The Impact of Frontline Employees’ Organizational Citizenship Behavior on Customer Loyalty: The Roles of Perceived Service Quality and Customer Trust

Abstract

The frontline employee behavior is important in the highly competitive and service-driven banking environments, in revealing customer experiences and long-term relationships. This paper relies on the Social Exchange Theory to test how Organizational Citizenship Behavior (OCB) of frontline employees in banks increases customer loyalty, where perceived service quality, operating as a mediating variable, and customer trust, as a moderating variable. A quantitative research design was applied, where data was gathered using structured questionnaires on the customers of the commercial banks. To test the hypotheses, the Structural Equation Modeling was utilized. The findings show that the direct and indirect influence of OCB on customer loyalty is positive and significant because of the improvement in service quality perceptions. Also the relationship between OCB and perceived service quality was found to be strengthened by customer trust which underscored the importance of customer trust as a crucial boundary condition in employee-customer exchange relationships. The results have value to the literature by expanding the OCB studies to customer-based results and also by merging organizational behavior and service marketing views. In practice, the research highlights the strategic value of developing citizenship behavior among frontline workers to improve service delivery, create customer loyalty, and long-term loyalty in the banking industry