Standardization in services: Assessing the impact on customer satisfaction

Abstract

To achieve high competitiveness, the companies need to satisfy varying customer needs. The changing nature of customer preferences leads to the increased complexity of the processes in service companies. In order to deliver the services of the high quality at the accepted costs, the companies resort to the process standardization. However, excessive process standardization may lead to company’s inability to cater to the different customer needs, and hinder firm competitiveness over time. The goal of the present study, thus, is to evaluate the impact of standardization on customer satisfaction, and identify factors that can further foster this relationship. We identify the factors that impact the standardization-customer satisfaction relationship through exploratory and confirmatory factor analysis, and then perform a structural equation model linking standardization to customer satisfaction in the system of multiple mediating factors. The analysis of 304 firms reveals the positive impact of standardization on customer satisfaction. We further evaluate the effect of employee rewards and recognition system, quality-oriented culture, management commitment, training and development as well as goal setting and project management on standardizationcustomer satisfaction relationship. The analysis reveals the triad of the factors that are cardinal to improvement of customer satisfaction through standardization: Training on improvement methods, rewards and recognition of employees to stimulate their participation in improvement initiatives, as well as management commitment. Further analysis reveals certain regional differences in the prevailing factors contributing to standardization across studied countries. The study contributes to the scarce field of knowledge of standardization application in services domain as well as provide directions for the further scholarly work in the field of process improvement and standardization as well as guidelines for the practitioners conducting process improvement in their organizations. © 2019, Technical University of Liberec. All rights reserved.