Document type
ArticleVersion
Accepted versionPublication date
All rights reserved
Please use this identifier to cite or link to this item: https://hdl.handle.net/2445/119266
Customer-Oriented Employees: Blessing or Curse for Firms?
Journal Title
Authors
Director/Tutor
Journal ISSN
Volume Title
Related resource
Abstract
I investigate whether the presence of customer-oriented employees benefi ts fi rms in a competitive environment. Employees are defi ned as customer-oriented if they are interested not only in their wage but also in the well-being of their customers. I find that fi rms may obtain higher profi ts by hiring self-interested rather than customer-oriented employees. This is because the employees' customer orientation has opposing effects on the profi ts obtained by the fi rms. On the one hand, customer-oriented employees provide a given level of quality for a lower wage. On the other hand, the employees' customer orientation increases competition reducing prices. If the second effect dominates, firms fi nd themselves trapped in a prisoners' dilemma as the strategy of hiring self-interested employees is strictly dominated by that of hiring customer-oriented employees. Hence, the very presence of customer-oriented employees may hurt fi rms. If motivated employees are merely interested in the quality of the good provided, the effect on the price outlined before disappears.
Subject (English)
Citation
Collections
Citation
MANNA, Ester. Customer-Oriented Employees: Blessing or Curse for Firms?. Journal of Economics & Management Strategy. 2017. Vol. 26, num. 4, pags. 842-875. ISSN 1058-6407. [consulted: 11 of August of 2026]. Available at: https://hdl.handle.net/2445/119266