Store managers, profitability and satisfaction in multi-unit enterprises

Purpose – This study aims to explore how managers of multi-unit retail chains balance unit customer satisfaction and profitability through the manager ' s customer, sales, and production operating orientations. Design/methodology/approach – This research links survey data (gathered from unit managers and customers) to customer satisfaction and unit financial performance. Findings – The study found that the store managers ' customer and sales operating orientations are strongly related to financial performance; further, these effects are negatively moderated by a production operating orientation. Results also indicate that the store manager ' s customer and sales operating orientations are related to customer satisfaction only when moderated by his/her production operating orientation. Research limitations/implications – Using a sample drawn from within a single firm, this research examines profitability and customer satisfaction at the unit level and identifies the manager of the unit as occupying a key strategic role in the multi-unit enterprise. Practical implications – The findings highlight the critical role the unit manager of a multi-unit enterprise plays in driving customer satisfaction and unit profitability. Further, the results point to the challenge of managing the production-related responsibilities of the retail enterprise while striving to be sales and/or customer oriented. Implications for management are particularly salient when considering the combined effect of production-sales and production-customer orientations. Originality/value – This study merges services operations and services marketing theory to explore how conflicting strategic initiatives are implemented at the store level, and how these, in turn, influence unit financial performance and customer satisfaction.