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European Journal of Applied Sciences – Vol. 10, No. 1
Publication Date: February 25, 2022
DOI:10.14738/aivp.101.11495. Azameti, M. S. K., Balila, J. (2022). Mediating Effects of Customer Management on the Relationship between Employee engagement,
Financial Strategic decisions, and Organizational Performance: A Conceptual Analysis. European Journal of Applied Sciences, 10(1).
290-297.
Services for Science and Education – United Kingdom
Mediating Effects of Customer Management on the Relationship
between Employee engagement, Financial Strategic decisions,
and Organizational Performance: A Conceptual Analysis
Azameti, M. S. K.
Wisconsin International University College
Ghana. No. 3 Akoto-Bamfo Street-North -Legon Accra
Box LG751, Accra-Ghana
Jolly Balila
Adventist University of the Philippines Putting Khayo
Silang -Cavite.P.O.BOX 1854 Manila Philippines
(kiko Lynet, Okiko Onyacha- Seventh -Day Adventist Univesity of Ruwanda)
ABSTRACT
This paper adopts an indepth review of literature with a Conceptual Case Anlysis
study paradigm.The review of literature covers Employee Engagement, Strategic
financial decision making, Customer Management and supporting theories and
organizational performance.The study conceptualizes that the two dependent
variables medited by customer management shown in the conceptual digram
impact organizational achievement in service enterprieses including educational
institutions.It emphasizes also that an organization may have all that it takes to
achieve its goals which may not include only conducive organizational climate,
egalitarian- leadership ,human capital maximization with streaming
organizational culture ethos and structural encumbrances, but also collaborating
efforts among all the sectors and mediators to achieved the desired goals.These
factors provide the thrust for achieving goals in an organization. Previous studies
emphasized organizational culture, structure and human capital performance as
key levers in achieving competitive advantage, side- stepping collaborating
between customer management,financial strategic decision making and the impact
on organizational performance. Recent studies in the health sector in west African
countries emphasized good administrative planning and control,rewards and
compensation,business strategy and off setting environmental uncertainty.The
earlier study focuses on the mediating roles of organizational capabilities and its
determinants.However,the This work uses a Conceptual Case Analysis study
methodology to conduct an in-depth analysis of the literature. Employee
engagement, strategic financial decision making, customer management, and
supporting theories, as well as organizational performance, are all covered in the
literature review. The study hypothesizes that the two dependent variables
mediated by customer management, as depicted in the conceptual diagram, have an
impact on organizational success in service businesses, including educational
institutions. It also emphasizes that an organization may have everything it takes to
achieve its objectives, which may include not only a favorable organizational
climate, egalitarian leadership, human capital maximization with streaming
organizational culture ethos, and structural encumbrances, but also collaborative
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Azameti, M. S. K., Balila, J. (2022). Mediating Effects of Customer Management on the Relationship between Employee engagement, Financial
Strategic decisions, and Organizational Performance: A Conceptual Analysis. European Journal of Applied Sciences, 10(1). 290-297.
URL: http://dx.doi.org/10.14738/aivp.101.11495
efforts among all sectors and mediators to achieve the desired objectives. These
variables give the impetus for an organization's aims to be met. Previous research
has focused on organizational culture, structure, and human capital performance as
essential levers for creating competitive advantage, ignoring collaboration between
customer management, financial strategic decision-making, and the influence on
organizational performance. knowledge gap left which is filled by this current
study are the conceptualization of customer management as an intervening
variable together with employee engagement and strategic decision manking as
dependent variables. In order to establish the relationship between dependent and
the independent variables, this study recommends further research work to
analyze an empirical data on employee engagement,strategic decision making and
customer management and its resultant effects on organizational performance.
Key words: Employee engagement, Strategic decisions making, customer management,
Organizational performance , culture ethos and organizational structural encumbrances
INTRODUCTION
The current study seeks to presents an in-depth review of literature on Organizational
Performance, Employee Engagement, Fnancial decision Making, and Customer Management
which constitutes the independent variable thus organizational performance and employee
engagement and strategic financial decision making as the indpenent variables in the study. The
research paradigm is combination of a Conceptual Analysis with a mediator variable. This is
partially in contrast with earlier studies which combined models and frameworks together with
primary data and literature review (Shatique-ur et al 2019); (Giti et al 2012; Rojas, R.R .2000);
Schermerhorn, J.R. et al (2014), besides, the approach is equally in consonant with those that
adopt the full conceptual case analysis with a review of the literature and propose further
research using primary data (Ganu and Peprah, 2018) and (Azameti, M.S.K. 2020).
The Humanist literature (1940), under the caption the ‘’New World Order” mentioned in
(Azameti M.S,K.2020), added two more variables such as organizational climate and leadership
typology to the Conceptual Case study Analysis paradigm. This underscores the phenomenal
use of diverse social and economic variables in conceptualizing case study analysis yet the
results remain inconclusive, all depends on the creativity and ingenuity of the individual
researcher.Adding to this volume of knowledge, the current research presents customer
management taking the center stage of collaborating with employee engagement and strategic
decision making that are perceived to ensure organizational performance.
Strategic plan implementation and other variables mentioned in literature do impact
organizational performance(Buani, H.Yusuf, A.Kiiru, et al 2015); Cania.L.(2014); (Sangkay, R.,
Lapian, S. J., & Rumokoy, F. 2016) states employee compensation, social structures,and their
effects on achievements of organizations). Hamas, T.T.(2004) is also of the view that social
factors have an impact on organizations. Hanafi E. and Fatma, Z.(2015) contend that
integration between the level of control and SWOT Analysis affect organizational performance,
further more Shafique-ur et al (2019), also emphasized that organizational culture,
organizational structure, and human capital performance are among the indispensable
variables that impact organizational performance. Management control in areas such as poor
planning culture, compensation, business strategy, environmental uncertainty, leadership, and
administrative issues mentioned in Hanafi, E. and Fatma, Z.(2015); Shafique-ur et al 2019)
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affects the performance of organizations. Previous research especially during the 1970s
focused on factors that determine the structures of an organization such as internal and
external factors with emphasis on economic and political encumbrances, however, the current
research is mainly on such internal factors within the organization, these form the independent
and dependent variables stated in the conceptual diagram(Figure 1.below). The current study
is the sequel to earlier studies of other researchers like William, Peprah (2018, Jeston & Neils;
2014; William & Ganu 2018; Newman,2012) and Hakim(2015 ). Burke and Litwin(2015) in
their study employed organizational performance model and a Causal Model of Organizational
Performance and Change that has enriched the conceptual paradigm of research.The study is
based on the assumption that collaboration between employees' level of engagement on
customer service, and the relationship between financial decision making, and customer
management at the center of organization management philosophy positively correlates with
organizational performance. This has introduced another strand in the conceptual Case
analysis with an in-depth review of the literature.
ORGANIZATIONAL PERFORMANCE
The concept of organizational performance is the comparison of an organization's goals and
objectives with its actual performance in three distinct areas thus,financial performance,
market performance, and shareholder value.
The concept of Organizational Performance in Specialized Theory
The concept of performance, as it appears defined in the dictionaries of French, English and
Romanian, defines more the idea of outcome, achieved goal, quality, and less the economic
aspects of efficiency and effectiveness.
The Explanatory Dictionary of the Romanian Language defines performance as ʺa result
(particularly good) obtained by someone in a sporting contest; a special achievement in a field
of activity; the best result obtained by a technical system, a machine, a device, etc.ʺ The
definition shows that the term performance was originally taken from themechanics and sports
fields, in order to subsequently be used to characterize the very good results also achieved in
other fields. This means that performance is obtained only by a limited number of entities, those
who get the bestresults. Performance can not be associated with any result achieved, but only
with a special one. What does ʺspecialʺmean? In the first place, net superior to what was
obtained in an earlier period, in the second place, superior to results obtained by ʺothersʺ and,
in a third place, different by the objectives obviously set, in a favourably acceptance.(Ion,Elena
Iuilana2016)
Currently there are a variety of definitions attributed to the concept of performance due to its
subjective nature. In the literature there are many articles or studies that define the concept of
performance closely related to environmental factors. Didier Noyé (2002) believes that the
performance consists in ʺachieving the goals that were given to you .Organizational
performance stated in literature means the actual output or results of an organization as
measured against its intended outputs that are goals and objectives. (Charles Omondi
Ondoro,2015). It is comprised of the actual output or results of an organization as measured
against its intended outputs. According to Richard et al (2019), organizational performance
encompasses three specific areas of firm outcomes namely, financial performance; product
market performance; and shareholder return. Some factors are to be performed by the
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Azameti, M. S. K., Balila, J. (2022). Mediating Effects of Customer Management on the Relationship between Employee engagement, Financial
Strategic decisions, and Organizational Performance: A Conceptual Analysis. European Journal of Applied Sciences, 10(1). 290-297.
URL: http://dx.doi.org/10.14738/aivp.101.11495
organization such as human and cultural factors, technology, natural recourses, economic
factors, regulatory measures, markets, management philosophy, organizational culture (Goals,
Value, Beliefs & Norms), organizational climate, motivated behavior, and teamwork, structure,
and culture. These have widened the scope of use of variables in the social Sciences research
approach.
EMPLOYEE ENGAGEMENT
Employee engagement is a workplace strategy that creates the right conditions for all
employees to give their best every day, committed to the organization's goals and principles,
inspired to contribute to organizational progress, and feeling better about themselves.
Employee involvement is about knowing one's position in an organization and being able to see
and feel how it fits into the organization's mission and goals (Pritchard, K.) (2010)’(Woods,
S.A.,Sofat,J.A(2013). It's all about getting a common vision for the employees. Employee
engagement is described as having a clear understanding of how an organization is achieving
its mission and goals, how it is evolving to better serve those objectives, and being given a voice
in the journey to provide ideas and express opinions that are considered as decisions are made.
(http://www.google.com/employeeengagement.org). Employee engagement in the context of
this study explains the points where customer management and financial strategic decision
making must be a colloaboration of all these stakeholders of the firm.More often than not, some
management decisions towards financial maximization scarsely involves empolyees who deals
directly with customers.When such decisions lack human face in its implementation it goes
against ethos of customers relationship management.Many service providing firms especially
private educational enterprises are vulnerable to such decisions when drastic measures are
taken to get fees paid by defaulting students.Some sudents eventually take French leave by
seeking admission in other competing institutions offering similar programmes.Employee
engagement must ensure customer management which calls for working in concert with
strategic financial decision makers like the finance directors of the institution who are
sometimes pushed by owner equity drive
EMPLOYEE ENGAGEMENT AND CUSTOMER RELATIONSHIP
Employee engagement affects customer service in a number of positive ways. Engaged
employees are more willing to go the extra mile to resolve a client's problem or close a sale,
contributing to a culture that consistently delivers great customer service. Engaged employees
pay way more attention to their work. Employee engagement measures how much employees
value their company as well as its customers. ... The happier your employees are, the better
service they'll provide to customers. If your employees are more engaged with your business
they'll be more committed to your customers' needs Management Guid e( 2019)
THE THEORY OF EMPLOYEE ENGAGEMENT
The theory of employee engagement, when stated simply, looks like common sense. According
to the theory, leaders of an organization must ensure that all their staff members are fully
engaged, that they are fully switched on at their job (2012 available at
https://www.awaragroup.com). The widely- used term 'employee engagement, embraces two
attempts of management—motivating the employees and focusing their commitment to
achieving the organizational objectives. Engagement at work was conceptualized by Kahn
(1990) as the 'harnessing of organizational members' selves to their work roles. The Three
Components of Employee Engagement are Validation that is the unconditional recognition of
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an employee's intrinsic human value, Recognition is conditional praise based on job
performance, behavior, and attitude and Feedback.
The term employee engagement has been defined by various researchers. A commonly agreed- upon definition would be the physical, psychological, or emotional involvement of the employee
while at work. Four things are important when we talk about employee engagement;
commitment, motivation, loyalty, and trust. In the context of this study, the concept of employee
engagement explains organizational leaders recognizing the value and expertise of employees
when considering customer maximization to impact organizational achievement. Research has
shown that strategic financial decisions of many service organizations less involved employees
both at the middle level and operational level of the organization. Many havoc has been done
against customer management which is directly in line with employee engagement when
performing their assigned duties.
JOB EMBBEDNESS THEORY
Job embeddedness theory defines sacrifice as “the perceived cost of material or psychological
benefits that are forfeited by organizational departure.” Aside from the most obvious benefits
of employment such as income and insurance, a variety of secondary incentives may be
withdrawn or concluded if an individual leaves .Management Guide(2018) These may include
formal benefits such as pension plans, stock options, or opportunities for future career
advancement. They may also include informal benefits such as co-worker friendships,
personally significant tasks or projects, or even the reputation of holding a certain position.
STRATEGIC FINANCIAL DECISION MAKING
Strategic financial management as a discipline has acquired critical significance because of
continuing globalization and resulting cross-border flow of capital. Financial Management: A
Strategic Perspective stresses the importance of applying knowledge and techniques of
financial management to the planning, operating, and monitoring of financial functions within
the context of the strategic choices and issues that have an impact on an organization’s long- term success. This decision must involve the expertise of employees who are more or less play
a significant role in customer maximization with an overriding aim of contributing to
organizational performance. Several studies stressed organizational culture. human capital,
organizational climate, and leadership styles, just to mention a few, influencing organizational
performance. As a sequel to this earlier research, the present study seeks to conceptualize
employee engagement, financial decision making, and customer management as the
intervening variables that propel organizational performance.
THEORY OF FINANCIAL MANAGEMENT
Basically, financial management theory deals with the usage of money in a business, including
all acquisitions, sales and expenditure. Its effectively taking financial management theory and
applying it to practice applicable to your organisation.(http://www.finance for
nonfinancemanagers.com). There are four recognized elements of financial management:
planning, controlling, organizing and directing, and decision making.
(https://Samples.jbpub.com).
The four divisions are based on the purpose of each task. Types of Financial Decisions.These
are: Financing Decision, Investment Decision, Dividend Decision and Working Capital
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Azameti, M. S. K., Balila, J. (2022). Mediating Effects of Customer Management on the Relationship between Employee engagement, Financial
Strategic decisions, and Organizational Performance: A Conceptual Analysis. European Journal of Applied Sciences, 10(1). 290-297.
URL: http://dx.doi.org/10.14738/aivp.101.11495
Decisions. The key aspects of financial decision-making relate to financing, investment,
dividends and working capital management.(https://www.economicdiscussions.net).
CUSTOMER MANAGEMENT
Customer management is defined as the process of managing the relationship between an
organization, its people, and its customers over time. For sustained success, companies need to
align their customer strategy with the company's aims and objectives. The definition of
customer management is the processes, practices, systems, and applications that a company
uses to manage its relationships with existing customers and new prospects.
It has long been established that effective organizational performance hinges on Customer
management in conjunction with employee engagement and strategic financial decision- making of the firm. This study is based on the assumption that for organization performance to
be achieved, analysis of the effect of mediating roles of customer management on the
relationship between employee engagement and strategic financial decision is to be analyzed .
Strategic financial decisions makers in many service enterprises such as private educational
institutions in Ghana most often try to sidestep other actors when perusing financial
maximization.By so doing,in enforcing such decisions sometimes lack human face that
eventually negates the practical and theoretical approaches to customer relationship
management.(Johson and Ross 2014) in Rajarshi,Debnath et al 2016).
CUSTOMER MANAGEMENT THEORY
The CRM Behaviour Theory represents seven inter-related perspectives of Customer
Relationship Management (CRM) relating to managing corporate customer relationships in
service industries such as telecommunications and education. This involved 52 personal
interviews with service providers and their corporate clients as mentioned in Management
Guide ( 2010). Research has shown that service-providing business like educational institutions
has inadvertently reduced their customer base through lack of this phenomenon of improper
management of their customers. Among several competitors, it is of strategic importance for
service providers to collaborate in employee engagement, financial strategic decisions making,
and customer management. Therefore, the importance of the mediating roles of customer
management on the relationship between employee engagement and financial strategic
decisions making and organizational performance cannot be over-emphasized. The current
literature presents a host of ways through which customer management affects the loyalty of
customers.
This paper employed the literature review method with conceptual analysis to show the extent
to which lack of corporation between employee engagement, financial strategic decision
making towards customer management affects organizational performance in the emerging
private educational enterprise in Ghana. This study proposes as follows:
P1. Employee engagement has a statistically positive relationship with customer management
and the performance of organizations.
P2. Strategic financial decisions have a statistically positive relationship with customer
management and organizational achievement
P3. Customer management has a statistically significant relationship with employee
engagement, financial decisions and organizational performance.
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Employee engagement
Figure 1: Representation of the perceived impact of workforce engagement, financial decision
making, and customer management on organizational performance
Source: The Researcheres’compilation: It suggests that employee engagement, strategic
financial decisions, and customer management significantly impact organizational
performance
This supports the earlier research of Shafique-ur, et al (2019); Kramar, R. (2014); Hanafi, E.,
and Fatma, Z.(2015), that emphasized the level of employee engagement, customer
management, and financial decision making as perceived factors that contributes to
organizational performance.This paper recommends empirical investigation with primary data
to find the true statistical relationship between the intervening variables in this study and their
impact on organizational performance.
CONCLUSION
Several studies recorded in literature present conceptual frameworks and models on
organizational performance with adoption of diverse variables yet the knowledge gap remains
unclosed.Human capital maximization,organizational structure and culture cocoon have also
been conceptualized in explaining the impact on organizational performance.Besides these
variables namely,organizational climate and management of leadershipstyle,administrative
issues such as planning,organizing, rewards and compensation, leading and controlling in the
context of leadership efficacy, just to mention few, have been added to the debate that makes
this field of study very dynamic.Adding to this debate this paper supports earlier ones that
organization can have all that it takes to achieve it goals but without collaborating between its
employees,focusing on customer management and financial decision making scarcely can such
feat be reliazed .
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Azameti, M. S. K., Balila, J. (2022). Mediating Effects of Customer Management on the Relationship between Employee engagement, Financial
Strategic decisions, and Organizational Performance: A Conceptual Analysis. European Journal of Applied Sciences, 10(1). 290-297.
URL: http://dx.doi.org/10.14738/aivp.101.11495
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