Exploring the Relationship between Quality Orientation, New Services Development and Organizational Performance

Abstract

In today's highly competitive environment in the financial services industry new service development has emerged as a central concept for competitive strategy. This is particularly true in services contexts such as financial services, characterized by continuous exchange activity. Therefore, most service marketers recognize today the importance of maintaining enduring development for new services to meet customers’ financial needs. Moreover, in this highly competitiveness market quality orientation concept has become a significant boardroom topic to offer superior service to the customers. The purpose of this study is to investigate the relationship between quality orientation, new service development and organizational performance. The proposed model was tested on managers of commercial Banks in Amman - Jordan. Structural equation modeling technique was employed using AMOS 7.0 to verify the reliability and validity of the multi-item scales and to test the hypothesized relationships. However, Finding indicates that Quality Orientation has a strong and positive effect on new service development and Organizational performance of commercial banks. It has also been found that there is a significant positive impact of new service development on banks performance. Results also indicate the mediating effect of new service development on quality orientation - banks performance relationship. The implications for financial institutions are that it is of increasing importance that new service development and Quality Orientation is used as a means of differentiation, to achieve higher profit, revenue growth , improved market share and market effectiveness. The findings contribute to understanding the relationships between quality orientation, new service development and organizational performance, provide critical implications for bank managers, and highlight directions for future research.