Should relationship quality be measured as a disaggregated or a composite construct?

Abstract

Purpose – The purpose of this paper is to report the results of an empirical study that tested two competing models of relationship quality for superiority and further examined the effect of relationship quality antecedents as well as relationship quality constructs on customer loyalty. Design/methodology/approach – Quantitative cross-sectional data generated from 332 informants who are experienced users of banking services formed the final database. The construct validity and reliability of the data set was confirmed. The two competing models were tested with partial least squares structural equation modelling technique. Findings – Although the two competing models support all the hypothesised relationships as expected, the disaggregated model of relationship quality was found to be a better predictor of customer loyalty than the composite model of the construct. The two models also show that relationship quality does transmit the effect of customer orientation, expertise and information sharing to customer loyalty. But each of these determinants contributed differentially to relationship quality in both models just as trust and satisfaction contributed differentially to customer loyalty in the disaggregated model. Research limitations/implications – This paper questions the predictive ability of all previous models that tested relationship quality as a composite construct. The concern is that outputs from those studies may not have reflected the accurate explanation of the construct on companies’ bottom line. Future research integrating the construct into behavioural models should, therefore, examine the construct from a disaggregated viewpoint. Practical implications – Retail managers especially those within the banking sector are better placed to enhance customer loyalty when relationship quality implementation is initiated from the lens of both trust and satisfaction as separate and interdependent constructs, rather than a composite measure. Such approach widens the latitude to identify areas where attention to improvement is needed most. Originality/value – The uniqueness of this paper is the measurement of relationship quality both as a disaggregated and composite construct in one study. As far as could be established, in exception of Rafiq et al. (2013) whose model was rather too simplistic, no study of this sort is found within the relationship marketing literature in general and the financial services sector in particular. Based on the two competing models tested, the disaggregated model of relationship quality ahead of the composite/global measure emerged as a superior approach to testing the construct.

The Effect of Task Conflict on Relationship Quality: The Mediating Role of Relational Behavior

“…The greater the information exchange between the buyer and the seller is, the more able they are to anticipate and respond to each other's needs. Frequent and effective communication helps partners track project progress and reduce self‐interest (Lee & Kim, ), which enhances project implementation and understanding of each other's intent (Izogo, ; Velez, Sanchez, Florez, & Alvarez‐Dardet, ). However, where one party would like to share information but fears that the information will be maliciously used by the counterparty and, as a result, does not share this information.…”

Banks Business Models, Risk Management Systems And Small And Medium Enterprises Financing Proclivity In Zimbabwe

“…Profitability and competitive advantages are gained through ensuring quality relationships exist between banks and their customers, given the level of competition in the banking industry and a dwindling customer base (Ndubisi, 2007;Izogo, Reza, Ogba and Oraedu, 2017). Concisely, sustaining good customer relationships and continuous patronage is regarded as critical for organisational success (Izogo, 2016;Ndubisi Khoo---Lattimore, Yang and Capel, 2011). In this respect, banks find themselves having to trade off tight risk management systems for customer loyalty and retention because such relationships impact banks performance (Hasana, Jackowicz, Kowalewski and Kozłowski, 2017).…”

Towards an Integrative Framework of Relationship Quality in a Retail Setting: Evidence from an Emerging Economy

“…Kim & Cha, 2002;Kim et al, 2006;Cheng et al, 2008;Castellanos-Verdugo et al, 2009;Rajaobelina & Bergeron, 2009). Contrary to previous research, this study addresses the construct at the level of its dimensions, following Balaji's (2015) and Izogo's (2016) assertions that customers are capable of making distinctions between different relationship quality dimensions and that a disaggregate model of relationship quality provides a better explanation of the formation of customer loyalty intentions.…”