The effects of employee behavior in sustainable service organizations

Abstract

Numerous service organizations involve employees in strengthening customer relationships. While the literature has emphasized the importance of a sustainable market orientation (SMO) for an organization’s image, it has not explored how employees’ behavior in sustainable service organizations influences the reputational effect. The purpose of this paper is to investigate the impact of SMO-aligned employee behavior on customer attitude and behavior, while considering different SMOs and the role of value-based brand choice. The authors conducted a 2 (SMO-aligned vs nonaligned) × 3 (social, environmental or economic SMOs) between-subject, scenario-based experiment with 313 participants to test the hypotheses. A moderated mediation analysis was also conducted. The results show that SMO-aligned employee behavior has a positive impact on customers’ trust in contrast with SMO-nonaligned behavior independent of the SMO. The relationship between employee behavior and customer word-of-mouth is mediated by trust. Furthermore, the effect on trust is moderated by value-based brand choice. This study contributes to employee behavior research by examining the impact of SMO-aligned employee behavior on customer outcomes in sustainable service organizations. Adding to previous research on employee behavior, it further considers the impact of value-based brand choice.