The effect of power distance and individualism on service quality expectations in banking

Abstract

Abstract Purpose – The purpose of this paper is to investigate the relationship between Canadian and Indian consumers' national cultural orientations and banking service quality expectations. Using two of Hofstede's five cultural dimensions operationalized at the individual level, and five dimensions of service quality from Parasuraman et al.'s SERVQUAL scale, the aim is to develop and test hypotheses relating national culture values to service quality expectations. Design/methodology/approach – The study is quantitative in nature, using surveys (online and written) from respondents in Canada and India. Data were analyzed using dummy variable regression and structural equation modeling. Findings – The results show that the importance of various SERVQUAL dimensions is related to Hofstede's power distance and individualism cultural dimensions both at the individual and national levels. More specifically, consumers low on power distance expect highly responsive and reliable service. High power distance customers attach higher importance to tangible service attributes. Consumers high on individualism expect lower empathy and assurance from service providers. Furthermore, Indian consumers attach higher importance to tangible attributes, whereas Canadian consumers find service reliability more important. However, differences in overall service quality expectations are not significantly different across the two countries. Practical implications – The results suggest that managers must be aware of the cultural values of the buyer/client in order to fully understand the most effective means of establishing and nurturing the service delivery process and, consequently, establishing service quality expectations. Banks will be more successful when service delivery is in tune with cultural imperatives, particularly sub‐group cultural imperatives. Originality/value – The study provides an original insight into the manner in which national culture impacts on service quality expectations. Furthermore, the study identifies individual sub‐cultural influences that shape service quality expectations.

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