A cross‐cultural comparison of individualism's moderating effect on bonding and commitment in banking relationships

Abstract

PurposeThe purpose of this paper is to describe a cross‐cultural study which examined individualism's moderating effect on the relationship between bonding and commitment between banks and their corporate clients.Design/methodology/approachData were collected through surveys completed by corporate customers from 126 Canadian companies and 156 Indian companies. Multiple regression analysis was used to calculate relative effects of structural and social bond on commitment across the two samples. Hierarchical moderated regression analysis was used to examine individualism's moderating effect on the bonding‐commitment relationship.FindingsThe paper's findings indicate that social and structural bonding are both antecedent to commitment, but that social bonding is given higher importance in the low individualism Indian society, while structural bonding is more important in the high individualism Canadian society. Individualism moderates the relationship between both social and structural bonding and commitment.Practical implicationsBank relationships are dependent upon specific cultural contexts in which buyers and sellers interact. The type of bonding relationship (e.g. social or structural) determines the strength of commitment. Bank managers must understand the proper emphasis to place on developing social connections versus business transactional relationships with clients in individualistic versus collective cultures.Originality/valueThis paper dramatizes the importance of understanding ways in which bonding relates to commitment, particularly when societal values vary and thus alter the relative importance of forms of bonding that generate commitment. Through empirical analyses, the paper demonstrates the moderating effect of individualism on the social bonding‐commitment and structural bonding‐commitment linkages in the context of an important service sector. To date, these relationships have not been explored in either the Indian or Canadian context.

The influence of acculturation on consumer relational bonding in banking relationships

“…Their findings show that clients perceive their relationship with the bank as weaker and less client oriented if the account managers who previously served them transfer to other branches or resign. Evidence shows that both structural and social bonds positively influence relationship commitment (Dash et al, 2009;Paulin et al, 2000;Williams et al, 1998). In a cross-cultural bank study, Dash et al (2009) find that buyers in more relationship-oriented cultures are more likely to prefer doing business with a bank with which they can establish a personal and social relationship.…”

“…Evidence shows that both structural and social bonds positively influence relationship commitment (Dash et al, 2009;Paulin et al, 2000;Williams et al, 1998). In a cross-cultural bank study, Dash et al (2009) find that buyers in more relationship-oriented cultures are more likely to prefer doing business with a bank with which they can establish a personal and social relationship. Their findings demonstrate that the influence of social bonding on commitment is comparatively higher for Indian customers (a culture of lower individualism) whereas structural bonding is more important for Canadian customers (a culture of higher individualism).…”

“…Building on previous research on bonding and relationship commitment (Dash et al, 2009;Paulin et al, 2000;Williams et al, 1998), this study proposes that structural bonding and social bonding are relationship factors of SCC and IPC, respectively. Structural bonding is an economic-based task bond, which ties a buyer and a seller in a business relationship because of mutual benefits of economic, strategic, technological, or organizational objective (Rodríguez & Wilson, 2002).…”

“…Sheth and Parvatiyar (1995) suggest that any relationship that attempts to develop customer value through partnering activities is likely to create a greater bonding between consumers and marketers; the greater the bond, the more committed the consumer becomes in the relationship. In the marketing literature, bonding is classified under two broad categories: structural and social (Arantola, 2002;Dash et al, 2009;Rodríguez & Wilson, 2002;Wilson, 1995;Wilson & Mummalaneni, 1986). Turnbull and Wilson (1989) describe structural bonding as two parties making investments that cannot be retrieved when the relationship ends.…”

Chinese relationship management: a qualitative study of banking in New Zealand

“…Previous studies have examined the connections between relationship factors and loyalty responses (Chiu et al 2005;Dash, Bruning, and Guin 2009;Jones, Taylor, and Bansal 2008), but deeper insights are needed into the interplay between these factors in different cultural contexts. The cultural differences between the East and the West (Hofstede 2007), lead to an expectation that Confucian and Western influences on relationship development may vary.…”