The impact of relationship-oriented behaviors on firm financial performance in the restaurant industry

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Kim, Byeong-Yong
Major Professor
Haemoon Oh
Cheryl O. Hausafus
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Hotel, Restaurant and Institutional Management

Effective supplier and customer relationship management has been recognized as important firm strategies for achieving the long-term financial and value-added benefits of the relationships. The present study investigated how supplier and customer relationship oriented behaviors affected financial performance of firms through three relationship performance outcome variables: (1) supplier relationship performance, (2) product and service quality performance, and (3) customer relationship performance.;A mailed survey was used to collect data nationwide from 1,000 randomly selected restaurant owners and presidents in the United States. Preliminary analyses, including tests of sampling adequacy, normality, and reliability, were performed using the SPSS 11.0 Windows. The proposed model and hypotheses were tested by structural equation modeling using the LISREL 8.5 program. Results of the preliminary analyses met the recommended guidelines suggested by previous studies, indicating that further analysis would be justified. The model fit indices revealed evidence of strong reliability and validity for the model constructs, indicating that evaluation of the structural model would be well grounded.;All path coefficients were statistically significant, indicating that all relationships among constructs were in the proposed direction. Results supported the usefulness of the framework that synthesizes concepts of both business-to-business and business-to-customer relationship marketing/management. The results also suggest that building relationships with suppliers and customers plays an important role in providing value to restaurant firms and stakeholders such as suppliers and customers, leading to high financial performance of the firms. Furthermore, customer care issues such as customer needs, customer complaints, and employees' interpersonal skills received the highest mean scores, implying that customer care should be the top priority in employee training. Finally, the findings and implications need to be considered in light of the limitations of the research.

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Thu Jan 01 00:00:00 UTC 2004