), ‘‘Customer orientation is the comprehensive, continuous collection and analysis of customer expectations as well as their internal and external implementation in an organization’s services and interactions, with the objective of establishing stable and economically advantageous customer relationships on the long term.’’ The specific characteristic of customer orientation in public organizations as compared to the private sector is expressed in Schedler’s definition (Schedler, 1995, p. 37): The increased focus on the concrete and existing needs of customers (e.g. residents) brings about profound shifts in public administration. Naturally, laws still do have to be followed, procedures have to be carried out properly, and uncomfortable decisions and demands have to be made, if necessary in an authoritarian manner. Customer orientation in this context does not mean making the customer the measure of all things. Rather, it means providing a necessary service in such a way that it meets the customer’s needs in the optimum manner. 1.3. Measuring customer orientation When measuring customer orientation, it is necessary to distinguish between institutional- and employee-related constructs. In the former case, one needs to analyze company documents and measure the extent to which the organization acts in a customer-oriented manner. Employee-related customer orientation, on the other hand, describes an employee’s ability (or perceived ability) to act in a customer-oriented manner and to meet customer expectations. A human factor perspective focuses therefore on employee-related customer orientation. Approaches for measuring customer orientation have been proposed in the field of institutional customer or market orientation. The MARKOR scale (Market Orientation scale) focuses on the aspect of customer information and uses 32 items on information collection and dissemination as well as reactions to customer information (Bruhn, 1999; Kohli et al., 1993). A scale developed by Narver and Slater (1990) takes the cultural aspect into consideration. Customer orientation is described as a facet of corporate culture that increases customer benefits and thus the success of the company. The so-called MKTOR scale (again, Market Orientation scale) consists of 14 individual items on the dimensions of customer orientation, competitive orientation and interfunctional coordination. Homburg and Werner (1998) take the service and interaction process as a basis for measuring customer
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orientation. In comparison to the scales mentioned above, this approach assesses customer orientation from the customer’s perspective. The scale consists of eight dimensions with a total of 28 individual items (Homburg and Werner, 1998). The SOCO scale (Selling Orientation and Customer Orientation) developed by Saxe and Weitz (1982) is often used in research that uses measures of customer orientation by employees (an employee-related construct) (Bennett et al., 1999; Boles et al., 2001; Brown et al., 2002; Hoffmann and Ingram, 1992). It consists of 24 items with two dimensions: 12 positive items on customer orientation and 12 negative items describing selling orientation. It is designed to measure the extent to which employees act in a customer-oriented manner and thus increase customer satisfaction in the long run (Brown et al., 2002). It provides a measure of customer orientation by the employee. Brady and Cronin (2001) adapted this scale to measure customer orientation from the customer’s perspective. A majority of the studies reviewed were carried out in private sector organizations. It is only partly possible to transpose the results of those studies into the public sector due to differences in customer relationships: For instance, the meaning of ‘‘customer loyality’’ is different in organizations where customers have no alternative to change the service agency. On the other hand, a positive attitude towards the customers may be more important than a marketing orientation in these organizations. In this study, we report the development of a short scale for measuring customer orientation from the employees’ point of view in two public sector organizations. 1.4. Macroergonomic requirements for high customer orientation Because of the increasing importance of customer orientation, researchers and practitioners are confronted with the question of how customer orientation can be improved. Studies in this area have been carried out in a variety of industries and fields. Various predictors of customer orientation have been identified. Bennett et al. (1999) discuss structural factors, the climate of change and the transfer climate as predictors of customer orientation. Structural factors include organizational characteristics such as leadership style and teamwork quality, and the climate of change includes stress, resistance to change and role conflicts. The transfer climate refers to the transfer of skills learned in training to the employees’ daily work. It could be influenced by factors such as workload, management, colleagues and corporate policy. Bennett et al. (1999) found that the change climate and transfer climate have a significant influence on perceived customer orientation among employees in public sector organizations. Trained employees who experienced a negative transfer climate estimate customer orientation to be lower than employees without training. Johnson (1996) was able to confirm empirically that a service climate that
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enables employees to provide customer-oriented service and to increase customer satisfaction has to be created within the organization in order to improve customer orientation. The service climate—and thus customer orientation—is influenced positively by the collection of data on customer expectations and needs and through training, teamwork, recognition and performance-based reward systems. Boles et al. (2001) mentioned the support of colleagues, a positive working environment and teamwork as predictors of customer orientation. Hoffmann and Ingram (1992) identified the positive influence of quality of working life (QWL) on customer orientation: they found a positive relationship between customer orientation and overall employee satisfaction, satisfaction with work activities, colleagues, support and encouragement. Kohli and Jaworski (1990) examined the prerequisites for market and customer orientation in business organizations: they include senior management attitude and commitment, teamwork across departments and suitable organizational systems. Finally, positive correlations between QWL of the employees and business outcomes (i.e. customer satisfaction) were also confirmed in a meta-analysis (Harter et al., 2002). We have developed a conceptual framework based on these various studies. According to the conceptual framework, the introduction of TQM/NPM in a public sector organization can affect various job and organizational characteristics, as well as QWL. In turn, those job and organizational characteristics and QWL can contribute to improved customer orientation by employees. A major assumption of this conceptual framework is that employee customer orientation can result in increased customer satisfaction. Based on existing research, we selected potentially important predictors—both from a theoretical and a practical perspective—of customer orientation. Dimensions that appear in almost every study include the employees’ work environment, the organization’s characteristics and the quality of employee working life. In our study, we used feedback and autonomy as job characteristics, team quality, participation and support from supervisor as organizational characteristics, and work satisfaction and stress as measures of QWL (e.g. Hackman and Wageman, 1995; Stuebbe and Houshmand, 1995). 1.5. Study goals and hypotheses The goals of this study were (1) to develop a short scale for the measurement of perceived customer orientation, to measure customer orientation when NPM is implemented and (2) to analyze organizational requirements for high customer orientation based on the proposed conceptual framework (see Fig. 1). The following hypotheses are tested: (1) The introduction of quality improvement programs in public sector organizations (NPM) will increase perceived customer orientation of the employees.
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Job characteristics Introduction of TQM/NPM principles in a public service organization
Organizational Characteristics
Perceived Customer orientation
Customer satisfaction
Quality of Working life
Fig. 1. Conceptual framework.
(2) The introduction of quality improvement programs in public sector organizations (NPM) will affect the job and organizational characteristics and the QWL of the employees. (3) QWL, job and organizational characteristics will influence perceived customer orientation of the employees.
2. Method 2.1. Sample and study design The study was carried out as a true longitudinal study over the period of 1 year in two comparable public organizations in the US and Austria. Both organizations are tax authorities with similar organizational structures. The main objectives for implementing NPM in the two organizations were performance orientation, efficiency, autonomy, employee and customer orientation, as well as improvements in service encounters with citizens. The Austrian tax authority has approximately 11,000 employees at 80 locations (local tax offices). Our study sample represents five large offices of the tax authority. This organization was in the initial stage of introducing NPM. In the first survey, which was carried out in the Fall of 2000 (t1), the employees had only been given general information on management goal to increase customer orientation. There had not yet been any concrete changes at the workplace. At the time of the second survey (Fall, 2001: t2), the employees were familiar with the basic concepts of NPM. Through a variety of communication channels (management presentations, Internet platforms), the employees had been informed as to the objectives of increased customer orientation and the planned organizational changes. However, no concrete measures to implement these changes had been taken. Therefore, this organization was just taking its very first steps toward increasing customer orientation during the study period. A state tax authority located in the USA has about 1800 employees at five large locations and numerous small offices located throughout the state. This authority has a comparable task structure to that of the Austrian tax
authority. All employees were included in our surveys. In contrast to the Austrian tax authority, the American organization had already made effort toward improving customer orientation using quality management principles. This early effort occurred about 10 years before the study period. Several TQM-related organizational changes had already been implemented by the time that we conducted our study. At the time that we conducted our surveys, there was a renewed initiative on organizational excellence. Our first survey was performed in 1999 (t1). At that time, all employees had been informed about organizational changes aimed at increasing customer orientation. The second survey was done in 2000 (t2). By that time, a number of concrete changes had been made, including the implementation of an integrated customer-oriented tax software to manage customer data (‘‘Integrated Tax System’’) as well as new customer interfaces at various locations. This organization can be considered to be in the midst of a long NPM development process. The difference between the two organizations with regard to the extent of NPM implementation reflects the development of recent decades. Public organizations, especially at the level of government administration, did not begin to address the issues of quality management (i.e. TQM or NPM) until relatively late. This development began in the US several years before it took place in Europe. Repeated surveys (true longitudinal analyses: t1/t2) enabled us to measure changes in perceived customer orientation and in its predictors over time. In addition, we compared customer orientation between the two participating organizations (USA/AT). As reported by Bennett et al. (1999), the two participating organizations experienced a climate of change due to the introduction of NPM. This climate can be characterized by stress, high workload and uncertainty, as well as positive factors such as the employees’ feeling of excitement about the change and motivation. The well-known Hofstede studies (Hofstede, 1983; Hofstede, 1998) indicate some cultural differences between Austria and the USA, i.e. lower values in ‘‘power distance’’, ‘‘individualism’’ and higher values in ‘‘masculinity’’ and ‘‘uncertainty avoidance’’ in Austria as compared to the USA. In relation to the differences between the two organizations in terms of the state of the NPM implementation, we do not expect a strong cultural effect on perceived customer orientation. 2.2. Instruments A short scale with seven items was developed to measure all three forms of perceived customer orientation (Bruhn, 1999). In developing the questionnaire items, we reviewed the various dimensions of TQM and NPM (e.g. Gruening, 2001; Nakhai and Neves, 1994; Prybutok and Stafford, 1997). An example of an item measuring informationbased interpretation of customer orientation was ‘‘My
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division knows how to measure satisfaction of its external customers’’. An item measuring culture-based interpretation was ‘‘My division is organized to respond to customers’ needs’’. An item measuring service and interaction-based perspective included ‘‘My division collects and uses customer satisfaction data to improve its services’’. Because the scale for measuring perceived customer orientation was developed and used in both English and German language versions, tests of scale characteristics were carried out separately for each version. The scale was tested using classic test theory as well as confirmatory factor analysis (due to its theory-driven development). The first measurement time (t1) was used for these tests. Cronbach’s alpha for the German version was 0.85, and the scale was normally distributed. A test using confirmatory factor analysis returned satisfactory fit values (w2 ¼ 115.5, df ¼ 12, p ¼ 0:00; GFI ¼ 0.96, NFI ¼ 0.95, CFI ¼ 0.96, RMSEA ¼ 0.10). We can thus conclude that the scale is one-dimensional and homogenous. Cronbach’s alpha for the English version was 0.91, and the distribution was also normal. The confirmatory factor analysis test also returned satisfactory fit values in this case (w2 ¼ 98.60, df ¼ 13, p ¼ 0:00; GFI ¼ 0.98, NFI ¼ 0.98, CFI ¼ 0.98, RMSEA ¼ 0.07). Therefore, this scale can also be considered one-dimensional and homogenous. A scale for measuring perceived customer orientation was thus created in a theoretically founded, one-dimensional implementation with satisfactory consistency. Table 1 shows key statistics of the study variables.
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2.3. Conducting the survey The survey of employees in the Austrian organization was conducted on site at the tax authority’s offices. In order to ensure a high response rate and the quality of the data, employees were thoroughly informed about the goals of the survey. Meetings were organized on site, with approximately 20 employees at a time filling out questionnaires in the presence of one study coordinator. In the American study, employees were given comprehensive information about the survey. Depending on the location, the questionnaires were either personally distributed by members of the research team or sent to employees by regular mail. The surveys were filled out at the workplace. They were collected by a member of the research team or returned by mail by the employees. Reminders were sent in order to improve the response rate. At both locations, participation in the study was voluntary and anonymous. An individual code was used to link the t1/t2 data for each employee. The survey was also supported by the management and employee representatives who wrote letters and memos expressing their endorsement of the study. 3. Results The sample from the Austrian organization consists of 810 employees at t1 (response rate: 77.2%), and 622 employees at t2 (response rate: 60.2%). The sample from the American organization consists of 1278 employees at t1
Table 1 Statistical characteristics of the study variables Scale name
Job characteristics Feedback
Autonomy
Example
N items
a USA t1
a AT t1
X (SE) USA t1
X (SE) USA t2
X (SE) AT t1
X (SE) AT t2
How much feedback on the quality of your work do you receive from your superiors? To what extent can you decide for yourself which tasks you wish to carry out?
3
0.88
0.68
47.7 (0.95)
56.0 (1.51)
53.8 (1.52)
47.7 (0.95)
3
0.70
0.61
61.5 (0.87)
61.8 (1.38)
61.3 (1.39)
61.5 (0.87)
4
0.81
0.82
3
0.88
0.80
4
0.75
0.75
53.6 (0.75) 39.0 (0.97) 53.0 (0.70)
54.4 (0.76) 39.7 (0.94) 55.0 (0.75)
58.3 (1.21) 51.6 (1.56) 53.6 (1.11)
57.3 (1.21) 50.2 (1.52) 51.9 (1.21)
5
0.81
0.82
4
0.90
0.79
60.3 (0.75) 68.5 (0.62)
62.2 (0.80) 67.5 (0.68)
57.4 (1.20) 65.4 (1.01)
57.6 (1.28) 63.9 (1.05)
7
0.85
0.91
55.4 (1.23)
56.9 (1.19)
56.9 (1.74)
61.1 (1.76)
Organizational characteristics Team quality In my opinion, teamwork increases our ability to work effectively. Participation To what extent do you decide on the responsibilities assigned to you? Support from Employees’ new ideas are met with full superiors acknowledgement by our superiors. Quality of working life Job satisfaction All in all, how satisfied are you with your work activities? Stress My daily tasks are extremely challenging and difficult. Perceived customer orientation Perceived customer My division is organized to respond to orientation customers’ needs
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(response rate: 70.2%), and 1110 employees at t2 (response rate: 60.9%). Overall the two samples displayed similar characteristics. All of the employees surveyed perform office tasks with much customer contact. The proportion of female employees was higher in the US (t1: USA 58%, AT 48%), while the percentage of younger employees was somewhat higher in Austria (t1: USA 22%, AT 28%). Response rates were judged satisfactory. 3.1. Changes in customer orientation (hypothesis 1) In the first step of the analysis, we examined customer orientation as reported by employees at each of the two measurement times (see Table 1). An analysis of variance was performed, with organization (USA/AT) as independent factor and the measurement (t1/t2) as repeated measure factor. The values for customer orientation lie in the middle range of the scale with scores around 55–60 for a possible range from 0 to 100, with a low standard deviation. In both organizations, a slight increase in customer orientation over the study period was observed. The analysis of variance confirms significant effects of the organization (USA/AT: F ¼ 6:03, p ¼ 0:01) and the measurement time (t1/t2: F ¼ 26:44, po0:001) as well as a significant interaction (organization measurement time: F ¼ 4:23, p ¼ 0:04). The organizational change processes were accompanied by a relatively small but significant increase in perceived customer orientation. The increase in customer orientation in the Austrian organization is higher than in the American sample. 3.2. Changes in the predictors of customer orientation (hypothesis 2) A variance analysis (MANOVA, QWL, job and organizational characteristics as dependent variables) confirms a significant difference between the two organizations (USA/AT: F ¼ 14:20, po0:001), no significant effect of the measurement time (t1/t2: F ¼ 0:65, p ¼ 0:42), and a significant interaction (organization measurement time: F ¼ 11:74, po0:001). Separate analyses for the various measures of job and organizational characteristics and QWL showed the following significant effects (see also Table 1). Job and organizational characteristics were perceived as more positive by Austrian participants as compared to the American participants (USA/AT: F ¼ 23:4, po0:001), with the strongest effects in ‘‘feedback’’ (USA/AT: F ¼ 24:4, po0:001) and ‘‘participation’’ (USA/AT: F ¼ 50:24, po0:001). Overall Austrian participants displayed a slight tendency toward perceptions of job and organizational characteristics becoming more negative over time. On the other hand, in the American sample, there is a slight tendency toward improvement in job and organizational characteristics over the study period (organization measurement time: F ¼ 11:1, p ¼ 0:01). QWL did not differ between the organizations (USA/AT:
F ¼ 3:50, p ¼ 0:06) and improved over the study period (t1/t2: F ¼ 5:09, p ¼ 0:02). 3.3. Predictors of customer orientation (hypothesis 3) In the third step of the analysis, we examined the effects of job characteristics, organizational characteristics and QWL on perceived customer orientation. To test hypothesis 3, the statistical analysis included two stages. In the first stage, the relationships were analyzed at time t1. Correlations between predictor variables and customer orientation were calculated (see Table 2), and a regression analysis was performed with the predictors entered as a block in the analysis (see Table 3). The analyses were performed separately for the two samples. The correlations follow a similar pattern in the two samples. The highest correlations with customer orientation were found for job satisfaction, perceived support from supervisor and feedback. The regression analyses show that customer orientation is related to increased job satisfaction, high support from supervisor, and, in the American sample, to increased feedback. These analyses confirm that a positive work environment, especially supervisor support and feedback, and high job satisfaction create favorable conditions for increasing perceived customer orientation. In the second stage of the analysis, we examined the predictors of changes in perceived customer orientation. A step-by-step regression analysis was performed with predictor variables entered as blocks. The dependent variable was perceived customer orientation measured at the second survey time (t2). In the first block, the baseline value for customer orientation (t1) was included. Then the baseline values for the predictors (job and organizational characteristics and QWL) were included. In the final block the change scores or difference values for each of the predictors were included. These analyses were performed separately
Table 2 Correlations of predictor variables with perceived customer orientation (t1) Customer orientation USA-t1
Customer orientation AT-t1
Job characteristics Feedback Autonomy
0.31** 0.21**
0.18** 0.13**
Organizational characteristics Team quality Participation Support from supervisor
0.12 0.12 0.35
0.12 0.15 0.27
0.39 0.13
0.29 0.01
Quality of working life Job satisfaction Stress Significant at po.05.
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Table 3 Regression analysis results (dependent variable: perceived customer orientation at t1)
Dependent variable Customer orientation (t1)
Sample 1: USA Durbin–Watson d ¼ 2:05
Sample 2: AT Durbin–Watson d ¼ 2:00
R2 (p) 0.20 (0.00)
R2 (p) 0.11 (0.00)
Significant predictors (Beta, p) Job satisfaction (0.24) Support from superiors (0.13) Feedback (0.14)
Significant predictors (Beta, p) Job satisfaction (0.20) Support from superiors (0.15) —
Table 4 Results of step-by-step regression analyses (dependent variable: perceived customer orientation at t2) Sample 1: USA Durbin–Watson d ¼ 1:95
Sample 2: AT Durbin–Watson d ¼ 1:95
R2 R2-change (p)
Significant predictors (Beta, p)
R2 R2-change (p)
Significant predictors (Beta, p)
(1) Customer orientation at t1
0.313 0.313 (0.00)
Customer orientation t1 (0.56, 0.00)
0.327 0.327 (0.00)
Customer orientation t1 (0.53, 0.00)
(2) Predictors at t1
0.353 0.039 (0.00)
Job satisfaction t1 (0.08, 0.01) Teamwork t1 (0.07, 0.01)
0.367 0.038 (0.00)
Teamwork (0.11, 0.04)
(3) Predictors (t2–t1)
0.408 0.055 (0.00)
Feedback t2–t1 (0.09, 0.00) Support from. superiors (0.10, 0.00)
0.440 0.073 (0.00)
Job satisfaction t2–t1 (0.18, 0.00)
Analysis block
for each of the two samples. Table 4 displays the results of this analysis. In both samples, the baseline value of customer orientation (t1) had a significant effect on the t2 measure of customer orientation. Overall, the predictors (baseline values and change scores) explain about 10% of the variance of customer orientation at t2. In the Austrian sample, good teamwork at t1 is related to high customer orientation at t2. In the American sample, high job satisfaction at t1 and good teamwork at t1 are related to high customer orientation at t2. In the Austrian sample, an increase in job satisfaction between t1 and t2 is related to high customer orientation at t2. In the American sample, increases in feedback and supervisor support between t1 and t2 are related to high customer orientation at t2.
4. Discussion In this study, we developed a short scale to measure perceived customer orientation. The scale includes the three aspects of customer orientation described in the literature (information, culture and service) as well as customer-related criteria from various TQM and NPM approaches. The scale is now fully developed in both English and German language versions. Our data show its usefulness in analyzing NPM implementation in two organizations that are at different stages of NPM introduction. Our analysis of predictors of customer orientation in the domains of work environment, the organization and the QWL allows for an improved conceptual approach of ‘‘perceived customer orientation’’. It also provides information to organizations interested in
improving NPM implementation processes with to the goal of increasing customer orientation. Because the scale customer orientation is short, it can be applied easily. In our study, it received a high level of acceptance from the employees surveyed. Tests on the basis of classic test theory and by means of confirmatory factor analysis confirmed the one-dimensionality and homogeneity of the perceived customer orientation construct in both English and German. We measured the extent to which public organizations act in a customer-oriented manner and the extent to which customer orientation is rooted in organizational culture. Customers are not often in contact with the tax authority, usually only once a year. On the other hand, employees are confronted with the organization and its customers on a daily basis. Employees can perceive customer orientation from an internal perspective probably more reliably than external customers can. The changes associated with NPM are probably perceived more strongly by employees than by customers. These changes can include new organizational structures, training in customer-oriented behavior or complaint management, and the introduction of new service standards. These changes may not be perceived by the customers, but can be seen as customer-oriented achievements. Increased customer orientation leads to a better assessment of perceived service quality and thus to higher customer satisfaction and customer loyalty. In the private sector, this leads to repeat business and referrals (Brady and Cronin, 2001). As for the revenue services investigated in this study, the effect of strong customer orientation is especially important with regard to loyalty and the citizen’s acceptance of rules and regulations related to the acting of the public authority: it may improve the
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image of the authority, and allow for positive communication between the employees and citizens. In both organizations, a significant but small increase in customer orientation was found over the study period. Before interpreting this data, several methodological issues are discussed. The study was designed as a true longitudinal survey, and response rates were satisfactory in both samples. However, we should note that the study was based on a quasi-experimental design (without control group). Therefore, we need to consider possible threats to internal validity. The internal validity of the study can be considered sufficient because the measuring instrument was found suitable for repeated use, the intervals between measurements were sufficiently long, and no other major influences affected the two organizations during the study period (Cook and Campbell, 1979). The introduction of NPM led to a significant but small increase in perceived customer orientation in both organizations. The increase in customer orientation can be interpreted first as a confirmation that introducing NPM brings about its intended effects. We can only speculate about the reasons for the small increase in customer orientation. The study period of 12 months was relatively short for such a comprehensive change as NPM. Only minor organizational changes were implemented in the two organizations in between the two surveys. In addition, increasing customer orientation in the public sector can constitute a major cultural change that cannot be fully implemented in a short period of time. The Austrian organization only recently started to implement NPM. Therefore, there may have been some negative effects in the way employees perceive their work environment. This can be explained by employee ‘‘resistance to change’’. The American employees had more experience with quality improvement: their NPM program was first introduced more than a decade ago, only to be renewed a few years ago. Therefore, one may expect less resistance to change in the American organization. Results on employee perceptions of the work environment, the organization and the QWL also have to be interpreted carefully because of linguistic and possible cultural differences. At t1 the data on job and organizational characteristics and QWL were more positive in the Austrian sample as compared to the American sample. This may explain the greater increase in perceived customer orientation in that sample, i.e. the Austrian organization had more positive ‘prerequisites’ for implementing NPM and fostering customer orientation among its employees. It is interesting to note that over the study period the Austrian sample showed a slight worsening in job and organizational characteristics and the US sample showed a slight improvement in those same variables. One possible interpretation is that the initial introduction of NPM places an additional burden on the employees, while the potential of these organizational changes to improve working conditions manifests itself after the employees experience NPM. Overall, the introduction of NPM
showed different effects with regard to the job and organizational characteristics in the two samples. With regard to QWL (job satisfaction), a slight positive effect could be observed in both samples. Overall the changes observed in the study variables were relatively small. The correlation analysis demonstrates a positive relationship between customer orientation and job and organizational characteristics and the QWL. The structure of this relationship follows a similar pattern in the two samples. In particular, high job satisfaction and supervisor support are related to high customer orientation. Overall a positive assessment of the work environment by employees is linked to high customer orientation. Our regression analyses using t1 data also confirmed this result. These cannot be regarded as artificial relationships due to response styles because only specific predictors (job satisfaction, feedback and supervisor support) showed strong relationships with customer orientation, a finding that is also confirmed by the longitudinal analyses. A positive work environment, in particular high job satisfaction, supervisor support and feedback, is related to an increase in perceived customer orientation. In order to attain the desired objective of increasing perceived customer orientation in the introduction of NPM, it is necessary to make improvements in general working conditions and in the organization. Knowledge of one’s own performance (feedback) and favorable social conditions at work (teamwork and supervisor support) as well as high job satisfaction are especially important in this context. In both samples, the analyses show that the predictors explain approximately 10% of the variance in the change of perceived customer orientation. As these are additional common variances in the change values (along with the relationships to the baseline values), these findings are particularly significant. They point out to macroergonomic recommendations for the implementation of NPM. The objective of increasing customer orientation may be easier to attain when employees perceive the quality of their working life to be satisfactory and when they experience positive teamwork and receive necessary support during the NPM implementation process. Fairly comprehensive NPM changes have to be implemented in order to increase customer orientation. Our results suggest the importance of teamwork. In addition, the introduction process has to be managed professionally, which includes providing sufficient perceived support as well as sufficient information to the employees. Increasing perceived customer orientation among public administration employees could be achieved through a carefully managed NPM implementation process that considers the organizational environment and the quality of the employees’ working life in a positive manner. Future research could explore whether macroergonomic interventions based on our study findings (e.g. improving supervisor support, encouraging teamwork and building effective feedback mechanisms) lead to improvement in employee customer orientation, and ultimately in increased customer satisfaction.
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