Managing relationships ‐ is this a quality issue?

This paper investigates how companies are managing their relationships with customers and employees. It shows that loyalty to both groups is shifting. While most companies are claiming that their staff are their most valuable resource the enclosed research findings reveal that the reality is vastly different. On the other hand, many companies are rewarding customer loyalty but the service being delivered, largely through demoralised staff, is falling short of expectations. According to the Commission on Public Policy and British Business (1997), UK firms are generally under‐performing and the staff they employ underachieving. It is suggested that the way forward is for companies to manage their relationships more effectively with both groups and to break the vicious cycle of decline.