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Article Excerpt
In today's economy, the success of a business largely depends on the quality of service provided to its customers (Berry, 1995; Gutek, 1995; Zeithaml & Bitner, 1996). Sasser and Arbeit (1976) distinguished between the service that is provided to internal and external customers, and argued that both are equally important. Quality service to internal customers results in empowered and happy colleagues who are likely to carry out their own work more effectively (Azzolini & Shillaber, 1993). Quality service to external customers brings customer satisfaction and loyalty (Rogelberg, Barnes-Farrell, & Creamer, 1999), which will in turn result in repeat business (Kotler, 1999). Hurley (1998) suggests that employees with whom customers interact directly should act proactively and exercise discretion as to how they deliver service quality to satisfy or even surprise customers. It is therefore important to understand what drives good service. According to past research, two antecedents to the work output of employees are service climate (e.g. Schneider, White, & Paul, 1998) and effective leadership of direct supervisors (e.g. Bettencourt & Brown, 1997; Deluga, 1994; Podsakoff, MacKenzie, Moorman, & Fetter, 1990).
Although service climate and effective leadership behaviour have been found to have a significant impact on employee service quality, little work has been undertaken to integrate these two conceptually related constructs in the same study. In this paper, we examine the relative contribution of service climate and effective leadership behaviour to employee service quality, and the interaction effect of these two independent variables on the outcome variable. The interaction effect is important, given the literature on the substitutes of leadership model (Kerr & Jermier, 1978). In addition, we note the importance of conceptualizing service climate and effective leadership behaviour as group-level variables, and the need to look at their influence on outcome variables beyond the individual level (e.g. Schneider et al., 1998; Strutton, Pelton, & Lumpkin, 1993; Williams, Podsakoff, & Huber, 1992; Yammarino & Dubinsky, 1992, 1994). Although service climate and effective leadership behaviour can best be conceptualized as group-level variables (Ehrhart, 2004; Schneider et al., 1998), to the best of our knowledge, no study has so far examined the direct and interaction effects of these two constructs at multiple levels. This gap in the literature motivates the present study.
This study plans to make the following contributions. First, we formulate a moderating model that predicts the interaction effects between service climate and effective leadership behaviour on employee service quality. This will contribute to an ongoing discussion on the substitutes of leadership model of Kerr and Jermier (1978). Second, in response to the call for a multi-level approach, we test the model at both the individual and group levels. Third, whereas most studies on these two potential antecedents to employee service quality have been conducted in North America and Europe, this study considers service climate and effective leadership behaviour in a Chinese society. As customer satisfaction and service quality are relatively new to many Chinese workers, data from this population will be useful for the research community in developing and refining theories for application beyond cultural boundaries. In the following sections, we briefly survey the literature on the relationships between service climate, leadership behaviour and employee service quality, and then move on to a description and test of the moderating model at the group level.
Impact of supervisors effective leadership behaviour on service quality
The literature abounds with actions that supervisors can undertake to be effective leaders. These actions can be crudely organized into three clusters: task-oriented actions (sometimes called performance or initiating structure), people-oriented actions (sometimes called maintenance or consideration) and ethical actions (sometimes called moral character). The first two have been discussed extensively by earlier researchers such as Blake and Mouton (1978), Fleishman (1967) and Misumi (1985). Some examples of performance actions are making timely decisions, motivating employees, giving directions, drawing up plans and meeting deadlines. In a service setting, effective supervisors influence and encourage the service behaviour of employees by setting targets for their frontline subordinates. They empower, inspire, reward and serve as role models so that their frontline subordinates understand how to deliver the best service. Maintenance actions include respecting the decisions of subordinates, resolving conflicts, listening to the views of subordinates, helping subordinates to achieve organizational and sometimes personal goals and being supportive when subordinates encounter work problems (e.g. Schaubroeck & Fink, 1998). Moral character--or ethical leadership--has recently attracted the attention of researchers (e.g. Emler & Cook, 2001; Greenleaf, Frick, & Spears, 1996; Kanungo & Mendonca, 1996; Ling & Fang, 1995; Srivastva, 1988), and can be linked to transformational leadership (Podsakoff et al., 1990; Turner, Barling, Epitropaki, Butcher, & Milner, 2002). Moral character includes the supervisor's fairness (Bettencourt & Brown, 1997) and trust-building behaviour (Deluga, 1994). Good supervisors act in an impartial and non-favouring manner and do not abuse their power for personal benefits.
Numerous studies have demonstrated that such effective leadership behaviour is associated with the quality of work of subordinates in service organizations (e.g. Bettencourt & Brown, 1997; Deluga, 1994; Pillai, Schriesheim, & Williams, 1999; Podsakoff et al., 1990; Schaubroeck & Fink, 1998). Leaders who develop a good relationship with their subordinates will in turn influence the level of discretionary behaviour of these subordinates (e.g. Settoon, Bennett, & Liden, 1996). In a field experiment, Lam and Schaubroeck (2000) found that using credible and influential people as service quality leaders could enhance the positive attitudes of bank tellers towards service quality initiatives, which result in a more favourable customer rating of service. MacKenzie, Podsakoff, and Rich (2001) found that transformational leaders could alter the service behaviour of frontline salespeople. Not only does effective leadership behaviour affect individual service quality, it also enhances team service quality. For example, supervisors' level of 'servant leadership' (Greenleaf et al., 1996) is associated with unit-level organizational citizenship behaviour in 249 grocery store departments (Ehrhart, 2004). Furthermore, proactive, considerate and charismatic store managers have been found to significantly improve the objective business performance of the supermarkets that they run (Koene, Vogelaar, & Soeters, 2002). A critical mass of colleagues delivering good service has a modelling effect on others. Thus, the supervisor's effort in raising service quality at the team level can be multiplied in its impact.
Impact of service climate on service quality
Service climate is derived from a consensual understanding, within a company, a department or a group, of how to behave in different settings and with different customer populations. Borucki and Burke (1999) defined service climate in terms of employee cognitive appraisals of the organization's attitude towards employee well-being, and the concern of members of the organization about customer well-being. This includes the extent of the perception that management sets clear performance standards, provides appropriate training and information, removes obstacles to service, assists in employee job performance and distributes rewards for good service to customers. A favourable service climate is associated with excellent interdepartmental service (Schneider et al., 1998). Service climate is also related to the perception that the organization and its members assist customers, and to outcome variables such as individual and organizational service performance (Borucki & Burke, 1999) and customer satisfaction with service quality (Johnson, 1996). Some data suggest that if the favourable service climate is 'strong' (i.e. when employees agree on their perception of the climate), then there is a low variability in customer satisfaction. However, a weak service climate is associated with a high variability in customer satisfaction (Schneider, Salvaggio, & Subirats, 2002).
Relationship between effective leadership behaviour of supervisors and service climate
Some writers have conceptualized leadership behaviour as a precursor to organizational climate (e.g. Dickson, Smith, Grojean, & Ehrhart, 2001; Koene et al., 2002; Litwin & Stringer, 1968) or group climate (Kivlighan & Tarrant, 2001). Kozlowski and Doherty (1989) integrated the vertical dyad linkage theory of leadership with climate perception, and showed that subordinates with whom a supervisor relates closely have a more positive evaluation of the organizational climate than subordinates who have a poor-quality relationship with their supervisors. More recently, Schneider et al. (1998) included in their formulation of service climate the subordinates' perception of the actions of their immediate supervisors to reward, support and expect good customer service. Furthermore, management's recognition and appreciation of quality service appears in the 'climate for service' scale. It should be noted, however, that although the supervisor is a member of the organization, his or her identity is separate from that of the organization. Although there is a partial overlap between the perception of a supervisor's behaviour and the organizational climate, a frontline supervisor does not have the power to dictate all features contributing to the service climate. Instead, senior management cultivates and nurtures the service climate by designing the company's compensation structure and setting policies on interdepartmental communication, the management of customer information, customer service policies and so forth. For this reason, this study treats service climate and the leadership behaviour of direct supervisors as conceptually separate entities. Moreover, in our measurement, we attempt to minimize any overlapping that may confound the two constructs.
Interaction between service climate and effective leadership behaviour: A moderating model
There is a large body of literature on the situational approach to leadership (e.g. Evans, 1970; Fiedler, 1967; House, 1971). A quarter of a century ago, Kerr and Jermier (1978) theorized that the effects of leadership can be substituted for, neutralized or enhanced by certain contextual variables. Many researchers (e.g. Howell, Bowen, Dorfman, Kerr, & Podsakoff, 1990; Podsakoff, MacKenzie, & Fetter, 1993; Podsakoff, Niehoff, MacKenzie, & Williams, 1993; Williams etal.,...
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