Linking Customer Focus and Competitive Advantage: The Mediation of Transformational Leadership

Abstract

Purpose: The empirical studies that have been conducted to determine the nature of the relationship between customer focus and competitive advantage have revealed that customer focus fosters competitive advantage; however, none of the studies attempted to include a contingency variable to gain more insight into the nature of this relationship. To fill this gap, this study was carried out in order to further investigate this link by introducing 'transformational leadership' as a contingency variable. 

Study design/methodology/approach: The study adopted a quantitative research approach with sample data collected from management employees from TAZARA. Validity, reliability and model fit were tested using factor analysis, principal component analysis and regression analysis in Jamovi software.

Findings: The results show that there is a positive and significant relationship between customer focus and competitive advantage, and between transformational leadership and competitive advantage. Transformational leadership was found to partially mediate the relationship between customer focus and competitive advantage.

Originality/value: This was the first study to empirically test the mediating effect of transformational leadership on customer focus and competitive advantage. As organisations relentlessly seek to gain and maintain competitive advantage through customer focus, their leaders require a transformational leadership style to ensure success. Replication of this study in other sectors is strongly recommended, with future studies also recommended to include other moderating and/or mediating variables.