The current issue and full text archive of this journal is available at www.emeraldinsight.com/0265-671X.htm Antecedents of The antecedents of relationship relationship quality in Malaysia and quality New Zealand 233 Nelson Oly Ndubisi Nottingham University Business School, Nottingham University, Received January 2007 Selangor, Malaysia Revised March 2008 Accepted March 2008 Catheryn Khoo-Lattimore Taylor’s University, Lakeside Campus, Malaysia Lin Yang School of Marketing and International Business, Victoria University of Wellington, Wellington, New Zealand, and Celine Marie Capel The University of Nottingham Malaysia Campus, Selangor, MalaysiaAbstractPurpose – The purpose of this paper is to examine the relationship between the relational dynamics,namely trust, personalisation, communication, conﬂict handling and empathy, and relationshipquality in the banking industry of two culturally dissimilar nations – Malaysia and New Zealand.Design/methodology/approach – Bank customers in Kuala Lumpur, Malaysia and Dunedin, NewZealand were surveyed using a questionnaire. Bank intercept technique was used in administering theinstrument. A total of 358 customers (comprising 150 from Malaysia and 208 from New Zealand)provided the data for the study. Multiple regression analysis was used to estimate the hypothesizedrelationships.Findings – The results of the study show that the ﬁve relational dynamics explain 84 percent and 76percent of variations in relationship quality in Malaysia and New Zealand respectively.Communication, trust, and empathy are signiﬁcantly related with relationship quality in bothcountries, whereas personalisation has a signiﬁcant impact on relationship quality in New Zealand butnot in Malaysia. The results also reveal that conﬂict handling is signiﬁcantly and marginallyassociated with relationship quality in New Zealand and Malaysia respectively.Research limitations/implications – Although the study was conducted on the banking industry,the outcome may be relevant to other service sectors. Further, understanding relational dynamics indifferent cultures is important, as the study has shown; thus integrating culture in the relationshipmarketing/management models would advance the understanding of culture roles in consumers’perceptions of and inﬂuences on relationship quality.Originality/value – The paper assesses and compares the impact of relational dynamics onrelationship quality among bank customers from two different cultures. By comparing oppositecultures this study is an advance over past single country studies, and enhances the prospect of International Journal of Quality &generalizing the ﬁndings. Reliability ManagementKeywords Culture (sociology), Banking, Malaysia, New Zealand Vol. 28 No. 2, 2011 pp. 233-248Paper type Research paper q Emerald Group Publishing Limited 0265-671X DOI 10.1108/02656711111101773
IJQRM Introduction28,2 Relationship marketing (RM) has been deﬁned as “the process of identifying and establishing, maintaining, enhancing, and when necessary terminating relationships with customers and other stakeholders, at a proﬁt, so that the objectives of all parties involved are met, where this is done by a mutual giving and fulﬁllment of promises” ¨ (Gronroos, 2000, p. 98). Associated to the subject of relationship marketing is the234 quality of the relationship. Jarvelin and Lehtinen (1996) refer to relationship quality (RQ) as a customer’s perception of how well the whole relationship fulﬁls his or her expectations, predictions, goals and desires. Hence, RQ is a bundle of intangible value, which augments products or services and results in an expected interchange between buyers and sellers (Levitt, 1986). The more general concept of RQ points to the overall impression that a customer has when a service delivery occurs (Ndubisi, 2006, 2007; Wong and Sohal, 2002), which is an important prerequisite to a successful long-term relationship. The beneﬁts of RM and RQ for organizations have already been researched (Alexander and Pollard, 2000; Colgate and Stewart, 1997; Goff et al., 1997). In particular, an examination of the literature reveals that there is a signiﬁcant amount of study on the advantages of relationship marketing exclusively within the banking industry (Colgate and Hedge, 2001; Lees et al., 2007; Lewis and Soureli, 2006; Ndubisi, 2007). This is not surprising given that the banking sector has been experiencing increasing competitive activity with ﬂotation, mergers and new market entrants (Bellou and Andronikidis, 2008). In addition, the intangibility of the offerings in the banking industry highlights the importance of customer relationships (Dibb and Meadows, 2001), which has been linked to customer loyalty (Ndubisi et al. 2007), and in turn to proﬁtability (Trubik and Smith 2000). Trubik and Smith (2000) and Garland (2002) found strong, direct relationship between customer loyalty and customer proﬁtability in the banking industry. Thus, generally, it pays for organizations to maintain quality relationship with customers. However, given the signiﬁcant sacriﬁce and investment required to build quality relationship with customers, the possibility of different drivers of relationship quality existing in different markets, and the potential for differential market responses to relationship building efforts/strategies of ﬁrms, it is not possible to generalize on the antecedents and consequences of relationship quality without undertaking a cross-cultural study. Thus, the objective of this research is to examine whether national culture plays a role in the association of the relational dynamics on customer perceived relationship quality. Although various dimensions have been used to reﬂect culture, the cultural clustering has typically been deﬁned by national and geopolitical boundaries hence in this research, we chose respondents from Malaysia and New Zealand as the comparative study groups because they exhibit signiﬁcant cultural differences. The rest of the paper is organized as follows: the next two sections reviews extant literature on relationship quality, relational dynamics or the relationship marketing dimensions, the concept of national culture and the dimensions of culture, and also shows the link between culture and the relational dynamics and relationship quality. This section also holds the study’s hypotheses. The next section shows the methodology of the research including data collection and analysis procedures. This is followed by the discussion of the ﬁndings and the study’s limitations and future
research direction. Finally, the implications of the research are presented and some Antecedents ofconclusions drawn from the outcomes. relationshipThe underpinnings of relationship quality qualityResearchers (e.g. Gummesson, 1987; Hennig-Thurau et al., 2002; Wong and Sohal, 2002)have documented various relational dynamics. More speciﬁcally, these dimensionshave been identiﬁed as empathy (Ndubisi, 2004; Yau et al., 2000), trust (Morgan and 235Hunt, 1994; Wong and Sohal, 2002; Selnes, 1998), communication (Sharma andPatterson, 1999; Palmatier et al., 2006), conﬂict handling (Dyer and Song, 1997; Songet al., 2000) and personalization (Berry, 1995; Gordon et al., 1998). In this study we averthat the relational dynamics namely empathy, trust, communication, conﬂict handlingand personalization will have inﬂuence on relationship quality in Malaysia and NewZealand. We also aver that the robustness of these relationships will differ between thetwo countries based on their cultural differences. This line of argument is representedin the schema (Figure 1). Empathy is deﬁned as the ability to understand someone else’s desires and goals(Yau et al., 2000). Empathy reduces reliance on legal governance because exchangepartners who are governed by the principle of empathy tend to treat others in themanner they would like to be treated (Ndubisi, 2004). Empathy is linked at a culturallevel to the ability of an individual to see situations from another’s perspective, thoughnot necessarily agreeing with such a perspective. One way to develop a uniquerelationship is to develop empathy. Communication means providing information that is timely and can be trusted-including information if delivery problem occurs; information on quality assurance;procedural information to customers and opportunity for customer feedback, etc.Palmatier et al. (2006) posit that communication enhances relationship quality andbuilds stronger relationship. This is supported by another study which found thatintensive communication occurs in close relationships (Holden and O’Toole, 2004).Although it has been found that communication style can differ widely between Figure 1. The schema of the research relationships
IJQRM receiver-focused amongst Asians or sender-centered between Westerners (Yum, 1988),28,2 communication has been identiﬁed as one of the conditions that must be fulﬁlled by the exchange partners for any relationship exchange (regardless of culture) to occur (Kotler, 1988). Trust is deﬁned as a willingness to rely on an exchange partner in whom one has conﬁdence (Moorman et al., 1993). Schurr and Ozanne (1985) deﬁned the term as the236 belief that a partner’s word or promise is reliable and a party will fulﬁl his/her obligations in the relationship. Generally, the strength and quality of a relationship rely on the level of trust – the higher the trust level, the stronger the relationship will be. Loyalty and trust for exchange partners in a relationship is an obligation and rendered without anticipation of reciprocity (Yau et al., 2000). Disregarding this obligation can seriously damage one’s reputation and lead to many disadvantages. Indeed, one would expect a positive outcome from a partner on whose integrity one can rely on conﬁdently (Morgan and Hunt, 1994). Conﬂict handling refers to the supplier’s ability to avoid potential conﬂicts and solve manifest conﬂicts before they create problems (Dwyer et al., 1987). It also points to the ability to discuss the arisen problems and their solutions openly. Ndubisi (2007) categorized conﬂict handling into preemptive (which strive to forestall sources of conﬂicts) and reactive CH which tries to solve manifest problems and make service recoveries. While service recoveries positively affect the relationship-quality (e.g., Mattila and Patterson, 2004), there are other important areas which have been largely ´ ignored – the ways service ﬁrms can avoid service failures (e.g., Vazquez-Casielles et al., 2007) through preemptive conﬂict handling. Conﬂicts generally result from perceived inequity (Adams, 1963), therefore preempting the sources of inequity and forestalling it will increase perceived relationship quality. Personalization is concerned with the degree to which the supplier can tailor the relationship to the customers. Studies have shown that personalization is one of the most successful relationship-building initiatives used by ﬁrms and is a signiﬁcant dimension impacting on RQ (Bettencourt and Gwinner, 1996; Claycomb and Martin, 2001). To our knowledge, there has been no academic literature investigating the role of culture in impacting personalization on relationship quality. Proﬁles of Malaysia and New Zealand According to the latest census held in 2000, the total population of Malaysia was 23.27 million people (APCD, 2008) but today it is estimated to be 25 million. According to APCD, 65.1 percent were Bumiputera (Malays), while Chinese and Indians comprised 26.0 percent and 7.7 percent respectively. Sarawak’s predominate ethnic group comprised 30.1 percent Ibans while Chinese and Malays comprised 26.7 percent and 23.0 percent respectively; Sabah is predominately comprised of the ethnic group Kadazan Dusun (18.4 percent) followed by the Bajas and Malay groups of 17.3 percent and 15.3 percent respectively (APCD, 2008). While the ofﬁcial language is Bahasa Malaysia, English language is widely spoken. New Zealand has a population of slightly less than four million people with most living in the key cities (Taylor, 2007). According to Taylor, the large majority of the population (89 percent) has a European heritage, primarily English. Therefore, English is the predominant language and Christianity the largest religion. The Maori, a Polynesian people who were the earliest inhabitants of New Zealand make up the
remaining population. Though Maori and Europeans freely intermarry and have Antecedents ofsimilar ways of life, each maintains its identity, so social and cultural aspects remain relationshipdistinct for each group. The standard of living is high, and their literacy rate is 100percent. qualityThe role of cultureNational culture has been deﬁned as patterns of thinking, feeling and acting that are 237rooted in common values and societal conventions (Nakata and Sivakumar, 2001).While culture is widely studied in the organizational literature, only recently havequality and relationship researchers began to examine culture in these domains.Hofstede (1980), Hofstede (2001) and Hofstede and Bond (1988) suggested that thecultures of different nations can be compared in terms of ﬁve dimensions. They areindividualism-collectivism, power distance, uncertainty avoidance, masculinity-femininity, and long term orientation. Table I shows the deﬁnition of culture andthe scores of Malaysia and New Zealand on each of the dimensions. In the following section, we present competing theoretical arguments in each case.For instance, in the case of individualism-collectivism, we ﬁrst make the case abouthow trust, empathy, communication and conﬂict handling will be more important in acollectivistic culture like Malaysia and how personalization will be more important inindividualistic NZ in building relationship quality. We also make the contrasting caseabout how personalization will be more important in high power distance culture likeMalaysia as this will help to further clearly mark class differences. The individualism versus collectivism dimension points to the relationship betweenan individual and other members of a society. Individualism refers to a loose socialframework where members look after themselves and their immediate families. On theother hand, a collectivist society indicates a preference for a tight knitted social Malaysia NZDimension Deﬁnition (based on Hofstede, 1980) score scoreIndividualism- A loosely (v. tightly) knit social framework in 26 79collectivisma which people are supposed to take care of themselves and immediate families only v. people feel absolute loyalty to their in-group and expect the in-group to look after themPower distance The extent to which a society accepts the fact 104 22 that power is inequitably distributedUncertainty avoidance The extent to which ambiguity and uncertainty 36 49 are threatening and avoided bMasculinity-femininity The extent to which assertiveness and success 50 58 are dominant values – the extent to which caring for others, quality of life, and people are dominant social valuesLong-term orientation The extent to which future-oriented values such –c 30 as persistence and thrift are dominantNotes: aHigher value indicates greater individualism; bHigher value indicates greater masculinity; Table I.c There is no score for Malaysia on LTO dimension; Figures in italics indicate that scores are Cultural dimensions andremarkably different Malaysia-NZ scores
IJQRM framework in which individuals expect their relatives to look after them for28,2 unquestioning loyalty. In highly collectivistic cultures, the emphasis is on the group, rather than the individual. People are more likely to value quality relationship and nurture it. Hence the overall predictive power of the relational dynamics will be greater in Malaysia compared to New Zealand. Therefore trust, communication, and empathy will be more important in a collectivistic culture like Malaysia in building quality238 relationship than in an individualistic culture like NZ. Personalisation will be more important in an individualistic culture like NZ in building relationship quality as customers continue to seek for customizations that will further distinguish them from other members of the society. The large versus small power distance dimension is the extent to which the members of the society accept inequality and power in institutions and organisations. In a large power distance society, people have a propensity to accept unequal distribution of power without any demand for justiﬁcation. In a small power distance society, people demand justiﬁcation for power inequalities and are not prepared to accept inequalities willingly. In NZ for example, we expect the relational dynamics to have inﬂuences on relationship quality due to its low power distance. We also expect conﬂict handling to be of signiﬁcant inﬂuence as preemptive conﬂict handling and open and free discussion of problems is more of a hallmark of low power distance culture than a high power distance society. Also due to the sophistication of the NZ market, personalisation is expected to have important inﬂuence on relationship quality compared to less sophisticated Malaysian market. The strong versus weak uncertainty avoidance dimension considers the degree of anxiety about uncertainty and ambiguity. Strong uncertainty avoidance speciﬁes intolerance by members of the society towards uncertainty and ambiguity. In contrast, weak uncertainty avoidance suggests a more relaxed and tolerant attitude by members of the society towards the future. The masculinity versus femininity dimension relates to the division of roles between the sexes in a society. Masculinity stands for a societal preference for competition, while femininity embodies an inclination to place relationships with people above money, to help others, to care for the weak and to preserve the quality of life. Since Malaysia and NZ are relatively close in their scores on these dimensions, differences in relationship quality and relational dynamics may not be explained by these dimensions. High long-term orientation cultures place greater value on persistence over quick results. These cultures also place a greater emphasis on being thrifty. Individuals are less likely to choose to transact with businesses or individuals they have no relationship with. Nonetheless, since there is no score for Malaysia on long-term orientation, we make no speculation based on this dimension. Extant literature (e.g. Ndubisi, 2004) has speculated that certain determinants of relationship quality are stronger in some cultures and weaker in others. This speculation however, has not been tested empirically. Given the dearth of research in the role of culture on relationship quality, this research attempts to enhance current understanding in this area. Taken together our critical assumptions are that: . personalisation will be more important in building quality relationship in individualistic cultures (e.g. NZ) as compared to collectivistic ones (e.g. Malaysia); . conﬂict handling will be more important in individualistic and low power distance NZ compared to collectivistic and high power distance Malaysia because open and free discussion of problem is not the norm in Malaysia and
preemptive conﬂict handling will be valued more in sophisticated market like NZ Antecedents of compared to less sophisticated Malaysian market; and relationship . trust, communication and empathy will be important in both cultures, albeit their quality association with relationship quality will be relatively more robust in collectivistic Malaysia than in individualistic NZ.Thus, we hypothesized the following: 239 H1. The impact of empathy on relationship quality will be stronger in Malaysia than in New Zealand. H2. The impact of communication on relationship quality will be stronger in Malaysia than in New Zealand. H3. The impact of trust on relationship quality will be stronger in Malaysia than in New Zealand. H4. The impact of conﬂict handling on relationship quality will be weaker in Malaysia than in New Zealand. H5. The impact of personalization on relationship quality will be weaker in Malaysia than in New Zealand.MethodologyThe population of this study is bank customers in the cities of Kuala Lumpur, Malaysiaand Dunedin, New Zealand. A bank intercept method was used in both countries toadminister the questionnaire. Participation by the respondents was absolutelyvoluntary. Out of 500 survey form administered in each location, 150 usable responseswere received in Malaysia and 208 in NZ. This translates to 30 percent and 42 percentresponse rates respectively. The construct measurements were adapted from different sources. Trust items wereadapted from past studies (Churchill and Surprenant, 1982; Ndubisi, 2007);communication and conﬂict handling items were adapted from Morgan and Hunt(1994). Items for empathy were developed based on Ndubisi (2004); personalisation andrelationship quality items were adapted from Churchill and Surprenant (1982), Morganand Hunt (1994), and Ndubisi, 2007). These items were measured on a ﬁve-point- Likertscale ranging from ‘strongly disagree’ to ‘strongly agree’. Table I shows the items usedfor each construct and their loadings, communalities and reliability estimates based onCronbach’s alpha values. Factor analysis was performed on the items to establish their suitability for themultivariate analysis. Based on acceptance of factor loadings of above 0.50 (Hair et al.,1998), the results indicated valid construct measures. Table II shows key factors, itemsand loadings, communalities and reliability statistics. Twenty-four items loaded on sixfactors out of the original 28. Owing to high cross loading, one item was dropped fromtrust (Employees of the bank show respect to customers) and three from empathy (Thebank demonstrates willingness to understand my feelings; the bank demonstrates anability to understand my feelings; and benevolence can be used to describe the bank’scustomer service policy). Total variance explained by the factors was 77.30 percent. Allfactor loadings were statistically signiﬁcant at p , 0.05. Thus overall convergentvalidity was established.
IJQRM Key dimensions and items Loadings Communalities Cronbach’s alpha28,2 F1 – Relationship quality (variance ¼ 56.79%) 0.92 RQ1: My relationship with the organization is desirable 0.63 0.760 RQ2: My relationship with the organization meets my goals 0.72 0.813240 RQ3: My relationship with the organization fulﬁls my expectations 0.69 0.809 RQ4: Overall, I have a good relationship with the organization 0.68 0.747 F2 – Personalisation (variance ¼ 5.65%) 0.91 PS1: The organization makes adjustments to suit my needs 0.77 0.777 PS2: The organization offers personalized services to meet customers’ needs 0.76 0.800 PS3: The organization is ﬂexible when its services are changed 0.74 0.774 PS4: The organization is ﬂexible in serving my needs 0.73 0.831 F3 – Empathy (variance ¼ 5.13%) 0.90 EM1: Employees of the organization exercise goodwill when dealing with customers 0.77 0.773 EM2: Employees of the organization try to put themselves in the customer’s position 0.79 0.766 EM3: Employees of the organization provide adequate care and attention to customers 0.71 0.783 EM4: Employees of the organization show compassion to customers 0.80 .810 F4 – Trust (variance ¼ 3.85%) 0.92 TR1: The organization is very concerned with security for my transactions/personal information 0.73 0.798 TR2: The organization’s promises are reliable 0.73 0.805 TR3: The organization is consistent in providing quality service 0.65 0.771 TR4: The organization fulﬁlls its obligations to customers 0.62 0.791 TR5: I have conﬁdence in the organization’s services 0.62 0.819 F5 – Conﬂict handling (variance ¼ 3.11%) 0.82 CH1: The organization tries to avoid potential conﬂicts 0.75 0.731 CH2: The organization tries to solve manifest conﬂicts before they create problems 0.80 0.802 CH3: The organization has the ability to openly discuss solutions when problems arise 0.60 0.728 F6 – Communication (variance ¼ 2.76%) 0.86 CM1: The organization provides timely and trustworthy information 0.50 0.723 CM2: The organization provides information when there is a new service 0.73 0.807 CM3: The organization makes reliable promises 0.50 0.693 CM4: Information provided by the organization is always accurate 0.50 0.638Table II.Factor loadings and Notes: Total variance (%) ¼ 77.30; KMO ¼ 0.965; Approx. Chi Square ¼ 6575.59; df ¼ 276; Sig.construct reliability ¼ 0.000
The scale reliability of each dimension was assessed using Cronbach’s alpha as Antecedents ofsuggested by Feldt et al. (1987). Reliability estimates (Cronbach’s Alpha) for the relationshipconstruct’s dimensions are shown in Table II, i.e. Relationship quality (0.92), Trust(0.92), Personalisation (0.91), Communication (0.86), Conﬂict Handling (0.82), and qualityEmpathy (0.90), suggesting a high degree of reliability. The results have well exceededthe 0.60 lower limit of acceptability (Hair et al., 1998). Thus the internal consistency ofthe instrument was conﬁrmed. 241Results and discussionTable III is the summary of the demographic composition of the respondents. The tableshows that the respondents represent a wide range of the population in terms of age,gender, race, education, marital status and income in both countries. The number ofmale and female respondents was more evenly distributed in New Zealand than inMalaysia (60.7 percent and 39.3 percent in Malaysia and, 45.2 percent and 50 percent inNew Zealand respectively). This may be because of the conservative nature ofMalaysian women compared to their NZ counterparts. The majority of the respondentsin both Malaysia and NZ were between the ages of 18 and 28, conﬁrming that“generation Y” were more responsive to survey than any other age group. There weremore respondents with post graduate degrees from NZ than Malaysia, a reﬂection ofthe NZ’s higher literacy rate. There were more divorcees in the NZ sample than in thecollectivistic Malaysia sample. The number of unreported cases or missing values was Malaysia New ZealandProﬁle Description No. % Description No. %Age 18-28 years 72 48.0 18-28 years 76 36.5 29-42 years 40 26.7 29-42 years 41 19.7 43-60 years 35 23.3 43-60 years 65 31.2 60 years above 1 0.7 60 years above 17 8.2 Not reported 2 1.3 Not reported 9 4.3Gender Male 91 60.7 Male 94 45.2 Female 59 39.3 Female 104 50.0 Not reported 10 4.8Highest educational qualiﬁcation Secondary or below 17 11.3 Secondary or below 80 38.5 High school/diploma 53 35.3 High school/diploma 25 12.0 Degree/professional 75 50.0 Degree/professional 67 32.2 Postgraduate 5 3.3 Postgraduate 25 12.0 Not reported 11 5.3Marital status Single 89 59.3 Single 103 49.5 Married 59 39.3 Married 73 35.1 Divorced 2 1.3 Divorced 18 8.7 Not reported 14 6.7Monthly income No income 26 17.3 No income 21 10.1 Below RM2,000 25 16.7 Below NZD2,000 91 43.8 RM2,000-RM3,999 31 20.7 NZD2,000- NZD3,999 47 22.6 RM4,000- RM5,999 32 21.3 NZD4,000- NZD5,999 16 7.7 RM6,000- RM7,999 17 11.3 NZD6,000- NZD7,999 6 2.9 RM8,000- RM9,999 10 6.7 NZD8,000- NZD9,999 8 3.8 Table III. RM10,000 and above 9 6.0 NZD10,000 and above 5 2.4 Respondents’ Not reported 14 6.7 demographic proﬁle
IJQRM more in the NZ data than in the Malaysia data. This may be a consequence of low28,2 power distance in NZ, which brings about freedom of choice and expression, whereby the respondents are not daunted to withhold any information they wish not to disclose. It may also be a reﬂection of strong individualism, with greater tendency to consider things as personal, compared to the more open and secret-sharing collectivistic society.242 Testing for association The results of the regression analysis in Table IV show that, in Malaysia, trust, personalisation, communication, conﬂict handling and empathy contribute signiﬁcantly (F ¼ 152:926; p ¼ 0:000) and predict 84 percent of variance in relationship quality. As for New Zealand, the results of the regression analysis in Table V show that trust, personalisation, communication, conﬂict handling and empathy contribute signiﬁcantly (F ¼ 110:7916; p ¼ 0:000) to relationship quality, predicting 76 percent of the variance. In other words, these ﬁve relationship marketing dimensions predict a signiﬁcant change in relationship quality, albeit the explanatory power of the relational dynamics is greater in Malaysia than in NZ. The strong collectivistic culture in Malaysia is a plausible explanation for the differences. The results in Table IV further show that, in Malaysia, there is a signiﬁcant relationship between trust, communication, and empathy and relationship quality at 5 percent signiﬁcance level. It means that perceived relationship quality depends on the level of trust (or trustworthiness), empathy and communication ability of the bank. The positive sign of the beta coefﬁcients shows that the higher the level of trust, empathy and communication of the bank, the greater the relationship quality perceptions of customers. Conﬂict handling has only a marginal relationship with relationship quality Variables Beta coefﬁcients t-value p-value Empathy 0.199 3.706 0.000 Communication 0.367 4.796 0.000 Trust 0.343 5.163 0.000 Conﬂict handling 0.103 1.681 0.095 Personalisation 0.014 0.216 0.829Table IV. Constant 20.106 20.760 0.448Regression analysis forMalaysia Notes: R 2 ¼ 0.842; F ¼ 152.926; Sig. F ¼ 0.000 Variables Beta coefﬁcients t-value p-value Empathy 0.154 3.153 0.002 Communication 0.362 5.194 0.000 Trust 0.312 5.134 0.000 Conﬂict handling 0.121 2.121 0.035 Personalisation 0.121 2.349 0.020Table V. Constant 20.151 20.835 0.405Regression analysis forNew Zealand Notes: R 2 ¼ 0.759, F ¼ 110.791, Sig. F ¼ 0.000
(at 10 percent signiﬁcance level, whereas personalisation has no signiﬁcant Antecedents ofrelationship with relationship quality even at 90 percent conﬁdence level. relationship The results for New Zealand in Table V show that there is signiﬁcant relationshipbetween all ﬁve factors and relationship quality at ﬁve percent signiﬁcance level. This qualityindicates that the higher the level of trust (or trustworthiness), empathy,personalisation, communication, and conﬂict handling ability of the bank, the higherthe level of customer perceived relationship quality. 243Limitations and future researchAlthough the objectives of this research were met, we identiﬁed two limitations in thecourse of the study. First, the study focuses speciﬁcally on the banking industry. Thisemphasis could limit generalisation of the ﬁndings to the entire service sector. Thislimitation however, presents an opportunity for future research in this area. Futureresearch should examine different service sectors to reduce possible service typeinﬂuences, and to elicit responses from a wide variety of service provider types basedon Bowen’s (1990) three service ﬁrm classiﬁcation. Bowen’s (1990) taxonomy of serviceﬁrms includes: (1) those services directed at people and characterized by high customer contact individually customized service solutions (e.g. health/medical care); (2) services directed at an individual’s property, in which moderate to low customer contact is the norm and the service can be customized only slightly (e.g. retail banking); and (3) services typically directed at people that provide standardized service solutions and have moderate customer contact (e.g. hotel/restaurant service).By comparing these different sectors, the ﬁndings stand a better chance to begeneralized. Another direction for future research is to include other less common relationalmarketing keystones not covered in this study. Some examples include equity,mutualism, and competence. These were not studied in the present work, whichconcentrated on the stronger relationship variables as identiﬁed by extant literature.By adopting a more comprehensive list, a richer understanding of the phenomenon canbe gained.Implications and conclusionsSeveral implications of the study are discussed – theoretical, cultural and managerialimplications. As the study shows consumers’ perception of a quality relationship isculture-bound. Cultural values play a signiﬁcant role in the association of the relationaldynamics with relationship quality in Malaysia and New Zealand’s banking sectors. Theoretically, all the culture-based hypotheses proposed in the paper are supported byempirical evidence. H1 (The impact of empathy on relationship quality in Malaysia willbe stronger than in New Zealand) was supported as shown by the results. The impact ofempathy on RQ in Malaysia with b of 0.199 is stronger than in New Zealand with b of0.154. Based on the higher beta coefﬁcient for empathy in Malaysia we can conclude thatH1 is supported. Although there is no doubt that bank customers in Malaysia and New
IJQRM Zealand perceive empathy as a strong contributor to their perceived RQ with their banks,28,2 it is a stronger determinant amongst Malaysians in a collectivist society. H2 (The impact of communication on relationship quality in Malaysia will be stronger than in New Zealand).was also supported as communication contributes more to a customer’s perceived RQ in Malaysia (b ¼ 0:367) than it does in New Zealand (b ¼ 0:362). This has been anticipated as the literature review pointed out that the244 ability to communicate is a ‘must-have’ condition for any relationship exchange to occur, however, since societies marked by strong ingroup and tight knit have more frequent communication and higher tendency for sharing of secrets, communication has a stronger impact on relationship quality in Malaysia than it does in NZ. Similarly, trust is an important determinant of relationship quality in both Malaysia and New Zealand, but more so in collectivistic Malaysia. The results justify the acceptance of H3 (The impact of trust on relationship quality in Malaysia will be stronger than in New Zealand), based on the beta coefﬁcient for trust which is larger in Malaysia (b ¼ 0:343) than New Zealand (0.312). H4 (The impact of conﬂict handling on relationship quality in Malaysia will be weaker than in New Zealand) was also supported by empirical evidence. There is signiﬁcant relationship found between conﬂict handling and customer relationship quality in New Zealand (p-value ¼ 0:035). However, this is not the case in Malaysia as only a marginal relationship was unveiled at 10 percent signiﬁcance level. Further explanation could be derived from the very nature of the Malaysian (or even larger Asian) society as well as the operationlisation of conﬂict handling in the study. Conﬂict handling in the study emphasizes open discussion of the problem and solution which is actually un-Asian. Most Malaysians see this kind of open discussion as confrontational, thus they are unlikely to subscribe to this type of conﬂict handling strategy. Another key element of conﬂict handling in the study is its preemptive rather than reactive approach. Proactive approaches like this are more likely to be appreciated in more sophisticated markets like NZ, where as the Malaysian market once described as “yesterday people” by one of the world’s leading authority in marketing management – Philip Kotler, may still be very content with reactive approaches such as service restoration. As such, conﬂict handling is this study has important implication for relationship quality in NZ but not in Malaysia. Also collectivists’ focus on harmony and success and their tendency to avoid open discussion of problems is understandable. As a collectivist society, Malaysians may be more concerned about how their actions impact groups than are individualists (Hui and Triandis, 1989), hence open discussion of problems may be shunned. They are also more willing to sacriﬁce personal interests for group welfare (Thomas et al., 2003) by not being confrontational as many of them will see open discussion of problems with the service provider. Lastly, the high power distance in Malaysia can result in restriction to freedom of expression (including complaints about service failures and dissatisfaction), thereby limiting the degree of openness in discussing problems instead a resort to private complaint behaviours. Malhotra et al. (2008) had documented that Malaysians generally are more likely to complain privately (to family and friends) about service failures and dissatisfaction than complain to the service provider as they view the latter approach as confrontational and against the spirit of harmonious co-existence. Lastly, H5 (The impact of personalization on relationship quality in Malaysia will be weaker than in New Zealand) was supported because personalisation showed signiﬁcant relationship with customer perceived relationship quality at ﬁve percent
signiﬁcance level in New Zealand ( p ¼ 0:02), but it was not a signiﬁcant determinant Antecedents ofof relationship quality in Malaysian. Two plausible explanations for this outcome are relationshipthe strong individualism culture and relatively sophisticated market in NZ. Sincepersonalisation can help to reinforce individual differences and uniqueness, it is more qualitylikely to be effective in building relationship quality in a highly individualistic culturesuch as NZ than in a collectivistic culture like Malaysia. Indeed, group approval andsimilarity are both well received and acceptable in Malaysia. Moreover, personalisation 245is a service delivery strategy that is likely to appeal to sophisticated markets who areconstantly demanding for greater value. Less sophisticated markets are more easilyimpressed, thus it may not require personalized or customized service to satisfy themand positively shape their relationship quality perceptions. For sophisticated andindividualistic markets like NZ, personalisation can be both a useful strategy fordelighting customers and a way to show them they are special to the organisation. Bydifferentiating and customising solutions to their unique needs and tastes, ﬁnancialservices organisations in this market are also demonstrating a level of competence thatis needed in order to delight such informed and highly demanding market. On the ﬂipside the collectivist society puts more emphasis on a caring and sharing interactionwith others, it emphasizes the similarities among members of the society more thantheir differences, hence, personalisation which stresses differences and uniquenessturns out to be a weak determinant of relationship quality. Managerially, banks need to understand what customers in one culture rank asimportant attributes to relationship quality, which may differ from those in another. Asthe research revealed, offering personalized services and demonstrating high conﬂicthandling ability were perceived as important determinants of relationship quality byNew Zealand bank customers as individualists, but they are not the case for collectivistslike Malaysians. International banks will need to modify their global marketingstrategies to take into account the impact of cultural differences in the perception of thedeterminants of good relationship quality. On the other hand, we also found somesimilarities in this study. More speciﬁcally, it was found that trust, communication andempathy contribute signiﬁcantly to relationship quality no matter what the culturecontext is. This implies that when banks offer their services to either collectivism/highpower distance-oriented or individualism/low power distance-oriented customers, theymust gain customers’ trust by consistently fulﬁlling their promises and offering reliableand quality service. Banks will also need to communicate effectively by providingtimely, accurate and trustworthy information on new services and any changes in theirservices. In addition, banks must show a strong empathy in the bank-customerrelationship by maintaining fairness, creating win-win situations and providing mutualsupport. It is also germane to mention that while trust, communication and empathy areimportant in the opposite cultures, their impact on relationship quality is more robust inMalaysia, where they are the only relational dynamics out of the ﬁve examined in thispaper with the potency to favourably shape relationship quality perceptions ofconsumers of ﬁnancial services. In sum, for the banking industry in the international context, it is important tounderstand that the cultural values of a given market are critical inputs to thedevelopment of effective relationship marketing strategies. Speciﬁcally, culture has akey role to play in building quality relationships as well as in designing strategies forenhancing perceived relationship quality.
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