Customer service performance in bridging the gap between strategic management of technology and financial performance: evidence from the banking industry of Sri Lanka

Abstract

Purpose: There is empirical evidence that both Strategic Management of Technology (SMT) and increased Customer Service Performance (CSP) level led to improved Financial Performance (FP) of organizations. However, there is still a vacuum of empirical studies that explain how both SMT and CSP together lead to Financial Performance in a banking context as these have relatively scant literature that explain the links between technology orientation and customer oriented corporate behavior in an emerging context. Hence, this study aims to identify empirical relationships between Strategic Management of Technology, Customer Service Performance, and Financial Performance of the banking industry. Design/methodology/approach: A representative sample of one thousand two hundred (1200) professionals from commercial banks in the Western Province who are registered with the Colombo Stock Exchange in Sri Lanka were surveyed using a survey questionnaire. To test the priori-based conceptual model, the data was evaluated using structural equation modelling procedures with Smart PLS. 3.2 software. Findings: The study revealed the positive impact between SMT practices and FP; positive impact between SMT practices and CSP; positive impact of CSP and FP; the mediation effect of CSP between SMT practices and FP of a service firm. Originality: The findings revealed the existence of a partial mediation of CSP on the relationship between SMT and financial performance of the firm. The study empirically confirms the complementary role of customer service-related performance in implementing strategic technology management decisions in order to enhance the financial outcome of the sector. Implications: The results have implications for decision makers in banks. Decision makers can take measures to strike a proper balance between the bank's SMT and CSP so that they can increase the financial results.