How and when does top management interaction with customers impact customer satisfaction?

Purpose: This paper investigates the effect of top management’s customer interactions (TMCI) on customer satisfaction. The study argues that TMCI’s overall relationship with customer satisfaction follows an inverted-U shape due to its positive and disruptive effects on the customer relationship efforts of frontline service/sales employees (FSEs). The paper further investigates the frontline competence of both FSEs and the top management team (TMT) as moderators of the impact of TMCI on customer satisfaction.

Design/methodology/approach: The conceptual model was tested empirically using data from managers, frontline employees, and customers of microfinance firms. A multilevel structural equation modelling approach was used to test the hypothesized model.

Findings: The results show that TMCI has a curvilinear relationship with customer satisfaction. The results also show that frontline employees’ collective efficacy attenuates this relationship by shifting the turning point of the curvilinear effect to the right. Furthermore, TMT frontline competence amplifies both the positive and negative effects of TMCI on customer satisfaction.

Research limitations/implications: The study advances knowledge on the effects of TMCI on customer satisfaction and highlights the nuanced relationship between top management involvement and indicators of firm performance. 

Practical implications: The findings show the importance of considering the frontline competence of both top management and frontline employees when encouraging TMCI in organizations. 

Originality/value: To the best of the author’s knowledge, this study is one of the first to examine TMCI’s direct impact on customer satisfaction and propose the frontline competence of both top management and frontline employees as boundary conditions on this relationship.