Size does matter: the effect of organizational size on customer satisfaction

Abstract

Drawing from literature in both organizational behavior and service marketing and management, we develop a conceptual model for explaining the effect of organizational size on customer satisfaction. We propose that organizational size affects customer satisfaction directly and through the intervening variable of employee job satisfaction. We focus on the second effect since it has not been previously identified in the literature. We then use the model to provide an explanation as to why a large company/small company hybrid can produce higher levels of customer satisfaction than either the small or large organizations in isolation — an explanation that also has not been previously discussed in the literature. We conclude by exploring the theoretical and practical significance of our model for future work.