It is often asserted that hearing the voice of the customer (VOC) can generate meaningful product and process innovation. Minimal empirical attention has, however, been devoted to evaluating this claim. The paucity of academic research exists, in part, due to the lack of an underlying conceptual foundation for the VOC concept. An opportunity thereby exists to impart theory, and evaluate whether hearing the VOC can indeed lead to favorable consequences. This research construes customer focus as a market‐sensing capability which manifests itself in the key organizational processes (i.e., intelligence generation and continual performance assessment) and values (i.e., a customer orientation serves as the guiding principle) that allow the VOC to be heard throughout the organization. Those manifestations are hypothesized to impact positions (i.e., relative [task‐related] performance) and outcomes (i.e., customer loyalty). The results based on data obtained from a cross‐sectional survey research design fielded in a supplier‐business customer context provide empirical support for the favorable consequences of being customer‐focused, and support the need to consider moderating variables. This paper advances theory by (1) answering the call to examine the capabilities that underlie a customer‐focused organization; (2) establishing empirical support for the (a) linkage between hearing the VOC and acting on that information, (b) elusive relationship between acting on the VOC and future buyer intentions, and (c) sources→positions→outcomes model as a path to achieving competitive advantage; (3) demonstrating that being customer‐focused does not have a direct effect on customer loyalty, thereby revealing a result different than that obtained in the consumer empowerment literature; and (4) demonstrating the importance of key moderators, namely (a) that relative (operational) performance has a strong positive effect on loyalty in relationships characterized by lower switching costs, and (b) that the effect of customer focus may lessen over time, implying that core capabilities may evolve into core rigidities. Additionally, this research contributes to business practice by providing managers with an understanding of how to hear the VOC throughout the firm (i.e., how to become a customer‐focused organization), and offering guidance on how to manage buyer–seller relationships.

This paper uses an institutional perspective to analyze Peter Drucker's contributions to management, marketing and marketing strategy. Drucker recognizes the importance of institutions in society. Further, his work reflects a variety of institutional views from sociology, economics and marketing. Drucker uses a form of comparative institutional analysis for evaluating both management and strategy issues. At the heart of each institutional comparison is the customer and the value created for the customer by the organization. Institutional comparisons help managers understand how the organization can create customers by adjusting its customer value proposition. Drucker influences marketers by focusing on how the organization's values are used to develop the organization's customer value proposition. Further, it is shown that the organization's values and its customer value propositions are manifested in its transaction rules, termed marketing institutions. Based on Drucker's work, a framework for comparing marketing institutions is introduced: the value leadership framework.

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Purpose -The purpose of this paper is to demonstrate the importance of institutional innovation in managing the future. Peter Drucker has encouraged managers to develop institutional innovations in order to reach organizational objectives. These institutional innovations revolve round the value created by the organization for its customers over time. Considering Drucker's insight from the perspective of institutional theory, this paper aims to describe how innovations in transaction institutions may lead to strategic transactions and provide a fundamental transformation in the way transactions are conducted in the market. Design/methodology/approach -Using a case study of the development of the American clock industry, it is shown that institutional innovations may provide a leadership position for an organization. By trading direct exchange for an innovative transaction model, management innovation occurred within and well beyond the confines of the American clock market. Findings -The historical case empirically illustrates and extends Drucker's notion of customer-centric management and the advantage of innovation. Strategically, management must understand how institutional innovations can be used to create a leadership position in the future. This occurs when management uses innovations in transaction rules, termed transaction "institutions", to create a contrast between the values exchanged between the customer and the organization and the values exchanged between the customer and competing organizations. Research limitations/implications -Peter Drucker's work is quite broad and, perhaps to his credit, he was never a traditional academic. As a result, evaluating his work is more difficult than evaluating research in one specific theoretical domain. However, it is clear that institutional thinking influenced Drucker. Analytically, this places him at odds with traditional economic and strategic analysis. Accordingly, this research is also somewhat at odds with traditional economic and strategic analysis. Practical implications -The implications for management are clear. The entrepreneurial role of each type of organisation in solving problems is critical. Only through entrepreneurship can long-term solutions to problems be developed. This requires a deep understanding of the costs involved, even on a small scale. When the details of costs are understood, entrepreneurial innovations can be developed in response. Originality/value -This is the first paper that utilizes an institutional framework for strategy analysis based on Peter Drucker's work. This helps managers manage the future by understanding how to systematically take and share risk.