Is Joint Achievement of Customer Satisfaction and Efficiency Beneficial in Merger Contexts?

[Editor’s Note: We’re pleased to welcome Vanitha Swaminathan, who collaborated with Christopher Groening, Vikas Mittal, and Felipe Thomaz on their paper “How Achieving the Dual Goal of Customer Satisfaction and Efficiency in Mergers Affects a Firm’s Long-Term Financial Performance” from the May issue of Journal of Service Research.]

02JSR13_Covers.indd• What inspired you to be interested in this topic?
This paper began by looking at the often repeated assertion that mergers lead to reductions in customer satisfaction. While one may believe this to be the case, there is evidence that customer satisfaction improvements actually increase financial value…which led us to ask the question, would managers wishing to maximize shareholder value reduce their focus on customer satisfaction in a merger? Following this, we wondered if a focus on both customer satisfaction and efficiency improves shareholder value even more in a merger context.

• Were there findings that were surprising to you?
Contrary to what conventional wisdom regarding mergers and customer satisfaction, we found that a dual emphasis on both customer satisfaction and efficiency improvements will actually benefit firms in a merger context. I think the biggest surprise was our finding that non-merged firms did not significantly benefit from a dual emphasis. In other words, we thought that a merged firm would find greater value in a dual emphasis, but not that a non-merged would find little to none.

• How do you see this study influencing future research and/or practice? It will help to go deeper into analyzing why customer satisfaction and efficiency improvements in merger contexts facilitate shareholder value maximization, more so than non-merger settings. Is it the improved availability of resources, or greater access to more profitable customer groups? Is it due to the creation of new synergies between the merging companies?
Addressing these questions will help increase our understanding of when to best implement these typically opposing goals (i.e., efficiency and customer satisfaction improvements) even in non-merger settings.

Read “How Achieving the Dual Goal of Customer Satisfaction and Efficiency in Mergers Affects a Firm’s Long-Term Financial Performance” from Journal of Service Research for free by clicking here. Don’t forget to click here to sign up for e-alerts and be in the know about all the latest from Journal of Service Research!

swaminathan-vanithaVanitha Swaminathan is Associate Professor of Business Administration and Robert W. Murphy Faculty Fellow in Marketing at the University of Pittsburgh. Her research interests revolve around branding strategy and consumer-brand relationships.GroeningChris_1

Christopher Groening is Assistant Professor of Marketing at the College of Business at Kent State University. Chris’s current academic research centers around investigating stakeholder influence on the financial outcomes of a firm.

MittalPhotoVikas Mittal is J. Hugh Liedtke Professor of Marketing at the Jones Graduate School of Business, Rice University and Adjunct Professor of Family Medicine at Baylor College of Medicine.Thomaz

 

Felipe Thomaz is a doctoral candidate at the Katz Graduate School of Business, University of Pittsburgh, Pittsburgh.

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