Impact of employee competence on customer satisfaction- mediating role of organization

performance

A Proposal submitted
By

Maria Ishaq (11851)

Javeria Aftab (10462)
Usama Ahmed (11057)
Mustafa Baig (11035)
Usama Shakil (11037)

To
Department of Business Administration

In partial fulfillment of
The requirement for the
Degree of
MASTER OF BUSINESS ADMINISTRATION
In
[Marketing]

This Project has been

Accepted by the faculty

FACULTY OF BUSINESS ADMINISTRATION

Mr. Umer Ahrar

Advisor

Research Facilitation Centre – RFU,

Iqra University
 Acknowledgments

In the beginning all Glory to Allah Almighty by Grace of Whom we were able to complete

our research project. It was His will and guidance that we were able to take this report as a challenge

and in the end, He bestowed us with his blessings. We take this opportunity to express our profound

gratitude and deep regards to our teacher Sir Umer Ahrar for his exemplary guidance, monitoring and

constant encouragement throughout this research report. The blessing, help, and guidance given by

his time to time shall carry me a long way in the journey of life on which we are about to embark.

Lastly, we would like to thank my group members for their constant encouragement without which

our research project would not complete.

ii
 Abstract

This research aims to study and analyze the effects and impacts of employee competence on

customer satisfaction on the settling of organizations' performance. The model organizational

competencies mediate the relationship between implementing marketing strategies mix and business

performance. The study will show what are the ways that an organization could render and forecast

customer satisfaction through employee competence. This research will describe the issue that

different companies and organizations are facing because of a lack of employee competence in

customer satisfaction. The mission and the purpose of the research are observed that the market

dilemmas of customer satisfaction and delight also the factors that influence brand loyalty and the

customer towards the products of different organizations. The study will provide the facts and

evidence for organizations that how much will be the effect of employee competence over customers

satisfaction and to maintain the service quality to fulfill the expectations and to satisfy the customers

so that they could encourage the employee competence and motivate the organization to formulate

such decisions which benefit both employees and their customers.

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 Table of content
Contents Executive Summary ................................................................................................... ii
List of Figures ........................................................................................................................... v
Chapter 1: Introduction ............................................................................................................. 1
1.1 Background of the Study ..................................................................................................... 2
1.2 Problem Statement .............................................................................................................. 2
1.3 Research Questions ............................................................................................................. 4
1.4 Purpose of the Study ........................................................................................................... 4
1.5 Significance of Study .......................................................................................................... 4
1.7 Definition of Terms (If required) ........................................................................................ 5
Chapter 2: Literature Review .................................................................................................... 7
2.1 Underpinning and Supporting Theories/Models ............................................................... 11
2.2 Empirical Reviews ............................................................................................................ 11
2.3 Research Framework ......................................................................................................... 11
2.4 Hypotheses ........................................................................................................................ 11
Chapter 3: Research Method ................................................................................................... 12
3.1 Research Approach ........................................................................................................... 12
3.2 Research Design ................................................................................................................ 13
3.3 Sampling Design ............................................................................................................... 13
3.4 Instrument of Data Collection ........................................................................................... 14
3.5 Procedure of Data Collection ............................................................................................ 14
3.6Statistical Technique ......................................................................................................... 14

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 Impact of employee competence on customer satisfaction- mediating
Role of organization performance

Chapter 1: Introduction

1.1 Background of the Study

The organizations having solid and basic business-related abilities are considered significant among

proficient representatives in an association. Through this research we will be putting light on how to great

customer satisfaction through employee competence and creating proficient competencies is a basic action in

an association to accomplish a great upper hand. Improvement of worker skills has likewise been found to

create huge hierarchical execution, in particular authoritative benefits, efficiency, and increment in

representative commitment just as professional advancement. Concerning representative competency, much

writing shows that competency prerequisite shifts as per positions, occupations, and associations.

1.2 Problem Statement

Indeed, customer satisfaction has an important role and organization has shifted their focus more on

customer satisfaction but employee competence plays an equal role in the organization, it's the foundation of

an organization. Shermon (2004) argues that competence is a human characteristic, which allows him to

perform work duties or better manage the situation. These characteristics are a set of attributes consisting of

knowledge, skills, traits, social roles, I-picture, and motives. Characteristics of behavior occur in a particular

form, which allows identifying and measuring competence. employee competence directly impacts on

customer satisfaction, although we can see that its decreasing day after day organization shifted their focus on

customer satisfaction if the staff is not competence and motivated then the working atmosphere, efficiency and

other factors indirectly impact the organization performance. Hence the main issue is organization are not

aware that which of the skills and knowledge is at the best for their organization to achieve enduring customer

satisfaction.
 Impact of employee competence on customer satisfaction- mediating
Role of organization performance

1.3 Research Questions

The impact of employee competence on customer satisfaction along with mediating role

organization performance? The expansion of study of relationship between employee competency and

organization performance? How a complex attitude of customer affects satisfaction? What are the

reasons that effects customer’s satisfaction towards buying any product?

1.4 Purpose of Study

The purpose of this study is to examine the link between customer satisfaction and employee

satisfaction and identify key factors in employee satisfaction. The study will proceed with the survey

measurement of these key factors in the call center at Company A. In conclusion, this study will generate

recommendations for future efforts toward employee satisfaction, aimed at achieving the goal of improved

customer satisfaction

1.5 Significance of the Study

The finding of this research let us know how employee competence playing a major role in customer

satisfaction and organizational performance. And along with it, flexibility is very essential for playing it

efficiently and effectively. As we know it was complex prior but it evolves over time. And these all-help

organizations overcome the uncertainties. as we know things are evolving over time and these findings will

tell what changes will be occurred in the organization and working on these patterns, and adapting it, where

the organization positions itself. Stalk et al. (1992) claim that competence emphasizes technological and

production expertise at specific points along the value chain while capabilities are broadly based and
 Impact of employee competence on customer satisfaction- mediating
Role of organization performance

encompass the entire value chain. In this respect, capabilities are visible to the consumer while the internal

competencies that support those capabilities rarely

1.6 Definitions

Employee competence. Competencies are individual characteristics, including knowledge, skills, abilities,

self-image, traits, mindsets, feelings, and ways of thinking, which, when used with the appropriate roles,

achieve a desired result

Customer satisfaction. Customer satisfaction is the degree to which customers perceive that they received

products and services that are worth more than the price they paid (Tracey, 1996).

Organization performance. Organizational performance is how efficiently and effectively an organization

performs its administrative and operational functions in conformity.

 Impact of employee competence on customer satisfaction- mediating
Role of organization performance

Chapter 2: Literature Review

2.1 Theoretical Review

Competence is theorized in terms of job knowledge, skills and attitudes (Tao, Yeh & Sun, 2006).

Accordingly, the present study considers the concept of competence being defined as employee’s job

knowledge, skills and attitudes (Tao, Yeh& Sun, 2006; Winterton et al., 2006). These two theories that best

explain the competence, having clearly define that competence allows employee, how to accomplish the task,

and in this research we highlight the importance of competence how it strengthen the organization

performance and its widely being used in many ways to fulfill the customer satisfaction. Thus, competent

employees are needed in order to increase the business success (Grigoryev, 2006). Grigoryev clearly

indicating that, how competent employees are required to uplift the organization performance or successes.

therefore there is no universal definition for customer satisfaction but this theory best fits in this research

(Kotler, 1997) Competence and capability Prahalad and Hamel (1990) contend that an organization should

focus on developing core competencies that help it to create enduring customer satisfaction. As the Kotler,

Parhalad and Hamel stated that how competence and customer satisfaction interconnected with each other, if

we ignore one thing the equation must be imbalance and we can lost our customers and it will create a huge

effect in organization performance. Furthermore an organization should comprehend that which of the core-

competence will help them out to achieve their specific target, from these finding we make it clear that not

every skills set and knowledge can be beneficial for the organization performance, they should focus on

customer pleasing skills and knowledge. Teece et al. (1997) extend this discussion of core competencies to

include capabilities. They argue that firms should not be viewed as a portfolio of assets (internal

competencies) but as a set of mechanisms by which customer-pleasing capabilities are selected and built

According to Sawalha (2013). By which narrow down and identify the problem will help out the organization

to see the shortcoming and will be able to set specific skills for their organization without any ambiguity

which not only satisfy the customer but also make a flexible environment in an organization.
 Impact of employee competence on customer satisfaction- mediating
Role of organization performance

2.2 Empirical Review

Empirical Review describing, the main objective of an organization is to provide complete satisfaction

to its customers, while the customers are satisfied if the product reaches to their level of requirement in a sense

of whether quality or services, when it comes to customers they never compromises on quality, quality pays a

great role similarly in organizations employees and their competency plays a vital role.

We have research that successful employees build the brand via positive customer satisfaction by fulfilling

their needs and when employees do not perform effectively, customers feel that company is apathetic to their

needs so they get dissatisfied and switch somewhere else, therefore good employees also helps the

organization to achieve their goals.

By looking at the articles we have made more researches which shows that, when the organization provides an

employee with a good environment they put their best efforts to achieve the target, therefore it is important

that organization should provide its employees pleasure and a healthy environment (Locke 1976)

Another research was made that customers behavior either negative or positive are highly correlated to the

employees, positive disconfirmation leads to satisfaction while negative disconfirmation leads to

dissatisfaction, product, quality price are the elements that are measured by customers overall judgments.

(Dimitri’s et al 2007)

2.3 Theoretical Model

Figure 2.1: Theoretical Framework.
 Impact of employee competence on customer satisfaction- mediating
Role of organization performance

Employee competence

Organization
performance

Customer satisfaction

2.4 Hypothesis:

Hypothesis 1: Influences of competence has significant impact on performance of employees

It is the responsibility of the company to develop a good and satisfying image about the product in

customer’s mind. Brand is the factor that can effect differently. It can be negative or positive. If the company

is going good with attractive advertisement and effecting the public then this can definitely leave a positive

impact on the customer’s mind. The quality of the brand mostly attracts the customer to buy. According to the

survey it has been observed that emotional actions or activities mesmerize the customer that is shaped by the

advertisement. The details of the brand should covered all the needs and want of the customer. If any of the

brand fulfilling all the demands of the customer then the attitude towards choosing a service will create in

positive manner.

Hypothesis 2: There is Significant impact of customer satisfaction towards organizational performance.

The engagement between the customer and the seller should be strong and effective. The employee of

the company should develop a comfortable zone for the client. The performance of the employees influenced
 Impact of employee competence on customer satisfaction- mediating
Role of organization performance

by the effective commitment. The competence is the main component that show the behavior of the employee.

And employee show its ability according to the environment and the tasks that assign to him. If there is

enough opportunities and benefits to satisfy the employee within the organization then the employee will try

to give his 100 percent to the company and try to engage the customer more and more that can proved

beneficial for the company that is a positive point.

Hypothesis 3: The environment of work has the significant impact on employee’s competence.

Yes, the employee’s competence is influenced by the environment of work. Many of the factors that

affect the employee’s competence about the performance which includes performance feedback are they

getting proper feedback according their performance? Are they motivating their employees to boost their

energy?, Are they getting incentives after performing beyond the expectations, Are they satisfying the

employees? Are they supporting by their leaders or supervisors. These all are essential components that

support the employee to work there.

 Impact of employee competence on customer satisfaction- mediating
Role of organization performance

Chapter 3: Research Method

3.1 Research Approach

3.1.1 Quantitative Research:

We were using quantitative approach to gathering information focuses on describing a phenomenon

Across a larger number of participants thereby providing the possibility of summarizing characteristics across

groups or relationships. They were also show how the attitude of the customer plays a role in making this

relationship successful. The study will provide an overview of how dynamic consumer behaviors influence

their satisfaction with their products and to boost their performance.

3.1.2 Deductive Approach

In this research we found out what action should we take to extract out customer satisfaction by

Improving employee competence so it will also improve in organization performance.

3.2 Research Design

3.2.1 Correlation Design

We were discussing about the relation between employee competence and job satisfaction. As it is

mention in some article Sherman (2004) argue about human attribute in which they perform their work dutiful.

McClelland (1973) American scholar developed the concept by testing competence rather than intelligence.

3.2.2 Causal Design

Our research establish on Causal Research that is used to determine the cause and effect relationship

between variables. This research we will use to identify the cause of the given behavior. Using causal

research, we decide what variations take place in an independent variable with the change in the dependent

variable.
 Impact of employee competence on customer satisfaction- mediating
Role of organization performance

3.3 Sampling Design

3.3.1Target Population:

We had collected the consumer details that we do not only respond to them but, we will also target the staff to

figure out the connection between job performance and customer satisfaction. The questionnaires were based

on two kinds: first, it was about the causes of customer satisfaction and second was about how to improve job

performance. The data were collected by questionnaires, online surveys, Interviews that are unstructured.

3.3.2 Sample Size:

Our goal was about to collect about 300 samples, but because of this pandemic, the situation is way too
different. So we collected 250 sample.

3.3.3 Probability Sampling:

We had used a stratified random sample to separate the community into numerous classes. That’s how we

Concluded the precise result.

3.4 Instrument of data collection:

We had been used this questionnaire as the primary set of information but due to this pandemic we could not

Perform interviews or surveys as it was quite difficult to have physical interview.

3.5 Procedure of Data Collection:

The method were used to gather information was online survey data very helpful for days now.
Whereas, because of this Covid-19/ Covid-20, physical survey was not feasible. Due to pandemic it was
difficult to take surveys or interview so we applied online method for data collection. For this analysis, the
Likert scale was implemented and we had collect the data inside the city.

3.6 Statistical Technique:

We applied multiple regression to find out the answer of it.

 Impact of employee competence on customer satisfaction- mediating
Role of organization performance

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Impact of employee competence on customer satisfaction- mediating
Role of organization performance