1980). Operational efficiency refers to competing on the basis of efficient utilization of existing
resources in direct contrast to business development where the primary competitive emphasis is
prospecting and exploring new opportunities. Kotterman (2006) argues that a CEO ³should take care
of stability, routine, clarity, risk minimization, control and predictability as well as take care of change
and follow up on new opportunities ́ (p.15). This is also in line with 5RZH¶V(2001) description of
leaders who combine managerial leadership, focused on the past with visionary leadership focused on
the future.
Organizational efficiency is often measured by meeting budget and time constraints. A culture that
stimulates efficiency and productivity emphasizes the importance of getting things done, on-time
delivery of products and services, and maintaining a pace faster than that of competitors, while
simultaneously controlling operation costs (Amabile et al., 2002; Lewis et al., 2002). Trade-offs have
been identified between operational efficiency and organizational creativity and client centricity,
respectively. The postulate of a trade-off between efficiency and creativity is one of the more enduring
ideas in organizational theory (Edwards, 2001; Hindo, 2007b; Kratzer et al., 2008; Magnusson et al.,
2009). Thompson (1967) describHGLWDVDFHQWUDOSDUDGR[RIDGPLQLVWUDWLRQ ́(p.15).
Moreover, there is an old established trade-off within the strategic management field between
operational efficiency and client centricity (Groenroos, 1994; Radnor & Johnston, 2012).
Organizations that aim for both efficient use of resources and customer retention have conflicting
strategic goals (Bateson, 1985). This is the case at least for service organizations.
Anderson et al. (1997) for instance found that service organizations had a negative correlation
between productivity and client satisfaction, in contrast to product organizations (.30 vs. .15).
Moreover they found that the profitability of service organizations was affected negatively when those
organizations pursued both productivity and satisfaction (cf. (Singh, 2000). Grönroos and Ojasalo
(2004) ZHUH OLNHZLVH DWWXQHG WR ZKDW WKH\ FDOOHG WKH ³VHUYLFH SURGXFWLYLW\ GLOHPPD ́(p.415).
Becoming more cost effective and more and more productive may lead to decreased service quality.
There are many examples of service organizations that face this dilemma (Hindo, 2007a; Singh,
2000). Starbucks for instance experienced that their drive for growth and efficiency was negatively
impacting the customer experience, which was the very reason Starbucks was successful in the first
place (Adamy, 2007). Despite the potential trade-off between quality and productivity, both are
necessary, especially in service organizations with a large human factor, such as health care,
entertainment, banking, education and consultancy (Mittal et al., 2005). The health care industry for