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Sunday, December 4, 2016

Do It Well and Do It Right: The Impact of Service Climate and Ethical Climate on Business Performance and the Boundary Conditions

Kaifeng Jiang, Jia Hu, Ying Hong, Hui Liao, & Songbo Liu
Journal of Applied Psychology
Vol 101(11), Nov 2016, 1553-1568.


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.


In conclusion, service excellence has become a strategic imperative for service organizations, and prior research has established an unequivocal picture of the value in building a service climate that guides employees to satisfy customers and generate value. Our findings suggest another indispensable and complementary route to service success: in addition to emphasizing service excellence, organizations should highlight high ethical standards to uniquely inhibit unethical behavior. Additionally, both excellent service behavior and adherence to ethics functioned synergistically. Last, our results showed that the synergy between service and ethical behavior was most salient when the market was turbulent or competitive.

The article is here.