We examine the relationships based on a model shown in the Figure. It is expected that management-subordinate task relationship has a direct effect on marketing effectiveness, which, in turn, has an effect on financial performance. In addition to the direct relationships among the three groups of constructs, we also examine the relationship among the within-group constructs of management-subordinate task relationship and marketing effectiveness.
RESEARCH METHODOLOGY
A packet of survey questionnaire along with a cover letter was delivered to respondents in a major U. S.
metropolitan area. Each respondent received a questionnaire along with a cover letter. On average, respondents completed the survey in about 20 minutes. The participation was voluntary. Respondents were asked to fill out the questionnaire at their convenience and return it within one week. A total of 1,200 questionnaires were distributed, resulting in 330 completed, valid responses (27.5% response rate). The sample comprises middle-level and lower-level managers from a variety of industry sectors.
Measurement
Churchill (1991) and Nunnally (1978) advocate the use of existing multi-item scales, which have been previously assessed with adequate reported reliability and validity. Management behavior was measured with self-reported perceptual measures on a Likert scale conceptualized by House and Dessler (1974) with items assessing the four management behaviors. Collaboration was measured with a 6-item scale, three for mutual dependency and three for common-goal relationship.
We examine market orientation with the two commonly accepted components, customer orientation and interfunctional coordination with a modified eleven-item self-reported perceptual scale based on those items originally developed by Narver and Slater (1990). We did not include the two decision criteria, which are not supported by Narver and Slater’s data, or competitive orientation, which is not specified in Kohli and Jaworski’s model and has been shown to have a negative effect on business performance by Armstrong and Collopy (1996).
Service quality was measured by a modified SERVQUAL scale that has been used to assess a general class of services along five dimensions: tangibility, assurance, responsiveness, reliability, and empathy (Zeithaml, Parasuraman, and Berry, 1990).
Financial performance was measured by four items: meeting revenue goal, subjective overall performance, profitability, and return on assets. All performance measures are single-item self-report items.
RESULTS
Several exploratory factor analyses were conducted to confirm the dimensions of major constructs. The results showed that management behavior has four distinctive factors as expected. The items also loaded on the expected factors. The four-factor solution of management behavior explains 65.0% of the variation, while a one-factor solution only explains 27.2% of variation. The results confirm that management behavior is a multi-dimensional construct. Collaboration is also shown to have a clear two-factor structure, explaining 61% of total variation. The results of factor analysis on market orientation showed that all eleven items loaded on a single factor, explaining 40.2% of total variation, while a two factor solution only explained 44%. Therefore, only one aggregate measure of market orientation was included in the subsequent regression models. Service quality is also a multi-item measure of business performance. A factor analysis revealed that the factor structure is congruent with those found in previous studies. The reliabilities of study measures are supported by their respective Cronbach alphas.
We examine the effect of management-subordinate task relationship on marketing effectiveness in Tables 1, and 2. Both task relationship factors, management behavior and collaboration, have significant effects on market orientation and service quality (all regression models have significant F values). Closer examinations reveal some intriguing findings. All task relationship factors have significant effects on market orientation, except the directive management behavior. The supportive management behavior has not only the strongest effect on market orientation (Table 1, Models 1.1), but also the strongest effect on service quality (Table 2, Models 2.1). Both collaboration factors have significant effects on market orientation and service quality, while common-goal relationship has a stronger effect on both.
Table 1: The Effect of Task Relationship on Market Orientation
MS Task Relationship Market Orientation Model 1.1: Management Behavior on Market Orientation Management Behavior:
Goal-Oriented .218**
Directive .080
Participative .113*
Supportive .437**
Adjusted R-Square .41 Regression F-Value 56.8
n 330
Model 1.2: Collaboration on Market Orientation ME Collaboration:
Mutual Dependency .21**
Common-Goal Relationship .30**
Adjusted R-Square .19 Regression F-Value 39.0
n 330
** p<0.01 * p<0.05
Table 2: The Effect of Task Relationship on Service Quality
Service Quality
MS Task Relationship Overall Tangibility Reliability Respnsvnss Assurance Empathy MGMT Behavior: Models 2.1: Management Behavior on Quality
Goal-Oriented .208** .112* .054 .131* .162** .204**
Directive .163** .188** .139* .068 .119* .025
Participative .043 .041 -.071 .126* .077 -.056
Supportive .497** .312** .225** .249** .384** .431**
Adjusted R-Square .50 .25 .10 .17 .32 .26 Regression F-Value 82.4 28.3 9.2 17.6 38.7 29.2
n 330 330 330 330 330 330
Collaboration: Models 2.2: Collaboration on Quality
Mutual Dependency .142** .057 -.020 .156** .125* .125*
Common-Goal .419** .175** .170** .270** .364** .350**
Adjusted R-Square .25 .04 .02 .13 .19 .17 Regression F-Value 54.5 7.3 4.4 25.5 38.2 35.4
n 330 330 330 330 330 330
Models 2.3: Market Orientation on Quality
Market Orientation .759** .481 .418** .481** .567** .511**
Adjusted R-Square .58 .23 .18 .23 .32 .26 Regression F-Value 448.2 99.6 69.9 99.1 115.7 116.2
n 330 330 330 330 330 330
** p<0.01 * p<0.05
The effect of marketing effectiveness on financial performance is also supported by significant F values in Table 3. Both market orientation and service quality are found to have significant effects on the four performance measures. Among the five service quality components, tangibility and empathy show more consistent effects, while reliability and responsiveness show little effect (Models 3.2).
Table 3: The Effect of Marketing Effectiveness on Financial Performance
Financial Performance
Marketing Effectiveness Meeting Revenue Goal Subject Performance Profitability Return on Asset Models 3.1: Market Orientation on Financial Performance Market Orientation: .253** .569** .285** .283*
Adjusted R-Square .06 .32 .08 .08
Regression F-Value 22.1 157.9 29.0 28.4
n 330 330 330 330
Service Quality: Models 3.2: Service Quality on Financial Performance
Overall Service Quality .252**(a) .573**(a) .358**(a) .290**(a)
Tangibility .214** .277** .139* .097
Reliability .108* .092 .019 .038
Responsiveness -.017 .109* .039 .098
Assurance .060 .223** .171** .045
Empathy .044 .177** .175** .174**
Adjusted R-Square .09 .35 .14 .08
Regression F-Value 6.1 34.3 10.7 6.7
n 330 330 330 330
** p<0.01 * p<0.05; (a)Based on a simple regression analysis, not part of the multiple regression model below.
DISCUSSION
The relationships among management-subordinate task relationship, organizational effectiveness, and business performance are supported. Although most of the regression beta coefficients are based on multiple regression models, we investigate the reliability of those coefficients by examining correlation matrices and stepwise regression models and found that, with a few exceptions, the results were consistent.
In addition, we examine the direct effects of management behavior and collaboration on financial performance. Only the goal-oriented management behavior and common-goal relationship has a consistent, significant effect on all of the four performance measures. This illustrates the importance of goal setting and communication. Finally, we look into the relationship between management behavior and collaboration and found that management behavior has significant impact on collaboration, except the effect of directive behavior on mutual dependency (Table 4).
Table 4: The Effect of Management Behavior on Management-Employee Collaboration
ME Collaboration
Management Behavior: Mutual Dependency Common-Goal Relationship
Goal-Oriented .117* .167**
Directive -.005 .126*
Participative .252** .134*
Supportive .302** .247**
Adjusted R-Square .26 .23
Regression F-Value 29.4 24.7
n 330 330
** p<0.01 * p<0.05