QUT Digital Repository: http://eprints.qut.edu.au/

Beatson, Amanda T. and Lings, Ian and Gudergan, Siegfried (2008) Employee behaviour and relationship quality : impact on customers. The Service Industries Journal, 28(2). pp. 211-223.

© Copyright 2008 Routledge

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EMPLOYEE BEHAVIOUR AND RELATIONSHIP QUALITY: IMPACT ON

CUSTOMERS

AMANDA BEATSON

IAN LINGS

SIEGFRIED GUDERGAN

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EMPLOYEE BEHAVIOUR AND RELATIONSHIP QUALITY: IMPACT ON

CUSTOMERS

Summary

This paper examines relationship quality as a multidimensional metaconstruct

comprising three dimensions; satisfaction, trust and commitment. The role of

relationship quality in its nomological network with service orientation as an

antecedent construct and consumers’ positive behavioural intentions, perceived

switching costs and activism as the consequences is explored. Survey data from 728

travellers are used employing structural equations modelling to test this

conceptualisation. We find that service orientation affects relationship satisfaction

and trust, and that the latter influences satisfaction and commitment. In turn,

satisfaction, trust and commitment have a positive impact on positive behavioural

intentions, trust a negative one on activism, and commitment a positive one on

perceived switching costs. The implications of this conceptual and empirical

understanding of relationship quality are discussed and directions for future research

presented.

Keywords: Services, Relationship Quality, Trust, Satisfaction, Commitment, Service

Orientation, Behavioural Intentions

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EMPLOYEE BEHAVIOUR AND RELATIONSHIP QUALITY: IMPACT ON

CUSTOMERS

1. INTRODUCTION

Relationship marketing is well recognised as being at the forefront of marketing practice and

academic marketing research [Berry, 1995; Hennig-Thurau, Langer and Hansen, 2001]. This

is even more so in the area of services marketing as consumers may seek on-going

relationships with service providers to reduce the perceived risk associated with the

consumption of services such as intangibility and credence factors [Hennig-Thurau et al.,

2001; Wong and Sohal, 2002]. Successful relationship marketing is well established as a

strategy for increasing customer retention, and implementing such a strategy provides firms

with a sustainable competitive advantage [Anderson and Narus, 1990; Roberts, Varki and

Brodie, 2003]. There has been less work examining the nature and impact of relationship

marketing, its organisational antecedents and consequences for consumer behaviour in the

context of consumer markets compared with business to business markets [Beatty, Mayer,

Coleman, Reynolds and Lee, 1996; De Wulf, Odekerken-Schroder and Iacobucci, 2001].

Understanding the relationship from the customer’s perspective, however, has been identified

as an important area of marketing research and given the importance of relationships in a

service context, this paper aims to investigate the quality of the relationship between the

customer and the service organisation from the customer’s perspective within the travel

industry [De Wulf et al., 2001; Gwinner, Gremler and Bitner, 1998; Hennig-Thurau, Gwinner

and Gremler, 2002].

Cross sea passenger transport was chosen as the research context, as this segment of the travel

industry market offers essentially undifferentiated core service benefits (transport between

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ports at similar prices) with no contractual or incentive obligation such as frequent flyer

points, for customers to remain with the service provider. Consequently, variations in repeat

purchase are expected to arise from relationship quality rather than price competition, or

contractual obligation [see for example Roberts et al., 2003]. To more fully understand the

role of relationship quality in this context, we investigate a wider nomological network with

service orientation as an antecedent to relationship quality and consumers’ attitudes and

behaviours towards the firm as consequences.

2. CONCEPTUAL FRAMEWORK

Retaining customers has become an important goal for organisations. This has increased

academic interest in relationship marketing [Colgate and Danaher, 2000]. Not only can

customer retention result in long run benefits for the firm, it also offers certain psychological,

social and economic benefits for customers [Gwinner et al., 1998]. In a consumer market

context, the interaction of consumers with front line staff becomes paramount in determining

the quality of the relationship as consumers often do not differentiate between the person

providing the service and the organisation [Bitner, 1990]. In order for service organisations to

compete more effectively it behoves them to better understand the nature of service

relationships from the consumers’ perspective [De Wulf et al., 2001; Gwinner et al., 1998].

Key questions to be answered are: how are consumers’ perceptions of the quality of their

relationships with service providers formed, and what are the consequences of high quality

relationships for the firm?

Roberts et al. [2003] define relationship quality as ‘a measure of the extent to which

consumers want to maintain relationships with their service providers’ [p. 191]. Relationship

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quality focuses on the overall nature of the relationship between the consumer and the firm

and views fulfilling consumers’ needs as central to relationship success [Hennig-Thurau et al.,

2002].

Previous investigations have variously conceptualised relationship quality as either a higher

order construct or as a metaconstruct [See for example, De Wulf et al., 2001; Hennig-Thurau

et al., 2002]. Although there is no clear consensus on the most appropriate conceptualisation,

of relationship quality, there is general agreement that satisfaction, trust and commitment are

key dimensions of relationship quality [See for example, Crosby, Evans and Cowles, 1990;

De Wulf et al., 2001; Dorsch, Swanson and Kelley, 1998; Hennig-Thurau and Klee, 1997;

Hennig-Tharau et al., 2002; Roberts et al., 2003]. In other words, high quality relationships

are defined by high levels of satisfaction, trust and commitment [De Wulf et al., 2001]. One

major advantage of conceptualising relationship quality as a multidimensional metaconstruct

(rather than a higher order construct) is the opportunity that this provides to gain a deeper

understanding of the construct and relationships between its dimensions. Furthermore, such a

multidimensional conceptualisation, provides an opportunity to explore the relative impact of

each dimension on the outcomes of the relationship. Consequently, in this research we adopt

the conceptual approach proposed by Hennig-Thurau et al. [2002] who regard relationship

quality as a metaconstruct composed of three interrelated core dimensions (satisfaction, trust

and commitment).

In this study relationship-satisfaction is defined as consumers’ overall affect based evaluation

of the relationship with the provider. It is cumulative in that it develops over the course of the

relationship (as opposed to specific to each transaction) and is based on an evaluation of

interactions with a range of service staff and systems [Anderson, Fornell and Rust, 1997; De

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Wulf et al., 2001]. Relationship-trust is defined as consumers’ confidence in the service

provider’s reliability and integrity and has similarities with the concept of trustworthiness [De

Wulf et al., 2001; Morgan and Hunt, 1994]. Relationship-commitment is conceptualised as

the consumer’s enduring desire to continue a relationship with a service provider because of a

liking or positive attitude, accompanied by this consumer’s willingness to make efforts at

maintaining the relationship [De Wulf et al., 2001; Morgan and Hunt, 1994]. Relationship-

commitment, in this context, represents the attitudinal element of consumer loyalty. These

three dimensions (satisfaction, trust and commitment) tap into the key facets of a successful

relationship.

Antecedents to Relationship Quality

It is well recognised in services marketing research that a link exists between employee

behaviours and consumer behaviour [see for example Bienstock, DeMoranville and Smith,

2003]. Employee behaviours such as organisational citizenship behaviour [Bienstock et al.,

2003], prosocial service behaviour [Bettencourt and Brown, 1997], customer orientation

[Bettencourt and Brown, 2003] and service orientation [Kelley, 1992; Lytle, Hom and

Mokwa, 1998] have all been related to positive consumer evaluations of the service

encounter. It is likely (given this association between employee behaviours and consumers’

evaluations of service encounters) that similar behaviours will also influence relationship

quality. Despite some research examining antecedents to relationship quality, such as

relationship investment [De Wulf et al., 2001], relational selling behaviour [Crosby et al.,

1990], and customer orientation [Wray, Palmer and Bejou, 1994], further research in this area

is necessary [Roberts et al., 2003]. Understanding the antecedents to positive relationships

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will enable organisations to develop and implement strategies aimed at securing better

relationships with customers and developing and maintaining customer loyalty.

As an extension of previous studies, this research examines the impact of service orientation

on the dimensions of relationship quality. Service orientation captures customers’ perception

of the organisation’s service related policies and practices, as enacted by employees. It has its

conceptual grounding in the notion of organisational climate [Schneider and Bowen, 1985].

Service orientation is thought of as the organisation’s ‘climate for service’ [Kelley, 1992], and

exists when the organisation’s policies and practices are directed towards the delivery of

exceptional customer service [Lytle et al., 1998]. Service orientated policies and practices

will affect the attitudes and behaviours that service employees display towards customers. It is

the customers’ perceptions of these employee attitudes and behaviours that represent the

organisation’s service orientation in this context. These perceptions of service orientation

will, in turn, influence customers’ evaluations of their service experience. Consequently, if an

organisation has a high degree of service orientation, it will be committed to delivering

excellent service. Customers will then perceive this service orientation and will recognise

that the firm is trying to serve them well, this, in turn, will increase the likelihood that they

will trust the firm, develop a positive affect to the firm, and will be satisfied with the firm,

that is, that they will report higher levels of relationship quality. Therefore it is proposed that;

H1: Customers’ perceptions of service orientation are directly related to their

perceptions of relationship quality, (H1a satisfaction; H1b trust; H1c commitment).

Outcomes of Relationship Quality

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Relationship quality captures the attitudinal element of consumer loyalty through relationship

commitment. However, it is also important to capture the subsequent behavioural responses

arising from relationship quality. Organisations are interested in not only the positive attitudes

to the firm through relationships, but also the behavioural outcomes from these relationships.

What do they really result in for the firm? Is there an actual benefit to the firm that can be

understood in terms of consumer behaviour? Customers typically engage in a range of

behaviours towards the organisation, ranging from positive behaviours (from the firm’s

perspective) such as repeat purchase and firm advocacy, through inertia, and negative

behaviours (from the firm’s perspective) such as reducing purchase behaviour, negative word

of mouth and complaining to third parties. It is particularly important for organisations to

understand how these positive and negative behaviours arise and how to manage them.

Two positive behavioural outcomes of relationship quality are regularly identified in the

marketing literature. These are repeat purchase behaviour and positive word of mouth

communications [Hennig-Thurau et al., 2002]. Consumers who perceive that they have a

high quality relationship with their service provider are likely to repeat purchase from that

firm [De Wulf et al., 2001] and are likely to communicate their experiences to others within

their social network ,i.e. engage in positive word of mouth [Hennig-Thurau et al., 2002;

Reichheld, 1996; Roberts et al., 2003]. Measuring these behaviours involves observation of

respondents to capture the behaviours directly. Such observations are not always practical

and, in line with other research in this area, we conceptualise these positive outcomes for the

firm as positive behavioural intentions, and assume that the relationship between consumers’

intentions and behaviours is significant. Consequently, we hypothesise that the higher the

consumer’s perceptions of relationship quality, the higher their intentions to behave positively

towards the firm.

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H2: Higher perceptions of relationship quality, (H2a satisfaction; H2b trust; H2c

commitment) lead to a higher level of positive behavioural intentions.

In addition to these positive behaviours, customers who are committed to a relationship with

an organisation are less likely to become activists against the company [Hoyer and MacInnis,

1997]. That is, they are unlikely to demonstrate negative behaviours towards the firm, such as

complaining to other customers and complaining to external agencies [Hoyer and MacInnis,

1997: 285]. When a consumer feels they are getting their requirements met through the

service provider, why would they feel the need to act in a negative way towards that provider?

Therefore it is hypothesised:

H3: Higher perceptions of relationship quality, (H3a satisfaction; H3b trust; H3c

commitment) lead to a lower level of activism against the company.

Previous research has identified that satisfaction with services increases consumers’

perceptions of the cost of switching suppliers [Gundlach, Achrol and Mentzer, 1995;

Patterson and Smith, 2003]. Such costs may take the form of continuity-, set-up-, or sunk

costs [Patterson and Smith, 2003], and are an important determinant of the likelihood that the

consumer will terminate the relationship or seek an alternative supplier [Morgan and Hunt,

1994]. We predict (given the association between relationship quality and consumers’

evaluations of service encounters), that consumers reporting higher levels of relationship

quality are likely to perceive higher switching costs than those who report low levels of

relationship quality. In essence, for customers experiencing a service relationship with a

supplier that is characterised by trust, liking and satisfaction, leaving this relationship will

represent a level of risk to them because another supplier may not fulfil their needs in the

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same manner. Therefore, we hypothesise that perceptions of relationship quality will

positively influence perceptions of switching costs:

H4: Higher perceptions of relationship quality, (H4a satisfaction; H4b trust; H4c

commitment) will lead to higher perceived switching costs.

Relationship between satisfaction, trust and commitment

In line with the suggestions of Hennig-Thurau et al., [2002], we also explore the structural

relationships between the three dimensions of relationship quality. Morgan and Hunt [1994]

suggest that trust is a central tenet of relationships; it is seen as reducing consumer uncertainty

and vulnerability; especially important in services contexts [Berry, 1995; Hennig-Thurau et

al., 2002]. These benefits can create relationship efficiency through decreased transaction

costs which then help foster commitment to the relationship [Garbarino and Johnson, 1999;

Hennig-Thurau et al., 2002; Morgan and Hunt, 1994]. If a customer trusts their service firm

they are more likely to have a positive attachment to the firm. This gives rise to the following

hypothesis:

H5: A higher level of relationship trust will lead to a higher level of relationship

commitment.

Trust has also been found to have a positive impact on satisfaction [Anderson and Narus,

1990]. Higher levels of trust result in lower anxiety concerning the interaction and thus

greater satisfaction [Hennig-Thurau et al., 2002]. When a consumer believes that the firm is

honest in their dealings with them it is likely to result in the customer being more satisfaction

with that firm. Consequently:

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H6: A higher level of relationship trust will lead to a higher level of relationship

satisfaction.

A positive relationship has also been reported between satisfaction and commitment [Oliver,

1999; Singh and Sirdeshmukh, 2000; Szymanski and Henard, 2001]. That is, those

consumers who are satisfied with their interactions with the organisation are provided with

repeated positive enforcement, thus creating positive emotional commitment bonds with the

organisation [Hennig-Thurau and Klee, 1997; Hennig-Thurau et al., 2002]. If a customer is

satisfied with the interactions they have with the firm they are more likely to have a positive

attitude or attachment toward that firm. Therefore it is hypothesised that:

H7: A higher level of relationship satisfaction will lead to a higher level of relationship

commitment.

3. RESEARCH METHODOLOGY

In order to collect data to examine the relationships between the constructs of interest in this

study, a questionnaire was designed employing measures adapted from existing marketing

and psychology scales. Specifically, relationship satisfaction was measured using a five point

semantic differential scale as recommended by Yi [1990], using items drawn from Ganesan

[1994]. Examples of the items used include satisfied/dissatisfied, pleased/displeased,

happy/unhappy. Relationship commitment was measured using five items adapted from

scales published by Garbarino and Johnson [1999] and Allen and Meyer [1990]. Example

items include “I feel a sense of belonging to (firm name)”, “I am committed to my

relationship with (firm name) because I like being associated with them”, and “I am loyal to

(firm name)”. Relationship trust, consumer activism, and positive behavioural intentions

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were all measured using items modified from Roberts et al. [2003]. Examples of the items of

relationship trust are “ (firm name) is concerned about the welfare of its customers”, “ (firm

name) tries to understand customers’ problems when they arise”, “ (firm name) is honest with

its customers about any problems with its service”. Examples of the consumer activism items

include, “I am likely to complain to external agencies, such as trading standards or the media,

if I experience problems with (firm name)”, and “I am likely to complain to other customers if

I experience problems with (firm name)”. Positive behavioural intentions items included “I

am to encourage friends and relatives to do business with (firm name)”, “I am likely to say

positive things about (firm name) to other people”, “I am likely to keep purchasing from (firm

name) for another year”, and “I am willing to provide (firm name) with more information

about myself to help them to serve me better”.

Perceived switching cost items were modified from Gundlach et al., [1995] and Morgan and

Hunt [1994], examples include; “Moving to another carrier is not worth the effort”, and “I

would have to invest a lot of time and effort to find another carrier of equal standard”.

Service orientation was measured using items adapted from Lytle et al. [1998] and Saura et

al. [2005] and referred to the firm’s staff. Example items include: ‘They provide prompt

service’, ‘They are committed to serving customers’ and ‘They view interactions with me as

opportunities to please me’. With the exception of relationship satisfaction, all scales utilised

a seven point response options anchored at strongly agree and strongly disagree. As

mentioned relationship satisfaction was measured using a semantic differential scale. A full

list of items used in the study is provided in Table 2

Data were collected using a self-completion questionnaire, administered to business and

leisure travellers on a cross channel ferry, and collected from pre-specified pick up points.

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Respondents were chosen using a customer intercept while they were on board the ferry, and

were asked to complete the questionnaire during their voyage. In total 808 questionnaires

were administered and 728 usable responses were received (effective response rate of

approximately 90%). This research context was chosen as, typically, the service offering is

undifferentiated, in terms of price, duration and comfort, between competitors operating the

same route. In this situation, any observed consumer loyalty is likely to be driven by

consumers’ evaluations of the service orientation of the service provider and consequent

quality of the service relationship.

4. RESULTS

Confirmatory factor analysis (CFA) within a structural equation modelling approach was used

to confirm the dimensionality of the scales for all constructs in the study. At this stage,

several items were removed from the scales to assure that items only captured the construct

that they were intended to, and to improve model fit. The final set of items for each scale is

illustrated in Table. 2. A random sample of 250 respondents was chosen from the data set.

The covariance matrix of the items capturing the constructs was analysed using LISREL 8.54

[Jöreskog and Sörbom, 2003]. Following the suggestions of Sharma [1996: 151] and Hair,

Anderson, Tatham and Black [1998: 605] maximum likelihood estimation was used. Fit

indices for the measurement model were as follows: χ2 = 281.317 (p = 0.973), df = 392, GFI =

0.925, AGFI = 0.908, St RMR = 0.0389.

Discriminant validity was tested following Fornell and Larcker [1981] and Anderson and

Gerbing [1988]. Evidence of discriminant validity is provided by a low to moderate

correlation among measures that are designed to measure conceptually different but related

constructs, i.e., a phi coefficient significantly less than one offers support for discriminant

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validity between constructs [Anderson and Gerbing, 1988]. The correlations between the

constructs in the study were all in the range 0.17-0.72, indicating that the scales discriminate

between the constructs included in the study (see Table 1 below). Additional evidence of

discriminant validity is provided if the average variance explained by a construct's items is

greater than the construct's shared variance with every other construct [i.e., the square of the

inter-factor correlations between any two constructs (φ2), Fornell and Larcker, 1981]. This

test provided further evidence of discriminant validity. The inter-factor correlations (φ),

squares of the inter-factor correlations (φ2), and average variances extracted are reported in

Table 1 below.

[Take in Table 1]

Having established that each of the scales measuring various constructs do indeed

discriminate between these constructs, the next stage in the analysis was to examine

composite reliabilities of each of the scales [Gerbing and Anderson, 1988; Hair et al., 1998:

611]. These are reported in Table 2 and all exceed the recommended standards of both

Bagozzi, Yi and Phillips [1981] and Hair et al. [1998], and provide evidence of the internal

consistency of the construct indicators. This suggests that the scale items do indeed measure

the latent constructs that they purport to.

Fornell and Larcker [1981] suggest that variance extracted is a stringent test of internal

stability and convergent validity. Anderson and Gerbing [1988] offer an alternative heuristic,

that significant t-values support the convergent validity of scale items. Both approaches were

used to test the convergent validity of the scale items.

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1. Examining the variances extracted for each of the scales adopted (Table 2), indicates that

all scales explain more than 50 per cent of the variance in the data for each of the

constructs, and so meet the test of convergent validity set by Fornell and Larcker [1981].

2. Also, all item loadings have significant t-values > 1.96, exceeding Anderson and

Gerbing’s [1988] heuristic. This suggests that the scale items adequately represent the

constructs that they purport to measure.

Overall these tests indicate that the scales used to measure the constructs of interest in this

study possess sufficient internal stability and validity to provide confidence that they measure

what they purport to.

[Take in Table 2]

The next stage in the analysis was to assess the structural model fit. The hypothesised

relationships in the model were tested simultaneously using structural equations modelling,

employing LISREL 8.54 [Jöreskog and Sörbom, 2003]. The full data set was used to test this

model. Model fit was assessed using several heuristics commonly published in the literature.

These goodness of fit indices suggest that the model fits the data well; χ2 = 301.256 (p =

0.901), df = 334, GFI = 0.920, AGFI = 0.903, St RMR = 0.044. The standardised path

coefficients as estimated by LISREL are given in Figure 1 below. Service orientation

explains more than 50 per cent of the variation in relationship trust, 42 per cent of the

variation in relationship commitment and 22 per cent of the variation in relationship

satisfaction. The model explains more than 56 per cent of the variation in positive

behavioural intentions and 27 per cent of the variation in consumer switching costs, however

only 9 per cent of the variation in consumer activism is explained by the proposed model.

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One partial explanation for the relationships between the constructs in this study may be the

existence of systematic measurement error arising from the use of a single instrument to

simultaneously collect data on all constructs in the study. In order to test for such common

method bias, a Harman’s [1967] one-factor test was performed following the approach

described in Podsakoff et al. [1984] and Schriesheim [1979]. All of the self-report items were

entered into a principal components factor analysis with varimax rotation. According to this

technique, if a single-factor emerges from the factor analysis or one-factor accounts for more

than 50 per cent of the variance in the variables, common method variance is present [Mattila

and Enz, 2002]. Our analysis revealed a seven-factor structure with no general factor present

(the first factor accounted for 15 per cent of the variance). Although this test does not rule out

the presence of common method bias, combined with measures taken in the questionnaire

design to minimise acquiescence bias, it does provide support for the absence of such a

general bias in the findings [Mattila and Enz, 2002].

As illustrated in Figure 1. below the impact of service orientation on relationship satisfaction

and relationship trust is positive (H1a and H1b). Additionally relationship satisfaction is seen

to have a direct effect on positive behavioural intentions (H2a) as does relationship trust

(H2b) and relationship commitment (H2c). H3b is also supported (relationship trust having a

negative effect on consumer activism). Relationship commitment is also seen to increase the

perceived switching costs of consumers (H4c). Trust emerges as the focal dimension in

relationship quality as it impacts both satisfaction and commitment (supporting H5 and H6).

[Take in Figure 1]

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5. DISCUSSION AND SUMMARY

This research addresses the call for additional investigation into the antecedents of

relationship quality [Roberts et al., 2003], and also examines some of the consequences of

high quality relationships for the firm. Additionally, the paper also explores the relationship

between the three dimensions of satisfaction, trust and commitment in the metaconstruct of

relationship quality [Hennig-Thurau et al., 2002]. We show that service orientation does,

indeed, act to increase consumers’ perceptions of relationship satisfaction and relationship

trust. Interestingly, however, it did not appear to increase consumers’ perceptions of

relationship commitment. Perhaps given the strong link between service orientation and the

other two dimensions of relationship quality particularly trust, these mask the relationship

with commitment. It could be said though just because a consumer perceives that a service

employee had their best interest at heart, it may not necessarily result in them being

committed to the organisation. The results do indicate that consumers’ perceptions of the

level of service orientation that organisations demonstrate have a positive impact on their

likelihood to trust and be satisfied with their relationship with the organisation. This implies

that service organisations should manage their customer interface to ensure that such

perceptions are facilitated. This will include adopting policies and practices that are directed

at allowing front line staff to deliver exceptional service to customers. Such policies may

include empowering employees [Thomas, 1998], training them [Jones and Sasser, 1996] and

implementing internal marketing to motivate them to deliver service excellence [Grönroos,

1985].

Furthermore this research adds support to previous studies examining the benefits of high

quality relationships with customers. Specifically we find that all three dimensions of

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relationship quality lead to positive behavioural outcomes. This suggests that satisfaction,

trust and commitment all result in repeat purchase and positive word of mouth toward the

service providing organisation. This strongly indicates the importance of achieving high

levels of relationship quality with consumers as it is likely to result in them continuing to

purchase in the future and also saying good things about the organisation and encouraging

friends and relatives to purchase from that organisation in the future. Trust and commitment

were also found to relate to consumer activism in that higher levels of trust and commitment

are likely to result in lower levels of consumer activism (negative behaviours towards the

firm, including complaining to other customers and complaining to external agencies which is

an important goal for organisations) [Hoyer and MacInnis, 1997: 285]. Interestingly, high

levels of relationship commitment also resulted in lower levels of switching costs. This

suggests that consumers which have an emotional attachment to the organisation are more

likely to perceive a risk associated with switching to a competing provider. This risk could be

economic or psychological.

Regarding the relationship among satisfaction, trust and commitment in the metaconstruct of

relationship quality, trust emerges as the focal dimension in this construct as it has a direct

relationship with both satisfaction and commitment. This result is consistent with Morgan

and Hunt [1994] who highlight the importance of trust in relationship marketing, and in

particular its importance for creating satisfied and committed consumers. The importance of

relationship trust is also ascertained as it also appears to affect all three behavioural outcomes

directly and indirectly: positive behavioural intentions, consumer activism and perceived

switching costs.

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Further replications of this work are necessary to examine the stability of these results in other

service contexts. Additionally, other cultural settings would also help increase further the

generalisability of the results. The use of dyadic data should also be considered for

replicating this work. Data about employee behaviour (service orientation) could be collected

directly from front line staff and linked to data collected from service customers regarding

their attitudes and behavioural intentions. This study serves to highlight the importance of

service employees in the establishment of consumer relationships with organisations and the

flow-on effect that these relationships have on consumer behaviour.

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26

TABLE 1

DISCRIMINANT VALIDITY OF SCALES

Service Orientation Trust Satisfaction Commitment

Positive BehaviouralIntentions

Activism Switching Costs

Average variance extracted

Service Orientation 0.745 0.785 0.770 0.750 0.62 0.690

Trust φ=0.720 (φ2=0.518) 0.810 0.795 0.775 0.645 0.715

Satisfaction φ=0.427 (φ2=0.182)

φ=0.461 (φ2=0.213) 0.835 0.885 0.685 0.755

Commitment φ=0.481 (φ2=0.231)

φ=0.647 (φ2=0.419)

φ=0.223 (φ2=0.050) 0.800 0.620 0.740

Positive Behavioural Intentions

φ=0.616 (φ2=0.379)

φ=0.694 (φ2=0.485)

φ=0.518 (φ2=0.268)

φ=0.573 (φ2=0.328) 0.650 0.720

Activism φ=-0.243 (φ2=0.060)

φ=-0.286 (φ2=0.082)

φ=0.-168 (φ2=0.028)

φ=-0.261 (φ2=0.068)

φ=0.-255 (φ2=0.065) 0.590

Switching Costs φ=0.322 (φ2=0.104)

φ=0.400 (φ2=0.160)

φ=0.171 (φ2=0.029)

φ=0.513 (φ2=0.263)

φ=0.335 (φ2=0.112)

φ=0.300 (φ2=0.090)

Inter-factor correlations((φ) [Square of inter-factor correlations(φ2)]

27

TABLE 2

COMPOSITE RELIABILITY AND VARIANCE EXTRACTED OF SCALES

Composite Reliability

Variance Extracted

Service Orientation They view interactions with me as opportunities to please me.

0.93 0.72 They provide a prompt service. They have a reputation for good service. They are committed to serving customers. They view serving customer as a priority. Relationship Commitment I am loyal to (firm name).

0.95 0.82

I am committed to my relationship with (firm name). because I like being associated with them. I feel strongly attached to (firm name).. I would like to develop a long term relationship with (firm name).. I feel a sense of belonging to (firm name).. Relationship Trust (Firm name). is honest with its customers about any problems with its service.

0.94 0.77

Customers can trust (firm name).. (Firm name). is concerned about the welfare of its customers. (Firm name). tries to understand customers' problems when they arise. (Firm name). tries to understand how its actions will affect its customers. Relationship Satisfaction (semantic differential) Satisfied/dissatisfied

0.95 0.85 Please/displeased Happy/unhappy Resentful/not at all resentful (R) Activism Switch to a competitor if I experience problems with the services of (firm name).

0.76 0.52 Complain to external agencies, such as trading standards or the media, if I experience problems with (firm name). Complain to other customers if I experience problems with (firm name). Positive Behavioural Intentions Say positive things about (firm name). to other people.

0.91 0.78 Encourage friends and relatives to do business with (firm name). Keep purchasing from (firm name). for another year. Perceived Switching Costs I would have to invest a lot of time and effort to find another carrier of equal standard.

0.86 066 Moving to another carrier is not worth the effort. In general it would be inconvenient to change to another carrier.

28

FIGURE 1

CONCEPTUAL MODEL DISPLAYING HYPOTHESISED PATHS

ServiceOrientation

SwitchingCosts

Activism

PositiveBehaviouralIntentions

Satisfaction

Commitment

Trust0.428

0.218

0.174

0.714

0.665

0.331

0.451

-0.193

0.259

Note: numbers are standardised coefficientsDotted line signifies non significant path (P<0.05)