Do Frontline Mechanisms Matter? Impact of Quality and Productivity Orientations on Unit Revenue, Efficiency, and Customer Satisfaction

Abstract

This study identifies a frontline mechanism comprising autonomy, cohesion, and feedback that helps explain when and why the simultaneous pursuit of quality and productivity orientations has positive or negative effects on unit revenue, efficiency, and customer satisfaction. An empirical test of the proposed framework using data from 423 employees in 30 strategic business units and longitudinal unit-level performance data indicates that frontline autonomy mediates the positive impact of productivity and quality orientations on unit revenue and customer satisfaction and their negative impact on unit efficiency. Feedback amplifies the influence of frontline autonomy by simultaneously enhancing its positive effect on satisfaction and its negative effect on efficiency. In contrast, unit cohesion strengthens the positive effect of frontline autonomy on revenue and customer satisfaction without augmenting its negative effect on unit efficiency. The results urge managers to shift their focus toward unit-level mechanisms to find clues for managing strategic dilemmas that stem from multiple goal pursuit in face-to-face service settings.