Intraorganizational relationships and operational performance

Abstract

This study examines how low and high performing companies operating in industrial markets differ in their organizational design – as a way to manage intraorganizational relationships – and how the type of customer relationship and the broadness of the target market influence this design. The results of the empirical study, carried out within manufacturing companies, indicate that the commitment of employees, effective interfunctional coordination, and the nature of incentive systems are the main discriminators between low and high performers. Also, the type of customer relationship and the broadness of the target market strongly influence the impact of these three components on the operational excellence of the company in a given context. The key results are of evident practical interest since the effective management of internal relationships is a critical factor for performance in industrial companies, and it can also be seen as a key prerequisite for the successful management of customer relationships in different market contexts.