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dc.contributor.authorLee, Ju-Yeon
dc.contributor.authorSridhar, Shrihari
dc.contributor.authorHenderson, Conor M.
dc.contributor.authorPalmatier, Robert W.
dc.date.accessioned2017-05-29T12:34:57Z
dc.date.available2017-05-29T12:34:57Z
dc.date.issued2015
dc.identifier.issn1526-548X
dc.identifier.doi10.1287/mksc.2014.0878
dc.identifier.urihttp://hdl.handle.net/10072/337625
dc.description.abstractFirms with a customer-centric structure—an organizational design that aligns each business unit with a distinct customer group—are expected to exhibit superior performance compared to firms that are internally structured. Top executives invoke these customer-centric beliefs when initiating corporate reorganizations. However, a lack of empirical evidence linking these customer-centric structures to better long-term financial performance raises doubts if corporate structure can truly foster customer centricity and better position a firm to satisfy customers and hence exhibit superior performance. The current research addresses this question by using longitudinal data (1998–2010) that links Fortune 500 firms’ corporate-level structure to performance. Utilizing a dueling mediator model with allowance for endogeneity in a firm’s organizational structure choice, the study reveals that a corporate-level customer-centric structure translates to greater customer satisfaction, but simultaneously adds coordinating costs. Further explaining customer-centric structure’s record of mixed success, the benefits of increased customer satisfaction diminish (1) as competitors have already adopted customer-centric structures, (2) in fragmented markets where competitors leave few unique customer needs unaddressed, and (3) in less profitable industries. Ultimately, we show that aligning corporate structure around customers pays off only in specific competitive environments.
dc.description.peerreviewedYes
dc.languageEnglish
dc.language.isoeng
dc.publisherinforms Institute for Operations Research and the Management Sciences
dc.relation.ispartofpagefrom250
dc.relation.ispartofpageto268
dc.relation.ispartofissue2
dc.relation.ispartofjournalMarketing Science
dc.relation.ispartofvolume34
dc.subject.fieldofresearchMarketing not elsewhere classified
dc.subject.fieldofresearchMarketing
dc.subject.fieldofresearchcode150599
dc.subject.fieldofresearchcode1505
dc.titleEffect of customer-centric structure on long-term financial performance
dc.typeJournal article
dc.type.descriptionC1 - Articles
dc.type.codeC - Journal Articles
gro.hasfulltextNo Full Text
gro.griffith.authorPalmatier, Robert W.


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