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Investigates the moderating effect of firm and environmental variables on the importance of a strategic element, customer service, in explaining satisfaction. The purpose of this paper is twofold. Explores first, the direct impact of certain firm and environmental variables on satisfaction. Next, investigates the quasi‐moderating effects of firm and environmental variables on the relationship between customer service and satisfaction. Indicates that product line growth rate and supplier flexibility contribute to customer satisfaction both directly and through an interaction with customer service. Suggests that the remaining environmental variables tested – channel configuration, reseller size, rivalry, and reseller power – do not affect the amount of customer service provided.

Observes that interfunctional co‐ordination is important to the provision of outstanding customer service since both marketing and logistics activities are required. Builds on a model first presented by Mentzer, Gomes and Krapfel, which conceptually integrated the logistics and marketing aspects of customer service. Communication, an additional logistics dimension, is added to the Mentzer, Gomes and Krapfel model. Uses factor analyses to test for convergent and discriminant validity, as well as to test for the appropriate number of model dimensions. Reliability of the measures is also assessed. Indicates seven dimensions of customer service. Three are from logistics: availability, delivery quality and communication; and four are from marketing: pricing policy, quality, product support‐sales representatives and product support‐customer service representatives. These differ somewhat from the Mentzer, Gomes and Krapfel model, which suggests that the physical distribution customer service dimensions might include availability, timeliness and delivery quality.

Drawing on the Austrian school of economics and the structure-conduct-performance (s-c-p) paradigm of industrial organization, the authors present and test a dynamic model of competitive activity and performance. They examine the model in two stages. First, they explore the influence of industry-level and firm-level cooperative mechanisms on firm-level competitive activity. Second, they examine the effect of firm- and industry-level competitive activity on firm performance. The authors use the dynamic model of competitive activity to examine the complex linkages between the firm's environment, its actions, and its performance outcomes. They report a longitudinal analysis of a sample of 1,903 competitive moves undertaken in the software industry. Hypothesis testing supports the relationships in the model argued from the Austrian perspective, but provides only partial support for those derived from the s-c-p paradigm. Firm-level cooperative mechanisms are found to increase the firm's competitive activity, and firm-level competitive activity is related positively to the firm's return on assets and return on sales. Contrary to expectation based on the s-c-p paradigm. industry-level cooperative mechanisms are not related to the firm's competitive activity or to its performance. Consistent with the IO paradigm, however, a measure of industry rivalry that directly captures industry-level competitive activity is related negatively to firm-level performance.

ABSTRACTIn recent years, a growing number of original equipment manufacturers (OEMs) have transferred their manufacturing processes to specialized firms, known as contract manufacturers. In so doing, contract manufacturers can reduce an OEM's production costs and provide OEMs with flexibility in the production process. We examine another potential reason for the use of contract manufacturing—the potential for efficiency gains from inventory reductions. Employing econometric models and data representing manufacturing industries in the USA, we provide statistical evidence that contract manufacturing can lead to lower industry‐wide inventory levels, after controlling for other relevant factors. Key managerial implications are derived from the analysis.