Journal of Business Research 63 (2010) 1164–1171

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Journal of Business Research

Public sector corporate branding and customer orientation

Susan Whelan a,⁎, Gary Davies b, Margaret Walsh a, Rita Bourke a

a Waterford Institute of Technology, Irelandb University of Manchester, UK

⁎ Corresponding author. Waterford Crystal Centre foBusiness, Waterford Institute of Technology, Ireland. Te

E-mail address: swhelan@wit.ie (S. Whelan).

0148-2963/$ – see front matter © 2009 Elsevier Inc. Aldoi:10.1016/j.jbusres.2009.10.013

a b s t r a c t

a r t i c l e i n f o

Article history:Received 1 July 2008Received in revised form 1 January 2009Accepted 1 August 2009

Keywords:Corporate brandingPublic sectorCustomer orientation

The objectives of branding and marketing in the public sector can differ in nature from those in the privatesector, to include an improved responsiveness to public needs, rather than an increase in customer numbers.In addition, the customer orientation (a disposition that will influence brand perception) of public services isoften questioned. Drawing from prior work in the private sector on the relationships expected betweenemployee and organization customer orientation (hereafter referred to as CO), corporate brand personality,and both employee and customer satisfaction, the authors propose a number of models. These models aretested using structural equation modeling on data from a study of the employees (n=302) and customers(n=200) of a public hospital. Corporate brand personality mediates the positive links between employeecustomer orientation (hereafter referred to as ECO) and satisfaction; ECO influences brand personality,which in turn influences satisfaction. However, while both the needs and enjoyment dimensions of ECOimprove customer satisfaction, the former has an unexpected, negative effect on employees. Organizationcustomer orientation (hereafter referred to as OCO) influences customer, but not employee, satisfaction. Thepaper discusses the implications for managing and researching corporate branding in the public sector.

r Marketing Studies, School ofl.: +353 51 302438.

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© 2009 Elsevier Inc. All rights reserved.

1. Introduction

Branding and corporate branding are terms more often associatedwith the private rather than the public sector of an economy. Sig-nificant exceptions exist, such as the branding of countries, regions,and cities (Jaffe and Nebenzahl, 2001), but the application ofmarketing concepts to public sector organizations is still a relativelynew topic for researchers (Kotler and Lee, 2007a,b). The marketing ofmany public services may inevitably be different from that in theprivate sector (Laing, 2003) as the defining characteristics of publicservices include the dominance of political rather than economicobjectives, and the primacy of the citizen rather than the consumer(Lovelock and Weinberg, 1990). In particular, governments mayrequire organizations in public ownership to becomemore responsiveto the customer and his/her needs, in other words, to become morecustomer-oriented, rather than to increase the number of customers.

Yet other aspects of public sector branding can be similar to those inthe private sector. A key to sustaining and expanding many publicservices is to build customer satisfaction and confidence (Corbin et al.,2001). Hospitals, universities, and government and regulatory agenciesseek to express their identities through marketing and branding(Wæraas, 2008); and services such as a public hospital may beconcerned to build both awareness and loyalty (Hood and Henderson,

2005).When a choice exists, for example between hospitals, a commonapproach to making the public sector more responsive is for govern-ments to insist improved choices for patients. The more positive theassociations that are made by external stakeholders, the more likelythey are to select one hospital over another (Shahian et al., 2000). Themore confidence patients have in a hospital and its services, the morelikely is their recovery (Health Service Executive TransformationProgramme, 2007–2010). Stakeholder views of a hospital's clinicalability will depend, in part, upon its brand among its community(Tokunaga et al., 2000). Kim et al. (2008) suggest that to have asuccessful healthcare organization, marketing efforts must focus onbuilding a high level of trust. So, while differences exist, many aspects ofbranding are common to both public and private sectors, in addition tothe need to consider employees as well as customers.

A number of reasons exist for considering the employee perspectivein understanding corporate branding in any service context, includingthat of the public sector. Employees can act as brand ambassadors (deChernatony, 2006; Wallace and de Chernatony, 2008) and theirinteraction with external stakeholders will in turn shape the externalview of the brand (Bettencourt et al., 2001). Specifically, the view thatcustomer-facing employees have of their organization influences theimpression that customers form of the organization (de Chernatony,1999). A number of models of corporate branding see the customer andemployee perspectives as interlinked or even interdependent (Hatchand Schultz, 1997; Fombrun, 1996; Davies and Miles, 1998). Suchalignment emphasizesmatching external brand image to internal viewsand values (de Chernatony, 1999; Hatch and Schultz, 2001). If

1165S. Whelan et al. / Journal of Business Research 63 (2010) 1164–1171

customer-facing employees share a positive view of the organizationwith customers, then a positive interaction between them ismore likelyto occur (Chun and Davies, 2006).

Further, the associationsmadewith a corporate brand result fromanaccumulation of all the communication and experiences about andwiththat brand (Fombrun, 1996). Central to this is the customer's experiencewith employees, and the CO of front-line service employees willinfluence the perceptions external stakeholders have of their experi-ences (Brown et al., 2002). High levels of CO enhance service user viewsof the organization's brand through positive interactions with thebrand's employees, and will result in greater overall satisfaction amongboth internal and external stakeholders (Rust et al., 1996 p. 391).However a low CO is often an issue in the public sector, resulting inimprovement initiatives in many countries (Chen et al., 2004).

Budgets for the overt promotion of positive associations with thecorporate namemay be limited in the public sector and any attempt toimprove perception though advertising is liable to criticism as being awaste of public money. Brand building must therefore rely on othermethods, including managing the customer experience. This sameexperience may also damage the corporate brand when employeesfail to deliver on the brand promise (de Chernatony, 2006).

In addition, because employees are important stakeholders in theirown right, they need to be attracted and also retained. For example,healthcare, the empirical focus for this paper, is the fastest growingservice in both developed and developing countries worldwide (Deyet al., 2006). The health sector in Ireland, the location for the study, isthe largest employer in the State, and the Health Services Executive(HSE) employs more than 120,000 staff in a population of just over4million. Their budget of almost €15 billion is the largest of any publicsector organization in the country. Hospitals compete with each otherand with employers in the private sector for employees. In the publicsector generally, wages tend to be lower than in the private sector,partly because employees can derive a motivational utility fromworking in the public sector (Delfgauw and Dur, 2008). Put anotherway, employee satisfaction and retention can depend upon howfavorable the associations are that they make with their employer.

In summary, while branding has become more prominent in thepublic sector, its role with stakeholders is under explored. CO in thepublic sector is a particular concern. As CO shapes experience with thebrand for both customers and employees, and experience in turn shapesthe associations both make with the brand; one expects a relationshipbetween CO and brand associations. To understand better both issuesand how they interact, the aims of this study are (1) to explore the roleof the corporate brand and customer orientation on stakeholdersatisfaction in a public sector context, and (2) to investigate the impactof both organizational and employee CO on employee and customerstakeholder satisfaction in that same context.

The paper begins with a review of prior theory and research per-taining to customer orientation, stakeholder satisfaction, and corporatebrand personality leading to the development of three hypotheses.Subsequently, the authors present the methods and results from fieldstudieswithemployees, patients, and their visitors at a public hospital inthe South of Ireland. Finally, the paper concludes with a discussion ofthe implications for research and practice in public sector brandmanagement.

2. Literature review and hypotheses development

2.1. Customer orientation and satisfaction

Customer orientation can be assessed at two levels, that of theorganization and that of the customer-facing employee. At anindividual level, CO refers to an individual's tendency or predisposi-tion to meet customer needs in an on-the-job context (Brown et al.,2002). The construct has two dimensions: a needs dimension, forexample whether staff take a problem solving approach with their

customers; and an enjoyment dimension, for example whether thestaff smile easily at a customer (Saxe and Weitz, 1982; Brown et al.,2002). Research investigating individual salesperson CO finds apositive relationship between CO and customer satisfaction (Rey-nierse and Harker, 1992). Brown et al. (2002) show that CO mediatesthe relationships between more basic personality traits and serviceperformance. Brown et al.'s (2002) three studies in two differentservice industries reveal that CO has a positive influence on employeesatisfaction in a service context; and employees working in anyservice environment can be expected to be more satisfied the morecustomer-oriented they are themselves.

As governments attempt to promote greater accountability in thepublic sector through the creation of quasi-markets, organizationssuch as hospitals receive increased funding when they meet certainnorms through an accreditation process (Health Service ExecutiveTransformation Programme, 2007–2010). Such norms include per-formance with customers. As poor performance can result in reducedrevenue, public sector managers can find themselves dealing withsimilar, albeit not identical, pressures as their commercial counter-parts. Therefore, prior work in the private sector acts as a guide as torelationships between such similar variables in the public sector, andthus the following hypothesis is proposed:

H1. The higher the perceived employee customer orientation (ECO),the higher the satisfaction of a public sector organization's (a) employ-ees, and (b) customers will be.

Based on Narver and Slater's (1990) work on the effects ofmarketing orientation on profitability, organization-level customerorientation (OCO) refers to the “degree towhich the climate or cultureof the organization is conducive to meeting customer needs” (Grizzleet al., 2008). This definition is consistent with Pervin's Goals Model(1983; Pervin and Persons, 1989), which posits that individuals aredriven to accomplish various goals, and the environment is viewed asoffering reinforcement opportunities to meet these goals and/orbarriers to the accomplishment of these goals. Organizational-levelcustomer orientation (OCO) moderates the relationship between ECOand employee performance of customer-oriented behaviors (Grizzleet al., 2008). In other words, OCO has a positive influence on both ECOand how the employee treats the customer, one that explains at leastpart of the relationship between ECO and employee behavior.

Here the chosen outcomemeasure is the satisfactionof employees orcustomers rather than the performance of employees, but the expec-tation is that OCOwill play a similar role and influence satisfaction (Rustet al., 1996). For employees, the perceived customer orientation of theorganization influences how customer-oriented they themselvesbecome, as employees respond to the policies of their employer. Thismay also influence employee satisfaction, as employees in a serviceenvironment shouldbemore satisfiedwhen they feel supportedby theiremployer's attitude towards customers. Customers will be moresatisfied if they perceive that the organization ismore oriented towardsthem; and their views of the policies of the organization will influencetheir perceptions as to the orientation of the organization's employees.Thus, the expectation is that OCO will have a positive relationship withboth ECO and satisfaction, placing OCO in a potentially moderatingrole between ECO and satisfaction. This then implies the followinghypothesis:

H2. The relationship between perceived employee customer orien-tation (ECO) and (a) employee, and (b) customer satisfaction ismoderated by the perceived level of organizational customer ori-entation (OCO).

2.2. Corporate brand personality, customer orientation, and satisfaction

Prior work establishes that ECO leads to both employee satisfaction(Brown et al., 2002) and external stakeholder satisfaction (Reynierse

1166 S. Whelan et al. / Journal of Business Research 63 (2010) 1164–1171

andHarker, 1992). The reason for this relationship is however unclear inthe literature thus far. One potential explanation is in the allied field ofreputation management, where the assumption is that the interactionsstakeholders have with an organization shape the associations theymake with that same organization (Fombrun, 1996). As CO influencesboth the employee and customer experience, the higher an organiza-tion's CO, the stronger and more positive will be the associations madewith the corporate name. Secondly, as reputation relates positively tostakeholder satisfaction (Davies et al., 2003), such associations po-tentially mediate the relationship between CO and satisfaction.

Brand personality is one way in which the associations made with abrand are conceptualized (Keller, 1998). Brands have characteristicssimilar to those of human characteristics, thereby evoking the brand asperson (personification) metaphor. The literature conceptualizesbrands as, for example, innovative, exciting, or sincere persons (Aaker,1997; Batra et al., 1993). Personification can also be used to describeemployee views of organizations (Slaughter et al., 2004), oftentermed as character (Goffee and Jones, 1998) or corporate personality(Furnham and Gunter, 1993); and defined as how a stakeholder dis-tinguishes an organization, expressed in terms of human characteristics(Davies et al., 2003).

Published measures of brand personality (Aaker, 1997; Slaughteret al., 2004; Davies et al., 2003) have three dimensions in common(Chun and Davies, 2006), namely, Competence, Agreeableness, andEnterprise (taking the labels for these from the scale used in this study).These dimensions are contained in the empirical study that follows.They often correlate with both employee and customer satisfaction(Davies et al., 2003), not only because they are common tomeasures ofbrand personality, but also because evidence exists to expect that ECOenhances such associations, and also to create satisfaction.

The agreeableness dimension (Appendix A) includes trust, whichhas strong links to customer satisfaction with companies, includingthose in the services sector (Deepak et al., 2002). Customers of serviceorganizations value the helpfulness, friendliness, and fairness oftreatment by front-line staff members (Westbrook, 1981). Agree-ableness is also important for employees, because trust correlatessignificantly with job satisfaction and organizational commitment(Pillai et al., 1999). The Competence dimension could be important increating satisfaction for both employees and customers, because or-ganizational effectiveness is a major signal a company gives to themarket (Brown and Dacin, 1997). One component of competence,reliability, is one of the dimensions of service quality (Parasuramanet al., 1988), and service failure is a source of customer dissatisfaction(McCollough et al., 2000). The Enterprise dimension includes itemssuch as innovative and up-to-date. Customers in both the public andprivate sectors can be positively influenced by how enterprising aservice organization appears to be (Bellenger and Korgaonkar, 1980);although constant change can be a source of personal stress for theemployees of those same organizations (Cooper and Payne, 1988);and change can have a negative effect on employee job satisfaction(Broadbridge et al., 2000).

How internal stakeholders treat external stakeholders influencestheir perception of the corporate brand (Chun and Davies, 2006; deChernatony, 2006). In particular, the more customer-oriented thestakeholders of a corporate brand perceive the organization to be, thestrongerwill be their view of that corporate brand in a service context.For example, Agreeableness contains the items supportive andconcerned within a facet labelled as empathy; and being customer-oriented implies having empathy for the customer perspective. Hav-ing a CO approach is associated with a trusting relationship betweensales people and customers in a commercial context (Saxe andWeitz,1982). Competence contains items such as hardworking and reliable,associations promoted by CO, while incompetence would imply aninability to meet customer needs. CO involves being responsive tochanges in customer needs (Narver and Slater, 1990), in other words,being imaginative and innovative, which are two components of

Enterprise. ECO therefore positively influences all three dimensions ofcorporate brand personality.

The more positive the associations a stakeholder makes with acorporate brand, the more satisfaction they report with that brand.These associations are built through experience with the brand, and ina service context this means with employees; a process whichdepends upon how customer-oriented those employees appear to be.Perceptions of ECO particularly affect customer views, but employeesatisfaction also depends upon how customer-oriented employeesbelieve their colleagues to be. As ECO positively influences corporatebrand personality, and in turn has a positive influence over sat-isfaction, this is likely to mediate the relationship between ECO andstakeholder satisfaction.

H3 (a). Corporate brand personality (CBP) mediates the relationshipbetween employee customer orientation (ECO), as perceived by em-ployees, and employee satisfaction.

H3 (b). Corporate brand personality (CBP) mediates the relationshipbetween employee customer orientation (ECO), as perceived bycustomers, and customer satisfaction.

3. Method

3.1. Context and sample

The empirical context here is a public hospital in the Republic ofIreland. The health service in Ireland is a mixture of private andpublicly funded organizations. This particular hospital obtains fundingfrom Government sources and employees work for the HealthServices Executive (HSE). The aim was to sample staff with directcontact with the public, that is, patients and those people visiting thehospital. The study began with three group discussions, one with agroup of patients, another with support staff, and one with medicalstaff (N=36). Two surveys followed, one with patients and theirvisitors, and another with staff working in the hospital. The resultsreported here are mainly of the quantitative studies with extractsfrom the qualitative data used only to illustrate and explain thequantitative findings as appropriate.

A total of 450 staff were given hard copies of the questionnaire and302 valid returns (without significant amounts of missing values)were obtained over the two weeks of the survey, giving an effectiveresponse rate of 75%. All employees were included in the sampleframe and the interviewers visited the hospital during two separateweeks to ensure that the majority of employees had a similar chanceof participating in the research. Patients and their visitors received asimilar questionnaire. The response rate here is higher as researcherscontacted the respondents in person. Researchers approached a totalof 250 potential respondents and obtained 200 questionnaireswithout significant amounts of missing values (80% response rate).Most non- or partial responses are from outpatients contacted whilewaiting for appointments andwho did not ultimately have the time tocomplete the survey. The sample frame does not include all patients,as the interviewers have to be sensitive to certain categories ofpatients in approaching them for interviews. For the purpose of thisstudy, only the data from employees with significant contact withpatients are included. Of the 302 employees, 240 had roles thatinvolved routine contact with patients and visitors. The structuralequation modeling (SEM) package, AMOS 7, analyzed the data.

3.2. Measures

3.2.1. Brand personalityThe measure of Davies et al. (2004) is adopted as being vali-

dated for both the customers and employees of a corporate brand,Appendix A. Respondents are asked to imagine that the corporate

Table 1Construct to construct correlations: customers.

(1) (2) (3) (4) (5) (6)

Agreeableness (1) 1 .61a .39a .47a .34a .61a

Competence (2) .61a 1 .48a .59a .44a .64a

Enterprise (3) .39a .48a 1 .39a .47a .49a

ECO (4) .47a .58a .39a 1 .44a .56a

OCO (5) .34a .43a .47a .44a 1 .36a

Satisfaction (6) .61a .64a .41a .56a .36a 1

a Correlation is significant at the 0.01 level (2-tailed).

Table 2Construct to construct correlations: employees.

(1) (2) (3) (4) (5) (6) (7)

Agreeableness (1) 1 .64a .42a .05 .26a .11 .59a

Competence (2) .64a 1 .63a .02 .23a .12 .53a

Enterprising (3) .42a .63a 1 .04 .16b .08 .42a

OCO (4) .05 .02 .04 1 −.02 −.01 .05ECO1 (5) .26a .23a .16b −.02 1 .64a .04ECO2 (6) .11 .12 .07 −.00 .64a 1 −.10b

Satisfaction (7) .59a .53a .42a .05 .04 −.1 1

a Correlation is significant at the 0.01 level (2-tailed).b Correlation is significant at the 0.05 level (2-tailed).

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entity has come to life as a human being and to rate the entity'spersonality using a number of traits along a seven point Likert-typescale anchored on Strongly Disagree to Strongly Agree, depending onhow well the respondent thinks that each of the traits describes theentity.

3.2.2. Customer orientationThe measure of employee customer orientation used the two-

dimensional scale from Brown et al. (2002) but adapted to the contextby for example, replacing the term customer with the term patient. Theneeds dimension is assessed with six items (e.g., Staff at XXX take aproblem solving approach with their patients), and the enjoymentdimension with six items (e.g., Staff at XXX find it easy to smile at eachpatient). Each question uses a five point Likert-type scale anchored onStrongly Disagree to Strongly Agree, Appendix B. OrganizationalCustomer Orientation is measured using a 5 item Likert-type scaleadapted to the context from Narver and Slater (1990), for example,“Managers at XXX constantlymake sure that employees are trying theirbest to satisfy patients”, Appendix C, which are anchored on StronglyDisagree to Strongly Agree on a 5 point scale.

3.2.3. SatisfactionSatisfaction refers to the stakeholder's overall satisfaction with the

corporate entity, rather than satisfaction with a particular treatmentor as job satisfaction. The reason for selecting this definition is toensure that the conceptualization of satisfaction is similar for bothgroups of respondents. Two of the three scale items for bothrespondent groups included are from Davies et al. (2004), and onefrom the literature on hospital marketing that emphasizes theoutcome of confidence in satisfaction in this sector for customers(Linder-Pelz, 1982). For employees, the third item comes from thehospital's survey of employee satisfaction. Likert-type measurementscales used various anchors, Appendix D.

4. Results

4.1. Measurement purification and analysis approach

The data was modeled using the two-stage data analysis approachrecommended by Anderson and Gerbing (1988) and Hunter andGerbing (1982). First, a confirmatory factor analysis (CFA) tests theconvergent validity and discriminant validity of the dimensions of thescales, as well as the entire measurement of the factors included in thestructural model. Second, a structural path analysis tests the structuralmodel and the related research hypotheses.

In accordance with the first stage of Anderson and Gerbing's (1988)approach, an assessmentwasmade of the dimensionality and reliabilityof each scale. An examination for outliers and for acceptable multi-dimensional normality followed (Byrne, 1998). The measures of brandpersonality are eachmulti-dimensional and so the data is aggregated atthe dimensional level. Somewhat unexpectedly, the two dimensions ofEmployee Customer Orientation, needs dimension and enjoymentdimension, are associated in different ways with other variables in theemployee data set; implying that they represent different constructs,and are therefore treated separately in the analysis of both data. ACFA for each set of focal constructs: Agreeableness, Competence, andEnterprise; employee customer orientation; organizational customerorientation; and satisfactionwasmade. The confirmatorymeasurementmodel fits the data satisfactorily (χ2 [df=7]=10.2, p<.001; goodnessof fit index [GFI]=.92; confirmatory fit index [CFI]=.93; normed fitindex [NFI]=.91; and root mean square error of approximation[RMSEA]=.05). All factor loadings are significant (p<.05) and thecomposite reliabilities of all constructs are greater than the .60 acceptedlevel (Bagozzi and Yi, 1988). Thus, the measures demonstrate adequateconvergent validity and reliability. Tables 1 and 2 present constructcorrelations for external stakeholders and employees. Structural

equation modeling using the maximum likelihood estimation methodtested the hypotheses.

4.2. Model estimation and re-specification

4.2.1. EmployeesThe baseline model for the employee data (Fig. 1) fits the data well

(Table 3).In the base model, both aspects of ECO (Fig. 1) link significantly to

employee satisfaction, but while the enjoyment dimension relationshipECO1 (I enjoy smiling at patients) is positive (SE: 0.22, p=0.01), theneeds dimension ECO2 (I take a problem solving approach withpatients) relationship is negative (SE: −0.23, p<0.01). Partial supportresults from findings for H1a .When OCO is in the expectedmoderatingrole to the base model (Fig. 2), the model fits the data well but thesignificance of the links from both aspects of ECO to satisfaction isunaltered. OCO does not significantly link to any of the three variablesresulting in the rejection of H2a.

Substituting Agreeableness for OCO improves the model fit. Theintroduction of Agreeableness changes the relationship between ECOand employee satisfaction. The link from the enjoyment dimension(ECO1 in Table 3) to employee satisfaction, which was previouslysignificantly positive, becomes non-significant; but the link from theneeds dimension (ECO2 in Table 3) remains substantially the same. Thelink from ECO1 (enjoyment dimension) to Agreeableness is significant(p<.001) as is that from Agreeableness to employee satisfaction(p<.001). The data supports H3a as Agreeableness then fully mediatesthe effect of this aspect of ECO on satisfaction. However the needsdimension is not significantly linked to Agreeableness (p=0.31) andthe influence on satisfaction remains both negative and significant.

Substituting Competence for Agreeableness, the links from bothaspects of ECO to satisfaction change in the sameway. The Competenceof the brand personality is a significant predictor of employee sat-isfaction (p<.001), the path from the enjoyment dimension of ECO toCompetence is significant, but that to satisfaction becomes non-significant. But as before, the needs dimension of ECO is not significantlyassociated with the brand personality dimension (p=.06) and the linkto employee satisfaction remains significant and negative (p<.001). Asimilar picture emerges for Enterprise whose path to satisfaction issignificant (p<.001) as is that from the enjoyment dimension of ECO(p=.03), but not from the needs dimension (p=.64), which remains

Fig. 1. Base Model.

Fig. 2. Full Model.

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significantly predictive of satisfaction, while the path from the enjoy-ment dimension to satisfaction, becomes non-significant.

All three dimensions of brand personality therefore mediate theeffect of the enjoyment dimension of ECO on satisfaction but not theneeds dimension. The data supports H3a but only in part. Both aspectsof ECO influence employee satisfaction but in very different ways. Theenjoyment dimension influences corporate brand personality, whichin turn influences employee satisfaction, both influences are positivesuch that the dimension has a substantial positive influence oversatisfaction. But the needs dimension does not influence the threeaspects of brand personality and has an unexpectedly negative influ-ence over satisfaction.

As a final check, the base model includes all four variables (OCO,Agreeableness, Competence, and Enterprise) (Model 6, Table 3). Thedata fits the model well and the same relationships persist. Eachdimension of brand personality is significantly predictive of employeesatisfaction: Agreeableness (p<.001), Enterprise (p=.001), andCompetence (p=.014). The enjoyment dimension of ECO predictsall three significantly: Agreeableness (p<.001), Enterprise (p=.028),and Competence (p=.001); but the direct path to satisfaction is notsignificant (p=.72). None of the paths from the needs dimension ofECO to the brand personality dimensions are significant, but the pathto satisfaction remains significantly negative. None of the pathwaysfrom OCO is significant.

4.2.2. CustomersAn analysis of customer data using an identical process followed. A

baselinemodel (Fig. 1) to testH1b assessesfirstwithbothdimensions ofECO predicting satisfaction. Adding OCO as a mediating variable to testH2b further develops this model. The three dimensions of CorporateBrand Personality (CBP) individually added as moderating variablestestedH3b. Finally, adding all four variables to the baselinemodel, Fig. 2,tested the fullmodel. The baselinemodelfits the datawell (Table 4) andtheneedsandenjoymentdimensionsof ECO, asperceivedbycustomers,have significant paths to satisfaction. The addition of OCO reduces thesignificance of both paths but only marginally so, and the model fit isagain good, resulting in the rejection of H2b.

In the next model, Agreeableness replaces perceived OCO but in amediating role. The addition of Agreeableness creates a sharp fall in thedirect contribution of the enjoyment dimension of ECO in explainingsatisfaction such that the path becomes insignificant. However, the pathfrom the needs dimension of ECO remains almost as significant asbefore. Paths to Agreeableness from the needs dimension are significant(p<.001), and from the enjoyment dimension less so (p=.038).

Table 3Employee models.

No Model CHI² df GFI CFI RMSE

1 Base 2.22 4 .99 1.0 0.02 Base+OCO 7.26 6 .99 .99 .033 Base+Agreeableness 2.4 6 .99 .99 .004 Base+Competence 2.7 6 .99 1.0 0.05 Base+Enterprise 3.2 6 .99 .99 .026 Base+OCO+Agree+Comp+Ent 11.4 15 .99 1.0 .00

Agreeableness mediates the effect of the enjoyment dimension onsatisfaction. When Conscientiousness replaces Agreeableness in themodel the dimension creates a similar effect, but this time the con-tribution of the needs dimension of ECO to satisfaction is the moreaffected. The path from Conscientiousness to satisfaction is significant(p<.001) and to the needs dimension of ECO (p=.001), but to theenjoyment dimension less so (p=.038). Conscientiousness mediatesthe effect of the needs dimension on satisfaction.

When Enterprise replaces Agreeableness, the influence of bothdimensions of ECO on customer satisfaction is largely unaffected.Enterprise predicts satisfaction (p<.001) and the path from the needsdimension to Enterprise is significant (p=.001) but the path from theenjoyment dimension to Enterprise is not significant.

An examination including all four variables in themodel shows thatthe data fits themodel well with the exception of the Hoelter 0.1 figure.As all paths to and from Enterprise are non-significant, the variable canbe removed andwhen re-run provides a better fit to the data (Model 13Table 4). Corporate Brand Personality mediates the influence of bothaspects of perceived ECO on customer satisfaction. Agreeableness hasthegreater influence for the enjoymentdimension, andCompetencehasthe greater influence for the needs dimension, thereby supporting H3b.

5. Discussion

The staff and customer data are in accord with H1, that is, greaterECO promotes greater satisfaction, but only for that aspect of ECO thatreflects taking enjoyment from being responsive to customers. Themore the staff are oriented towards the second component of ECO,that is, dealing with patient needs, (always answering a patient'squestions or helping patients achieve their own goals), the less likelythey are to be satisfied; while the more customers saw staff givingprominence to their needs, the more satisfied they are. One commentfrom the employee focus group illustrates the conflict for some staff inappearing more customer-oriented on both aspects of CO:

“It's like if you smile the world smiles back at you so you betterkeep smiling and just keep going, and you do, but your patiencedoes start to give in. I am here to do my job, not make patients feelbetter by smiling at them.”

Staff members however are generally willing to appear friendly, andthosewho are report higher levels of satisfaction; but thosewhoadopt a

A HOELTER0.01 Enjoy ECO1→satisfaction Needs ECO2→satisfaction

1431 .22 (p=0.01) −.23 (p=0.01)554 .22 (p=0.01) −.23 (p=0.01)

1247 .00 (n/s) −.17 (p=0.01)1111 .06 (n/s) −.20 (p<0.01)932 .13 (n/s) −.21 (p<0.01)643 −.02 (n/s) −.17 (p<.01)

Table 4Customer models.

No Model CHI² df GFI CFI RMSEA HOELTER0.01 Enjoy ECO1→satisfaction Needs ECO2→satisfaction

7 Baseline 9.1 4 .98 .99 .08 290 0.30 (p=.001) 0.31 (p=.001)8 Base+OCO 12.1 6 .98 .99 .07 277 0.29 (p<.001) 0.26 (p<.001)9 Base+Agreeableness 13.6 6 .98 .99 .08 246 0.16 (n/s) 0.23 (p<.01)10 Base+Competence 16.0 6 .98 .99 .08 243 0.21 (p<.05) 0.10 (n/s)11 Base+Enterprise 14.0 6 .98 .99 .08 239 0.27 (p<.01) 0.25 (p<.01)12 Base+OCO+Agree+Comp +Ent 30.0 13 .97 .98 .08 182 0.14 (n/s) 0.11 (n/s)13 Base+OCO+Agree+Comp 23.0 11 .97 .99 .07 214 0.17 (p=.032) 0.10 (n/s)

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more customer-oriented approach to their professional work reportlower levels of satisfaction. For some staff, having to constantly smile is astep too far, believing that their role is more to heal patients. Those whotake the opposite view, believing that taking a patient-centeredapproach has positive medical benefits, might feel alienated andtherefore bemore dissatisfied. Staff openly expressed negative attitudesand views toward patients and visitors attitudes, for example: “…

Visitors, they demand as much as patients.”Marked differences exist between the response patterns of employ-

ees and customers to the relevance of OCO; with OCO expected toinfluence ECO and to mediate the relationship between ECO andsatisfaction. In neither case does OCO play the role predicted in medi-ating the influence of ECO on satisfaction. Worse, employee views ofOCO do not influence either dimension of their ECO, and have only amarginal influence over their satisfaction (at p<0.1). In contrast,customer views of OCO have a strong and positive influence over theirviews of ECO and their satisfactionwith the hospital. As one participantcommented in the focus group: “I think that any good hospital has to berun by good management, and if you haven't got good managementthen you haven't got good staff or a good hospital; it's all down tomanagement as far as I'm concerned.”

Staff views of management contrast with those of customers, withsome staff suggesting that the behavior of senior managementtowards them differs from how staff are to behave towards customers.

ECO suggests certain patterns of behavior among employees. Thereputation literature argues that the service experience will shape theassociations that customers and employees make with the corporatename. Both aspects of ECO promote Agreeableness, that aspect ofcorporate personality that emphasizes supportiveness and empathy.One short comment from a customer focus group illustrates thesignificance of the dimension: “It's the nurses. The nurses are so sup-portive and kind. You know you will be well cared for.”

Agreeableness fully mediates the influence of the enjoymentdimension of ECO on customer satisfaction. In otherwords, the behaviorof staff appears to promote this aspect of the corporate brand, which inturn promotes satisfaction.

Competence fully mediates the needs aspect of ECO and anotherquotation helps to explain how: “A feeling of relief…I was brought in acouple times by ambulance, the great feeling of relief when you arebrought in when you have experienced nurses and doctors.”

Staff appearing to be competent promote positive feelings amongpatients, with competence associations built in turn when staff areperceived to deal with a patient's needs.

Enterprise is not as relevant to the links between ECO andcustomer satisfaction, even though Enterprise correlates stronglywith satisfaction. However, all three dimensions of Corporate BrandPersonality mediate the influence of ECO on employee satisfaction.Working in an environment where those around you find smiling atpatients easy, and where you and your colleagues take pleasure frommaking patients happy, promotes positive associations with thecorporate brand. When all three dimensions are included as potentialmediators in a model linking ECO to employee satisfaction (Model 6,Table 3), not surprisingly the path through Agreeableness is the mostsignificant. A negative but insignificant path is present from the needscomponent of ECO to all three dimensions.

6. Conclusions and further research

Public sectormanagers oftenoverlook ormisunderstand thebenefitsof marketing (Kotler and Lee, 2007a,b) or view them as inappropriate(Laing, 2003). One concept central tomarketing is customer orientation(CO). The relevanceof CO to apublicly-ownedorganizationgoes beyondthe idea of assuring tax payers that the public is getting value formoney,and specifically that organizations such as hospitals and schools areresponsive to user views and needs. Links demonstrated between COand positive organizational outcomes in the commercial sector (Saxeand Weitz, 1982) are consistent when assessed either at the individuallevel (Brown et al., 2002) or at the corporate level (Narver and Slater,1990). Such outcomes include improved satisfaction for both customersand employees from a greater CO (Rust et al., 1996).

The results from this study in the public sector donot align fullywiththe expectations from prior studies in the private sector. Oneexplanation could be that the organization studied here is failing bynot embracing CO. However, the hospital is a designated center ofexcellence in many clinical areas. This is far from being an institution incrisis as might be inferred, as the hospital is, from the interviews withemployees and other data sources, well regarded in Ireland. Ofimmediate concern to the hospital management is the lack of a sig-nificant relationship between OCO and either ECO or staff satisfaction.The customer model demonstrates such links, but may be due to anassumption by customers that senior management, with whom theyhave little contact, and their policies, are responsible for the ECO thatthey can observe. If Model 8 (Table 4) positions OCO as mediating theinfluence of ECO on satisfaction, the fit is very similar lending somesupport to that possibility.

The scores from employees to individual questions measuring OCOare often low. The mean for the items such as ‘have organized ourhospital to the needs of our patients’ and ‘pay close attention to ourpatients after treatment’ are below the midpoint of the rating scale;implying general disagreementwith these statements. But this does notexplain the lack of a correlation in sucha large sample betweenOCOandECO (Table 2). More likely, a disconnection exists between OCO andECO, where employees do not associate hospital policy on COwith theirown attitudes to CO. This could explain the equally unexpected resultsshowing differences in the effect of the two aspects of ECO. Employees,rather than managers, are defining what CO represents.

Highly qualified professionals, doctors, nurses, teachers, lecturers,police, and lawyers often dominate public sector organizations.However managers who may or may not share the same backgroundas the professionals they manage, very often manage such staff. Thelatter may well see their role as imparting their knowledge and skills tothe public rather than helping customers to address their own needs.This raises the possibility of rethinking the management of customerorientation in the context of public sector organizations. Further workneeds to explore the possibility that customer orientation, as defined inthe commercial sector, is either not appropriate to the public sector, orthat examples are necessary where the transfer of such ideas hasworked.

Corporate brand imagery develops through actual experiences withthe brand (Fombrun, 1996), and CO can be expected to influence theassociations stakeholders make with an organization. Links between

1170 S. Whelan et al. / Journal of Business Research 63 (2010) 1164–1171

these and COhave not been overtly tested in either the public or privatesectors, but the twoeffects hypothesized fromavailable theory andpriorstudies, that is, ECO influences brand associations to the pointwhere thelinks between ECO and satisfaction are mediated by such associations,find support in the study data. Not surprisingly, the stronger that samebrand imagery, themore satisfaction reported by the same respondents,afinding verymuch in linewith previouswork in the commercial sectorwith both employees and customers of the same organization (Chunand Davies, 2006). The significant links from both aspects of ECO tosatisfaction, but mediated by Agreeableness and Competence, implythat the relationship between ECO and satisfaction is indirect and viabrand imagery. An examination of this finding in the private sector, andin further studies in different contexts within the public sector, wouldoffer fruitful avenues for further research.

The findings here emphasize the potential to promote greater CO,and by doing so, build positive associations with the corporate brand.In the commercial sector, training to promote CO is an option but onethat may not be favored here as many training programs rely upon adidactic approach. Peccei and Rosenthal (2000) find that, even in theprivate sector, responses to CO programs are not homogeneous. Inother words, assuming as many do, that if the investment in suchtraining is large enough a positive effect will result, ignores the realitythat some will pay lip service to CO initiatives and others will rejectthe idea both attitudinally and behaviorally.

Resistance from front-line service employees to the articulation ofmarketing concepts has resulted in a widespread failure to translateorganizational commitment into reality in the public sector (Laing andMcKee, 2001).A cognitively-based approach toCOdevelopment ismorelikely to succeed inmany public sector organizations, including those inhealthcare and education, where employees might need evidence thatbeing more customer-oriented makes their efforts within theirprofessional role more effective. Finally, any assumption that relation-ships demonstrated in the commercial sector hold in the public sectorrequire further investigation. All three developed hypotheses are fromprior work in the private sector, but the findings support only one ofthese hypotheses for the employee data.

Acknowledgments

The authors extend their sincere thanks to Professor Tom J Brownof Oklahoma State University for his valuable comments on a previousversion of this manuscript. The authors also gratefully acknowledgethe assistance of the anonymous public hospital that provided thedata. The Irish Technological Sector Research Strand 1 PostgraduateR&D Skills Programme financially supported this research. Finally, theauthors are grateful for the recommendations made by the anony-mous reviewers throughout the review process.

Appendix A. Corporate Brand Personality (CBP) measures rated ona 7 point Likert-type scale, where 1=strongly disagree and 7=strongly agree.

Agreeableness items(12 items)

Competence items(7 items)

Enterprise items(9 items)

Cheerful

Reliable Cool Pleasant Secure Trendy Open Hardworking Young Straightforward Ambitious Imaginative Concerned Achievement oriented Up-to-date Reassuring Leading Exciting Supportive Corporate Innovative Agreeable Extrovert Honest Daring Sincere Trustworthy Socially responsible

Appendix B. Employee Customer Orientation (ECO) measuresrated on 5 point Likert-type scale, where 1=strongly disagree and5=strongly agree.

Enjoyment Dimension Items:

1. Staff at XXX find it easy to smile at each patient.2. Staff at XXX enjoy remembering a patient's name.3. It comes naturally to staff at XXX to have empathy for their

patients.4. Staff at XXX enjoy responding quickly to their patients' requests.5. Staff at XXX get satisfaction from making their patients happy.6. Staff at XXX really enjoy taking care of their patients.

Needs Dimension Items:

7. Staff at XXX try to help patients achieve their goals.8. Staff at XXX achieve their own goals by satisfying patients.9. Staff at XXX get patients to talk about their service needs with

them.10. Staff at XXX take a problem solving approach with their patients.11. Staff at XXX keep the best interest of their patient in mind.12. Staff at XXX are able to answer a patient's questions correctly.

Appendix C. Organizational Customer Orientation (OCO)measures rated on a 5 point Likert-type scale, where 1=strongly disagree and 5=strongly agree. “Managers at XXX…”

1. Constantly check to make sure hospital policies and proceduresdon't cause problems for patients.

2. Constantly make sure that employees are trying their best to satisfypatients.

3. Think of patients' point of view when making big decisions.4. Plan to keep our hospital ahead of competitors by understanding

the needs of our patients.5. Assess patient satisfaction regularly.6. Pay close attention to patients after treatment.7. Really care about patients, even after they have received their treat-

ment etc.8. Have organised the hospital to the needs of its patients.

Appendix D. Satisfaction measures for staff and customers.

1. I would recommend XXX to a friend or colleague where 1=stronglydisagree and 5=strongly agree (both).

2. Please rate your overall satisfaction with XXX, where 1=verydissatisfied and 5=very satisfied (both).

3. Please rate your overall confidence in XXX where 1=veryunconfident and 5=very confident (customer only).

4. What is your opinion of XXX where 1=very unfavorable and5=very favourable (staff only).

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Susan Whelan is a Senior Lecturer in Marketing, Waterford Crystal Centre for MarketingStudies, School of Business, Waterford Institute of Technology, Ireland (swhelan@wit.ie).

Gary Davies is Professor of Corporate Reputation, Manchester Business School, University ofManchester, United Kingdom (gary.davies@mbs.ac.uk).

Margaret Walsh is a PhD candidate, School of Business, Waterford Institute of Technology,Ireland (mwalsh@wit.ie).

Rita Bourke is a Master by Research candidate, School of Business, Waterford Institute ofTechnology, Ireland (rbourke@wit.ie).