The contribution of managerial ability on customer satisfaction: an empirical investigation

Abstract

ABSTRACT The study empirically examines the effects of managerial ability on customer satisfaction, as well as the role of firm-level and industry-level moderators on the relationship. The effect of customer satisfaction on firm value is also investigated. Managerial ability is assessed as the residual remaining after accounting for the effects of seven key financial variables, while customer satisfaction is derived from the ACSI panel data. The results demonstrate that managerial ability positively affects ex-post customer satisfaction, indicating that more capable managers are better able to satisfy their customers. In turn, customer satisfaction directly influences firm value, as measured by Tobin’s q. In terms of moderators, non-service firms more strongly regulate the managerial ability-customer satisfaction link; advertising expenditure and competitive intensity have insignificant roles to play.