Influence of Organisational Cultural Capabilities on Customer Experience Management and Firm Performance: Evidence from the Hospitality and Tourism Industry in Australia

Abstract

Studies on customer experience management (CEM) have suggested that CEM is about an organisation’s ability to provide inspirational cultural expertise, excellent leadership and management, good human resources practices, procedures and technological support that customers and employees can trust, etc. CEM is increasingly becoming the next competitive advantage for companies operating in the service industries, where productivity, customer satisfaction and retention, loyalty, and positive word-of-mouth, and lowering operational costs are the objectives to get market share. Current research has explored in-depth CEM from an organisational perspective, as there has been an overemphasis on customer behaviours and customer-centric experiences based on emotional experiences, sense, and feel. A theory-based conceptual framework can serve as the basis for further research and investigate other essential attributes to CEM, for instance workplace culture, leadership, and employee experience. There is a lack of research on customer and visitor experience in the hospitality and tourism industries (H&T) in Australia, further compounded by not enough knowledge on the adoption of organisational cultural change, which has restricted the growth of hospitality and tourism industries and the expected high quality of customer experience. This study investigates the critical organisational cultural capabilities. It aims to: (a) build on and extend existing research in CEM by exploring the body of organisational culture literature and connecting that to current customer experience literature and theory (e.g., dynamic capability, service profit chain); and (b) test the relationships between organisational cultural capabilities, employee experience, customer experience, CEM, and business performance. To achieve these objectives, the relevant literature is comprehensively reviewed, leading to a conceptual framework to better comprehend the organisational capabilities in CEM. This framework is then tested and validated using structural equation modelling (SEM) and data collected from professionals working in the H&T industry. The findings show that, to provide a holistic customer experience, what is significant for CEM are organisational cultural capabilities such as learning culture orientation, customer orientation, and employee intrapreneurship. Results further confirm the effect of internal 2 | Page quality as a result of CEM in human resources practices, database support, and leadership. Overall, the results support implementing both dynamic capability and the service-profit chain (SPC) theories in the customer experience management context. They also suggest that a combination of internal (i.e., between top-management team and employee) and external (i.e., between employee and customer) relationships coexist and jointly influence customer performance and, thus, the firm’s financial performance. This study provides a comprehensive understanding of the topic comprising four themes: firstly, critical organisational cultural capabilities; secondly, direct management influence on employees; thirdly, CEM performance; and fourthly, CEM metrics. This study’s major contribution is to expand on the existing customer experience literature as it applies to the H&T industry. Doing so will improve our knowledge of customer experience in Australia. This study extends the applicability of the dynamic capabilities theory and the service profit chain framework (SPC) to understand the influence of organisational cultural capabilities on CEM and consequently, customers, employee, and how well organisations perform. It confirms the appropriateness of combining the dynamic capabilities theory and service profit chain framework, in order to assess the impact of these capabilities on the customer experience chain. In this way