The climate for service is conceptualized and studied as a correlate of customer satisfaction and corporate financial and market performance, with customer satisfaction as a mediator of the climate-performance relationship. Brief reviews of relevant literatures yield three hypotheses: (1) customer satisfaction will be a significant correlate of organizational financial and market performance, (2) organizational service climate will be a significant correlate of organizational customer satisfaction, and (3) customer satisfaction will mediate the relationship between service climate and financial and market performance. The hypothesized relationships are supported in a 3-year longitudinal study of Fortune 200 service companies (not units within companies) from diverse service sectors with path analyses supporting full mediation for customer satisfaction in the link between service climate and corporate financial and market performance. Management implications for corporate competitive advantage through a focus on service climate are discussed.
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