The Linkage between Employee Training and Customer Satisfaction in the Global Food and Beverage Industry

This report explores the relationship between employee training and customer satisfaction in the global food and beverage industry. It discusses the importance of customer satisfaction and employee training, theoretical frameworks, and literature review. The report highlights the need for employee training in the contemporary commercial organizations and the importance of customer satisfaction in the food and beverage industry. It also discusses the theoretical models for employee training and the importance of customer satisfaction in the food and beverage industry.

Running head: BUSINESS RESEARCH METHODOLOGY
Business Research Methodology
Name of the Student
Name of the University
Author Note

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Table of Contents
1. Introduction..................................................................................................................................2
1.1 Identification of a problem....................................................................................................3
2. Literature Review........................................................................................................................3
2.1 Independent Variable.............................................................................................................3
2.2 Dependant variable................................................................................................................9
2.3 Relationship between employee training and customer satisfaction...................................14
3. Conclusion.................................................................................................................................15

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1. Introduction
In the contemporary period, with the continuous development of a more integrated and
inclusive global economy, especially post Globalization, the commercial and industrial scenarios
in the global framework have also been experiencing considerable dynamics and modifications
so as to cater to the needs of the customers across the world. Newer industries and cognitions
have been cropping up with more and more demand as well as supply side players getting
involved in each of these industries. The continuous entry of new supply side players in these
industries have been contributing positively to the increase in the competition among the firms.
This in turn encourages the firms in these industries to develop their operational framework and
implement different methods and strategies in order to keep an edge over their competitors and
for capturing larger share of clientele which in turn helps in ensuring profitability and long term
sustainability of the companies.
One of the primary determinants of the success, profitability and long-term sustainability
of the business organizations is the level of customer satisfaction from their commodities or
services. This in turn is an extremely crucial indicator for the measuring the well being of the
company itself because the prospects of the companies depend hugely on their goodwill which is
created by the presence of a large satisfied clientele. This is especially true for food and beverage
industries as there usually remain many supply side players in these industries, thereby
increasing the number of options in the hands of the customers. There can be different ways in
which the companies in these industries can bring in modifications in their operational
framework to increase the satisfaction of the customers, of which one of the primary ways is the
provision of appropriate training to their employees.

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1.1 Identification of a problem
There have been many literary evidences regarding the need for employee training in the
contemporary commercial organizations and on the aspects of customer satisfaction as one of the
primary determinant of the profitability and sustainability of the business organizations in the
highly competitive and globally integrated markets. However, not much work has been done
regarding the linkage of these two factors, emphasizing on the effects of training of employees
on the customer satisfaction, especially in the food and beverage industry, which has several
unique features of its own. The following section tries to conduct an extensive literature review
with the objective of studying the above-mentioned linkage, on the perspective of global food
and beverage industry, exploring the theoretical as well as the empirical aspects.
2. Literature Review
This section of the report tires to study the literary evidences present in the contemporary
period regarding the two above-discussed variables, the employee training and the aspects of
customer satisfaction, with special emphasis on the food and beverage industry in the global
framework. The review incorporates extensive theoretical as well as empirical exploration of
each of these variables individually as well as exploration of the relationship between the same,
with the help the scholarly works.
2.1 Independent Variable
Training of employees
Cascio (2018), in his elaborate work on the management of human resources in the
contemporary global commercial environment, describes in details the different employee related
operational activities, which the companies undertake, and the requirements behind the same.

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According to the author, over the years, with the changes in the business prospects of the
companies and the demand structures of the customers and also with the increase in the number
of competitors in each industry, the need of managing the resources of the companies efficiently
has been felt. This has become extremely crucial specifically for the purpose of creating scopes
of profitability and future prospects for the companies in the contemporary competitive global
business framework (Hassan et al., 2014). Management of resources, as per the assertions of the
author, primarily includes development and management of an efficient human resource base in
the companies themselves. This is because the productivity and efficiency of the human
resources form one of the integral part of the operational framework of the companies, on which
the profitability as well as the future prospects of the same depends considerably.
The assertions regarding the need for management of human resources, as put forward by
the author has been supported by many other literary evidences, which include the works of
Jehanzeb & Bashir (2013). The scholars argue that in face of global competitions in all the
industrial and service sectors, it is needed on part of the companies to manage and develop their
human resources in such a way that they contribute in making a competitive edge for the
companies to stay ahead of their competitors. One of the primary strategies, which the
commercial organizations can implement in this aspect, as per the assertions of the authors, is the
implementation of training programs for the employees, in order to improve their skills, which in
turn is expected to benefit both the employees as well as the employers.
According to Elnaga & Imran (2013), with the businesses becoming more integrated as
well as with the scope of businesses expanding with time, the needs for continuous development
of the skills of the employees become absolute necessity, both for the betterment of the
employees as well as for the prospects of the business organizations as well. In this aspect,

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Sweeney & Martindale (2012), tries to define the term “employee training” as the programs, both
voluntary as well as involuntary, which are often implemented by the companies in order to
develop the existing skills of the employees or to incorporate new skills in them for the purpose
of better understanding of their job roles. The trainings, according to the authors, can be both
voluntary as well as involuntary. The involuntary training programs make it mandatory for the
employees to attend while the voluntary ones gives them the provision to choose to attend or not
to attend the same.
Benefits of employee training
Singh & Mohanty (2012) puts forward the bilateral benefits of training of employees in
the contemporary business organizations. According to the scholars, on one hand better trained
and updated employees lead to the development of skilled, efficient and highly productive
workforces in the company, who understand their jobs well and bring out more than what is
expected from them. This in turn, increases the prospects of the companies by increasing their
overall productivity and cost efficiency and by earning higher trust from their clientele. On the
other hand, the development of skills of the employees also help them in individual and personal
levels, by empowering them to take up higher job roles and contributing positively in the
development of their long term career (Dhar, 2015).
Food and Beverage Sectors
In this context, the training and skill development of the employees, especially in the
companies venturing in global food and beverage sectors and the importance of the same have
been highlighted by Odunlami & Matthew (2014). According to the authors, the global food and
beverage industry has been consistently growing and modifying with the changes in the demands

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of the customers across the world. The industry, in the contemporary period, has been
experiencing modernizations in the aspects of innovations and application of new cost effective
as well as superior technologies, with almost 55% of the enterprises globally incorporating
innovations in their productions and sales. With the globalization of these sectors and continually
increasing usage of internet, e trading is also becoming one of the primary components of
changes in this sector. Together these point towards the rapid dynamics and expansion of the
concerned industry in the global framework.
Figure 1: Export share of process food market in the world
(Source: Rais, Acharya & Sharma, 2013)
According to Turi, Goncalves & Mocan (2014), one of the primary hurdles in the
expansion and future profitability of the highly dynamic global food and beverage sector, is the
presence of insufficient labor force and the absence of high skilled workers. According to the
authors, the demand for skilled employee is considerably high in this industry as with the
increasing implementation of innovative technologies, the employees should also be capable
enough to use the same so as to cater to the customers and their changing demands across the
world. As per their arguments, the primary skills, which the employees in the food and beverage

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sector lack primarily, include the foreign language skills, higher professionalism, organizations
as well as learning of the usage of innovative technologies for higher and better production.
Theoretical Framework
There exist several theoretical models regarding the procedures of employee training in
the commercial organizations, the primary ones being discussed as follows:
a) Instructional System Design Model
Kraiger (2014), in his works, highlights the ISD Model as one of the primary models,
which are used widely for the purpose of designing employee trainings so as to increase their
overall performances. The model, deals with the determination of the aspects of training,
namely- who, when, where, why, what and how. The steps incorporated in the model are as
follows:
Figure 2: Components of the ISD Model
(Source: USGS Human Capital, 2018)

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As per the model, for appropriate training of employees the employers need to:
 Analyze the need for the trainings for their employees
 Plan the goals they want to achieve and select the strategies for imparting training
accordingly
 Develop the training tools and materials accordingly
 Execute the training programs accordingly
 Evaluate whether the goals set had been reached by the training programs, by evaluating
the performance of the employees
b) Transitional Model of Employee Training
Another extensive and more inclusive model for employee training, widely implemented
across the world is the transitional model. According to Liu et al. (2012), based on the vision,
values and the missions of the companies as a whole, the training procedure of the employees in
the organizations needs to be developed and executed:

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Figure 3: Transitional Model of Employee Training
(Source: Long, Perumal & Ajagbe, 2012)
As can be seen from the above figure, the model takes into account the missions, visions
and the values of the companies, depending on which the objectives for training the employees
are articulated, which leads to the planning, implementation and evaluation of the training
programs of the employees.
One of the primary objectives of the companies being increase in the number of clients,
customer satisfaction becomes one of the primary requirements of the companies in order to
increase their profitability and future prospects in the global scenario.
2.2 Dependant variable

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Customer Satisfaction
The term “customer satisfaction” has been defined from various perspectives by different
scholars. From the commercial point of view, Saeidi et al. (2015), defines customer satisfaction
as the measurement of the ways in which the level of utility of the goods and services of different
companies meets or surpasses the expectations of the customers. The term, has gained immense
importance over the years, with the commercial scenarios becoming more competitive and
globally integrating.
Importance of customer satisfaction
Jhandir (2012), in his elaborate research work regarding the implications of service
quality and customer satisfaction in the global commercial aspects, explains the different reasons
behind the increase in the importance of the notion of customer satisfaction in different business
and marketing arenas in the contemporary period. According to him, the following are the most
important reasons for which customer satisfaction has to be treated as one of the primary factors
of significance by any company:
 Customer satisfaction, especially in the recent times in a more competitive business
scenario, acts as one of the leading indicators predicting whether the goods and services
produced by the companies are repurchased and whether the company gains loyal
clientele
 With the number of supply side players increasing in each of the industries and with each
of them gaining global exposure conveniently, high customer satisfaction from the goods
and services of a company, acts as an indicator of differentiation of the same from its
rivals

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 Tu, Wang & Chang (2012), also argues that increase in the customer satisfaction from
consumption of goods or services of any company leads to the creation of a higher
goodwill of the company, much of which is spread by the word of mouth of the happy
and satisfied customers. Similarly, the lack of customer satisfaction also leads to creation
of negative word of mouth which in turn effects the long term profitability and
sustainability of the company extensively, given the fact that in general the number of
options in the hands of customers are much high in almost all the industries.
 According to Khan (2012), customer satisfaction is considerably important in the
contemporary period as given the huge number of supply side providers in each of the
industries. Given this scenario, it becomes easier for the contemporary commercial
companies to retain their existing customers than acquiring newer clientele, thereby
making customer satisfaction a key unit of concern in the contemporary commercial
scenario.
Customer Satisfaction in food and beverage industry
As per the arguments put forward by Wu, Huang & Chou (2014), customer satisfaction is
even more crucial in the food and beverage industry across the world. The authors put forward
several assertions in the support of the same, which can be explained as follows:
 The food and beverage industry, being the industry producing and supplying raw as well
as processed foods and alcoholic and non-alcoholic beverages, constitutes a crucial part
of the daily commodity bundles of the customers. A significant share of the daily expense
of the global population goes in buying these commodities, thereby creating considerable

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scopes of revenue generation for the companies venturing in the supply side of these
industries.
 The initial fixed cost of production in this industry being lesser comparative to many
other industries and the global exposure of the food and beverage companies across the
world being higher than many other sectors, the level of competition among the firms in
this particular sector is considerably high. On the other hand, the demand for foods and
beverages for each individual is not unlimited and with the increase in income, the
pattern of consumption of the individuals keeps on changing. These together makes it
even more competitive for the companies venturing in this sector, which in turn makes
customer satisfaction even more important for the companies, as a lot of the profitability,
sustainability as well as the global share of clientele depend on how satisfied the
customers are with their products and whether they want to repurchase.
 Brownell (2012), in this context puts forward the notion of healthy eating and organic
production in the food and beverage industry. According to the author, in the recent
periods, with the negative effects of junk foods and beverages on the global health and
obesity conditions coming up, more and more customers are opting to shift towards
organic and healthy eating. This shift in the consumption pattern also makes it important
for the food and beverage companies to take into account the aspect of customer
satisfaction in their production and operational framework.
Theoretical Framework
Keeping the above discussion in consideration, it therefore becomes immensely
important for the companies, especially the food and beverage companies in the international
framework, to measure the level of customer satisfaction with their products and to implement

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necessary procedures in order to increase the same. There are several theoretical frameworks in
this aspect, which are discussed as follows:
SERVQUAL Model of Customer Satisfaction
Given that the topic emphasizes on the food and beverage industry, one of the widely
used models in the aspect of measurement of customer satisfaction of the companies, is the
SERVQUAL Model of measurement of service quality and customer satisfaction. According to
Ryu, Lee & Gon Kim (2012), the SERVQUAL method involves multidimensional analysis of
measuring the service quality of different companies and industries with the help of the aspects
including the perceptions and expectations of the customers availing the products. The model is
based on five dimensions of measurements, which are as follows:
Figure 4: Five dimensions of measuring service quality and customer satisfaction
(Source: Yousapronpaiboon, 2014)

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The five primary dimensions of the SERVQUAL Model have been explained elaborately in the
works of Bhat (2012), according to whom:
 Reliability indicates towards the ability of the company to perform the services which
they promise, appropriately and without any error
 Responsiveness refers to the presence of a prompt and willing customer service
department in the companies
 Assurance refers to the level of knowledge of the employees of the company and the
ability of inducing trust among their customers
 Tangibles indicates towards the conditions of the facilities, tangible services,
communication materials and others with the company, which can have positive
implications on the consumers
 Empathy refers to the presence of the framework where each of the customers have the
provision of individual care and attention from the company
In this model, the service quality is measured by the following formula:
SQ = P-E,
Where, P refers to the perception of the given service quality by the customers and
Q refers to the expectations of the individuals regarding the service quality of the same
2.3 Relationship between employee training and customer satisfaction
Taking help of the SERVQUAL Model of service quality and customer satisfaction
assessment, Beukes, Prinsloo & Pelser (2013), tries to assert the importance of implementation
of training for the employees for increasing the customer satisfaction, especially in the food and

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beverage industry. As per the assertions of the authors, there exist several gaps in the model,
which if not addressed properly can lead to decrease in the level of satisfaction of the customers.
One such gap is the difference between the expectations regarding the service quality and the
actual specifications of the same, which is known as the Delivery gap. Another gap, the
communication gap, refers to the difference between the intentions of the service delivery and
the information, which is provided to the customers.
According to the authors, for bridging these gaps and for building up a robust, responsive
and empathetic customer service framework in the companies, it is of utmost importance for the
companies to implement proper training framework for the employees. These training facilities
need to be designed such that the employees are enabled to understand the objectives of the
companies as well as demands and complaints of the customers. Trainings can help in bridging
the above mentioned gaps as well as the other gaps, including the knowledge gap and the
standards gap, which usually are found to be present and hampering the customer satisfaction
level, thereby hampering the long term goodwill and profitability of the concerned companies.
3. Conclusion
The above review of the existing literatures highlights the different traits present in the
aspects of both training of the employees as well as customer satisfaction, with the help of the
existing theoretical and conceptual frameworks, drawing the relationships between the two
concerned variables. Given the presence of immense global competition and dynamics among
the supply side players in almost all types of industries, especially the international food and
beverage industry, it becomes evident from the review that there lies extreme importance in the
operational framework of the companies to incorporate and evaluate the customer satisfactions

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and feedbacks of the customers. There also exists the need for employee training and
development for the companies in order to achieve greater customer satisfaction, which in turn is
expected to have considerable positive implications on the profitability and sustainability of the
companies, in the extremely competitive global environment.

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