Moderate effects of cost leadership and differentiation strategies on relationship between service workforce management and performance

Abstract

The study investigated the effects of cost leadership and differentiation strategies among service workforce management based on their performance. Furthermore, it verified the following hypotheses: (1) the service workforce management practice has positive effect on company performance; (2) cost leadership strategy has positive moderating effect on the relationship between service workforce management and corporate performance, and (3) differentiation strategy has positive moderating effect on the relationship between service workforce management and corporate performance. To achieve these research goals, the researchers conducted surveys and empirical researches using validity check, reliability analysis, regression model and moderate regression model. The samples consisted of 209 companies in 13 big cities in China, including Beijing, Shanghai, Quingdao and Dailian. As for the results of those researches, the researchers found that service workforce management practice affects corporate performance positively in Chinese sample companies. Furthermore, the research showed that the cost leadership strategy has positive moderating effect on the relationship between service workforce management and corporate performance, while diversification strategy reflects no significant effect. From these research results the researchers could obtain a managerial implication that implementing service workforce management practices and cost leadership strategy at the same time gives Chinese companies more improvement in corporate performance due to synergistic effect. © Rushing Water Publishers Ltd. 2019.