How Employer and Employee Satisfaction Affect Customer Satisfaction: An Application to Franchise Services

Journal of Service Research, 14(2), May 2011, 136-148

14 Pages Posted: 16 Oct 2013 Last revised: 1 Nov 2013

See all articles by Heiner Evanschitzky

Heiner Evanschitzky

University of Münster - Finance Center Muenster

Christopher Groening

University of Missouri at Columbia - Department of Marketing

Vikas Mittal

Rice University

Maren Wunderlich

T-Mobile International AG

Date Written: December 17, 2011

Abstract

In small-service settings, how do owner satisfaction, front-line employee satisfaction, and customer satisfaction relate to one another? The authors use generalized exchange theory (GET) to examine how satisfaction levels of these three constituents are reciprocated. The authors examine a European franchise system comprising 50 outlets, 933 employees, and 20,742 customers. Their results show two important findings. First, the effect of owner-franchisee’s satisfaction on customer satisfaction is fully mediated by front-line employee satisfaction. Thus, managers of a service outlet can strongly impact the satisfaction and behavioral intentions of their customer base, even without direct contact with them. Second, the link between customer satisfaction and purchase intention is moderated by employee satisfaction at an outlet. The link between customer satisfaction and customer purchase intentions is almost twice as strong when employees are satisfied than when they are not. Thus, there is a ‘‘double positive effect:’’ not only does higher employee satisfaction at an outlet directly lead to higher customer satisfaction but it also indirectly strengthens the association between customer satisfaction and their repurchase intentions.

Keywords: customer satisfaction, employee satisfaction, manager satisfaction, franchisee satisfaction, exchange theory, purchase intentions, service-profit chain

Suggested Citation

Evanschitzky, Heiner and Groening, Christopher and Mittal, Vikas and Wunderlich, Maren, How Employer and Employee Satisfaction Affect Customer Satisfaction: An Application to Franchise Services (December 17, 2011). Journal of Service Research, 14(2), May 2011, 136-148, Available at SSRN: https://ssrn.com/abstract=2339332

Heiner Evanschitzky (Contact Author)

University of Münster - Finance Center Muenster ( email )

Universitatsstr. 14-16
Muenster, 48143
Germany

Christopher Groening

University of Missouri at Columbia - Department of Marketing ( email )

College of Business
Columbia, MO 65211
United States

Vikas Mittal

Rice University ( email )

6100 South Main Street
250 McNair
Houston, TX 77005-1892
United States

Maren Wunderlich

T-Mobile International AG

Bonn
Germany

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