Customer orientation, relationship quality, and performance. The third-party logistics provider’s perspective

DOIhttps://doi.org/10.1108/IJLM-08-2013-0093
Date14 November 2016
Pages738-754
Published date14 November 2016
AuthorZhaofang Chu,Qiang Wang,Augustine A. Lado
Subject MatterManagement science & operations,Logistics
Customer orientation,
relationship quality,
and performance
The third-party logistics
providers perspective
Zhaofang Chu
School of Management,
University of Science and Technology of China, Heifei, China
Qiang Wang
School of International Trade and Economics,
University of International Business and Economics, Beijing, China, and
Augustine A. Lado
School of Business, Clarkson University, Potsdam, New York, USA
Abstract
Purpose Drawing on the customer value-based theory and the resource dependency theory, the
purpose of this paper is to investigate how Chinese third-party logistics (3PL) providers leverage their
customer orientation to improve operational performance directly in a stable environment or through
building and maintaining high-quality 3PL relationships in an uncertain environment.
Design/methodology/approach A survey-based approach is employed to collect data from
managers at 132 3PL providers in mainland China. Confirmatory factor analysis is used to assess
measures and hierarchical regression is utilized to test the hypothesized relationships.
Findings This study documents significant positive effects of customer orientation and relationship
quality on operational performance, as well as significant mediation effect of relationship quality. However,
the effect of customer orientation on operational performance decreased, while the effect of relationship
quality on operational performance became stronger,under high rather than low environmental uncertainty.
Practical implications An important implication for managers based on this study is that, in order
to be effective, Chinese 3PL providers would need to become more customer oriented and to continually
develop and leverage high-quality 3PL relationships in order to enhance their operational performance,
especially in situations of high environmental uncertainty.
Originality/value The paper documents the importance of developing and leveraging high-quality
3PL relationships as a key mediator of the relationship between customer orientation and operational
performance. It also documents how environmental uncertainty exerts a powerful moderating
influence in this relationship, providing insights into understanding how customer orientation is
leveraged by 3PL providers to improve their performance.
Keywords China, Customers, Partnership
Paper type Research paper
Introduction
Faced with rapid economic growth and heightened customer expectations, companies
in China are increasingly outso urcing their logistics activit ies to third-party
logistics (3PL) providers (Chu and Wang, 2012). Within the last decade, Chinese
The International Journal of
Logistics Management
Vol. 27 No. 3, 2016
pp. 738-754
©Emerald Group Publishing Limited
0957-4093
DOI 10.1108/IJLM-08-2013-0093
Received 19 August 2013
Revised 30 October 2014
Accepted 8 September 2015
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/0957-4093.htm
This research is supported by National Natural Science Foundation of China (No. 71402174), and
Humanities and Social Planning Project of the Ministry of Education of China (No. 12YJC630026).
738
IJLM
27,3
logistics industry has experienced rapid growth with an annual growth of more than
20 percent (Chu, 2012). In 2013, this industry contributed approximately RMB
3.9 trillion ($1 RMB ¥6.3 in 2013), representing 14.8 percent of that of the services
industrys value-added (National Development and Reform Commission et al., 2014).
However, the intensity of competition caused by greater market openness following
Chinas joining the World Trade Organization (WTO) has forced Chinese 3PL
providers to review their value propositions and adapt their business strategies to
improve competitiveness (Wang et al., 2008).
In their attempt to tran sition from cost-bas ed strategies to service -based
differentiation strategies (Wang et al., 2008), many 3PL firms have emphasized
greater responsiveness to customersrequirements (Tian et al., 2010). Customer-
oriented 3PL providers are specialist providers of logistics services that seek to
understand the requirements of target customers and create and deliver superior value
for the target customers (Panayides, 2007; Tian et al., 2010). In line with the customer
value-based theory (CVT), firms with an organizational culture that emphasizes greater
customer orientation and responsiveness are expected to outperform those that lack
such a culture. Thus, in this study, we seek to gain a better understanding of the extent
to which customer-oriented 3PL providers achieve operational performance throug h
building high-quality relationships with their customers.
Researchers have investigated how custome r-oriented 3PL providers make
contributions to customer firmslogistics improvement and performance (Tian et al.,
2010). However, there are still gaps in our understanding of how 3PL providers leverage
customer orientation to generate superior operational performance. Specifically, whereas
researchers have documented the direct effect of customer orientation on 3PL performance,
little attempt has been made to examine the contingent effects of key factors, such as
relationship quality and environmental uncertainty on this relationship. Accordingly, we
investigate the mediating influence of relationship quality, and the moderating influence
of environmental uncertainty in the relationship between customer orientation and
operational performance for 3PL providers in China. The CVT supplies the logic for the
mediating role of relationship quality in the customer orientation-performance relationship,
while the resource dependency theory (RDT) provides the logic for the moderating
influence of environmental uncertainty on the relationships among customer orientation,
relationship quality and operational performance. We test our hypothesized relationships
using survey data collected from a sample of 3PL providers in China.
The remainder of this paper is organized as follows. First, we provide a synthesis
of the related literature in CVT and RDT to lay the theoretical foundation for our
conceptual model. Next, we describe the research methodology and data analysis.
Finally we discuss our findings and offer implications for future research and practice.
Theoretical background and research hypotheses
Theoretical foundations for conceptual model
CVT. The CVT of the firm posits that firms exist to satisfy customersneeds through
superior products or services (Slater, 1997). According to this theory, firms compete in
hyper-competitive environments through differentiation strategies for creating and
delivering value (such as identifying appropriate target markets/customers,
understanding customersneeds, and delivering promised value). They achieve
superior performance through establishing a customer value-based organizational
culture (i.e. customer orientation) and configure their value delivery activities and
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3PL providers
perspective

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