The conditional effect of inter functional coordination on the relationship between customer orientation and firm performance: empirical evidence from manufacturing firms, Nairobi, Kenya

Abstract

The purpose of this study was to investigate the conditional effect of inter functional coordination on the relationship between Customer orientation and Firm performance. Specific objectives were: to determine the effect of Customer orientation on Firm performance and to investigate the effect of Inter Functional coordination on Firm performance. The study also explored the conditional effect of Inter Functional coordination on the relationship between Customer orientation and Firm performance. The study was guided by Stakeholders Theory and Resource Based Theory. Explanatory research design was used and data collected by questionnaires from a sample size of 300 using random sampling technique. Cronbach alpha was used to test reliability of the research instrument. Pearson correlation and multiple regression models were used to analyze the data and to test the hypotheses. The findings confirm that both Customer orientation and Inter Functional coordination positively and significantly affect Firm performance. Results also indicate that Inter Functional coordination significantly has a conditional effect on the relationship between Customer orientation and Firm performance, thus providing new knowledge in marketing literature. Companies should therefore pay attention to customer perceived value, understand their needs and share customer information among all the functional areas of the firm as this has been found to affect Firm performance.