The Impact of Customer Contact on Information Asymmetry in Employee-supervisor Relationships

Employees who have contact with outside customers may obtain private information from these customers, while they may also adapt rules to meet customer demands. This increases information asymmetry between the employees and their supervisors. However, customers may also have a disciplining effect through increasing employees’ felt accountability and motivation, while processes with customer contact require more transparency to facilitate customer interaction. This may reduce information asymmetry. In a sample of 516 employee-supervisor relationships, we find a negative relationship between outside customer contact and both employee and supervisor assessment of information asymmetry, suggesting that the transparency and disciplining mechanisms are more important. The relationships are more negative for less experienced supervisors, who likely benefit more from the additional disciplining effect. For employee assessment of information asymmetry, the relationship is also more negative for less experienced employees, who may be more susceptible to the disciplining effect. Additional analyses show that the relationship is less negative in not-for-profit organizations, where clients typically are less powerful. The results are consistent with outside customers reducing information asymmetry.