How and when customer feedback influences organizational health

Abstract

Purpose– The purpose of this paper is to explore how and when customers influence organizational climate and organizational health through their feedback. Based on affective events theory, the authors classify both positive and negative customer feedback (PCF and NCF) as affective work events. The authors expect that these events influence the positive affective climate of an organization and ultimately organizational health, and that the relationships are moderated by empowerment climate.Design/methodology/approach– Structural equation modeling was utilized to analyze survey data obtained from a sample of 178 board members, 80 HR representatives, and 10,953 employees from 80 independent organizations.Findings– The findings support the expected indirect effects. Furthermore, empowerment climate strengthened the impact of PCF on organizational health but does not affect the relationship between NCF and organizational health.Research limitations/implications– The cross-sectional design is a potential limitation of the study.Practical implications– Managers should be aware that customer feedback influences an organization’s emotional climate and organizational health. Based on the results organizations might actively disseminate PCF and establish an empowerment climate. With regard to NCF, managers might consider the potential affective and health-related consequences for employees and organizations.Social implications– Customers are able to contribute to an organization’s positive affective climate and to organizational health if they provide positive feedback to organizations.Originality/value– By providing first insights into the consequences of both PCF and NCF on organizational health, this study opens a new avenue for scientific inquiry of customer influences on employees at the organizational level.