Commitment

Along with trust, commitment has been theorised to be one of the key mediating variables for successful relationships (Morgan & Hunt 1994). Commitment is thought

to play an important part in relationship development. According to Gundlach, Achrol and Mentzer (1995, p.78), commitment is ‘… an essential ingredient for successful long-term relationships’. This section explains the concept of commitment and explores how commitment can lead to customer loyalty, a goal of most successful service organisations.

Commitment has been conceptualised in a number of different ways such as an unwillingness to consider an alternative (Leik & Leik 1977), an action that is undertaken in order to maintain a relationship (Dwyer, Schurr & Oh 1987), and a desire to maintain a relationship (Bowen & Shoemaker 2003; Moorman, Zaltman & Deshpande 1992; Morgan & Hunt 1994). After an extended review of literature, it can be noted that the definition of commitment proposed by most researchers consists of two major components. These are a belief that the relationship is important and its consequence, which is a subsequent desire to maintain the relationship. In other words, researchers commonly propose that commitment is the positive feeling that customers have toward their relationship with a service provider, which in turn encourages them to maintain the relationship indefinitely. The key to ensuring a high level of commitment is to assist customers to realise the importance of their relationship with a service provider. As a result, there is a need to conduct continual research in order to determine what factors encourage a high level of commitment between the service provider and customers, as a means to ensure a high level of customer loyalty.

Commitment has become one of the most popular issues in relationship marketing research during the past 20 years, mainly because the marketplace has become more

competitive. Commitment is perceived to be essential for business success (O'Malley & Prothero 2004) as it helps a company to retain a business relationship with its customers (Dwyer, Schurr & Oh 1987; Garbarino & Johnson 1999; Gummesson 2002; Gundlach, Achrol & Mentzer 1995; Hocutt 1998; Moorman, Zaltman & Deshpande 1992; Morgan & Hunt 1994). Many researchers recognise the importance of commitment as a major determinant of long-term relationships, noting that commitment along with trust is central to all successful relationships (Bowen & Shoemaker 2003; Garbarino & Johnson 1999; Morgan & Hunt 1994). The importance of commitment is reinforced by recent studies that have found that commitment leads to repurchase intentions, as well as positive word-of-mouth communication (Fullerton 2005; Garbarino & Johnson 1999; Sanzo 2003; Wetzels, Ruyter & Birgelen 1998).

Although a large amount of research on commitment refers to commitment as a unitary concept (Bowen & Shoemaker 2003; Moorman, Zaltman & Deshpande 1992; Morgan & Hunt 1994), some researchers see commitment as a binary concept consisting of two dimensions. These are affective commitment and continuance commitment, also called calculative commitment (Fullerton 2005; Gounaris 2005; Wetzels, Ruyter & Birgelen 1998). Affective commitment can be referred to as ‘… an affective state of mind an individual or partner has toward a relationship with another individual or partner’ (Wetzels, Ruyter & Birgelen 1998, p.409). Continuance commitment can be referred to as ‘… the perceived structural constraints that bind the firm to its partner and not a cognitive consideration of possible future opportunities’ (Gounaris 2005, p.128).

The researchers, who see commitment as a binary concept, commonly argue that the concept of commitment needs to be categorised into two dimensions, because each dimension can be influenced by different factors, and each can have a different effect on relationship development (Fullerton 2005; Gounaris 2005; Wetzels, Ruyter & Birgelen 1998).

On one hand, affective commitment is a genuine feeling that exchange partners have toward one another. The determinants of this type of commitment should be the factors that encourage an exchange partner to view a relationship as important, and thus genuinely encourage them to stay in the relationship. Examples of those factors are trust (Dwyer, Schurr & Oh 1987; Moorman, Zaltman & Deshpande 1992; Morgan & Hunt 1994), switching cost (Morgan & Hunt 1994; Patterson & Smith 2003), relationship benefits (Patterson & Smith 2001) and shared values (Morgan & Hunt 1994).

On the other hand, continuance commitment is not a genuine feeling that exchange partners have toward one another. Customers only stay in a relationship because the cost of terminating the relationship is too high. The determinants of this type of commitment are expensive penalties that usually apply when exchange partners want to end a relationship, or when there is a lack of an alternative. This kind of determinant helps a firm trap an exchange partner in an unwanted relationship. It can be noted that most of the time, the determinants that lead to one type of commitment will not lead to the alternative. In fact, in many cases the determinants that create a positive impact on one type of commitment, can create a negative impact on the other type of commitment. For example, trust does not only exclusively provide a positive

impact on affective commitment; it also provides a negative impact on continuance commitment (Gounaris 2005). Morgan and Hunt (1994) present a link between economic termination costs and affective commitment. According to this perspective, it could be argued that the impact of termination costs on different types of commitment, can vary depending on the types of termination costs, and on the degree to which termination costs are applied. On the one hand, low termination costs and psychological termination costs are assumed to provide a positive impact on affective commitment, because they do not force customers to stay, but encourage customers to rethink the positive advantages of being in the relationship before terminating the relationship. On the other hand, high economic termination costs are assumed to lead to continuance commitment, because it makes customers feel they are trapped in an unwanted relationship.

Affective commitment and continuance commitment have different effects on relationship development. It is argued that affective commitment provides a positive impact on relationship development, whilst continuance commitment provides a negative impact on a relationship (Fullerton 2005; Gounaris 2005; Wetzels, Ruyter & Birgelen 1998). Fullerton (2005), for example, notes that affective commitment has a strong positive impact on both repurchase intention and advocacy across three service settings, namely banking services, telecommunications services and grocery retail services. However, it has been found that continuance commitment not only has a weak positive impact on repurchase intentions in two service settings, banking and telecommunication services, but also has a negative impact on repurchase intentions in grocery service settings. Continuance commitment has been found to have a negative impact on advocacy (another term for positive word-of-mouth

communication) across all service settings. Moreover, in business-to-business services, Gounaris (2005) finds that only affective commitment can lead to a higher intention to stay in a relationship with a service provider. Furthermore, Wetzel, Ruyter and Birgelen (1998), find that affective commitment has a stronger positive impact on intention to stay than continuance commitment.

An extensive literature review indicates that affective commitment is a dominant dimension of commitment in most research publications dealing with relationship marketing despite the fact that researchers have not reached full agreement on how commitment should be perceived (unitary or binary). However, there is evidence that most of the relationship marketing researchers (even those who perceive commitment as a unitary concept) use affective commitment to operationalise the concept of commitment (Caceres & Paparoidamis 2007; Garbarino & Johnson 1999; Morgan & Hunt 1994). A number of researchers used affective commitment measurements when measuring the concept of commitment in their studies. For instance, Morgan and Hunt (1994) measure their commitment concept by adapting an affective commitment scale from the work of Allen and Meyer (1990). Secondly, in most studies trust is found to have a positive impact on commitment. As mentioned earlier, trust only provides a positive impact on affective commitment. Since trust provides a negative impact on continuance commitment, it can be assumed that in these studies the concept of commitment referred to, is a form of affective commitment (Fullerton 2005). Thirdly, many studies commonly propose positive links between commitment and customer loyalty in terms of increasing repurchase intention, as well as positive word-of-mouth communication or advocacy (Caceres & Paparoidamis 2007; Fullerton 2005). Again, as mentioned earlier, such links can only be true when affective commitment is

employed, because only affective commitment has been found to have a strong positive impact on customer loyalty in both aspects (repurchase intention and positive word-of-mouth communication). In contrast, continuance commitment only provides a weak positive impact on repurchase intentions but results in a negative impact on positive word-of-mouth communication (Fullerton 2005).

In summary, the key to the concept of commitment is that customers need to realise the importance of their relationship with a service provider before they will become committed to the relationship. Researchers have not agreed about whether commitment should be perceived as unitary or binary. Those researcher who see commitment as a binary concept, suggest that commitment can be categorised into two categories: affective commitment and continuance commitment. Since only affective commitment has been found to provide a positive impact on relationships in terms of increasing repurchase intention and positive word-of-month communication, it can be noted that most of the relationship marketing studies commonly operationalise commitment as affective commitment. Therefore, in line with these previous studies, the concept of commitment in this thesis is operationalised as affective commitment.

2.7 Summary

Although the link between customer satisfaction and customer loyalty has been in the spotlight for some considerable time, an extensive review of literature conducted in this chapter indicates that customer satisfaction does not always lead to customer loyalty. Nowadays, relationship quality is thought to be the key ingredient of customer loyalty. As a result, several models of relationship development have been

proposed by previous researchers to assist those wishing to develop business relationships. Those relationship development models were reviewed in this chapter in order to assist the researcher to select the most appropriate starting model for this thesis. It was found that the KMV model provides the most systematic, rational approach to relationship marketing research and therefore was chosen to provide the original basis of the conceptual framework for this thesis.

A comprehensive literature review also highlighted the fact that no previous studies have been identified that involve hospitality research in an intercultural context with regards to the development of customer loyalty from trust and commitment. This reinforces the importance of this study. However, prior to embracing the research design it is essential to develop an understanding of the major cultural differences between Eastern and Western societies that have been identified in previous cross- national research. The next chapter provides insights into the cultural dimensions proposed by various groups of cross-cultural researchers with particular reference to Australia and Thailand, and thus provides input into the development of propositions that are presented in Chapter Four.

Chapter Three