Social capital, customer service orientation and creativity in retail stores

Journal of Business Research 59 (2006) 1214 – 1221

Social capital, customer service orientation and creativity in retail stores Omar Merlo a , Simon J. Bell a , Bülent Mengüç b,⁎, Gregory J. Whitwell c a

b

Judge Business School, University of Cambridge, Trumpington Street, Cambridge CB21AG, UK Department of Marketing, Int'l Business and Strategy, Brock University, St. Catharines, Canada ON L2S 3A1 c Faculty of Economics and Commerce, University of Melbourne, Victoria 3010, Australia Received 16 February 2006; accepted 19 September 2006

Abstract This paper argues that the structural, relational and cognitive dimensions of social capital within retail stores provide an insight into the antecedents of customer service orientation and store creativity. These three dimensions enhance a customer service orientation as a result of increased knowledge sharing, creation of information channels, and the facilitation of cooperative behavior. Secondly, because these factors foster the process of resource exchange and combination, they are also associated with an increased level of store creativity. Indeed, for a high level of creativity to take place at the store level, knowledge has to be shared and combined in an effective manner. Our proposed model is tested on a sample of 112 stores within a large national retail chain. We find partial support for our hypothesized model. © 2006 Elsevier Inc. All rights reserved. Keywords: Social capital theory; Customer service orientation; Creativity; Retail stores

1. Introduction Retail organizations have recently made considerable leaps in their level of market orientation and customer responsiveness. This is particularly true of the global retail chains. It is well understood that responding to customer needs more efficiently and effectively than competitors is an important source of advantage for retailing organizations. While responding to customers' expressed needs and preferences is critical for competitive advantage in retail industries, a balance needs to be struck with the need to be innovative, which improves the retailer's ability to anticipate and cater to customers' emergent or latent needs (Narver et al., 2004). Accordingly, retailers must be both market driven and market driving (Jaworski et al., 2000; Kumar, 1997). On the surface, these two objectives might appear in conflict. Being market driven largely implies incremental innovation as customers' expressed needs will be largely anchored within an existing business model or framework (Tuominen et al., 2004). Market driving innovation, on the other hand, implies larger ⁎ Corresponding author. E-mail addresses: [email protected] (O. Merlo), [email protected] (S.J. Bell), [email protected] (B. Mengüç), [email protected] (G.J. Whitwell). 0148-2963/$ - see front matter © 2006 Elsevier Inc. All rights reserved. doi:10.1016/j.jbusres.2006.09.021

steps forward and leads to more radical changes in the way people shop. Accordingly, market driving innovation involves greater risk (Kumar et al., 2000). Although they may require competing business logics (Tuominen et al., 2004), both objectives are pursued successfully by many retail organizations. Clothing retailer Zara, for example, consistently exceeds customers' expectations of contemporary, fashionable design (evidence of being market driven), while having also changed the way customers buy fashion (evidence of market driving). If retail stores are to attempt to be both market driven and market driving, they must, at a minimum, combine high levels of creativity with superior customer orientation. Creative ideas provide the seed for all innovation (Amabile et al., 1996), while customer orientation helps to channel innovative activity toward the provision of superior customer value. But this in turn raises questions about the sources of, and preconditions for, organizations achieving both high levels of creativity and customer orientation. Accordingly, one of the major questions we seek to answer in this paper is: what kind of organizational context encourages retail firms to be simultaneously creative and responsive to customers? We contend that having access to, and leveraging, valuable information is central to the achievement of this dual goal. Information must also be disseminated efficiently and accurately,

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so that members of an organization can respond to customer needs quickly and at the same combine multiple insights to generate new ideas. As a consequence, retail organizations must comprise relationships between members that facilitate both efficient response and a degree of organizational introspection capable of yielding more radical innovation. Social capital theory (Nahapiet and Ghoshal, 1998)–with its emphasis on relationships, networks, and information flows–is a framework that is especially useful for understanding and analyzing the challenges facing retail stores in being simultaneously market driven and market driving. An organizational commitment to meeting customer needs (i.e., being market driven) will be partly dependent on the level and nature of information flows; something which social capital theory reminds us is driven by the nature of relationships and networks of store employees. Market driving, by contrast, is about ‘escaping the tyranny of served markets’ (Hamel and Prahalad, 1991); something which may be done by encouraging experimentation and trialing new ideas that change customers' perceptions of the nature and purpose of retail stores. Social capital theory is crucial here too because it highlights the importance of two building blocks in organizational creativity: social interaction and diverse resource inputs (Kogut and Zander, 1992; Tsai and Ghoshal, 1998). Our aim, then, is to demonstrate how the creation of social capital allows retail stores to achieve superior performance in both customer service orientation (evidence of being market driven) and store creativity (evidence of market driving). The paper is organized as follows. First, we discuss the conceptual foundation of our study. Second, based on this theoretical background, we propose a model that specifies the dimensions of social capital-communication openness, trusting culture and shared vision—as antecedents to customer service orientation and store creativity which, in turn, affect the overall performance of the retail store. Third, we describe the research method and present our findings. Finally, the paper concludes with a discussion of the results and implications for management and future research.

We employ Nahapiet and Ghoshal's (1998) conceptualization of social capital, where three dimensions are argued to facilitate the combination and exchange of resources within firms. The first dimension is structural, which emphasizes the importance of the location of an actor's contacts in a social structure of interactions. This dimension is articulated in this study in terms of the degree of open communication facilitated by a social network infrastructure, which enables retail employees to combine or share resources. The second dimension is relational, and is conceptualized here in terms of a trusting culture, which is a key relationship asset, as it is capable of increasing cooperation and support among service employees. The third dimension is cognitive, which is embodied in shared codes and commonality of goals. This dimension is reflected here in the concept of shared vision, which represents the shared values that facilitate individual and group actions. We adopt Woodman et al.'s (1993, p. 293) characterization of organizational creativity, which is defined as the ‘the creation of a valuable, useful new product, service, idea, procedure, or process by individuals working together in a complex social system’. While the creativity literature is replete with various definitions, tenets, and measures of creativity, we find meaningful novelty to be the most pervasive theme (e.g., Andrews and Smith, 1996; Sethi et al., 2001). We focus, therefore, on the key processes indicative of creative organizations: experimentation and risk taking (Sethi et al., 2001; Tiwana and McLean, 2005), the generation of new ideas (Paulus and Yang, 2000), and the translation of new ideas to valuable or meaningful outputs (Im and Workman, 2004). In sum, we consider social capital within retail stores as an organizational resource, which will be a significant determinant of a retail store's market driven and market driving performance. Specifically, we expect the structural, relational, and cognitive dimensions of social capital to be antecedents of the level of creativity and the intensity of the customer service orientation within retail stores. In turn, we expect both creativity and customer service orientation to lead to superior retail store performance.

2. Theoretical background

3. Hypothesized model

Bourdieu (1983, p.250) defines social capital in terms of resources linked to group membership, and highlights the importance of ‘durable obligations subjectively felt (feelings of gratitude, respect, friendship, etc.)’. Tsai and Ghoshal (1998) investigated the impact of social capital on the internal functioning of firms, focusing on the extent to which social capital facilitates a firm's ability to create value through innovations. Central to these studies is the idea that networks of relationships and interactions between individuals can facilitate the creation of value within firms. Accordingly, we anchor our hypothesized model in a resource-based view of the firm in which social capital, and its constituent elements, are considered valuable, inimitable, and non-substitutable assets that underpin key processes and values–in our case retail store creativity and customer service orientation–that lead to competitive advantage (Wernerfelt, 1984).

We argue that open communication, a trusting culture and a shared vision-key components of social capital within organizations—will improve retail store performance. The benefits of social capital are not simply manifested in incremental improvements but also in more dramatic advances in business processes. For this reason we look at the mediating effects of customer service orientation (evidence of market driven improvement) and store creativity (evidence of market driving innovation). Fig. 1 outlines our proposed model. 3.1. Social capital, customer service orientation and store creativity Open communication. Open communication captures the idea of employees within stores sharing information and learning from the experiences of other employees. It improves

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Fig. 1. Theoretical model.

an employee's ability to access service-related information located within his or her social network, and provides access to information resources located within previously untapped networks. It also facilitates the questioning of accepted routines, makes employees aware of new options, and encourages the dissemination of successful approaches to satisfying customers. Organizations need to nurture communication channels among co-workers, because they can provide the opportunity for employees to locate the expertise required to solve particular problems (McLean, 2005), and because information sharing can improve the ability of employees to offer customers desired products and services (e.g., Im and Workman, 2004). Drawing from social learning theory, Zhou and Shalley (2003) argue that individuals who are capable of performing a behavior but do not perform it, are more likely to do it after demonstration of that behavior, or through the communication of information and examples. It follows that service employees who may observe the customer-oriented behaviors of other employees are likely to understand better how to behave similarly in the future (Shalley and Perry-Smith, 2001). Thus, open communication is a powerful facilitator of role modeling, and as such it may foster the development of collective behaviors that are customer service oriented. Based on these considerations, we predict: Hypothesis 1. The higher the degree of open communication, the higher the degree of customer service orientation. By definition, the more open is communication between employees, the greater is the flow of information and ideas from one employee to another. Employees, as a consequence, will be exposed to a greater variety of new thoughts about, and approaches to, work. Such a situation should provide a stimulus for greater store creativity (see Angle, 1989). There is an extensive body of literature suggesting that creative ideas cannot be generated without the benefit of contextual influences such as team member interaction (e.g., Egan, 2005). Sharing of new information and knowledge among employees triggers the development of novel ideas and the search for alternative solutions (Madjar, 2005). Factors that lead to information and

resource exchange may also increase the likelihood of chance insights. Organizations characterized by open communication, as Kanter (1988) points out, also tend to have integrative structures, have multiple linkages inside and outside the organization, and emphasize collaboration and teamwork (see McLean, 2005). Kanter (1988) also argues that innovation is more likely to occur in such organizations; by contrast, organizations with a culture of ‘segmentalism’ tend to stifle innovation because people are discouraged from taking the initiative to solve problems. Similarly, Angle (1989) argues that organic organizations– those that promote open communication flows, pay more respect to expertise than to position, and have decentralized decisionmaking–are better placed than so-called mechanistic organizations to enjoy organizational innovation in conditions of dynamic environmental change. The work of Angle and his colleagues in the Minnesota Innovation Survey (see Angle, 1989) demonstrates the important influence on creativity and innovation of information flows within the organization: innovation effectiveness is related to communication frequency both within and outside innovation teams. Therefore, we make the following prediction: Hypothesis 2. The higher the degree of open communication, the higher the degree of store creativity. Shared vision. The cognitive aspect of social capital, shared vision, points to the way in which members of a network are united by a common sense of purpose and by the existence of an esprit de corps. A shared vision, by definition, involves a set of common values. This does not suggest that all service employees should be identical; rather, a shared vision represents the glue that can hold a potentially diverse group of people together, and which may facilitate the harmonization of their individual efforts (Fiol, 1994). Thus a shared vision can lead to group cohesiveness. The commonality of purpose and the team spirit that are intrinsic to a shared vision suggest that the more employees submerge their own individual views to improve a greater collective purpose, the more likely they are to cooperate toward achieving store objectives. Indeed, for teams to function effectively there must be some sharing of assumptions and some collective thinking to solve customer-related problems (Senge, 1990). Being customer-oriented requires more than just a focus on information pertaining to customer needs; it also requires a culture where deeply entrenched values reinforce a customer focus and pervade the organization. Moreover, total agreement on the store's vision across all levels and departments is likely to make close supervision of individual service employees redundant, fostering team empowerment. As self-managing teams have been associated with outcomes such as high productivity, commitment, and improved customer service (e.g., Cohen and Ledford, 1994; Wellins et al., 1990), a shared vision may be an important catalyst for the development of a customer service orientation. Accordingly, we predict that: Hypothesis 3. The higher the degree of shared vision, the higher the degree of customer service orientation.

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Evidence in support of a link between shared vision and creativity is more ambiguous. On the one hand, research has shown that individuals who are original, egotistic, individualistic and unconventional are more likely to display creative personalities (e.g., Gough, 1979). At the group level, evidence suggests that team creativity often results from the integration of the individually held (and potentially diverse) expertise of team members (Tiwana and McLean, 2005). On the other hand, evidence also suggests that co-worker support, interaction, and shared goals improve the creative output of employees who may otherwise display limited creative behaviors (Madjar et al., 2002; Zhou and Shalley, 2003). Baker and Sinkula (1999), for example, suggest that the lack of a universally understood organizational focus lowers individuals' motivation to learn. On balance, however, we favor the view that the mutual understanding and support that is intrinsic to a shared vision will tend to foster creativity. We believe this for two reasons. First, although some diversity will be important (if not essential) to stimulate creativity, team members must hold a shared understanding about how these outputs can be deployed productively for creative outcomes to materialize in the organization (Egan, 2005). Second, shared vision implies a degree of goal clarity for employees which, as McLean (2005, p. 235) notes, ‘frees up employees to focus their attention on solving problems and generating ideas rather than spending time and energy on trying to determine what goals should receive focus’. Likewise, Amabile (1998) argues that clearly specified strategic goals–a fundamental basis by which shared vision emerges– often enhance people's creativity. Shared vision should be seen principally in terms of agreement on the goals to be achieved, including the fundamental purpose of the organization, and not in terms of an agreed view on the means by which the end is realized. On the basis of these arguments, we predict the following: Hypothesis 4. The higher the degree of shared vision, the higher the degree of store creativity. Trusting culture. The relational dimension of social capital is manifested in the degree of trust that exists between store members. Because trust can foster joint efforts, higher levels of cooperation, and more positive attitudes (e.g., Dirks and Ferrin, 2001), the development of a trusting culture is likely to facilitate the propensity of employees to support each other, and to cooperate in the pursuit of customer satisfaction. For example, Davis et al. (2000) found that in restaurants exhibiting high levels of trust between general managers and employees, service providers worked in more effective ways to serve customers, and this translated into increased sales. In general, evidence suggests that trust in co-workers has a positive effect on organizational citizenship behavior (e.g., McAllister, 1995), and that trust in management is linked to increased sales performance (e.g., Rich, 1997). Also, a trusting culture enhances employees' commitment to the store through increased job satisfaction (Flaherty and Pappas, 2000). Further, employees who trust their co-workers are less likely to be self-preoccupied or concerned with

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improving their own position vis-à-vis their co-workers, they may exhibit less selfish and competitive behaviors, and will prioritize group objectives above their own (see Mayer et al., 1995). Mistrust, on the other hand, leads to interpersonal rejection and arouses defensive behaviors (Gibb, 1961). Hence, a culture of trust can foster coordinated efforts towards satisfying customers. Based on these considerations, we predict that: Hypothesis 5. The higher the degree of trusting culture, the higher the degree of customer service orientation. Tesluk, Farr and Klein (1997) highlight the importance of what they call ‘socio-emotional support’ in fostering creativity. They define this concept in terms of ‘the extent that employees believe that the work environment provides the interpersonal support necessary to feel free to function creatively’ (p. 34). According to McLean (2005), this notion of socio-emotional support highlights the importance of a trusting culture among co-workers–and between employees and management–to ensure that employees are less risk averse and put forth creative ideas. Thus, by enabling people to take risks (Mayer et al., 1995) and by facilitating openness of expression (Gibb, 1961), trust can be crucial for the development of creativity withinstores. A trusting culture is also one which relies less on external sanctions to achieve goals and more on the intrinsic motivations of employees. It has been demonstrated that intrinsic motivation is much more powerful than extrinsic motivation in producing creative behavior (Angle, 1989). Not surprisingly, then, the obverse of trust, namely control, has been cited regularly as a major impediment to creative behavior (Amabile, 1998; Angle, 1989). The argument is that control, be it in terms of control over decision-making or over information flows, diminishes creativity primarily because of its impact on intrinsic motivation (McLean, 2005). Accordingly, we predict the following: Hypothesis 6. The higher the degree of trusting culture, the higher the degree of store creativity. 3.2. Customer service orientation, creativity and retail store performance A customer service orientation leads to, among other things, improved retail salesperson performance (Brown et al., 1991), reduced customer switching intentions, and increased customer satisfaction and commitment (Goff et al., 1997; Jones et al., 2003). Greater customer service orientation among retail store employees will provide a climate within which customer needs can be articulated and met more closely. The higher levels of customer satisfaction that result will be crucial in determining factors such as customer loyalty, business growth and profitability. A higher degree of customer service orientation is also likely to be associated with stronger retail store performance due to its impact on non-customer-related outcomes. Employees inclined to help customers are also likely to help their fellow co-workers,

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improving the efficiency of internal operations (Bell and Mengüç, 2002). Accordingly, we suggest the following: Hypothesis 7. The higher the degree of customer service orientation, the higher the retail store performance. Because creativity is likely to facilitate a store's ability to adapt to changing customer needs, and match those needs more effectively over time, it may also be associated with an increased level of store performance. Kelley, Longfellow and Malehorn (1996) suggest that creative discretion amongst service employees improves customization of the service offering. This is likely to increase customer satisfaction and loyalty, which may reduce the costs of customer turnover to the retail store. Further, creative work environments have a positive effect on job satisfaction and attenuate the effects of employee stress (Gilson et al., 2005). It has been demonstrated that employees with positive attitudes and motivation have a positive influence on the way in which their customers perceive them (Schneider and Bowen, 1985). Creative work environments, as such, stimulate employee behaviors that produce positive customer experiences and hence heightened customer satisfaction and stronger customer relationships (Gilson et al., 2005). Creativity also leads to customer-keeping innovation, which can be an important driver of business growth and performance (Amabile et al., 1996). Consequently, we propose the following: Hypothesis 8. The higher the degree of store creativity, the higher the retail store performance. 4. Method 4.1. Sample and data collection procedure The research setting for the survey is a national retail organization employing approximately 20,000 people, the majority of whom are employed in stores. At the time of the study, the organization comprised 130 stores nationally which served as the unit of analysis. Six stores did not qualify for the study as they either sold vastly different lines of merchandise or competed in different markets, or had only just opened prior to conducting the survey. Accordingly, the final number of stores selected was 124. The research design consisted of two questionnaires. Our rationale for adopting a multi-questionnaire data collection procedure was to reduce the potential for common method bias. The first was completed by Area Sales Managers (ASMs)– customer service personnel who work on retail floor–who reported on the levels of the social capital dimensions. ASMs have an average tenure of 3 years and each store employed between 3 and 8 ASMs (depending on store size). The questionnaire was distributed to all 520 ASMs employed across the population of stores. A total of 432 ASM questionnaires (83%) were returned from the 124 stores (100%). The number of responses per store ranged from one to six with an average of 3.5 responses per store. Listwise deletion of ineligible cases resulted in a usable sample of 413. Given the multiple informant

design of the ASM survey, stores for which only one ASM questionnaire was obtained were removed from the sample. As a result, 12 stores were eliminated from further consideration. The second questionnaire, which adopted a key-informant design, was sent to store managers who reported on store creativity, customer service orientation, and overall store performance. Store managers had an average tenure with the organization of 9 years. We received store manager responses from 100% of stores which were then matched with the aggregated ASM data from the 112 stores that qualified. 4.2. Measures Scales used to measure the constructs were adapted from the available literature, where possible. All items were measured on five-point Likert scales ranging from 1 (strongly disagree) to 5 (strongly agree). The sources of measures used in this study are reported in Appendix A. 5. Analysis and results 5.1. Data aggregation and validation We aggregated the employee level data to match the store level of analysis (Klein et al., 1994). We first established that eta-squared (η2) values exceeded the threshold of .20 (Georgopoulos, 1986). Next, we computed within-store agreement with the use of rwg (James, 1982). The rwg for each store exceeded the threshold of .70 which indicated a high level of within-store agreement among respondents. Consequently, we found that store level data aggregation was appropriate. Table 1 shows the intercorrelations, reliability, and descriptive statistics for the constructs at the store level. We computed Cronbach's alpha for each scale at the store level, with the exception of store performance, which was a formative scale. The intercorrelation for the store performance items was .67 ( p b .001), which suggests that the measure is reliable (Cortina, 1993). 5.2. Hypotheses testing We tested our hypotheses using a structural equation modeling technique where single-scale score indicators (i.e., the average total score in the corresponding scale) are employed to measure the latent variables (Bollen, 1989). This allowed us to Table 1 Descriptive statistics (N = 112) Variables

Mean SD η2

1. Trusting culture 2. Shared vision 3. Communication openness 4. Creativity 5. Customer service orientation 6. Store performance

3.59 3.40 3.51

.43 .38 .92 .47 .37 .95 .41 .37 .94

.79 .82 .58 .80 .46 .67

3.66 3.81

.35 – .36 –

– –

.79 .44 .68 .68 .88 .53 .59 .63 .57

3.58

.41 –

–

.67 .32 .33 .48 .36 .60

All correlations are significant at p b .01.

rwg α

1

2

3

4

5

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optimize sample size relative to parameter estimates and correct for measurement error. We estimated the error variance for each latent variable by computing the formula: [(1 − Cronbach's alpha) × variance]. Table 2 reports our findings. The initial findings suggest that the paths from trusting culture to creativity, and from creativity to store performance were not statistically significant (i.e., Hypotheses 6 and 8 were not supported). After eliminating these two paths from the initial model, we re-estimated the model. The revised model supported all other hypotheses. 6. Discussion and implications for management The expected positive relationship between open communication and customer service orientation (Hypothesis 1) was confirmed. This finding underscores the importance of a relational infrastructure in building an understanding of, and ability to serve, retail customers. This finding is also consistent with the view that an individual's level of customer orientation can be augmented by co-worker openness and willingness to help (Bell and Mengüç, 2002). The positive impact of communication on store creativity (Hypothesis 2) emphasizes the importance of encouraging a free flow of information throughout the organization such that all organizational members can benefit from the insights of others when generating ideas. It avoids problems associated with organizational ‘silos’ and, perhaps, the constraints of discipline or function-based norms. Our expectation that shared vision and customer service orientation are positively related (Hypothesis 3) was supported. This suggests that in a store in which employees have widely different values and behavioral norms, it will be difficult to establish a common commitment to serving customers. In contrast, our findings indicate that in stores where a shared vision is cultivated, employees are prone to be more customer service oriented. Table 2 Model test Proposed model

Simplified model

Hypothesized relationships

b

b

Communication openness → customer service orientation Communication openness → creativity Shared vision → customer service orientation Shared vision → creativity Trusting culture → customer service orientation Trusting culture → creativity Customer service orientation → store performance Creativity → store performance

.39 4.21⁎⁎⁎ .39 4.21⁎⁎⁎

R2 Customer service orientation Creativity Store effectiveness ⁎p b .05; ⁎⁎p b .01; ⁎⁎⁎p b .001.

t-value

.41 .19 .40 .24 – .60

4.78⁎⁎⁎ 1.99⁎ 4.68⁎⁎⁎ 2.86⁎⁎ – 7.82⁎⁎⁎

.03 .35

–

–

.49 .55 .36

.48 .55 .36

.41 .19 .39 .24 .03 .58

4.71⁎⁎⁎ 1.99⁎ 4.10⁎⁎⁎ 2.88⁎⁎ .37 6.22⁎⁎⁎

t-value

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The positive association between shared vision and creativity (Hypothesis 4) begins to address the question of whether a variety of viewpoints within an organization is more effective for learning than a shared understanding (e.g., Huber, 1991). In our case at least, a shared vision appears necessary for employees to focus their creative efforts. Hypothesis 5, which suggested a positive link between a trusting culture and customer service orientation, was supported. This is consistent with literature that is beginning to explore the importance of the interdependencies between frontline service staff (Bettencourt et al., 2005) in delivering superior service quality. The customer service orientation of individuals will depend not only on the intrinsic motivation and capabilities of the individual, but also on the interpersonal support and assistance that customer service staff can provide each other. There was, however, no support for our expectation of a positive relationship between a trusting culture and store creativity. This is somewhat at odds with findings that creativity is most likely to emerge in ‘safe’ environments (i.e., where organizational members feel confident enough to take risks) (e.g., Edmondson, 1999). High levels of trust may, lead to a degree of organizational complacency in which novel ideas are not pursued. These results may also suggest that group level creativity begins first with individual efforts and initiatives. Indeed, a balance may be needed ‘between solo activities and interpersonal exchanges, as time and effort are required for both’ (McFadyen and Cannella, 2004, p. 736). Hypothesis 7 suggested a positive relationship between customer service orientation and store performance. This is consistent with a rich literature on the impact of a customer orientation on business performance. It underscores the importance of service quality for retail customers. While product lines and assortments are easily replicated by competitors, service quality is a key contributor to a retail store's overall value proposition and differential advantage. Contrary to expectations, the creativity–store performance link was insignificant. The nature of our data collection, in which employee and store manager questionnaires were administered contemporaneously, may help to explain this finding. Unlike customer-oriented behaviors which have a more immediate bearing on customer satisfaction, creative initiatives may require a longer gestation period before they have an impact on customer behavior and business performance. For example, changes to a product line may take at least a season, or possibly longer, to take effect. Further, creativity manifested in store policies and procedures may eventually affect the efficiency of the store, although this may take some time to appear in overall store performance metrics (e.g., inventory management). A further explanation might be found in the research of Gilson et al. (2005). They found that standardization had a positive relationship with customer satisfaction while creativity had none. However, they also found that work standardization was not a significant predictor of another outcome variable, team performance, but that teams in creative work environments had significantly higher levels of performance. Customers, they argued, may not like the ambiguity in their service interactions that comes with creativity and the change that this implies.

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Rather, the efficiency and competence of service providers is most important. Gilson et al. (2005, p. 528) suggest that, ‘[i]t could be that if team members are being creative, they may be less focused on interpersonal exchanges with customers, which may lead to lower customer satisfaction… [Furthermore, i]f teams are being creative, they may be taking more time to complete a task and may be less attentive to customers than they would be otherwise.’ In the retail sector, established customers like a certain degree of predictability; hence the outcomes of creative activities, at least initially, can be a source of frustration if they require customer learning and involve disruptions to habitual behavior. It is possible that our somewhat parsimonious measure of retail store performance (i.e., overall store performance) was too general to detect the positive contribution that creative initiatives might have in a retail environment. This study is not without its limitations. The cross-sectional nature of our data limits our ability to make stronger conclusions about causality between dependent and independent variables. It is plausible that a customer service orientation and the behaviors that this elicits may have a material effect on the level of social capital within the store. An experimental or longitudinal research design would enable us to investigate whether these relationships are unidirectional or reciprocal (Schneider et al., 1998). Furthermore, the unit of analysis was retail stores of one retail organization. While this allowed us to control for inter-organizational and inter-industry differences, there are limits to our ability to apply these findings to other industries and organizations. The extent to which creativity could manifest itself in a store environment might also have been limited by policies and procedures imposed by head office. These limitations notwithstanding, there are important managerial implications deriving from our research. First, opening channels of communication both within and across hierarchies within retail stores is desirable in order to enhance the customer service orientation of staff and the likelihood of new and creative solutions being proposed. This might be achieved through job rotations, by regularly modifying team composition, or perhaps through information technologies which help connect more remote employees with others within the store. A second implication is that the pursuit of a strongly held shared vision and trusting culture might be at the expense of customer service orientation and organizational creativity, respectively. Genuine creative insight may be more likely to originate from groups and individuals who are more isolated from intraorganizational networks. Appendix A. Survey items Constructs Shared vision (adapted from Hult and Ferrell, 1997) A ‘team spirit’ exists in our ranks. Around here, cross functional teamwork is the common way of working rather than the exception to the norm. There is a commonality of purpose in our store. There is total agreement on our store's vision across all levels and departments in our store.

Appendix A (continued ) Communication openness (Kohli et al., 1993) There is a wide-spread sharing of critical information between people within our store. People in our store always share relevant information about customers. Ideas are shared openly within our store and can be tested by all interested employees. New employees are given frequent opportunities to learn from others at all levels at [company name]. Communication openess (Kohli et al., 1993) Our store is structured so that people or teams working on similar tasks can easily share their experiences and problems. Trusting culture (adapted from Robinson, 1996) I am not sure that I fully trust my fellow employees (r). Overall, the motives and intentions of those in my store are good. My co-workers are always honest and trustworthy. Members of my store show a great deal of integrity. Retail store creativity (adapted from Denison et al., 1996; McLean, 2005) People in our store are receptive to unanticipated ideas and processes. Experimentation is encouraged within in our store. In our store, new insights and ideas get developed into improved services or processes. Our shared understanding of store ideas supports the development of new ideas in our store. Customer service orientation (adapted from Peccei and Rosenthal, 1997) In our store, we are always working to improve the quality of service we give to customers. We have specific ideas about how to improve the service we give to customers. We often make suggestions about how to improve customer service in our store. We put a lot of effort into our jobs to try to satisfy customers. No matter how we feel, we always put ourselves out for every customer we serve. We often go out of our way to help customers. Store performance (formative construct) Overall our store runs very efficiently. Overall our store outperforms the competition. r—reverse scored item

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