Externalization of employment in a service environment: The role of organizational and customer identification

This study investigates the impact of employment externalization (in the form of limited-term vs. permanent employment status) on customer-oriented service behavior, and how identification processes may help to resolve the 'paradox of externalization' (i.e., organizations relying more on potentially disenfranchised employees to maintain strong connections with their customers). Survey data were obtained from 369 sales, service, and technical support personnel from the Canadian subsidiary of a large international service organization in the high technology sector. Organizational and customer identification fully mediate the relationship between employment status and customer-oriented service behavior. Additionally, the perceived external image of the organization and the visibility of one's affiliation with the organization moderate the relationships between employment status and organizational and customer identification.