From Customer Orientation to Customer Satisfaction: The Gap between Theory and Practice

Abstract—The classical quality management theory suggests that different quality improvement practices have a similar positive effect on overall operational efficiency, leading to cus-tomer satisfaction. Based on a study of 225 organizations in the electronics industry in Hong Kong, we find that individual quality improvement practice has a specific effect on operational per-formance, rather than equally improving the overall operational efficiency. Our investigations indicate that customer orientation practices primarily affect time-based efficiency, while process improvement efforts help cost-related performance. On the other hand, emphasizing process-control systems leads to customer satisfaction directly without necessarily improving operations. While supporting the basic assertions of the classical quality man-agement theory, these findings reveal that several problems exist in the practice of quality management in industry, and suggest that a re-direction of several quality management practices seems necessary. This research refines the understanding of quality man-agement by explicating the specific effect of customer orientation and process management on organizational performance. Index Terms—Customer orientation, customer satisfaction, operational efficiency, process improvement. I