When Does Customer-Oriented Leadership Pay Off? An Investigation of Front-Stage and Backstage Service Teams

The service literature highlights the importance of organizational leaders in creating an organization-wide customer orientation (CO). Yet some open questions remain regarding this relationship: Are organizational leaders from different hierarchical levels equally effective in creating a CO? Does the functional role of employees affect the importance of certain leaders? More generally, when does customer-oriented leadership really pay off? To address these questions, we investigate how senior managers’ and direct supervisors’ CO affects the CO climate and effectiveness of both frontstage and backstage service teams. Analyzing multisource data from 575 employees and their supervisors from 110 teams in a retail bank, we find that the effect of perceived senior manager CO on team CO climate and team effectiveness is stronger in backstage teams while perceived direct supervisor CO has a greater influence in frontstage teams. Moreover, team CO climate consensus moderates the effect of team CO climate on team effectiveness. These results suggest that, contrary to past theorizing, customer-oriented leadership does not per se increase team CO climate and team effectiveness; rather, the correct coupling of leadership source and degree of customer contact needs to be achieved. Service managers should use these findings and appoint the correct leader to implement CO, to make the organization-wide CO diffusion more efficient and effective.