Jiang, K., Hu, J., Hong, Y., Liao, H., & Liu, S.
Journal of Applied Psychology. Advance online publication.
Prior research has demonstrated that service climate can enhance unit performance by guiding employees’ service behavior to satisfy customers. Extending this literature, we identified ethical climate toward customers as another indispensable organizational climate in service contexts and examined how and when service climate operates in conjunction with ethical climate to enhance business performance of service units. Based on data collected in 2 phases over 6 months from multiple sources of 196 movie theaters, we found that service climate and ethical climate had disparate impacts on business performance, operationalized as an index of customer attendance rate and operating income per labor hour, by enhancing service behavior and reducing unethical behavior, respectively. Furthermore, we found that service behavior and unethical behavior interacted to affect business performance, in such a way that service behavior was more positively related to business performance when unethical behavior was low than when it was high. This interactive effect between service and unethical behaviors was further strengthened by high market turbulence and competitive intensity. These findings provide new insight into theoretical development of service management and offer practical implications about how to maximize business performance of service units by managing organizational climates and employee behaviors synergistically.
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