Relationship of service quality, business reputation, and business image with organizational performance

Abstract

Research has shown that many factors can contribute to better organizational performance. This paper investigates the relationship of service quality, business reputation, and business image with organizational performance. Two surveys were conducted among customers of Icelandic banks in 2021 (n = 479) and 2023 (n = 635) with total answers of 1,114. This paper develops a model to interpret the survey data with the working title “QRI-P.” The questionnaire used for the surveys derives from an earlier research project which started in 2004. The questionnaire evaluates the image of the largest banks in Iceland, the quality of their service, and the general attitude towards them.

Descriptive factor analysis shows six factors with an eigenvalue higher than 1; however, this research uses five factors: general service quality, digital quality, reputation, image, and performance, all of which show satisfactory internal validity (α > 0.7) and explain 71% of the variance in the data. The results of regression analysis show that the model explains 62% of the variance in performance (R2 = 0.62). Of the factors used, general service quality had the greatest weight (β = 0.40), but that factor alone explained 7.3% of the variation in performance (P2 = 0.073). The next most important factor was reputation (β = 0.28), which alone explained 3.4% of the variance in performance (P2 = 0.034), and the third most important factor was image (β = 0.16), which explained 1.4% of the variation (P2 = 0.014). The factor that explained the least of the variance was digital quality (β = 0.09), and that factor alone explained only 0.5% of the variance in performance (P2 = 0.005).