Reexamining the Link Between Customer Orientation and Business Performance: The Role of Information Systems

Abstract

Customer orientation is said to strengthen business performance, but empirical research has not consistently supported the claim. In this study, we reexamine the important relationship between customer orientation and business performance. The study is based on the literature that suggests that business performance is multidimensional (consisting of market and financial dimensions), and that customer orientation is facilitated by information systems (consisting of information technology, or IT, capability and information services). We determined through a survey that customer orientation contributes to business performance, first by influencing market performance, which in turn, determines financial performance. Importantly, a dimension of information systems—IT capability, but not information service quality—positively moderates the impact of customer orientation. The study points to a more complex relationship between customer orientation and business performance than previously described.