Using two waves of store financial data and survey data collected from 34,866 and 34,365 employees and 30,239 and 33,299 customers who shopped at 594 stores of a large U.S. retail company we tested path models relating importance of service to management, service climate variables, sales personnel service performance, and store financial performance. At the store-level of analysis, the results indicated that (a) importance of service to management does relate positively to service climate variables (b) service climate variables are predictive of sales personnel service performance, and (c) sales personnel service performance in turn is predictive of store financial performance. Issues concerning the generalizability of the present findings as well as the implications of these results for effectively managing the internal and external task environments of retail service organizations are discussed. Copyright © 1999 John Wiley & Sons, Ltd.
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