From customer orientation to customer satisfaction: The gap between theory and practice

Abstract

The classical quality management theory suggests that different quality improvement practices have a similar positive effect on overall operational efficiency, leading to customer satisfaction. Based on a study of 225 organizations in the electronics industry in Hong Kong, we find that individual quality improvement practice has a specific effect on operational performance, rather than equally improving the overall operational efficiency. Our investigations indicate that customer orientation practices primarily affect time-based efficiency, while process improvement efforts help cost-related performance. On the other hand, emphasizing process-control systems leads to customer satisfaction directly without necessarily improving operations. While supporting the basic assertions of the classical quality management theory, these findings reveal that several problems exist in the practice of quality management in industry, and suggest that a re-direction of several quality management practices seems necessary. This research refines the understanding of quality management by explicating the specific effect of customer orientation and process management on organizational performance.