Organizational Capabilities and Customer Value: A Mediation Effect of Human Resource Practices in Saudi Arabia Service Sector

Abstract

This research aims at testing the mediating influence of human resource practices between organizational abilities as well as customer value of services sector in Saudi Arabia. The sample size is composed of 280-service organizations. Regression analysis was conducted to examine the assumptions. The results established upon the constructs of association organizational abilities (market orientation, learning orientation, innovativeness, manufacturing capabilities, and customer relational capabilities) and customer value. The results emphasis that customer value is a development of human resource practices. Market orientation, learning orientation, and Innovativeness are, moreover, significant predictive factors of human resource practices, which strongly relates to customer value. Customer value is, briefly, driven by human resource practices which originally drive itself. The results also imply that human resource practices have a partial mediation of the connection amid organizational capabilities and customer value. Considering human resource practices, therefore, leads to weaken the relationship between the organizational capabilities and customer value. Hypothetical and managerial results implied are also discussed.

Keywords: organizational capabilities construct; human resource practices; customer value; mediation effect, Service Sector, and Saudi Arabia.