Academic journal article Journal of Business Economics and Management

Toward Understanding Conflicts between Customers and Employees' Perceptions and Expectations: Evidence of Iranian Bank

Academic journal article Journal of Business Economics and Management

Toward Understanding Conflicts between Customers and Employees' Perceptions and Expectations: Evidence of Iranian Bank

Article excerpt

1. Introduction

During the past few decades, service quality has become a major area of attention to practitioners, managers and researchers. This attention is due to its strong impacts on lower costs, customer satisfaction, customer loyalty, business profitability and finally on performance superiority.

There have been many researches on the definition, modelling, measurement, data collection procedure, data analysis, etc., issues of service quality. For example, some researchers believe that the importance of service quality for business performance has been recognized through the direct effect on customer satisfaction and the indirect effect on customer loyalty. Quality, in service industries, is an important strategic factor that strongly affects customers' satisfaction, loyalty, retention, and finally firms' performance superiority.

This paper aims to answer the following five important questions in five steps:

Q1: What factors are affecting bank service quality? (Factor determination step)

Q2: What are the relative importance weights of each factor from viewpoints of customers and employees? (Factors' weights determination step)

Q3: How do customers and employees score bank service quality? (Comparing bank service quality measurement step)

Q4: What about the significance of difference between customers and employees' viewpoints on the quality of bank services? (Horizontal or comparative gap analysis step)

Q5: What lessons do bank managers learn from understanding the gaps? (Improvement and development of action plan design step)

The rest of the paper is organized as follows. Section 2 reviews the literature. Section 3 explains research methodology. Results of an empirical investigation in one of leading and largest Iranian banks are provided in section 4. Finally, section 5 concludes the paper.

2. Literature review

It is wellknown that service quality, as a key strategic indicator in service industries, strongly affects a customers' satisfaction, loyalty, retention, firms' profit ability and performance superiority. (Horovitz 1990; Fitzsimmons, J.A. and Fitzsimmons, M. J. 1994). There have been many researches on the definition, modelling, measurement, data collection procedure, data analysis, etc., issues of service quality. In literature, common research objectives for services are as follows:

* To identify dissatisfied customers;

* To discover customers' requirements or expectations;

* To monitor and track service performance;

* To assess overall company performance compared to competitors;

* To assess gaps between customers' expectations and perceptions;

* To gauge effectiveness of changes in services;

* To appraise service performance of individuals and teams for rewards;

* To determine expectations of a new service;

* To monitor changing expectations in an industry;

* To forecast customers' future expectations.

Results of several researches in literature reveal that there is a significant positive relationship between the quality of services and customers' satisfaction and loyalty (Parasuraman et al. 1985, 1988; Oh 1999; McDougall and Levesque 2000; Sureshchandar et al. 2002; Wen-Bao 2007), there is a significant positive relationship between customers' satisfaction and customers' loyalty/retention. (Oliver 1993; Bloemer and Kasper 1995; Gremler and Brown 1996; Spreng and Mackoy 1996; Stank et al. 1999; Lasser et al. 2000; Caruana 2002; Sureshchandar et al. 2002; Papassapa and Miller 2007; Brady et al. 2002), and there is a significant positive relationship between customers' loyalty/retention and firms' profitability and performance superiority.

Fig. 1 explains the relationship between customers' satisfaction and loyalty. Fig. 2 shows the sequential relationships among service quality, customers' satisfaction, customers' loyalty and customers' retention with firms' profitability/performance superiority. …

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