بازدهی و کارایی خرده فروشی های کوچک: نقش مشتری مداری و کارآفرینی مداری

While it is generally agreed that a customer and entrepreneurial orientation enhance company performance in large multi-national organizations, relatively little is known about how these variables influence the small retailers that form a substantial part of national economic well-being. This study investigates the potential influences of these factors on the performance of small retailers in Switzerland, because this nation has long had a reputation for creativity, innovation and a customer focus. Performance is viewed as a two dimensional concept including an effectiveness and an efficiency perspective. Data for this study were collected through personal interviews from 261 SMEs. While customer orientation is found to be positively related to both efficiency and effectiveness, results only show a positive impact from entrepreneurial orientation on effectiveness. At the same time, entrepreneurial orientation is found to be a driver of customer orientation, and thus having an indirect impact also on efficiency for the small retail firms. All in all, the study shows that small retailers do indeed put an emphasis on both customer and entrepreneurial orientation in spite of their limited resources. It also stresses that this will increase their competitive advantage. In the light of existing literature, limitations and future research directions are subsequently addressed.

A constantly changing environment, intensive global competition, and lower retail margins characterize today’s retail business climate. It is thus not surprising that within many areas, retailing is dominated by large, global firms such as Carrefour, Wal-Mart, Toys “R” Us or IKEA, that benefit from advantages of scale and extensive human resources. Nevertheless, there is a need for smaller retailers since they are an important part of the supply chain in most countries (Shaw and Gibbs, 1999). Small companies collectively employ a substantial number of people, can serve important niche markets and have the flexibility to differentiate service provision and meet a variety of customer needs. They provide opportunities that may be neglected by large organizations and identify changing market requirements in a creative way to capitalize on areas that have future growth potential, providing value for customers as well as generating business profitability (Smith and Sparks, 2001). However, successful retailers have to meet a number of challenging demands. They need to promote customer service and the value component of their business (Adjei et al., 2009 and Lusch et al., 2007); have a strong market orientation (Elg, 2007 and Rodriguez Cano et al., 2004); and be well informed about new technological and environmental developments as well as changing customer needs in order to pursue new, entrepreneurial opportunities (Griffith et al., 2006, Kaufmann and Dant, 1999 and Shane and Venkataraman, 2000). But there is relatively little knowledge about how smaller retailers, with limited resources, respond to a changing business environment and how these changes relate to company performance. For example should they take a creative, proactive approach to become leader in a niche market, or should they offer a complementary convenience service at low cost to differentiate their business from competitors? In each case what role does customer orientation and entrepreneurship play in developing company strategy, influencing value perceptions and managing profit margins? To answer these questions this paper addresses the relationships between customer orientation and entrepreneurial orientation in small retail establishments, and examines business performance from an efficiency as well as effectiveness perspective. Efficiency is seen in terms of return on investment, return on sales and return on assets, whereas effectiveness is interpreted as profit growth (built on profit margins); sales growth (from reliable, quality products and services); and market share that adds credibility and value to the company brand ( Auh and Menguc, 2005). We argue that these two performance measures are significantly different in nature and may not always go in the same direction. For example, a retailer may adopt a selling orientation to enhance short-term profit and efficiency, but this is likely to have a negative impact on customer satisfaction and long term effectiveness ( Goff et al., 1997 and Saxe and Barton, 1982). The distinction may be especially important for small service firms with limited resources. For example, a firm with a strong focus on customer and entrepreneurial orientation may be successful in offering attractive solutions to the market and making sales grow, but it may not have the capability to simultaneously maximize efficiency in terms of return on investments or benefit from scale advantages in marketing. Small retail companies in Switzerland were targeted as a suitable focus for this research because the Swiss culture has a proclivity towards the proactive, risk-taking, and innovativeness observed Tajeddini and Tajeddini (2008); towards creativity discussed by Gielnik et al. (2012); and towards entrepreneurship outlined by Tajeddini and Mueller (2012). Moreover according to the work of Hofstede (2001), the Swiss nation score highly in societal–cultural factors of ‘individualism’, ‘power-distance’ and ‘long term orientation’; and have a long history of creativity and innovativeness in responding to changing customer needs as well as technological opportunities (Tajeddini and Trueman 2008). The emphasis on customer orientation was chosen because small retailers have limited resources for advanced marketing research or interfunctional coordination as discussed in market orientation studies ( Narver and Slater, 1990). Yet there is clearly a need for a customer-focused strategy if companies are to survive in the long term ( Brady and Cronin, 2001, Deshpandé et al., 1993, Drucker, 1954, Johnson, 1998 and Tajeddini and Trueman, 2008). Furthermore, as recognition of the economic significance of small firms has grown ( Acs and Audretsch, 1990 and Loveman and Sengenberger, 1991), research has found that customer orientation is especially important ( Kara et al., 2005, Pelham, 1997, Pelham, 1999, Pelham, 2000 and Vitale et al., 2004). On the other hand, in order to grow and sustain a competitive advantage, businesses need to combine existing resources in new ways to develop and commercialize new products, move into new markets, and service new customers adopting an entrepreneurial orientation ( Hitt et al., 2001 and Lumpkin and Dess, 1996). Yet the disruptive influence of introducing new products, services and customers can have an adverse effect on efficient and effective performance, presenting the company with a dilemma ( Abernathy, 1978); so it is important to balance customer needs with essential entrepreneurial requirements to grow the business ( Liu et al., 2002). Similarly organizations have to differentiate themselves from competitors ( Parasuraman et al., 1988) and, with intense competition and globalization in the retail industry, a focus on customer service provides an opportunity to differentiate and strengthen the company brand name ( Elg, 2007 and Panigyrakis and Theodoridis, 2007). However most studies in this field have investigated the manufacturing or hospitality industry rather than small retailer companies ( Kara et al., 2005 and Tajeddini and Trueman, 2008). In short this research examines the relationship between customer and entrepreneurial orientation and how this influences performance in terms of efficiency and effectiveness for small retail companies. Firstly it explores the literature in order to rationalize the key determinants of entrepreneurial and customer orientation as antecedents to company performance and develops a series of hypotheses. Secondly it explains the research methodology and rationale leading to key research questions, the research model and an in depth study of 261 Swiss small-sized retailers. Thirdly it reviews the statistical analysis and interpretation of research findings and finally it discusses the implications of findings and opportunities for future research.

In the beginning of this paper we asked whether small retailers are investing in marketing activities, and if this will have a positive impact on their performance. Largely, the empirical investigation answers these questions with a “yes”. These firms benefit from pursuing new market opportunities and responding to the needs of their customers. The goal of this paper was to address the question of how two different strategic capabilities, namely entrepreneurship and customer orientation, are differently related to efficient and effective firm performance for small retailers. Despite the strong theoretical suggestion leading to such a research question, the extant literature has not explicitly tested this hypothesis in the small retailer context. This research proposed and tested a more integrated approach that explicitly articulates the role of two key drivers of effectiveness and efficiency in the context of small retailers. First, the study shows that customer orientation positively influences performance in both efficiency and effectiveness terms to build value for company and customers. In our sample, the results indicate that retailers can influence effectiveness and efficiency by prioritizing customer needs and satisfaction. This linkage is generally supported by the empirical data where a higher level of customer orientation is associated with improved business performance such as profit goal achievement, sales goal achievement, ROI achievement and market share. The rationale suggests that a customer orientation provides a company with a better understanding of its customers (Voss and Voss, 2000 and Tajeddini, 2011). This subsequently leads to more satisfied customers, who will purchase a retailer’s products again and inform others, and ultimately leads to long-term relationships with customers and to superior firm performance. Attributed to the definition of (Drucker, 1954), in this field of business, it appears that the managers and owners of small retailers “put the customer’s interest first” in order to develop a long-term profitable enterprise. This is particularly intriguing given that outcomes are consistent with prior studies (e.g. Tajeddini and Trueman, 2008; Tajeddini, 2010) that found that customer orientation has a positive effect on profit goal achievement, sales goal achievement and ROI achievement. The results assert that small retailers may develop a long-term profitable enterprise if they are customer focused by creating products or services of superior value and differentiate their business from competitors ( Deshpandé et al., 1993). This is in line with Grönroos (1982) who noted that service industries need to impart customer orientation to employees if they are to reinforce the quality of the firm and its services. Consequently, small retailers should create a culture of customer orientation by accentuating the creation of customer value as the overriding organizational goal, and providing norms for business development and consensus ( Slater and Narver, 1995). In all, our results support earlier findings that customer orientation has an impact on performance for small retailers ( Megicks and Warnaby, 2008) as well as small manufacturers ( Pelham, 2000 and Vitale et al., 2004). Although Kara et al. (2005) discussed that the results of market orientation may not completely be transferrable from manufacturing to small retailers, our findings indicate that small retailers similar to manufacturing firm are rewarded for putting an effort into customer satisfaction activities and for trying to develop new values for their customers. Viewed from a slightly different perspective, our findings supported the claim that regardless of whether the firm is small or large, customer orientation is positively associated with effectivness and efficiency of firm performance. Arguably, small firms may enjoy high level of efficiency and effectiveness since they have the flexibility to take care of local and/or special customer needs (Smith and Sparks, 2001). Direct positive impact of customer orientation on effectiveness and efficiency suggests that small service firms should focus on customer orientation as a competence that can distinguish them from their competitors. Arguably, customer–performance relationship enhances the Swiss retailer’s ability to create and deliver superior customer value by optimizing the firm’s effectiveness and efficiency. This enforces the classic tenet of staying close to the customer enhances desirable outcome creation and maintains of superior customer value (Slater and Narver, 1998). As a result, in the effort to create superior customer value continuously, retailers are advised to emphasize the need to understand target customers thoroughly to provide the business with insights to deliver better customer value and achieve superior performance (Day 1994; Slater and Narver, 1998). This approach may help them to develop a better system to satisfy customers, and thus is more likely to lead to a differentiation advantage (Zhou, Li and Yhou, 2007). Next, empirical findings confirm entrepreneurial orientation as an important determinant of effectiveness. This implies that entrepreneurial activities are generally important to the success of small retailers. The findings show that competitiveness achievement is driven by entrepreneurial orientation in the small firms. It indicates that small retailers are required to consistently recognize opportunities and marshal resources to achieve their goals (Stevenson and Gumpert, 1985). This is also important because Switzerland consists of about 300,000 small- and medium-size enterprises (SMEs) accounting for nearly 95% of all active organizations (Quayle, 2001) and over 50% of the population is engaged with small businesses (Tajeddini and Mueller, 2009). In addition, the link between entrepreneurial orientation and efficiency, however, appears to be more complex than generally assumed. In our sample, the results indicate that retailers can influence effectiveness by exploiting the opportunity, capabilities and resources, but it seems that it does not necessarily translate to the efficiency application. We approach this finding from two separate but interrelated perspectives: entrepreneurial ventures vs. small businesses and Swiss culture. A possible explanation is the concept of entrepreneurship in the small businesses. Allen (2007) argues that entrepreneurial ventures and small businesses are related but they are not the same in most respects. While small-business owners typically operate a business to make a living, entrepreneurs can be described as a radical innovator, a disruptor of an existing equilibrium and the instigator of a process of ‘creative destruction’ (Schumpeter, 1934). In fact, small retailers, as opposed to entrepreneurs, form an economic core (Kirchoff, 1994), and Allen (2007) notes that they may be a lifestyle for the owners or family, often referred to as Mom and Pop businesses. They tend to remain relatively small and geographically bound, most often because of a conscious decision and the part of the founder to keep the firm a small life style business (Allen, 2007). Corporate entrepreneurship has to do with the process of renewal activities that enhances a firm’s ability to compete and take risks (Miller, 1983; Sathe, 1989; Zahra, Neubaum and Huse, 2000). This process requires that the businesses becomes involved with product-market innovation, undertakes somewhat risky ventures, and is first to come up with proactive innovations, beating competitors to the punch (Miller, 1983). But not all business firms have a willingness to assume risk (Lumpkin and Dess, 1996; Tajeddini and Mueller, 2012). In other words, the owners and managers of small retailers do not have larger resources to be able to have risk-taking propensity towards taking chances in uncertain decision-making contexts. The findings are reminiscent of the recent research of Tajeddini and Mueller (2012) who found that Swiss small watch managers tend to be averse to risk-taking. They found that these managers appear more market-orientated than entrepreneurial-oriented by making a thorough assessment of market needs before undertaking any bold action. In addition, past research has also shown that many businesses fail to meet financial expectations (Cooper and Edgett, 1996) and produce insignificant success (Johne and Storey, 1998). Similarly, Lonial and colleagues (2008) found no significant effect of entrepreneurial orientation toward new service development on financial performance in the hotel industry. However, their results provided evidence for the mediating role of NSD-performance in the relationship between market orientation and financial performance. Yet, scholars encourage managers to adjust their innovation focus and approach when the goal is either increased financial performance (Ottenbacher, 2007) or quality improvement (Tajeddini, 2009). The findings show that these small service businesses are able to introduce technical solutions that respond the needs of consumers in order to enhance their performance. Still, a successful innovation may generate profit for the entrepreneur, but it will not last for a long time because other rivals quickly enter the market by imitation or adoption. However, if the entrepreneurs align themselves with the centrality of the customer orientation approach and remain active in striving to find additional customer values it may lead to a sustainable competitive advantage. From a managerial perspective, it should also be stressed that while customer orientation initiatives may have a direct impact on both effectiveness and efficiency; new, entrepreneurial efforts should be regarded as a long term investment rather than as a way to drive short term efficiencies. All in all, our results can be interpreted as suggesting that customers may appreciate small retailers who take risks, introduce new products and ideas that meet their needs. This can lead to growth in terms of market shares and sales. However, the risks and increased costs generated by an entrepreneurial orientation may make it difficult for a small retailer to increase the efficiency performance in terms of profitability, ROI, etc. However, we also found that an entrepreneurial orientation was positively related to the small retailers' customer orientation. Since the latter is, in turn, positively related to efficiency a strong entrepreneurial orientation does nevertheless have an important indirect effect on efficiency as well and be necessary for long term success. Our research is among the incipient investigations that intend to empirically test the antecedents of efficiency and effectiveness in the small retail services. The first criterion depicts performance measure in terms of efficiency outcomes capturing a wide range of parameters which impinge upon business success. The second criterion is more of a measure of organizational effectiveness. A simple arithmetical average of four variables such as profitability goal, ROI, ROS and ROA was taken to build an overall business efficiency index. Likewise, the same procedure repeated from profit growth, sales growth, and market share to obtain a total business effectiveness index. Although it would have been possible to incorporate additional marketing measures (customer satisfaction, customer loyalty etc.), these were deemed to be too diffuse. This was thought particularly so because of the cross-sectional nature of the study which meant that such measures were likely to cloud rather than add analytical insights (Ahmed, 1998). To our knowledge, it is the first study that demonstrates the effect of two key orientations on efficiency and effectiveness in a retail setting. Although our findings expand the extant knowledge on the impact of customer orientation and entrepreneurial orientation on efficiency and effectiveness of retailers, we recognize several limitations that must be taken into account when generalizing our results. The design of our experiment provides insight into the Swiss small sized retailers—one specific service domain with a unique culture and experience—but it remains unclear whether findings would be similar for other service industries and cultures. Another avenue for further research would be to test the cross-cultural stability of our findings. Given that cultural norms about service delivery in general vary across cultures (Tajeddini, 2011; Tajeddini and Trueman, 2012), additional research should examine the extent to which cultural variables influence the interplay of efficiency and effectiveness. Moreover, all data were collected in a cross-sectional manner, and, therefore, all we can conclude is that the role variables and their posited consequences are related at one point in time. A final remark should be made about the relatively small sample size that was a consequence of the time intensive nature of the data collection process.