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Since the enactment of the Motor Carrier Act of 1980, researchers have often attempted to ascertain the determinants of the freight carrier selection process. This issue has assumed greater urgency of late as reflected by the results of a joint study by the University of Tennessee, Mercer Management Consulting, and Ernst & Young, LLP (Holcomb and Manrodt, 2000) which found that shippers in the study had made a conscious effort to reduce the number of carriers used. Many studies have examined the overall quality of service and its relationship to costs. Specifically, McGinnis (1990) reviewed empirical studies done during the 1970's and 1980's to address the relative importance of service and cost as determinants of the transportation choice decision and whether this choice changed after deregulation. It was found for the periods before and after deregulation that cost was a major factor only after service objectives were met. (1) Taylor and Meinert (2000) state that even though low cost was important, it was not the only concern of shippers. Lambert, et al. (1993) also found that greater emphasis on the quality of service delivered was more important to shippers than low rates. D'Aveni (1995) has noted that as competition increases, the value (ratio of quality to cost) offered by firms causes customers to move toward the firm offering the higher value at a given price. Holcomb and Manrodt (2000) further found that carriers must better understand the needs of their customers in order to provide this greater value. In order to offer low prices, companies continuously search for ways to decrease operating costs without sacrificing the quality their customers expect. Liu (1993) developed an equilibrium model taking the service quality levels as given with the carriers competing by setting rates. It was found that only a small number of competing carriers could coexist in a market of intense competition where shippers demand high service quality yet want to control costs. Additionally, Allen and Liu (1995) found that excluding service quality measures from the cost estimation functions underestimates scale economies. Wisner and Lewis (1996) examined the quality issue from the carrier's perspective in a survey of transportation company members of the American Society of Transportation and Logistics. They found that quality of service is also a concern of the carriers. The survey found that many companies have implemented formal quality improvement programs and appear to be committed to quality improvement. Crosby (1979) defines quality as "conformance to requirements." The problem with this definition is that the ... customer often perceives the quality of the intangible service differently than the provider does. It is this difference in perception of service that creates polarization in defining and satisfying transportation customers ... (Crosby, 1979, p. 63). Parasuraman, et al. (1985) further state that consumers use their expectations, coupled with perception of performance, to measure the quality of service delivered. Many variables have been used to measure quality. In a review of the marketing literature, Parasuraman, et al. (1985) provide some insight into service quality determinants. They found the following determinants of service quality: reliability, responsiveness, competence, access, courtesy, communication, credibility, security, understanding of the customer and tangible measures. The tangible measures include physical facilities, equipment and per-sonnel. Lambert, et al. (1993) found that 16 of the 18 variables rated most important by their survey respondents were service related. The four variables ranked highest were quality of dispatch personnel, on-time pickups, on-time deliveries, and competitive rates. Allen and Liu (1995) used a service index and convenience index from Distribution magazine's annual "Quest for Quality Survey." Liu (1993) used transit time as a proxy for service quality. …

The relationship between the functional orientation of senior managers and service quality in LTL motor carriers