Determinants of quality and efficiency performance in service operations

Using arguments from the knowledge-based view and resource-based view of the firm, the purpose of this paper is to propose that external knowledge (as measured by a firm’s customer orientation) and internal knowledge management (through human capital development techniques of job-related training and enhancing employee capability) together contribute to successful service delivery systems.

The hypothesized model is tested on a large sample of 249 Chinese service firms using structural equation modeling and hierarchical regression analyses.

The results indicate that the knowledge management factors of customer orientation, employee capability and job-related training had a varying influence on quality and efficiency dimensions of service system performance. Also, internal knowledge facets of employee capability and job-related training had complementary effects in inducing improved performance on both quality and efficiency.

The focus on the key enablers of customer orientation, employee capability and job-related training does not represent a comprehensive set of enablers of service system performance outcomes. Also, a longitudinal examination of capabilities that influence service system performance can also be explored.

The context of service firms in multiple sectors serves as an important contribution to the emerging literature that bridges human resource management and customer orientation in service settings. Implications of the results for practice and theory development are discussed.