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International Journal of Business and Management Invention
ISSN (Online): 2319 – 8028, ISSN (Print): 2319 – 801X
www.ijbmi.org || Volume 5 Issue 6 || June. 2016 || PP—57-63
www.ijbmi.org 57 | Page
The Impact of Organizational Climate, Service Quality and
customer Satisfaction on Organizational Performance: a Case of
International Tourist Hotel Industry in Taipei City
Gao-Liang Wang 1
, Yu-Je Lee 2
, Song-Fen Cheng3
1
(Dept. Of Marketing Management, Takming University Of Science And Technology, Taiwan)
2
(Dept. Of Marketing Management, Takming University Of Science And Technology, Taiwan)
3
(Dept. Of Marketing Management, Takming University Of Science And Technology, Taiwan)
ABSTRACT: The demand for vacation and accommodation has grown greatly because of the government’s
policy on promoting tourism which is in line with the two-day weekend policy in Taiwan. Therefore, the demand
for domestic tourist hotels has been growing accordingly. The purpose of this study is to explore the impacts of
organizational climate, service quality and customer satisfaction on organizational performance. This study
focused on section managers and front-line staff of international tourist hotels in Taipei City as the population
of the study. Convenience sampling was used to draw samples from the population. The study results showed (1)
organizational climate has significant positive impacts on organizational performance; (2) service quality has
significant positive impacts on organizational performance; and (3) customer satisfaction also has significant
positive impacts on organizational performance. In addition, the results of this study can be used by the relevant
industry as a reference for business-related decision-making so as to get ahead of the game, grasp the
profit-making opportunities and improve the organizational performance.
Keywords: Organizational climate, service quality, customer satisfaction, organizational performance,
international tourist hotel industry
I. INTRODUCTION
1.1 Motivation and Purpose
The demand for vacation and accommodation has been increasing because of the government‟s policy on
promoting tourism. Many business groups have been preparing to invest in and build international tourist hotels.
As of the April of 2016, there were 75 international tourist hotels in Taiwan, and currently 35 applications for
constructing international tourist hotels have been approved by the Tourism Bureau, Ministry of Transportation
and Communications (Tourism Bureau, Ministry of Transportation and Communications, 2016).
With the increase in the total number of international tourist hotels, it requires more professional managers to be
engaged in the operation and management. One of the functions of international tourist hotels is to provide food,
accommodation and relevant public facilities. The services, regardless of catering, reservations, accommodation,
travel arrangements and airport pick-up/drop-off serves, involve complex operation. Therefore, the international
tourist hotel industry is an industry with comprehensive, diversified and multi-functional services(Wu, 2002).
Moreover, with the change of social environment and increase in travel experiences, the quality of
accommodation of the international tourist hotels has been emphasized, calling for higher quality of
accommodation and service standards. As a result, the managers of the international tourist hotels have to
continue to learn, grow and acquire more professional knowledge and capability of operation and management,
especially create an appropriate organizational climate to meet the new demands of the customer and the challenge
of ever-changing market.
In recent years, international tourist hotels are committed to customer services. The constant innovation on
services indicates their emphasis on the customers. For example, the development of international chain system by
Hyatt Taipei and Landis‟hotel services management consultant team are examples demonstrating the international
tourist hotel industry‟s active introduction of internationalization and continuous improvement on the business
strategies and service quality. The hotel industry is heading toward a labor-intensive industry that requires a large
number of professional workforces.
Based on the above motivation, the study intends to understand the impacts of organizational climate, service
quality and customer satisfaction on the international tourist hotel industry in Taipei city. The population of the
study is focused on the section managers and front-line staff in the international tourist hotels in Taipei City. The
main purposes of the study are as follows:
(1) To understand whether organizational climate has a significant positive effect on organizational performance;
(2) To understand whether service qualityhas a significant positive effect on organizational performance; and
(3) To understand whether customer satisfactionhas a significant positive effect on organizational performance.
The Impact Of Organizational Climate, Service Quality Andcustomer Satisfaction On…
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II. LITERATURE REVIEW
Literatures on the main dimensions of this study, including organizational climate, service quality, customer
satisfaction and organizational performance, were reviewed as below:
2.1 Conceptual Definition of Main Dimensions
2.1.1 The Definition ofOrganizational Climate
There are many literatures on organizational climate. In this study, the organizational climate is conceptually
defined as “a holistic concept which consists of the staffs‟ subjective view on institution, organization and
management. It is a property to describe behavior patterns in an organization. Some organizations have open and
harmonious organizational climate while others show strict and depressed organizational climate. Different
organizational climates will have different impacts on the staffs‟behavioral motivation and work morale.” The
above conceptual definition is summarized from the following literature, and is hereby briefly described:
Desseler (1976)believed that organizational climate is staffs‟ perception and feeling toward an organization‟s
autonomy, remuneration, compassionate, warmth, support and openness.
Litwin and Stringer (1968)divided organizational climate into nine dimensions: (1) structure; (2) responsibility; (3)
rewards; (4) risk; (5 ) warmth; (6) support; (7) standard; (8) conflict; and (9) identity.
2.1.2 Definition of Service Quality
Over the years, many scholars have come up with different definitions for service quality. In this study, “service
quality” is conceptually defined as “the appraisal arisen from a customer after he/she receives services. The
customer‟sperception before and after receiving the service or interacting with the service providers is consistent,
and no „bad mood‟ is arisen.” The above conceptual definition is summarized from the following literature:
Parasuraman, Zeithaml and Berry (1988) pointed out that service quality is a comprehensive appraisal or attitude
toward the superiority of service wherein superiority arises when the actual service exceeds the customer‟s
expectation. Parasuraman,Zeithaml & Berry further summarized the abovementioned service quality into five
dimensions: (1) reliability; (2) responsiveness; (3) assurance; (4) empathy and (5) tangibility, and came up with a
service quality scale “SERVQUAL.”
In addition,Weng (2000)also believed that service quality is derived from the comparison between a customer‟s
expectation on service prior to receiving the service and the actual perception of the service while receiving the
service.
Furthermore, Fan(2012)also pointed out that service quality is customers‟ subjective perception on the
evaluation of expected and actual services which vary depending on internal and external environment.
2.1.3 Definition of Customer Satisfaction
The study‟s conception definition of customer satisfaction refers to “the summarized emotional response to
product acquisition or consumer experience during a time point or a period of time.” The above conceptual
definition is summarized from the following literature:
Cardozo (1965)was the first scholar proposing the concept of consumer satisfaction. Based on the concept of cost
and remuneration, he believed that if a customer‟s perception on product remuneration is higher than the cost,
satisfaction arises, and it might lead to another purchase behavior. Fornell (1992) thought customer satisfaction is
an overall feeling, i.e., customer satisfaction is a form of consumer attitude which reflects an overall feeling of like
or dislike after the consumer receives the service or uses the product.Anderson & Sullivan (1993)proposed that
the process customers used to evaluate satisfaction is called the difference between “expectation and actual
experience,” i.e., the customer satisfaction depends on the expectation and actual performance of a product or
service. Giese & Cote(2000)held that customer satisfaction refers to summarized emotional response to product
acquisition or consumer experience during a time point or a period of time.
Szymanski & Henard (2001) pointed out that variables that affect satisfaction include expectation, loss,
performance and emotion, and fairness is also an important determinant. Yeung (2002)thought customer
satisfaction can be viewed as a way to identify customer expectation and it almost began to be conceptualized as
a threshold of customer‟s satisfaction on services.
The study refers to the classification of Fornell(1992), and classifies customer satisfaction into five
sub-dimensions: (1) pre-purchase expectations: the degree of expectation; (2) post-purchase perception
performance: level of quality with respect to price and level of price with regard to quality; (3) degree of
satisfaction: overall satisfaction, degree of which expectation is met and the gap between ideal and actual
situations; (4) complaint: number of complaints made to sales and management personnel; and (5) customer
loyalty: price tolerance and intention of repurchase. The sub-dimensions of customer satisfaction in this study
are referred to the following literature.
Oliver & Desarbo (1988)divided the theories of customer satisfaction into five theories: (1) expectation; (2)
The Impact Of Organizational Climate, Service Quality Andcustomer Satisfaction On…
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disconfirmation; (3) equity theory; (4) attribution; and (5) performance.
And Fornell (1992)divided customer satisfaction into five sub-dimensions: (1) pre-purchase expectation; (2)
post-purchase perception performance; (3) degree of satisfaction; (4) complaints; and (5) customer loyalty.
In addition, Oliver(1997)thought when measuring overall satisfaction, properties that customer value should be
weighted so that they would more accurately reflect the true degree of satisfaction in customers‟ mind.
Yu (2015)pointed out that measurement of customer satisfaction can be divided into two categories, namely (1)
overall evaluation: only a single dimension is measured; and multi-dimensional measurement: measuring
satisfaction from multiple dimensions based on different properties.
Organizations exist because they create products and services that people consider valuable. The better an
organization operates, the higher value it can create. With dramatic changes in the competitive environment, the
importance of performance to a company has increased gradually. When evaluating corporations, the investors
nowadays tend to make their investment based on whether the companies can bring them great benefits. Because
the environment and situations every company faces are different, the business strategies it adopts are different.
Therefore, when determining how to design the organizational structure and which strategies to adopt, the
organizations have to match the companies‟ business strategies in order to enhance the satisfaction of business
outcome and the level of achievement of preset goals.
2.1.4 Definition of Organizational Performance
In this study, the conceptual definition of organizational performance refers to “A quantitative standard or
subjective perception to evaluate the level of achievement of preset goals or level of satisfaction of business
outcome of a company during overall operation. It can be divided into strategy performance and operation
performance. The measurement indicator of the former includes return on investment and the measurement
indicator of the later is employee satisfaction.” The above conceptual definition is summarized from the
following literature:
Robbins & Coulter (2002)considered organizational performance as the final result accumulated from all
operating procedures and activities of an organization. WhileLee (2004)thought organizational performance is the
result of measurement that assesses the level of achievement of preset goals and level of satisfaction of operation
during the organization‟s overall operation.
With regard to measurement of performance, Woo & Willard (1983) pointed out fourteen variables that are
commonly used in measuring performance, including: return on investment (ROI), return on sales, sales revenue,
cash flow/investment, market share, acquisition of market share, quality of product relative to competitors,
activities of new products relative to competitors, direct costs relative to competitors, product R&D, difference in
ROI, Rate of change of ROI and cash flow/percentage change rate of investment. In addition, Venkatraman &
Ramanujam (1986) pointed out that measurement of performance include: (1) financial performance: it is the most
common indicator in general research, including return on assets and sales growth rate; (2) operational
performance: financial performance pluses non-financial indicators such as market share, product quality,
introduction of new products and value added rate; and (3) organizational effectiveness: non-financial indicators
with a wider range such as employee morale, turnover rate.
2.2 Relationship between Two Dimensions
2.2.1 Organizational Climate and Organizational Performance
So far, no literature has discussed the relationship between organizational climate and organizational
performance. However, we subjectively think organizational climate and organizational performance are related.
Therefore, this study proposes the following hypothesis: H1: Good organizational climate has a significant
positive impact on organizational performance in the case of international tourist hotels in Taipei City.
Although the study proposed the above hypothesis, for the purpose of objectiveness, it is necessary to examine
whether the hypothesis is valid through questionnaire and statistical analysis.
2.2.2 Service Quality and Organizational Performance
After reviewing literature related to service quality and organizational performance, the study proposed the
hypothesis 2:H2: Good service quality has a significant positive impact on organizational performance in the
case of international tourist hotels in Taipei City.
Guo (2012) believed that there is a positive correlation between quality of staff service and organizational
performance.
Lu(2013)also thought that good service quality brings out a sense of trust from customers during consumption
process which in turn raises the possibility of re-consumption, and thus increases the organizational
performance.
In addition,Chen (2013)pointed out that, in small and medium sized accounting firms, the higher the sense of
responsibility is, the higher the quality of service and organizational performance are.
The Impact Of Organizational Climate, Service Quality Andcustomer Satisfaction On…
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Taking a broad view of the above, the subjects in the literatures were different from that of this study. Therefore, it
is necessary to examine whether the hypothesis 2(H2) proposed in this study, i.e., good service quality has
significant positive impact on organizational performance in the case of international tourist hotels in Taipei City,
is valid through questionnaire and statistical analysis.
2.2.3 Customer Satisfaction and Organizational Performance
So far, no literature has discussed the relationship between customer satisfaction and organizational performance.
However, we subjectively think organizational climate and organizational performance are related. Therefore,
this study proposes the following hypothesis: H3: Good customer satisfaction has a significant positive impact
on organizational performance in the case of international tourist hotels in Taipei City.
Although the study proposed the above hypothesis, for the purpose of objectiveness, it is necessary to
examine whether the hypothesis is valid through questionnaire and statistical analysis.
2.3 Research Framework
The following research framework, as shown in Figure 1, can be drawn from the above research purposes,
hypotheses and literature review:
Figure 1: Research framework
III. RESEARCH METHOD
3.1Research Subject and Questionnaire Design
The research population of this study is limited to the section managers and front-line staff of international
tourist hotels in Taipei city. Convenience sampling was used to sample the population. To increase the content
validity and reliability, we first conducted expert questionnaire after the questionnaire was designed, and then
conducted the pilot test which revised or removed inappropriate questions in the questionnaire followed by the
post-test. Atotal of 250 copies of questionnaire were distributed and 232 valid responses were collected, rendering
the effective response rate 92.80%.Figure 1 shows the number of questions in the main dimensions (conceptual
dimensions) and sub-dimensions (operational measurement) in the questionnaire.
Table1: Questionnaire Question Structure
Main dimension Number of Questions Source of reference for the questionnaire
OC 3 Gary Desseler(1976) and the study‟s own design
SQ 4 Parasuraman et al (1988) & Fan (2012)
CS 3 Fornell(1992) and the study‟s own design
OP 3 Lee (2004)
3.2 Statistical Methods Used in this Study
This studymainly used Pearson correlation and multiple regression analysis as the statistical methods for the
quantitative researchwhich are shown in the following Results and Analysis.
IV. RESULTS AND ANALYSIS
4.1 The Purpose of this Study is to explore the Impacts ofOrganizational Climate, Service Quality and
Customer Satisfaction on Organizational Performance.
Using questionnaire as a research tool, data collected by the questionnaire were processed and analyzed
statistically. Indicators with regard to the questionnaire such as convergence validity, discriminate validity and
average variance extracted (AVE) are briefly described below.
Table2 Convergence validity, AVE and discriminate validity in this study
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AVE Composite Reliability Cronbach‟s α (1) (2) (3) (4)
(1) OC 0.651 0.863 0.842 0.807
(2) SQ 0.682 0.892 0.873 0.703 0.826
(3) CS 0.663 0.871 0.824 0.631 0.642 0.814
(4) OP 0.652 0.863 0.816 0.584 0.572 0.581 0.807
Table 2 shows reliability (Cronbach‟s α>0.7), but also discriminate validity and convergence validity (AVE>0.5;
CR>0.7) in this questionnaire.
4.2 Correlation Analysis on the Impacts of Organizational Climate, Service Quality, Customer Satisfaction on
Organizational Performance
The impacts of organizational climate, service quality and customer satisfaction on organizational performance
were analyzed by Pearson product-moment correlation.
Table 3: Correlation analysis of each dimension
Organizational
Climate
Service
Quality
Customer
Satisfaction
Organizational
Performance
Organizational
Climate
Pearson
correlation
1
Significance
(two-tail)
Service
Quality
Pearson
correlation
.136 1
Significance
(two-tail)
.054
Customer
Satisfaction
Pearson
correlation
.479** .061 1
Significance
(two-tail)
.000 .391
Organizational
Performance
Pearson
correlation
.693** .287** .474** 1
Significance
(two-tail)
.000 .000 .000
** When the significant level is 0.001 (two-tail), the correlation is significant
As shown in Table 3, there is a positive relationship between organizational climate and organizational
performance, and the correlation coefficient is 0.693. In addition, service quality and organizational performance
are positively correlated, and the correlation coefficient is .287. Finally, the correlation coefficient of the
correlation between customer satisfaction and organizational performance is .474. The results of correlation
analysis show that organizational climate and organizational performance are positively correlated. Service
quality and organizational performance are positively correlated, and customer satisfaction and organizational
performance are also positively correlated.
4.3 Regression Analysis on the Impacts of Organizational Climate, Service Quality and Customer Satisfaction
on Organizational Performance
This section analyzes the level of impact of organizational climate, service quality and customer satisfaction on
organizational performance using linear regression as well as determines whether there are significant impacts
among variablesas shown on the following Table 4 and Table 5.
Table 4: Regression analysis coefficients
Model
Non-standardized coefficient Standardized
coefficient t Significanc
e
Collinearity
statistics
Estimate of B Standard error Beta distribution Tolerance VIF
(Constant) .597 .321 1.861 .064
Organizational
Climate
.456 .044 .579 10.338 .000 .750 1.333
Service Quality .207 .053 .495 9.340 .000 .963 1.039
Customer
Satisfaction
.168 .051 .486 9.529 .001 .752 1.330
The Impact Of Organizational Climate, Service Quality Andcustomer Satisfaction On…
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a.Dependent variable: organizational performance
Table 5: Summary of regression analysis models
Model R
R
square
Adjusted
R square
Estimated
standard
error
Statistical change
R squared
change
F
change
df1 df2 Significant
F change
2 .695b
.483 .469 .36017 .476 179.452 1 195 .000
3 .721c
.519 .504 .34803 .037 14.840 1 194 .000
4 .738d
.545 .529 .33935 .026 11.041 1 193 .001
Based on Tables 4 and 5, the validation results of the hypotheses in this study are as follows:
H1: Organizational climate has direct impacts on organizational performance (valid)
H2: Service quality has direct impacts on organizational performance (valid)
H3: Customer satisfaction has direct impacts on organizational performance (valid)
V. CONCLUSIONS AND RECOMMENDATIONS
5.1 Conclusions
Based on the above analyses and results, the following conclusions can be drawn:
(1) Organizational climate has significant positive impacts on organizational performance in the case of
international tourist hotels in Taipei City (path coefficient = .579);
(2) Service qualityhas significant positive impacts on organizational performance in the case of international
tourist hotels in Taipei City (path coefficient = .495); and
(3) Customer satisfactionhas significant positive impacts on organizational performance in the case of
international tourist hotels in Taipei City (path coefficient = .486).
5.2 Contribution of this Study (Management Implication)
This study explores a practical issue using exploratory factor analysis (EFA). It is a topic worth further exploration.
This study not only provides a reference for further study, the results can also be used as a reference in
business-related decision-making in relevant industry so as to get ahead of the game, grasp the profit-making
opportunity and improve the organizational performance. Therefore, this study is a valuable reference.
In addition, organizational climate, service quality and customer satisfaction have positive significant impacts on
organizational performance. The results of this study reveal the key factors to enhance the organizational
performance of international tourist hotels.
5.3 Research Limitations and Recommendations
After careful consideration, although this study has strived to be as comprehensive as possible while using the
existing research resources, the following limitations still exist during the implementation.
(1) The scope of this study is limited to Taipei City. Due to limited research resources, the questionnaire could not
be distributed all over Taiwan. In addition, the subject of this study was limited to the customers of
international tourist hotels and is not universal enough. We recommend that the subsequent researchers can
expand the scope of the study.
(2) This study used convenience sampling method for sampling. Even though the response rate is higher, the
samples might not represent the population. We recommend the subsequent researchers to use other sampling
methods such as simple random sampling or stratified sampling.
(3) The framework of this study did not consider the impact of customer satisfaction of international tourist
hotels on the customers‟ behavioral intention. The subsequent researchers can expand the scope of the
research. We believe, with expanded scope, it will provide further understanding in this field.
REFERENCES
[1]. Anderson, E. W., & Sullivan, M. W., The antecedents and consequences of customer satisfaction for firms. Marketing Science, 12,
1993, 125-143.
[2]. Cardozo, R. N., An experimental study of customer effort, expectation and satisfaction, Journal of Marketing Research, 2, 1965,
244-249.
[3]. Chen, H. C., The Effect of Felt Responsibility to Relationship of Customer Quality, Service Quality and Organizational Performance:
Small and Middle Accounting Firm as an Example, master‟s thesis, Executive MBA, Accounting Department, National Changhua
University of Education, 2013.
[4]. Dessler, G.,Organization and management: A contingency approach, Englewood Cliffs, N.J: Prentice-Hall, 1976.
[5]. Fan, Z. F., Relationships among Corporate Image, Service Quality, and Customer Satisfaction-A Case of Cathay Life Insurance
Company Limited, master's thesis, Master's Program of International Business Administration (IMBA), Feng Chia University, 2012.
[6]. Fornell, C., A national customer satisfaction baromer: the Swedish experience. Journal of Marketing, 56, 1992, 61-103.
[7]. Giese, J. L. & Cote, J. A., Defining Consumer Satisfaction. Academy of Marketing Science Review, 2000.
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[8]. Guo, Y. X., A Study of Technical and Administrative Innovation, Service Quality and Organizational Performance in International
Tourist Hotels-Organizational Citizenship Behavior as a Moderator, master‟s thesis, Master‟s Program in Department of Restaurant,
Hotel and Institutional Management, Fu Jen Catholic University, 2012.
[9]. Lee, S. H., The study on the business strategy, execution and balanced scorecard forwarding business performance-Taking Rubber
Industry as example, master's thesis, College of Management, I-Shou University, 2004.
[10]. Litwin, G. G. and Stringer, R. A., Motivation and Organizational Climate. Boston, MA: Harvard University Press, 1968.
[11]. Lu, H. W., A Study on the Correlation between Tour Conductor‟s Leadership, Service Quality and Organization Performance in the
Consumers‟ Recognition, master‟s thesis, Department of Business Administration, Shih Hsin University, 2013.
[12]. Oliver, R. L. & Desarbo, W. S., Response Determinants in satisfaction judgment. Journal of consumer research, 14(3), 1988,
495-507.
[13]. Oliver, R. L., Satisfaction: A behavioral perspective on the consumer, New York: Irwin/McGraw-Hill, 1997.
[14]. Parasuraman, A., Zeithaml, V. A., & Berry, L. L., The SERVQUAL: A multiple-item scale for measuring consumer perceptions of
service quality, Journal of Retailing, 64(1), 1988, 12-40.
[15]. Robbins, S. P., & Coulter, M., Management (7th
Ed.). Upper Saddle River, NJ: Prentice Hall, 2002.
[16]. Szymanski, D.M. & Henard, D.H, Customer satisfaction: A meta-analysis of the empirical evidence, Journal of the Academy of
Marketing Science, 29(1), 2001, 16-35.
[17]. Tourism Bureau, Ministry of Transportation and Communications, 2016, Business Operation Analysis Report on International Tourist
Hotels in Taiwan, website of Tourism Bureau, Ministry of Transportation and Communications (www.tbroc.gov.tw)
[18]. Venkatraman, N. and Ramanujam, V., Measurement of business performance in strategy research: A comparison of approaches.
Academy of Management Review, 11 (4), 1986, 801-814.
[19]. Weng, C. X., A Comparative Study for Evaluation Approaches of Service Quality, Sun Yat Sen Management Review, 8 (1), 2000,
105-122.
[20]. Woo, C.Y. and Willard G., Performance representation in business policy research: discuss and recommendation, Paper Presented at
the 23rd Annual National Meeting of the Academy of Management Dalla, 1983.
[21]. Wu, M. Q., Hotel Management-Theory and Practice, Taipei: Yang-Chih Book Co., Ltd, 2002.
[22]. Yeung, S. P. M., Teaching approaches and the development of responsible environmental behaviour: The case of Hong Kong. Ethics,
Place and Environment, 5(3), 2002, 239-269.
[23]. Yu, C. H., A Study on the Relationship among Service Quality, Perceived Value and Repurchase Intention - Customer Satisfaction as
Mediating Variable, master‟s thesis, Institute of Business Management, Kao Yuan University, 2015.

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The Impact of Organizational Climate, Service Quality and customer Satisfaction on Organizational Performance: a Case of International Tourist Hotel Industry in Taipei City

  • 1. International Journal of Business and Management Invention ISSN (Online): 2319 – 8028, ISSN (Print): 2319 – 801X www.ijbmi.org || Volume 5 Issue 6 || June. 2016 || PP—57-63 www.ijbmi.org 57 | Page The Impact of Organizational Climate, Service Quality and customer Satisfaction on Organizational Performance: a Case of International Tourist Hotel Industry in Taipei City Gao-Liang Wang 1 , Yu-Je Lee 2 , Song-Fen Cheng3 1 (Dept. Of Marketing Management, Takming University Of Science And Technology, Taiwan) 2 (Dept. Of Marketing Management, Takming University Of Science And Technology, Taiwan) 3 (Dept. Of Marketing Management, Takming University Of Science And Technology, Taiwan) ABSTRACT: The demand for vacation and accommodation has grown greatly because of the government’s policy on promoting tourism which is in line with the two-day weekend policy in Taiwan. Therefore, the demand for domestic tourist hotels has been growing accordingly. The purpose of this study is to explore the impacts of organizational climate, service quality and customer satisfaction on organizational performance. This study focused on section managers and front-line staff of international tourist hotels in Taipei City as the population of the study. Convenience sampling was used to draw samples from the population. The study results showed (1) organizational climate has significant positive impacts on organizational performance; (2) service quality has significant positive impacts on organizational performance; and (3) customer satisfaction also has significant positive impacts on organizational performance. In addition, the results of this study can be used by the relevant industry as a reference for business-related decision-making so as to get ahead of the game, grasp the profit-making opportunities and improve the organizational performance. Keywords: Organizational climate, service quality, customer satisfaction, organizational performance, international tourist hotel industry I. INTRODUCTION 1.1 Motivation and Purpose The demand for vacation and accommodation has been increasing because of the government‟s policy on promoting tourism. Many business groups have been preparing to invest in and build international tourist hotels. As of the April of 2016, there were 75 international tourist hotels in Taiwan, and currently 35 applications for constructing international tourist hotels have been approved by the Tourism Bureau, Ministry of Transportation and Communications (Tourism Bureau, Ministry of Transportation and Communications, 2016). With the increase in the total number of international tourist hotels, it requires more professional managers to be engaged in the operation and management. One of the functions of international tourist hotels is to provide food, accommodation and relevant public facilities. The services, regardless of catering, reservations, accommodation, travel arrangements and airport pick-up/drop-off serves, involve complex operation. Therefore, the international tourist hotel industry is an industry with comprehensive, diversified and multi-functional services(Wu, 2002). Moreover, with the change of social environment and increase in travel experiences, the quality of accommodation of the international tourist hotels has been emphasized, calling for higher quality of accommodation and service standards. As a result, the managers of the international tourist hotels have to continue to learn, grow and acquire more professional knowledge and capability of operation and management, especially create an appropriate organizational climate to meet the new demands of the customer and the challenge of ever-changing market. In recent years, international tourist hotels are committed to customer services. The constant innovation on services indicates their emphasis on the customers. For example, the development of international chain system by Hyatt Taipei and Landis‟hotel services management consultant team are examples demonstrating the international tourist hotel industry‟s active introduction of internationalization and continuous improvement on the business strategies and service quality. The hotel industry is heading toward a labor-intensive industry that requires a large number of professional workforces. Based on the above motivation, the study intends to understand the impacts of organizational climate, service quality and customer satisfaction on the international tourist hotel industry in Taipei city. The population of the study is focused on the section managers and front-line staff in the international tourist hotels in Taipei City. The main purposes of the study are as follows: (1) To understand whether organizational climate has a significant positive effect on organizational performance; (2) To understand whether service qualityhas a significant positive effect on organizational performance; and (3) To understand whether customer satisfactionhas a significant positive effect on organizational performance.
  • 2. The Impact Of Organizational Climate, Service Quality Andcustomer Satisfaction On… www.ijbmi.org 58 | Page II. LITERATURE REVIEW Literatures on the main dimensions of this study, including organizational climate, service quality, customer satisfaction and organizational performance, were reviewed as below: 2.1 Conceptual Definition of Main Dimensions 2.1.1 The Definition ofOrganizational Climate There are many literatures on organizational climate. In this study, the organizational climate is conceptually defined as “a holistic concept which consists of the staffs‟ subjective view on institution, organization and management. It is a property to describe behavior patterns in an organization. Some organizations have open and harmonious organizational climate while others show strict and depressed organizational climate. Different organizational climates will have different impacts on the staffs‟behavioral motivation and work morale.” The above conceptual definition is summarized from the following literature, and is hereby briefly described: Desseler (1976)believed that organizational climate is staffs‟ perception and feeling toward an organization‟s autonomy, remuneration, compassionate, warmth, support and openness. Litwin and Stringer (1968)divided organizational climate into nine dimensions: (1) structure; (2) responsibility; (3) rewards; (4) risk; (5 ) warmth; (6) support; (7) standard; (8) conflict; and (9) identity. 2.1.2 Definition of Service Quality Over the years, many scholars have come up with different definitions for service quality. In this study, “service quality” is conceptually defined as “the appraisal arisen from a customer after he/she receives services. The customer‟sperception before and after receiving the service or interacting with the service providers is consistent, and no „bad mood‟ is arisen.” The above conceptual definition is summarized from the following literature: Parasuraman, Zeithaml and Berry (1988) pointed out that service quality is a comprehensive appraisal or attitude toward the superiority of service wherein superiority arises when the actual service exceeds the customer‟s expectation. Parasuraman,Zeithaml & Berry further summarized the abovementioned service quality into five dimensions: (1) reliability; (2) responsiveness; (3) assurance; (4) empathy and (5) tangibility, and came up with a service quality scale “SERVQUAL.” In addition,Weng (2000)also believed that service quality is derived from the comparison between a customer‟s expectation on service prior to receiving the service and the actual perception of the service while receiving the service. Furthermore, Fan(2012)also pointed out that service quality is customers‟ subjective perception on the evaluation of expected and actual services which vary depending on internal and external environment. 2.1.3 Definition of Customer Satisfaction The study‟s conception definition of customer satisfaction refers to “the summarized emotional response to product acquisition or consumer experience during a time point or a period of time.” The above conceptual definition is summarized from the following literature: Cardozo (1965)was the first scholar proposing the concept of consumer satisfaction. Based on the concept of cost and remuneration, he believed that if a customer‟s perception on product remuneration is higher than the cost, satisfaction arises, and it might lead to another purchase behavior. Fornell (1992) thought customer satisfaction is an overall feeling, i.e., customer satisfaction is a form of consumer attitude which reflects an overall feeling of like or dislike after the consumer receives the service or uses the product.Anderson & Sullivan (1993)proposed that the process customers used to evaluate satisfaction is called the difference between “expectation and actual experience,” i.e., the customer satisfaction depends on the expectation and actual performance of a product or service. Giese & Cote(2000)held that customer satisfaction refers to summarized emotional response to product acquisition or consumer experience during a time point or a period of time. Szymanski & Henard (2001) pointed out that variables that affect satisfaction include expectation, loss, performance and emotion, and fairness is also an important determinant. Yeung (2002)thought customer satisfaction can be viewed as a way to identify customer expectation and it almost began to be conceptualized as a threshold of customer‟s satisfaction on services. The study refers to the classification of Fornell(1992), and classifies customer satisfaction into five sub-dimensions: (1) pre-purchase expectations: the degree of expectation; (2) post-purchase perception performance: level of quality with respect to price and level of price with regard to quality; (3) degree of satisfaction: overall satisfaction, degree of which expectation is met and the gap between ideal and actual situations; (4) complaint: number of complaints made to sales and management personnel; and (5) customer loyalty: price tolerance and intention of repurchase. The sub-dimensions of customer satisfaction in this study are referred to the following literature. Oliver & Desarbo (1988)divided the theories of customer satisfaction into five theories: (1) expectation; (2)
  • 3. The Impact Of Organizational Climate, Service Quality Andcustomer Satisfaction On… www.ijbmi.org 59 | Page disconfirmation; (3) equity theory; (4) attribution; and (5) performance. And Fornell (1992)divided customer satisfaction into five sub-dimensions: (1) pre-purchase expectation; (2) post-purchase perception performance; (3) degree of satisfaction; (4) complaints; and (5) customer loyalty. In addition, Oliver(1997)thought when measuring overall satisfaction, properties that customer value should be weighted so that they would more accurately reflect the true degree of satisfaction in customers‟ mind. Yu (2015)pointed out that measurement of customer satisfaction can be divided into two categories, namely (1) overall evaluation: only a single dimension is measured; and multi-dimensional measurement: measuring satisfaction from multiple dimensions based on different properties. Organizations exist because they create products and services that people consider valuable. The better an organization operates, the higher value it can create. With dramatic changes in the competitive environment, the importance of performance to a company has increased gradually. When evaluating corporations, the investors nowadays tend to make their investment based on whether the companies can bring them great benefits. Because the environment and situations every company faces are different, the business strategies it adopts are different. Therefore, when determining how to design the organizational structure and which strategies to adopt, the organizations have to match the companies‟ business strategies in order to enhance the satisfaction of business outcome and the level of achievement of preset goals. 2.1.4 Definition of Organizational Performance In this study, the conceptual definition of organizational performance refers to “A quantitative standard or subjective perception to evaluate the level of achievement of preset goals or level of satisfaction of business outcome of a company during overall operation. It can be divided into strategy performance and operation performance. The measurement indicator of the former includes return on investment and the measurement indicator of the later is employee satisfaction.” The above conceptual definition is summarized from the following literature: Robbins & Coulter (2002)considered organizational performance as the final result accumulated from all operating procedures and activities of an organization. WhileLee (2004)thought organizational performance is the result of measurement that assesses the level of achievement of preset goals and level of satisfaction of operation during the organization‟s overall operation. With regard to measurement of performance, Woo & Willard (1983) pointed out fourteen variables that are commonly used in measuring performance, including: return on investment (ROI), return on sales, sales revenue, cash flow/investment, market share, acquisition of market share, quality of product relative to competitors, activities of new products relative to competitors, direct costs relative to competitors, product R&D, difference in ROI, Rate of change of ROI and cash flow/percentage change rate of investment. In addition, Venkatraman & Ramanujam (1986) pointed out that measurement of performance include: (1) financial performance: it is the most common indicator in general research, including return on assets and sales growth rate; (2) operational performance: financial performance pluses non-financial indicators such as market share, product quality, introduction of new products and value added rate; and (3) organizational effectiveness: non-financial indicators with a wider range such as employee morale, turnover rate. 2.2 Relationship between Two Dimensions 2.2.1 Organizational Climate and Organizational Performance So far, no literature has discussed the relationship between organizational climate and organizational performance. However, we subjectively think organizational climate and organizational performance are related. Therefore, this study proposes the following hypothesis: H1: Good organizational climate has a significant positive impact on organizational performance in the case of international tourist hotels in Taipei City. Although the study proposed the above hypothesis, for the purpose of objectiveness, it is necessary to examine whether the hypothesis is valid through questionnaire and statistical analysis. 2.2.2 Service Quality and Organizational Performance After reviewing literature related to service quality and organizational performance, the study proposed the hypothesis 2:H2: Good service quality has a significant positive impact on organizational performance in the case of international tourist hotels in Taipei City. Guo (2012) believed that there is a positive correlation between quality of staff service and organizational performance. Lu(2013)also thought that good service quality brings out a sense of trust from customers during consumption process which in turn raises the possibility of re-consumption, and thus increases the organizational performance. In addition,Chen (2013)pointed out that, in small and medium sized accounting firms, the higher the sense of responsibility is, the higher the quality of service and organizational performance are.
  • 4. The Impact Of Organizational Climate, Service Quality Andcustomer Satisfaction On… www.ijbmi.org 60 | Page Taking a broad view of the above, the subjects in the literatures were different from that of this study. Therefore, it is necessary to examine whether the hypothesis 2(H2) proposed in this study, i.e., good service quality has significant positive impact on organizational performance in the case of international tourist hotels in Taipei City, is valid through questionnaire and statistical analysis. 2.2.3 Customer Satisfaction and Organizational Performance So far, no literature has discussed the relationship between customer satisfaction and organizational performance. However, we subjectively think organizational climate and organizational performance are related. Therefore, this study proposes the following hypothesis: H3: Good customer satisfaction has a significant positive impact on organizational performance in the case of international tourist hotels in Taipei City. Although the study proposed the above hypothesis, for the purpose of objectiveness, it is necessary to examine whether the hypothesis is valid through questionnaire and statistical analysis. 2.3 Research Framework The following research framework, as shown in Figure 1, can be drawn from the above research purposes, hypotheses and literature review: Figure 1: Research framework III. RESEARCH METHOD 3.1Research Subject and Questionnaire Design The research population of this study is limited to the section managers and front-line staff of international tourist hotels in Taipei city. Convenience sampling was used to sample the population. To increase the content validity and reliability, we first conducted expert questionnaire after the questionnaire was designed, and then conducted the pilot test which revised or removed inappropriate questions in the questionnaire followed by the post-test. Atotal of 250 copies of questionnaire were distributed and 232 valid responses were collected, rendering the effective response rate 92.80%.Figure 1 shows the number of questions in the main dimensions (conceptual dimensions) and sub-dimensions (operational measurement) in the questionnaire. Table1: Questionnaire Question Structure Main dimension Number of Questions Source of reference for the questionnaire OC 3 Gary Desseler(1976) and the study‟s own design SQ 4 Parasuraman et al (1988) & Fan (2012) CS 3 Fornell(1992) and the study‟s own design OP 3 Lee (2004) 3.2 Statistical Methods Used in this Study This studymainly used Pearson correlation and multiple regression analysis as the statistical methods for the quantitative researchwhich are shown in the following Results and Analysis. IV. RESULTS AND ANALYSIS 4.1 The Purpose of this Study is to explore the Impacts ofOrganizational Climate, Service Quality and Customer Satisfaction on Organizational Performance. Using questionnaire as a research tool, data collected by the questionnaire were processed and analyzed statistically. Indicators with regard to the questionnaire such as convergence validity, discriminate validity and average variance extracted (AVE) are briefly described below. Table2 Convergence validity, AVE and discriminate validity in this study
  • 5. The Impact Of Organizational Climate, Service Quality Andcustomer Satisfaction On… www.ijbmi.org 61 | Page AVE Composite Reliability Cronbach‟s α (1) (2) (3) (4) (1) OC 0.651 0.863 0.842 0.807 (2) SQ 0.682 0.892 0.873 0.703 0.826 (3) CS 0.663 0.871 0.824 0.631 0.642 0.814 (4) OP 0.652 0.863 0.816 0.584 0.572 0.581 0.807 Table 2 shows reliability (Cronbach‟s α>0.7), but also discriminate validity and convergence validity (AVE>0.5; CR>0.7) in this questionnaire. 4.2 Correlation Analysis on the Impacts of Organizational Climate, Service Quality, Customer Satisfaction on Organizational Performance The impacts of organizational climate, service quality and customer satisfaction on organizational performance were analyzed by Pearson product-moment correlation. Table 3: Correlation analysis of each dimension Organizational Climate Service Quality Customer Satisfaction Organizational Performance Organizational Climate Pearson correlation 1 Significance (two-tail) Service Quality Pearson correlation .136 1 Significance (two-tail) .054 Customer Satisfaction Pearson correlation .479** .061 1 Significance (two-tail) .000 .391 Organizational Performance Pearson correlation .693** .287** .474** 1 Significance (two-tail) .000 .000 .000 ** When the significant level is 0.001 (two-tail), the correlation is significant As shown in Table 3, there is a positive relationship between organizational climate and organizational performance, and the correlation coefficient is 0.693. In addition, service quality and organizational performance are positively correlated, and the correlation coefficient is .287. Finally, the correlation coefficient of the correlation between customer satisfaction and organizational performance is .474. The results of correlation analysis show that organizational climate and organizational performance are positively correlated. Service quality and organizational performance are positively correlated, and customer satisfaction and organizational performance are also positively correlated. 4.3 Regression Analysis on the Impacts of Organizational Climate, Service Quality and Customer Satisfaction on Organizational Performance This section analyzes the level of impact of organizational climate, service quality and customer satisfaction on organizational performance using linear regression as well as determines whether there are significant impacts among variablesas shown on the following Table 4 and Table 5. Table 4: Regression analysis coefficients Model Non-standardized coefficient Standardized coefficient t Significanc e Collinearity statistics Estimate of B Standard error Beta distribution Tolerance VIF (Constant) .597 .321 1.861 .064 Organizational Climate .456 .044 .579 10.338 .000 .750 1.333 Service Quality .207 .053 .495 9.340 .000 .963 1.039 Customer Satisfaction .168 .051 .486 9.529 .001 .752 1.330
  • 6. The Impact Of Organizational Climate, Service Quality Andcustomer Satisfaction On… www.ijbmi.org 62 | Page a.Dependent variable: organizational performance Table 5: Summary of regression analysis models Model R R square Adjusted R square Estimated standard error Statistical change R squared change F change df1 df2 Significant F change 2 .695b .483 .469 .36017 .476 179.452 1 195 .000 3 .721c .519 .504 .34803 .037 14.840 1 194 .000 4 .738d .545 .529 .33935 .026 11.041 1 193 .001 Based on Tables 4 and 5, the validation results of the hypotheses in this study are as follows: H1: Organizational climate has direct impacts on organizational performance (valid) H2: Service quality has direct impacts on organizational performance (valid) H3: Customer satisfaction has direct impacts on organizational performance (valid) V. CONCLUSIONS AND RECOMMENDATIONS 5.1 Conclusions Based on the above analyses and results, the following conclusions can be drawn: (1) Organizational climate has significant positive impacts on organizational performance in the case of international tourist hotels in Taipei City (path coefficient = .579); (2) Service qualityhas significant positive impacts on organizational performance in the case of international tourist hotels in Taipei City (path coefficient = .495); and (3) Customer satisfactionhas significant positive impacts on organizational performance in the case of international tourist hotels in Taipei City (path coefficient = .486). 5.2 Contribution of this Study (Management Implication) This study explores a practical issue using exploratory factor analysis (EFA). It is a topic worth further exploration. This study not only provides a reference for further study, the results can also be used as a reference in business-related decision-making in relevant industry so as to get ahead of the game, grasp the profit-making opportunity and improve the organizational performance. Therefore, this study is a valuable reference. In addition, organizational climate, service quality and customer satisfaction have positive significant impacts on organizational performance. The results of this study reveal the key factors to enhance the organizational performance of international tourist hotels. 5.3 Research Limitations and Recommendations After careful consideration, although this study has strived to be as comprehensive as possible while using the existing research resources, the following limitations still exist during the implementation. (1) The scope of this study is limited to Taipei City. Due to limited research resources, the questionnaire could not be distributed all over Taiwan. In addition, the subject of this study was limited to the customers of international tourist hotels and is not universal enough. We recommend that the subsequent researchers can expand the scope of the study. (2) This study used convenience sampling method for sampling. Even though the response rate is higher, the samples might not represent the population. We recommend the subsequent researchers to use other sampling methods such as simple random sampling or stratified sampling. (3) The framework of this study did not consider the impact of customer satisfaction of international tourist hotels on the customers‟ behavioral intention. The subsequent researchers can expand the scope of the research. We believe, with expanded scope, it will provide further understanding in this field. REFERENCES [1]. Anderson, E. W., & Sullivan, M. W., The antecedents and consequences of customer satisfaction for firms. Marketing Science, 12, 1993, 125-143. [2]. Cardozo, R. N., An experimental study of customer effort, expectation and satisfaction, Journal of Marketing Research, 2, 1965, 244-249. [3]. Chen, H. C., The Effect of Felt Responsibility to Relationship of Customer Quality, Service Quality and Organizational Performance: Small and Middle Accounting Firm as an Example, master‟s thesis, Executive MBA, Accounting Department, National Changhua University of Education, 2013. [4]. Dessler, G.,Organization and management: A contingency approach, Englewood Cliffs, N.J: Prentice-Hall, 1976. [5]. Fan, Z. F., Relationships among Corporate Image, Service Quality, and Customer Satisfaction-A Case of Cathay Life Insurance Company Limited, master's thesis, Master's Program of International Business Administration (IMBA), Feng Chia University, 2012. [6]. Fornell, C., A national customer satisfaction baromer: the Swedish experience. Journal of Marketing, 56, 1992, 61-103. [7]. Giese, J. L. & Cote, J. A., Defining Consumer Satisfaction. Academy of Marketing Science Review, 2000.
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