Managing Service Quality: An International Journal

Cultural influences on service quality and customer satisfaction: evidence from Greek
insurance
Evangelos Tsoukatos Graham K. Rand

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To cite this document:
Evangelos Tsoukatos Graham K. Rand, (2007),"Cultural influences on service quality and customer
satisfaction: evidence from Greek insurance", Managing Service Quality: An International Journal, Vol. 17
Iss 4 pp. 467 - 485
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Cultural influences on service

quality and customer satisfaction:
evidence from Greek insurance
Evangelos Tsoukatos

Cultural
influences on
service quality
467

Department of Finance and Insurance, TEI of Crete, Fournia-Lakonia,

Crete, Greece, and

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Graham K. Rand
Department of Management Science,
Lancaster University Management School, Lancaster, UK
Abstract
Purpose The purpose of this research is to examine the effect of culture on service quality and
customer satisfaction.
Design/methodology/approach By extending GIQUAL, an instrument developed for measuring
service quality in Greek Insurance, to measure the culture of individuals, hypotheses on all 25 possible
relationships between the dimensions of culture and of service quality are determined and tested. The
relationships between the dimensions of service quality and customer satisfaction, in the light of
culture, are further examined.
Findings Of the 25 hypothesized relationships between the dimensions of culture and of service
quality, 23 are confirmed and the remaining two are directionally supported. The hypothesized
importance of the service quality dimensions is also confirmed. However, the expected association
between the importance of quality dimensions and the strength of their relationships with customer
satisfaction is only directionally supported. Although the typology of Hofstede is used in the study, a
culture different from the one specified for Greece by Hofstedes scores is exposed.
Research limitations/implications The main limitations of this study are first, that it is based
on a single service industry and secondly, that convenience sampling is used. However, its
methodology and conclusions provide a solid basis for future research.
Practical implications Insight on using culture for directing resources where quality investments
are needed most is provided to managers. Although weak, the directional support for the hypothesized
effect of the importance of quality dimensions on their relationships with customer satisfaction
enhances the value of the findings. Different sub-cultures that may be found in varying market
segments can be used for determining quality investment priorities.
Originality/value This study explores the effects of culture on service quality and customer
satisfaction drawing evidence from Greek Insurance.
Keywords Culture, Customer services quality, SERVQUAL, Customer satisfaction, Insurance, Greece
Paper type Research paper

Introduction
A number of recent studies on the effect of culture on service quality and customer
satisfaction (Mattila, 1999; Donthu and Yoo, 1998, Furrer et al. (2000); Liu et al., 2001)
have generated a stream of research on this particular area (e.g. Laroche et al., 2004;
Testa, 2004; Kanousi, 2005). However, gaps still exist in the literature. For instance, the
effect of culture on the importance of service quality dimensions to customers has not
been adequately researched. The issue is important for managers. If culture determines

Managing Service Quality

Vol. 17 No. 4, 2007
pp. 467-485
q Emerald Group Publishing Limited
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DOI 10.1108/09604520710760571

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468

the importance of service quality dimensions, then it is also a driver of customer

satisfaction through the relationships of the latter with the dimensions of service
quality. Hence, culture is critical in optimizing the allocation of quality resources for
increasing customer satisfaction.
This study is a contribution towards expanding the existing knowledge on this
research area. Drawing evidence from Greek retail insurance, the study assesses
cultures effect on the importance of service quality dimensions (Parasuraman et al.,
1988) to customers. Further it evaluates the effect of culture on customer satisfaction.
In this respect, it examines whether the importance of service quality dimensions is
consistent with the strength of their relationships with customer satisfaction.
Most of the management studies on the effects of culture identify culture with
nation or ethnicity (e.g. Laroche et al., 2004; Lorenzoni and Lewis, 2004). However,
Farley and Lehmann (1994) suggest that cultural factors are only loosely related to the
nation state. Further, they propose that the identification of culture with nation may
lead to systematic errors in within-nation studies. Following this line of thinking, this
study measures cultural dimensions at the level of individuals, while simultaneously
abiding by Hofstedes typology on culture (Hofstede, 1980, 1991). In doing so an
interesting divergence from the cultural profile of Greece given by Hofstedes scores
(www.geert-hofstede.com/) is uncovered.
This paper is organized as follows. First, we review the literature on service quality,
customer satisfaction and the effect of culture on these two constructs. Second, we put
forward hypotheses on the twenty five possible relationships between the dimensions
of culture and service quality. Third, we present the methodology of this study. Finally,
we discuss research results, managerial implications, research limitations, directions
for further research and conclusions.
Literature review
Service quality and service quality measurement
Parasuraman et al. (1985, 1988) showed that service quality could be measured as the
discrepancy between perceived and expected service through five dimensions:
Reliability ability to perform the promised service dependably and accurately,
Responsiveness willingness to help customers and provide prompt service,
Assurance ability to inspire trust and confidence, Empathy the caring,
individualized attention provided to customers and Tangibles the tangible elements
of service.
Several instruments have been introduced for measuring service quality, the most
prominent of which is SERVQUAL. The metric is designed to fit a variety of service
sectors. It provides a basic skeleton through its expectations and perceptions format,
encompassing statements for each of the five service-quality dimensions. The skeleton,
when necessary, can be adapted or supplemented to fit the characteristics of specific
research needs of a particular organization (Parasuraman et al., 1988). An
appropriately modified version of the SERVQUAL scale, given the name GIQUAL,
was developed for assessing service quality in Greek Insurance (Tsoukatos and Rand,
2006) and was used in this study.
The disconfirmation conceptualization of service quality implies that, for a given
level of service, quality perceptions across dimensions depend on service expectations.
The latter also reflect the importance of dimensions to customers (Donthu and Yoo,

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1998). Boulding et al. (1993) propose that expectations depend on what customers think
that will and/or should happen during a service encounter. Will expectations are
generated as a result of what customers consider as reasonable/feasible or have been
told to expect. Should expectations, reflect the level of service customers feel they
deserve. Boulding et al. (1993) suggest that what customers think should happen may
be influenced by their feelings on what will happen. Further, they propose that will
expectations positively influence service quality perceptions, while should
expectations have a negative effect on the same.
Customer satisfaction
It is common to find unclear distinctions between service quality and customer
satisfaction in the literature. The confusion results largely from the disconfirmation
conceptualization of both constructs in conjunction with similarities in their
consequences. The prevailing conclusion is that service quality and customer
satisfaction are closely related although conceptually distinct constructs (Shemwell
et al., 1998). The various models linking perceived service quality to customer
satisfaction consider perceived service quality and expectations as the main
antecedents of satisfaction (e.g. Swan and Trawick, 1981; Tse and Wilton, 1988;
Johnson and Fornell, 1991; Cronin and Taylor, 1992; Spreng and Olshavsky, 1993).
Culture and its effect on service quality and customer satisfaction
The modern description of culture, as socially patterned human thought and
behaviour, was originally proposed by Edward Tylor (1974). Culture is everything that
people have and think, as members of a society (Ferraro, 2002) and cultural values are
considered as basic motivators in life and prescriptions for peoples behaviour
(Rokeach, 1973).
Culture is defined as the collective programming of the mind which distinguishes
the members of one human group from another (Hofstede, 1980). As a driver of
peoples thoughts, wishes, perceptions and behaviour, culture influences service
quality perceptions through service expectations (Donthu and Yoo, 1998; Furrer et al.,
2000). Will expectations are influenced by the customers experience of the level of
service usually delivered in a society with specific cultural characteristics. On the other
hand, should expectations are influenced by the customers own cultural
characteristics. Further, service performance perceptions, filtered through the lens of
culture (Liu et al., 2001); have been found to directly affect perceived service quality
and satisfaction (Halstead et al., 1994).
Much of the research on culture is based on the work of Hofstede (1980, 1991). He
initially defined culture in terms of four dimensions; Power Distance,
Individualism/Collectivism, Masculinity/Femininity and Uncertainty Avoidance. A
fifth dimension, Long Term Orientation was later added as a result of a study in
East-Asian societies (Hofstede and Bond, 1988). Hofstede (1980, 1991) identified culture
with nation and provided scores across its five dimensions for a number of countries
and regions around the world.
Culture has recently been examined as a determinant of service quality and
customer satisfaction. Winsted (1997) studied service assessment by consumers in the
United States and Japan and identified significant differences. The dimensions
identified in the United States were civility, personalization, remembering,

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conversation, congeniality, delivery, and authenticity. Those identified in Japan were

civility, personalization, conversation, concern, and formality. Winsted (1997) showed
that service quality dimensions explain a significant portion of customers overall
satisfaction.
Donthu and Yoo (1998) examined the effect of culture on service expectations. They
tested a set of hypotheses relating specific dimensions of culture with overall service
expectations and expectations across dimensions of service quality. They showed that:
(1) Power Distance, Uncertainty Avoidance and Individualism are positively
related to overall service expectations.
(2) Power Distance is inversely related to Responsiveness and Reliability.
(3) Uncertainty Avoidance is positively related to Tangibles.
(4) Individualism is positively related to Empathy and Assurance.
Donthu and Yoo (1998) accepted the notion that culture is not necessarily identified to
nation (Farley and Lehmann, 1994) and applied the concept of culture to individuals.
Mattila (1999) focused on determining the tradeoffs that Western and Asian
customers are willing to make between personalized service and pleasant physical
environment in luxury hotels. She explained the cultural differences between Western
and Asian customers in terms of Individualism/Collectivism, Power Distance
(Hofstede, 1980, 1991), and High versus Low-Context Communication (Hall, 1984).
She related her findings to a reduced set of service dimensions and suggested that
Western customers rely on the tangible cues of physical environment and value the
dimensions of service that are related with pleasure, more than those of Asian
background.
Furrer et al. (2000) established that the importance of SERVQUAL dimensions
varies across people from different cultural backgrounds. They produced correlations
between all pairs of dimensions of culture (Hofstede, 1980, 1991) and of service quality
(Parasuraman et al., 1988), substantiating positive or negative relationships. Furrer
et al. (2000) also accepted the notion that culture is not necessarily identified with
nation and measured culture at the level of individuals. Adding to previous research
they distinguished powerful from weak customers, took into account gender
differentiation of service employees and made a distinction between frequent and
infrequent service situations.
Straughan and Albers-Miller (2001) examined culture as a driver of loyalty to
domestic retailers. Individualism was found negatively related with loyalty while
uncertainty avoidance was positively related to the same. Malai and Speece (2005)
examined how culture is integrated into the relationship between customer value and
customer loyalty on the basis of the individualism-collectivism dimension (Hofstede,
1980). Eng and Kim (2006) examined the impact of Confucian culture on e-customer
loyalty in South Korea. They proposed a conceptual model for empirical analysis by
drawing from Hofstedes (1980, 1991) cultural dimensions and previous studies on
e-customer loyalty in European contexts. They showed the influence of collectivism in
Confucian culture.
Overall, these studies provide proof that culture is related to service quality and
customer satisfaction. However, the investigation is far from being conclusive and
significant gaps still exist in the literature. For instance, the effect of culture on the

importance of service quality dimensions to customers has not been studied in

domestic markets. This study closes the gap by investigating these relationships in
Greek retail insurance.

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Hypotheses
To extend previous research, we put forward hypotheses for each pair of possible
relationships between the dimensions of culture (Hofstede, 1980, 1991) and the
importance to customers of SERVQUALs dimensions (Parasuraman et al., 1988).
Power Distance (PDI)
Power Distance is the extent to which the less powerful members of institutions and
organizations within a country expect and accept that power is distributed unequally
(Hofstede, 1991). It reflects the general human inequality in a society. People with a
high score in Power Distance accept centralization and formalization of authority and
tolerate the lack of autonomy, which fosters inequalities in power and wealth
(Hofstede, 1980). Furthermore, they tolerate power hierarchy, vertical top-down
communication and even discrimination by age, race, religion, gender etc. (Donthu and
Yoo, 1998).
Furrer et al. (2000) proposed that the exercise of power in service encounters depend
on whether customers are (or consider themselves) powerful or weak in relation to
service employees/agents. Matilla (1999) assumed that powerful customers in luxury
hotels exercise power over weaker service employees. Donthu and Yoo (1998), on the
contrary, suggested that, in most services, providers exercise power over their
customers arising from expertise, professional knowledge, skills, equipment etc. Furrer
et al. (2000) agreed with the assumption of Matilla (1999), given the service setting in
which she conducted her study. However, they suggested that the assumption of
Donthu and Yoo (1998) is more likely to be true in infrequent rather than in frequent
service situations.
Powerful customers with a high score in Power Distance consider that they deserve
extremely good treatment from weaker service employees/agents. Hence, they focus on
Reliability, Responsiveness and Empathy. However, such customers do not put
emphasis on Assurance. They dont need to be assured by weaker service
employees/agents (Matilla, 1999; Furrer et al., 2000).
On the other hand, weak customers with a high score in Power Distance view
themselves as being unimportant to service providers and do not expect an empathetic
and responsive service. Such customers feel dependent on more powerful service
providers and consider service providers work as beyond their grasp (Donthu and
Yoo, 1998). Hence, these customers do not expect to be assured and are prepared to
accept a relatively less reliable service from powerful service providers (Donthu and
Yoo, 1998; Furrer et al., 2000).
Based on these arguments the following hypothesis is set for weak customers in
infrequent service situations:
Ha. There are inverse relationships between Power Distance and the importance
of Reliability, Responsiveness, Assurance and Empathy.

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Individualism/collectivism
Individualism/Collectivism captures social behaviour towards the group. Loose ties
between people characterize individualistic cultures, whereas strong, cohesive ties
between group members characterize collectivistic cultures (Hall, 1984; Hofstede, 1980,
1991).
Individualistic customers are less tolerant of poor service than collectivists (Furrer
et al., 2000) and put emphasis on reliable and responsive service. Donthu and Yoo
(1998), despite identifying self-confidence as a key characteristic of individualists,
proposed a positive relationship between Individualism and Assurance. On the
contrary, Furrer et al. (2000) suggested an inverse relationship between the two
variables considering that self-confident individuals do not usually need Assurance.
Donthu and Yoo (1998) proposed that individualists more than collectivists expect
service employees to be empathetic. However, Furrer et al. (2000) suggested that this
relationship is difficult to prove, as it might depend on the items measuring Empathy.
Instead, they suggested a weak negative relationship between Individualism and
Empathy.
On the grounds of the arguments of Boulding et al. (1993), individualists in a
collectivist culture may think that they deserve a reliable, responsive, assuring and
empathetic service but they understand that service delivery in collectivist cultures is
bound to be tuned to satisfy a collectivist customer base. Therefore, the following
hypothesis may be set for collectivist cultures.
Hb.

The relationships between Individualism and the importance of Reliability,

Responsiveness, Assurance and Empathy are of no particular direction.

The masculinity/femininity
The Masculinity/Feminity continuum reflects the extent to which the roles of genders
are socially distinct. Individuals with a high score in Masculinity expect men to be
tough, assertive and focused on material success. At the same time, they expect women
to be modest, tender, caring for others and concerned for the quality of life (Hofstede,
1980, 1991).
Customers with a high score in Masculinity expect male service employees to be
more professional, and hence more reliable, responsive and assuring. On the other
hand, they expect females to be more empathetic (Furrer et al., 2000). On these grounds,
the following hypotheses are set regarding Masculinity in industries with mostly
female service employees:
Hc1. There are inverse relationships between Masculinity and the importance of
Reliability, Responsiveness and Assurance.
Hc2. There is a positive relationship between Masculinity and the importance of
Empathy.
Uncertainty avoidance
Uncertainty Avoidance is the extent to which social groups and individuals tolerate
uncertainty and accept risk. High Uncertainty Avoidance is associated with
intolerance for uncertainty and risk-taking (Hofstede, 1980, 1991).
In infrequent service situations, customers feelings of uncertainty are intensified
(Furrer et al., 2000). Because of this, customers with a high score in Uncertainty

Avoidance put emphasis on Reliability, Responsiveness and Assurance. Both Donthu

and Yoo (1998) and Furrer et al. (2000) hypothesized a positive relationship between
Uncertainty Avoidance and Empathy. However, the former did not confirm this
hypothesis. We consider that Empathy does not contribute towards decreasing or
increasing uncertainty. Hence, the relationship between Uncertainty Avoidance and
Empathy will be of no particular direction. Consequently, the following hypotheses can
be set regarding Uncertainty Avoidance.
Hd1. There are positive relationships between Uncertainty Avoidance and the
importance of Reliability, Responsiveness and Assurance.

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Hd2. The relationship between Uncertainty Avoidance and the importance of

Empathy is of no specific direction.
Long term orientation
Long Term Orientation is the extent to which individuals exhibit a long-term
future-oriented perspective (Hofstede, 1980, 1991). In service-encounters, Furrer et al.
(2000) hypothesized an inverse relationship between Long Term Orientation and the
importance of Assurance and positive relationships between Long Term Orientation
and the importance of Reliability, Responsiveness and Empathy. However, they were
not able to confirm the hypothesized relationships of Long Term Orientation with
Responsiveness and Empathy. Donthu and Yoo (1998) also proposed a positive
relationship between Long Term Orientation and Responsiveness.
Our position is that long-term oriented customers are prepared to find excuses when
they accept a relatively poor service in order to keep the relationship with their service
provider for which they care most. As long as the service is Reliable, they will not place
much importance on Responsiveness, Assurance and Empathy. On these grounds, we
set the following hypotheses:
He1. There is a positive relationship between Long Term Orientation and the
importance of Reliability.
He2. The relationships between Long Term Orientation and the importance of
Responsiveness, Assurance and Empathy are of no specific direction.
Relationships between the dimensions of culture and the importance of tangibles
Furrer et al. (2000) found significant positive relationships between Tangibles and
Power Distance, Individualism and Masculinity and significant inverse relationships
between Tangibles and Uncertainty Avoidance and Long Term Orientation. Donthu
and Yoo (1998) also associated Tangibles, as a means of reducing uncertainty, with
high Uncertainty Avoidance.
However, because of the distinct characteristics of the industry (Tsoukatos, 2003),
Tangibles is an almost negligible parameter in Greek retail insurance (Tsoukatos et al.,
2004; Tsoukatos and Rand, 2006). Therefore, we set the following hypothesis regarding
the relationships between the dimensions of culture and Tangibles:
Hf.

The relationships between the dimensions of culture and the importance of

Tangibles are of no specific direction.

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Methodology
Retail insurance in Greece
This study draws from Greek retail insurance. Retail insurance in Greece is primarily
conducted through agents or brokers, to a lesser extent through bank assurance, the
European term for expressing the synergy between banking and insurance, and rarely
through other means such as the internet, phone, mail etc. (Tsoukatos, 2003). Before
and during a sale, the service encounter mainly takes place between customers and
agents (or sales employees in banks). After sale service is usually provided by
specialized service employees.
The Casualty and Liability Sector focuses on auto-vehicle and home-owners
insurance (67 per cent and 11 per cent of annual premiums respectively) (www.eaee.gr/
). The Life Sector focuses on individuals, in the 35-45 age range with average to higher
income, who are seeking to improve their social insurance benefits.
A characteristic of insurance, in general, is the power that service providers usually
exercise over their customers. Insurance is an infrequent service situation (not more
than a couple of service contacts per year). In such situations, providers are equipped
with expertise and skills on the service that are not usually shared by their customers.
Consequently, providers exercise power over their customers (Donthu and Yoo, 1998;
Furrer et al., 2000), especially if customers are not in very high income brackets or
social positions. Considering the customer base on which the industry is focused,
customers in Greek retail insurance are assumed to be weak in relation to their service
providers. This is relevant to our analysis, especially in relation to the dimension
Power Distance (hypothesis Ha).
A distinct characteristic of Greek insurance is that service is delivered mainly by
females (almost 90 per cent of insurance service employees are females). This is also
relevant to our analysis in relation to Masculinity/Femininity, as the gender of service
employees determines the service expectations of customers with high masculinity
scores.
Research instrument and data collection
A 20-item questionnaire developed by Furrer et al. (2000) was used for measuring the
cultural characteristics of individuals. This was added to the four-section research
instrument that was especially developed for the Greek insurance industry and was
built around GIQUAL (Tsoukatos and Rand, 2006).
After proper piloting, the extended questionnaire was used for data collection in
Heraklion, a major city in Greece. The mall intercept technique (Rice and Hancock,
2005) was employed in this respect. Trained interviewers approached people in the
market place asking for a personal interview within the following few days in the
respondents work places or homes. Individuals were accepted in the sample under the
conditions that:
.
they held at least one insurance policy;
.
they were over 25 years of age; and
.
they had some insurance service experience within the last three months.
A usable sample of n 252 resulted from this exercise. The method of personal
interview was chosen because it is considered superior to self-administered
questionnaires in perceptual or attitudinal surveys (Groves, 1989).

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Measurement
Cultural dimensions
The questionnaire used for assessing the cultural characteristics of respondents (see
Appendix) is divided into five four-item parts, each designed to measure scores on the
dimensions Power Distance, Individualism, Masculinity, Uncertainty Avoidance and
Long Term Orientation (Hofstede, 1980, 1991). Two pairs of items, all measured using
identical seven-point Likert scales, reflect the positive and negative poles of each
dimension. An individuals overall score for each dimension of culture is given by the
average of the scores of the items that operationalize the specific dimension; the items
reflecting the negative pole taken with a minus sign. Overall scores with plus or minus
signs indicate propensity towards the positive or negative poles respectively.
Service quality perceptions
Service quality is assessed by the GIQUAL scale built on the generic SERVQUAL metric,
appropriately extended to capture specific attributes of Greek insurance. In this respect,
the following items were initially added to the SERVQUAL list of attributes: insurance
products price in Tangibles and offer quality products and services, contracts with
clear terms and settling claims with no unnecessary delays in Reliability. After the
pilot study, the metric was subjected to a purification process, based on the increase of
alpha if item deleted criterion (Pallant, 2001), that resulted in the removal of Insurance
products price as not fitting to any dimension. Hence the metric remained with
twenty-five items; four in Tangibles, eight in Reliability, four in Responsiveness, four in
Assurance and five in Empathy. Prior to its use, the metric was extensively tested and
found reliable, valid and stable (Tsoukatos et al., 2004; Tsoukatos and Rand, 2006).
For each of the 25 GIQUAL items, service quality perceptions are measured by the
difference between performance perceptions and expectations. Service quality
perceptions of dimensions are measured by the average of the scores of the items
that operationalize each dimension.
Importance of service quality dimensions to customers
The expectations scores, measured with 7-point Likert scales, are used as indicators of
the importance of the 25 GIQUAL items to customers. The importance of dimensions is
denoted by the average of the scores of the items that operationalize dimensions.
Customer satisfaction
Customer satisfaction is treated as a one-dimensional construct (Meyer and
Westerbarkey, 1996) and is measured by a 10-point Likert scale.
Analysis
The analysis follows a sequence of logical steps. First, the cultural profiles of
respondents are specified. The distributions statistics are used to outline the overall
cultural characteristics of the group of respondents. Second, Pearsons correlation
coefficients are used to test the hypotheses on the relationships between the
dimensions of culture and the importance of service quality dimensions. The results
enable the ranking of service dimensions in terms of their importance to customers.
Finally, the effect of the dimensions importance on the strength of their relations with
customer satisfaction is assessed.

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Respondents cultural profile

Hofstedes (1980, 1991) measurements indicate that Greece is a society with a high
Power Distance score, very low Individualism score and a high Masculinity score. In
addition, its on top of the list regarding Uncertainty Avoidance (www.geert-hofstede.
com/). However, the distribution statistics of the respondents scores (Table I) portray a
cultural group with very high Uncertainty Avoidance, low Individualism, very low
Power Distance, very low Masculinity and positive Long Term Orientation. It is clear
that there is divergence regarding Power Distance, Masculinity and to a lesser extent
Individualism (no judgment can be made for Long Term Orientation since no such
score is available for Greece). For the purposes of this analysis the scores of culture
utilized are the ones measured by the authors.
Relationships between the dimensions of culture and the importance of service
dimensions
Pearsons correlation is used for assessing the relationships between the dimensions of
culture and of service. Correlation coefficients are computed between overall scores of
dimensions of culture and importance scores of dimensions of service (Table II). A total
of 23 out of the 25 hypothesized relationships are confirmed while the remaining two
are directionally supported.
Power distance. Weak customers with a high Power Distance score consider
themselves as unimportant to service providers. Such customers are prepared to
tolerate relative poor service. These hypotheses are supported by negative correlations
between Power Distance and Reliability (2 0.214, p , 0.01), Responsiveness (2 0.207,
p , 0.01) and Assurance (2 0.124, p , 0.05). However, the hypothesis of an inverse
relationship between Power Distance and Empathy is only directionally supported by
a non-significant negative correlation (2 0.05).

Table I.
Average scores of
cultural dimensions

Mean
SD
Skewness

Tangibles
Reliability
Responsiveness
Assurance
Empathy
Table II.
Table of correlations

Power
distance

Individualism

Masculinity

Uncertainty
avoidance

Long term
orientation

20.86
0.96
20.13

2 0.27
0.90
2 0.02

2 0.88
0.87
2 0.44

0.70
0.76
0.18

0.07
0.71
20.10

Power
distance

Individualism

Masculinity

Uncertainty
avoidance

Long term
orientation

0.062
2 0.214 * *
2 0.207 * *
2 0.124 *
2 0.050

0.023
20.002
20.018
20.063
0.097

0.013
2 0.200 * *
2 0.228 * *
2 0.161 * *
2 0.074

20.029
0.357 * *
0.319 * *
0.290 * *
0.039

20.045
0.131 *
0.064
0.016
0.010

Notes: * Correlation is significant at the 0.05 level (1-tailed; * * correlation is significant at the 0.01
level (1-tailed)

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Individualism. In a collectivist culture, service delivery is tuned to satisfy the needs of a

collectivist customer base. Customers are aware that a reliable, responsive, assuring and
empathetic service may not be delivered. In such cultures, the relationships between
Individualism and the dimensions of service quality are expected to have no specific
direction. This hypothesis is supported by non-significant correlations between
Individualism and Reliability, Responsiveness, Assurance and Empathy.
Masculinity. Inverse relationships between Masculinity and Reliability, Responsiveness
and Assurance, and a positive relationship between Masculinity and Empathy in
industries with mostly female service employees are anticipated. These hypotheses are
supported by significant negative correlations between Masculinity and Reliability
(20.200, p , 0.001), Responsiveness (20.228, p 0:000) and Assurance (20.161,
p , 0.005). The hypothesis on the relationship between Masculinity and Empathy is not
even directionally supported as the corresponding correlation is negative (20.074).
Uncertainty avoidance. In infrequent service situations, customers with a high
Uncertainty Avoidance put emphasis on Reliability, Responsiveness and Assurance.
Because Empathy does not contribute towards decreasing or increasing uncertainty
the relationship between Uncertainty Avoidance and Empathy is expected to have no
specific direction. These hypotheses are supported by significant positive correlations
between Uncertainty Avoidance and Reliability (0.357, p 0:000), Responsiveness
(0.319, p 0:000) and Assurance (0.290, p 0:000) and a non significant correlation
between Uncertainty Avoidance and Empathy (0.039).
Long term orientation. Long-term oriented customers are concerned with preserving
relationships with their service providers and find excuses when accepting relatively
poor service. As long as the service is reliable such customers are indifferent towards
Responsiveness, Assurance and Empathy. These hypotheses are supported by a
significant positive correlation between Long Term Orientation and Reliability (0.131,
p , 0.005) and non significant correlations between Long Term Orientation and
Responsiveness (0.064), Assurance (0.016) and Empathy (0.010).
Tangibles. The hypothesis that this particular dimension is of no importance to
customers is supported by insignificant correlations between the dimensions of culture
and Tangibles.
Importance of service quality dimensions
To assess the importance of service quality dimensions the following factors are taken
into account:
.
the cultural characteristics of respondents, indicated in Table I;
.
the relationships between the dimensions of culture and the importance of
service quality dimensions, inferred from the correlations in Table II; and
.
the characteristics of Greek retail insurance, infrequent service situation, weak
customers, mostly female service employees and Tangibles of negligible
importance.
On the basis of the above the following arguments can be put forward.
Reliability.
.

Reliability is important to weak customers with low scores in Power Distance

because they do not tolerate poor service;

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478

customers with low Masculinity scores do not associate female employees with
poor service and, hence, Reliability is important to them;
in infrequent services, a high score in Uncertainty Avoidance is associated with
putting emphasis on Reliability;
Reliability is important for Long Term Oriented customers.

The combination of these arguments with the scores in Table I indicates that the
importance of Reliability is associated with four dimensions of culture, Power Distance,
Masculinity, Uncertainty Avoidance and Long Term Orientation.
Responsiveness and assurance. Using a similar argument, the importance of
Responsiveness and Assurance is associated with three dimensions of culture, Power
Distance, Masculinity and Uncertainty Avoidance.
Empathy. No significant relationships have been found between the dimensions of
culture and Empathy.
Tangibles. The relationships between the dimension of culture and the importance
of Tangibles are also non-significant. In addition, Tangibles is negligible in Greek
insurance because of its specific characteristics (Tsoukatos et al., 2004).
On the basis of these observations the following hypothesis is set:
Hg. Reliability is the most important dimension of service quality, followed by
Responsiveness and Assurance sharing the second and third positions.
Empathy is in the fourth position and Tangibles is in the last.
To assess this hypothesis, the average expectations scores of the dimensions
Reliability, Responsiveness, Assurance, Empathy and Tangibles, being 6.69, 6.59, 6.57,
6.23 and 5.65 respectively, are examined. The hypothesis is supported by a series of
paired samples t-tests indicating that:
.
the Reliability score is statistically higher than the scores of all other dimensions
(p 0:000).
.
Responsiveness and Assurance share the second and third positions with
statistically equal scores (p 0:367)
.
Empathy is in the fourth position with a lower score than Responsiveness
(p 0:000) and Assurance (p 0:000);
.
Tangibles follows in the fifth position with a significantly lower score than
Empathy (p 0:000).
Relationships between the dimensions of service quality and customer satisfaction
The idea that perceived service quality and customer satisfaction are closely related is
implicit in the literature (Shemwell et al., 1998). Logically, this can be extended to the
relationships between individual service quality dimensions and customer satisfaction.
We set the hypothesis that:
Hb.

The strength of the relationships between the dimensions of service quality

and customer satisfaction is consistent with the importance of these
dimensions to customers.

The hypothesis is tested in a two-step process. First, the correlation coefficients

between quality perception scores across the dimensions of service and customer

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satisfaction are determined. As expected, the correlation between customer satisfaction

and Reliability is the highest (0.67). It is followed by the correlations with
Responsiveness (0.64), Assurance (0.62), Empathy (0.56) and Tangibles (0.25). All are
significant at the 0.01 level.
Second, the significance of the differences between correlations is examined. A test,
described by Blalock (1972) is employed in this respect. It examines the differences
between correlations on a special t-statistic (df n 2 3) calculated by the formula
t r xy 2 rzy)SQRT[{(n 2 3)(1 rxz)}/{2(1 2 r 2xy 2 r 2xz 2 r 2zy 2rxyrxzrzy)}] (x, y are
variables from the same sample for which the difference of their correlations with
variable z is examined, and n is the sample size).
The t-statistics (df 249) (Table III), reveal that the correlation between Tangibles
and customer satisfaction is weaker than the correlations between the latter and all
other dimensions. However, the differences between the correlations of Reliability,
Responsiveness, Assurance and Empathy are not significant.
Hence, hypothesis Hb is only partially supported as the correlation coefficients
between Reliability, Responsiveness, Assurance and Empathy and customer
satisfaction offer only directional support.

Cultural
influences on
service quality
479

Research results
The purpose of this study is twofold. First, the study aims to determine whether
culture is related to service quality and whether the importance of service quality
dimensions is connected to the dimensions of culture. Second, to examine whether the
importance of service quality dimensions determines the strength of their relationships
with customer satisfaction and, hence, whether culture is a determinant of the latter.
These research questions are tested on a sample of customers from Greek retail
insurance. The analysis fully supports the first hypothesis and provides partial
support for the second. It affirms that culture and service quality are related.
Twenty-three out of the twenty-five hypothesized relationships between the
dimensions of culture and of service quality are confirmed while the remaining two
are directionally supported. It is determined that the ranking of the service quality
dimensions can be predicted on the basis of cultural profiles. More specifically, the
importance of the five service quality dimensions is found exactly as hypothesized on
the basis of respondents cultural profile; Reliability, followed by Responsiveness and
Assurance, equally ranked, then Empathy and finally Tangibles. We suggest that
markets can be segmented for quality resource allocation on the basis of culture.
The hypothesis on the effect of culture on customer satisfaction is not fully
supported. As hypothesized, the strengths of the relationships of service quality

Reliability
Responsiveness
Assurance
Empathy

Tangibles

Reliability

Responsiveness

26.19 *
25.84 *
25.37 *
24.30 *

0.31
0.56
1.44

0.25
1.12

Note: * Significant at the 0.001 level

Assurance

0.83

Table III.
T-statistics for the
difference of correlations
with customer
satisfaction

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480

dimensions with customer satisfaction and the importance of dimensions are

identically ranked. Further, the examination of the differences between correlations
determined that the relationship between Tangibles and customer satisfaction is, as
expected, the weakest ( p , 0.001). However, the relationships of Reliability,
Responsiveness, Assurance and Empathy with customer satisfaction are statistically
equal ( p . 0.05). We consider this result as one that needs further examination as it
may have been caused by the methodological limitations of this study.
In measuring culture at the level of individuals we uncover an interesting
divergence from the national cultural profile of Greece on the basis of Hofstedes scores
(www.geert-hofstede.com/). There are two possible reasons for this deviation. First,
Hofstedes scores across cultural dimensions for Greece may be wrong or out-of-date.
After all, these scores had initially resulted from a study, conducted almost half a
century ago, based on a sample not representative of the Greek society. Furthermore,
much has changed in Greece since that time. Second, our sample represents a
sub-culture based not on ethnic but on social and demographic characteristics (Donthu
and Yoo, 1998) reflecting todays bourgeoisie in a major Greek city. Our position is that
either one or both these claims may be applicable. Nevertheless, not enough evidence
exists on their validity.
The results of this study are important because they provide insight as to how
culture affects the relative importance of service quality which, in turn, may affect
customer satisfaction. In the following section we provide directions for service
managers and researchers seeking to understand the effect of culture on service quality
and customer satisfaction.
Managerial implications
The findings of this study contribute towards more efficient management of a service
environment and more specifically of an insurance service environment. First, the
relationships between the dimensions of culture and of service quality suggest that
service expectations are affected by cultural profiles and culture determines the
importance of service quality dimensions to customers. These suggestions are
consistent with previous findings (e.g. Furrer et al., 2000). For a given performance, the
service quality perceptions depend on customers expectations. Hence, managers
should turn to culture as an aid to their decision making process, especially in relation
to allocating quality efforts and resources. For example, to better serve a market
segment with similar cultural characteristics to our sample, managers should direct
quality efforts and resources primarily to Reliability and secondly to Responsiveness
and Assurance. Dissimilar market segments will require different allocation of
resources (Furrer et al., 2000). Service managers should become aware of the cultural
segmentation of their markets.
Second, the identical rankings of the relationships between customer satisfaction
and service quality dimensions and the importance of the service quality dimensions,
suggest that culture also affects customer satisfaction. The study provides evidence
that channelling quality efforts and resources to the most important dimensions will
have the greatest impact on customers satisfaction. For example, in a similar setting to
this study it would be more beneficial, in terms of customer satisfaction enhancement,
if resources were directed towards closing the quality gap of Reliability rather than of

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any other dimension. We suggest that this is an additional reason for culture to be
included in the portfolio of managers decision aids.
Finally, culture is not static. Changes in culture affect the importance of service
quality dimensions and may reduce the effectiveness of quality resource allocation
schemes if not detected in time. For example, the replacement of the me generation by
the now generation in the United States in the 90 s resulted in a cultural change that
increased the importance of Responsiveness at the expense of Empathy (Heskett et al.,
1990). Service managers should be aware that the dynamic nature of culture may
demand frequent monitoring and act accordingly in their markets.
Limitations and directions for further research
Although due care was taken regarding methodological considerations, the study
suffers from a number of limitations. First, due to the nature of the survey (drawing
only from a single service industry) only one combination of situational variables was
studied, i.e. infrequent service situation, weak customers and female service
employees. Second, the study used the typologies of Hofstede (1980, 1991) regarding
the dimensions of culture, and Parasuraman et al. (1985, 1988) regarding the
dimensions of service quality. Both assumptions are testable and should be the subject
of further research. However, the methodology of this study will be valid even if new or
alternative dimensions exist. Further, convenience sampling, although common in
management studies (e.g. Brady et al., 2002; Chang et al., 2002; Wang et al., 2004;
Semeijn et al., 2005) was used, so issues such as location and representativeness of the
sample may have affected the findings. Nevertheless, given time and cost constraints
the sampling procedure is considered adequate.
Despite its limitations, this study does provide the methodological framework for
further research. Future studies should encompass samples from a number of service
industries and therefore, examine all possible combinations of situational variables.
Cross-national repetitions of the study would give the opportunity to enhance
managers understanding on the effect of culture on service quality and customer
satisfaction in international markets. Finally, the evolutions of culture and service
expectations need to be monitored. The ever increasing use of technological means
seems to result in rapid cultural changes and rising service expectations as a
consequence of escalating levels of service delivery (Heskett et al., 1990). Such changes
need longitudinal research.
Conclusions
The results of this study contribute to both academia and practice. With regard to
academia our study builds on previous research on the relationships of culture with
both service quality and customer satisfaction. This is especially the case in the
relatively under-researched area of the impact of culture on the importance of service
quality dimensions. Additionally, it is the first study that does so in a within-nation
context.
With regard to practice, the study provides an insight for managers on the use of
culture for prioritizing the allocation of quality improvement efforts and resources to
enhance customer satisfaction.
Although the combination of situational variables in the Greek retail insurance
industry (infrequent services, weak customers, primarily female employees) is different

Cultural
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service quality
481

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from other industries, the methodological framework of the study is applicable to every
culture/service setting arrangement. Hence, a variety of industries may benefit by
replicating this study.
Finally, the issue of culture is vital to all service industries in todays global
marketplace. More detailed measurements of culture would contribute towards
removing any potential errors on the effect of culture.

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482
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Appendix. Hofstedes cultural dimensions
Power distance
1. Social inequalities are expected and welcome.
2. Less powerful individuals (in terms of wealth, influence, position etc), should be protected
by the more powerful ones.
3. Social inequalities should be minimised or even cease to exist ( 2 ).
4. There should be, and there is, interdependence between the less and more powerful
individuals (in terms of wealth, influence, position etc) ( 2 ).
Individualism/collectivism
5. Individuals must be responsible only for themselves and their immediate families.
6. Individuals are identified irrespectively of the social group (or groups), that they belong.
7. Wider family is important and its members must protect each other and be loyal to it ( 2 ).
8. Individuals are identified on the basis of the social group (or groups), they belong to and
their position within the group (or groups) ( 2 ).
Masculinity/femininity
9. Money and tangible goods are important in life.
10. Men must be assertive, ambitious and tough.
11. The dominant social values should be caring for others and preserving the quality of life ( 2 ).
12. Men and women are equally entitled to be tender and care for others ( 2 ).

Uncertainty avoidance
13. Stress and a feeling of anxiety and nervousness are common between individuals.
14. Being afraid of unclear situations and of taking unknown risks is normal.

15. Uncertainty is normal and one must accept each day as it comes ( 2 ).
16. Personal feelings should not be exposed ( 2 ).

Cultural
influences on
service quality

Long term orientation

17. The eagerness to subordinate oneself to a superior cause is normal.
18. One must be patient to have long-range results.
19. Social traditions must always be kept and respected ( 2 ).
20. Social obligations must be fulfilled regardless of personal cost ( 2 ).
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Note: ( 2 ), indicates reverse-coded items

About the authors

Evangelos Tsoukatos has a BSc in Mathematics from Aristotelion University of Thessalonica,
1976, Postgraduate Diploma and MA in OR from Lancaster University Management School,
1977 and 1978 respectively. He is a Senior Lecturer in Insurance at the Department of Finance
and Insurance, Technological Educational Institute of Crete. His research interests include
Service Quality, Management of Customer Behaviour and Financial Services Marketing. He is
currently a Doctoral Candidate at Department of Management Science, Lancaster University
Management School, UK. He is the corresponding author and can be contacted at:
tsoukat@sdo.teiher.gr
Graham K. Rand is a senior lecturer in Operational Research at Lancaster University, UK. He
has been Council Member and Conference Chairman of the British Operational Research Society,
and editor of the Journal of the Operational Research Society for six years from 1991-1996. For the
International Federation of Operational Research Societies (IFORS), he was Vice-President
(1998-2000), and has been editor of both International Abstracts in Operations Research (from
1980-1991), and International Transactions in Operational Research (2000-2005). He was editor of
the proceedings of the IFORS Conference held in Buenos Aires in 1987, and Chairman of the
Program Committee for the IFORS Conference held in Athens in 1990. For the European
Association of Operational Research Societies he was chairman of the Gold Medal jury in 1995.
For INFORMS, he is currently a member of the jury for the prestigious Edelman Prize. He was a
founder member of both the International Society for Inventory Research (1983), and the
Operations Management Association (1985). He is European Director of Omega Rho.

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