Going Beyond the Conventional Service Profit Chain Model

Abstract

The main aim of this study is to enhance and go beyond the conventional service profit chain model (SPC) by adding new intervening variables suggested in the relevant literature. Empirical data were obtained from 201 service companies from different service businesses using a survey approach; 603 questionnaires were collected from three perspectives: customers, front-line employees, and managers. A SmartPLS package was used to check data reliability and validity and to test hypotheses for paths using a Structural Equation Modelling (SEM) approach. The findings of this study revealed that internal service quality (ISQ) enhanced employee satisfaction and that employees’ attitudes induced higher external service value and customer responsiveness alongside organizational performance. In addition, most of the intervening factors and links within the new SPC framework suggested in this study were supported. This study contributes to the relevant literature by adding new mediating factors to the conventional model. Hence, this study extends the integrative mechanism for how a firm’s internal operational activities will be translated into customer perceptions and business performance in the Saudi context.