Employee Orientation and Performance: An Exploration of the Mediating Role of Customer Orientation

Managing stakeholders is an important managerial aspect of corporate social responsibility. Employee stakeholder is one of the primary stakeholders that are critical to a company. Previous studies have shown inconclusive findings regarding the performance impact of managing this stakeholder, with some identifying little impact while others finding a positive association. This study further explores this issue in the context of foreign companies' subsidiaries in China. A potential mediating mechanism (i.e., customer orientation) between employee stakeholder orientation and performance (both financial performance and innovation performance) was proposed; a sample of 103 Chinese subsidiaries of foreign companies which have new product development responsibilities was used to test hypotheses. A subsidiary's employee orientation was found to show a significant positive relationship with its product innovation performance, but no significant relationship with its financial results. Moreover, employee orientation showed a significant indirect relationship with both performance outcomes through customer orientation.