The External Value of Internal Employee Responsiveness: Evidence from the Field

Abstract

Internal coordination patterns among employees are often externally visible and may serve as signals of quality enabling the formation of trust between the firm and its external stakeholders. We focus on inter-employee responsiveness, or the responsiveness of employees to each other, as a particularly important, quantifiable, and objective aspect of internal coordination. Leveraging proprietary data from one company with exogenous assignment of employees to teams that serve individual customers, we examine the effect of inter-employee responsiveness on customer trust.  Each customer is served in an app-based group chat by a randomly assigned team of employees, and our data contains more than 2 million group chat messages with over 16 thousand customers. We find that inter-employee responsiveness serves as a credible signal in gaining customers’ trust as evidenced by their future contracting choices. The effect is more pronounced when the signals are 1) more frequent and 2) more intense. The results are robust to controlling various confounding factors and using alternative measures of customer trust. Our findings provide important implications for the value of internal employee responsiveness as a potential signal for building trust with external stakeholders.

Keywords: internal coordination, employee responsiveness, customer trust, signaling