Culture and Tradition in Measuring Quality of Service and Customer Satisfaction - Book Report/Review Example

Ahmad, Ahmad, Kashif-ur-Rehman and Saif, Muhammad Iqbal. “Islamic Banking Experience of Pakistan: Comparison Between Islamic and Conventional Banks.”International Journal of Business and Management 5 (2) (2010), pp. 137-143. Print. This paper is a comparative study of service quality and customer satisfaction in Islamic and conventional Pakistani banks. The authors explain that the background to banking in this country has been rather turbulent in recent years due to “unstable policies and uncertainty.” What is clear is that Islamic banking has begun to emerge as a key feature of the banking sector in Pakistan since the creation of the first Islamic bank in 2002. The experience of Islamic banking in surrounding countries has been mixed and so this article seeks to investigate the performance of Islamic banks in Pakistan, with an emphasis on customer service. Since the population of Pakistan is more than 96% Muslim, there is ample opportunity for Islamic banking to take business from conventional banks, which are either state owned with a reputation for inadequate products and poor service, or privately owned since new legislation which was completed in 1992. The approach used to gather data in this article is a structured questionnaire in English modelled on the SERVQUAL design. 720 customers in total were selected and a 7 point Likert scale was used to analyze the responses. The results showed higher customer satisfaction in the Islamic banks and some gender differences. A strong feature of this article is the fact that it includes a thorough view of the literature, covering 39 academic books and articles. It also addresses an up to date issue in contemporary Pakistan. One weakness of this article is the fact that authors state that they use stratified random sampling but in fact the stratification is limited to the distinction between Islamic and conventional banks, and the actual sample was put together using personal contacts. The demographics are therefore likely to be biased. This is compounded by the fact that they issued the questionnaires in English, which will favor the upper classes of society. Cui, Charles Chi, Lewis, Barbara R. and Park Won. “Service quality measures in the banking sector in South Korea.” International Journal of Bank Marketing 21 (4) (2003), pp. 191-201. Print. This article starts out with a critique of the SERVQUAL surveying method, especially since it is usually applied organisations outside the Western part of the world and has in the past produced variable results. A key aim of the study was therefore to text the appropriateness of the SERVQUAL and related measures such as weighted SERVQUAL and SERVPERF for markets in Asia, and notably in South Korea. The authors theorize that customer-supplier loyalty is a stronger factor in Asian markets because of the collective culture that prevails in these countries. After first trying a convenience sample method, and finding it unsatisfactory, the authors used personal contacts and a snowball method to survey customers of the three major banks in the city of Seoul. A sample of 153 respondents was used, of which 73.2 per cent had at least university level. The authors conclude that the original SERVQUAL and weighted SERVQUAL cannot be used directly in South Korea because they produce misleading results. SERVPERF proved marginally more useful, but there are still question marks about its appropriateness for an Asian context. The authors concede that the sample size is too small to be generalized outside this specific context. Another limitation is that the sample was too small to be suitable for split-sample methods. More research is needed into survey methods and especially into the defining of the dimensions which are used to inform such methods. Cronin, J.J. Jr. and Taylor, Steven A. “SERVPERF versus SERVQUAL: Reconciling Performance-Based and Perceptions-Minus-Expectations Measurement of Service Quality.” Journal of Marketing 58 (1) (1994), pp. 125-131. Print. This study re-examines SERVPERF and SERVQUAL, starting out from the hypothesis that criticisms which have been levelled against the SERVPERF appear to lack substance. The authors support the need to measure performance and the need to be aware of customer expectations. They disagree, however, with “Perceptions-Minus-Expectations” as an approach because they believe that it is one dimensional and cannot fully represent the links that exist between perceptions, expectations and customer buying behavior. A number of conceptual issues are explored, including the ambiguity which exists in the use of terms like customer service and service quality. The authors maintain that these terms are often poorly defined, and they are used almost interchangeably, even though they are based on different premises. Both SERVQUAL and SERVPERF scales are defined as tools for measuring a specific long term attitude at a single point in time (p. 126). The authors revisit different ways of using and interpreting SERVQUAL and SERVPERF and conclude that it is not appropriate to include customer expectations in measures of service quality. The authors are keen to make a distinction between measuring long term attitudes and short term opinions. There is qualified support for the use of performance-importance maps, but this is not exactly the same as customer expectation. A strength of this paper is that it reflects deeply on the methods commonly used to measure customer satisfaction and service quality. It breaks down the concepts and examines each one separately, and looks for ways to put them together appropriately. There is however a weakness in that the paper appears to defending the previous work of the authors, rather than truly looking for new solutions with an open mind. Othman, A. and Owen, L. “Adopting and Measuring Customer Service Quality (SQ) in Islamic Banks: A Case Study in Kuwait Finance House.” International Journal of Islamic Financial Services 3 (1) (2001). This is an interesting article which starts out from the assumption that Islamic banks are culturally different from conventional banks, and that this necessarily implies that this difference should be a major factor in devising systems to measure customer service quality and customer service. It therefore rejects standards which were developed for Western banks and proposes a new measurement tool called CARTER which is based on 34 items. The authors highlight the difficulties caused by vague definitions of quality and the controversies that surround the school of thought which posits that the focus of this research should be on a supposed gap between customer perceptions and customer expectations. In many Islamic banking contexts, it is argued, personal contact is more highly valued than hi-tech facilities such as cash machines. If this is the unique selling point of Islamic banks, then the hi-tech focus of Western quality measures will be inappropriate. A survey was conducted and it achieved 360 responses out of 500, which is a very high rate. A five point Likert scale was used and questions included direct enquiry about the importance that customers place on the bank being run on Islamic principles. The paper concludes that Islamic banks need to adopt more service quality measures, but that they need to adapt them also, with a conscious effort to tailor them to the local context. The strengths of the study are that it used Arabic language for the survey, which is accessible to a wider range of customers than English, and questions were devised which address perceptions of Islamic products and services. A weakness was that 82% of respondents were male, and incomes were very high, reflecting again the Kuwaiti culture, but this result leaves female and lower income customers who may provide the future growth for the bank. The article also made concrete recommendations and stressed staff training needs. Newman, Karin and Cowling, Alan. “Service quality in retail banking: the experience of two British clearing banks. International Journal of Bank Marketing 14 (6), pp. 3-11. Print. This article starts with the observation that customer satisfaction is no longer sufficient for banks, since most customers who defect from a bank say that they were satisfied when they left. The standard that is required for customers to stay loyal is “total satisfaction” which means that they stay loyal, buy more and bring other customers to the bank. The article reports on two empirical studies, each one looking at the experience of a different British high street bank in its effort to improve its service quality. Each bank adopted a separate strategy – one using TQM methodology and the other a using SERVQUAL approach. The authors used a case study methodology, involving semi structured interviews, document analysis and observation. This method was chosen because it provides such a rich variety of data which in turn gives a full picture of what is happening in the bank. The authors found that both banks experienced improvements in their customer service through these initiatives, and so it was not possible to find in favour of one or other system. It is noted that the positive impact of the SERVQUAL method contributes to the on-going debate about the appropriateness of this method for banking and other service industries. To some extent it shows that SERVQUAL can be a useful aid and it does produce positive results. It is, however, not the only strategy available and so research into this area must continue. A strength of this article was the case study approach, which gives ample opportunity to understand the context of each bank in depth. A weakness of the study is that it was comparing two very different initiatives, and therefore it is not surprising that the authors had difficulty finding a clear indicator of which was best. The future gap The studies outlined above all focus on the importance of culture and tradition in measuring quality of service and customer satisfaction. There is general agreement that banks must work on customer loyalty as well as gaining new customers, especially since many markets are maturing and there is not so much potential to find new customers as there once was. These articles each considered banking in one particular country. Together they demonstrate that local culture and context are very important not only in defining criteria for measuring quality, but also in interpreting the results from standard methods and tests. Islamic banks need to do more about these issues, but at the same time there is considerable dissatisfaction with measuring tools which are based on Western concepts and Western psychology. The importance of loyalty in Islamic societies is cited as an indicator that different tools need to be applied to this particular type of banking. The theoretical side of this argument is well founded and clearly articulated. The evidence cited from empirical studies is, however, less than convincing. This is largely due to the use of a questionnaire method, which allows responses framed and codified in a narrow way. There is also a problem of skewed samples, and a failure to gather sufficient numbers of responses to provide reliable results. Future studies in this area must therefore adopt rigorous methods, and aim for large samples if questionnaires are to be used. The case study method may be a more suitable method because it allows a range of different data gathering techniques, and it may produce unexpected results through structured interviews which allow the participants to express their thoughts more freely than is possible in a questionnaire. Read More