CONCEPTUAL FRAMEWORK 2 – HYPOTHESIS DEVELOPMENT

DEVELOPMENT

The section below provides theoretical support for the interrelationship between all constructs and, based on the interrelationships found, identifies the hypotheses. The conceptual framework 2 (figure 6.2) is developed specifically in pursuit of objective 4 - investigating the extent/nature to which co- creation/engagement practice varies according to economic and geographical regions, but also to address

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some issues that directly impact the pursuit of objective 4.

Hypothesis 1

It is stated by Schlevogt (2001) that Chinese people from Northern and Southern regions have diverse attitudes towards people relationships and business activities, largely as a result of the differences of in Chinese culture associated with regions, whereby Northern people lay more emphasis on the values of Confucianism such as, for example, harmonies, thriftiness, respecting the elderly, good-mannered, kind- heartedness, faithfulness and family orientation, etc. In addition, Chan and Wu (2005) argue that the consumption pattern across Eastern, Western, Northern and Southern regions varies quite distinctly. Especially when compared with people from Eastern and Southern China, those from Western China are relatively more conventional and conservative. Consistent with these arguments, Zhou et al. (2010) advocate that, from the perspective of cultural materialism, a society’s cultural values and attitudes are largely dependent on its regional structure.

Chan and Wu (2005) also suggest that the economy in developed areas (e.g. coastal region) has been dominating China’s development for several centuries with large higher-level industrial departments, whereas the economy in China’s developing areas has been mainly dominated by the agricultural industry. Consequently, the developed areas in China might accept more western lifestyles and tend to be more individualist; people from developing areas, in contrast, might reserve more traditional Chinese culture values (Zhou et al., 2010; Ralston et al., 1993).

Hence, based on the above literature reviews, it can be argued that Chinese culture is likely to have a greater influence in less well-developed cities (e.g. Tier 3) than it in larger, more well-developed cities (e.g. Tier 1). This is due to larger/more-well developed cities being more cosmopolitan and more Western-oriented, and the influence of Chinese culture therefore, being less pronounced (Ralston et al., 1996). This also applies to economic regions. Correspondingly, this current research proposes the following hypothesis,

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H1: Chinese culture is likely to vary in strength according to city tier and geographical region.

• H1a: The less developed the city tier, the stronger the key Chinese culture characteristics will be

• H1b: The less developed the economic region, the stronger the Chinese cultural characteristics will be.

Hypothesis 2

Wang and Lin (2009) contend that traditional norms, ideas and the mode of thinking are still persistent and universal in Chinese people’s everyday life, even though Western culture has infiltrated into China. Some scholars have verified that the indigenous Chinese cultural values can affect consumer behaviour (Lai et al., 2010; Hoare and Butcher, 2007). From the customer perspective, Yi and Gong (2013) develop and validate two kinds of behaviours in the value co-creation process: citizenship behaviour and participation behaviour, and this research assumes that these behaviours can be applied to any geographical and/or cultural context, including China.

For citizenship behaviour, Ebrahimpour et al. (2011) utilise 16 variables to achieve a model for enhancing organisational citizenship behaviour and prove that there is a positive and significant relationship between organizational culture and organizational citizenship behaviour. Similarly, Snell and Tseng (2003) have investigated Chinese socialism as values in mainland China have affected employees’ organisational citizenship behaviour. Furthermore, Han and Altman (2010) suggest that the values of Confucianism, such as harmonies, group orientated principles, guanxi, conscientiousness, self-learning and thriftiness, greatly affect the indigenous forms of organisation citizenship behaviour in China. According to Srnka’s (2004) culture level categories, organisational culture is a kind of micro-level culture, which is based on a macro- level cultural value and moral pursuit such as, for example, national culture/Chinese culture. In addition, from the perspective of value co-creation, the customer can be viewed as ‘partial employee’ engaged in service creation process, just like the employee in the firm (Vargo and Lusch, 2004a; Keh and Teo, 2001), and customers who engage in behaviours such as feedback, advocacy, helping and tolerance (Yi and Gong, 2013). Thus, there are two corresponding parties - organisational culture and Chinese culture, and employee and customer. In this sense, it could be argued that Chinese culture might positively affect customer

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citizenship behaviour.

While Yi and Gong (2013) conceptualise participation behaviour as a multidimensional notion made up of four measurements: information seeking, information sharing, responsible behaviour, and personal interaction. In the dialogue with firm, participation behaviour means customers are more actively to participate and create personalised offers (Fagerstrom and Ghinea, 2013; Yi and Gong, 2013). Furthermore, Zhou et al. (2010) and Zhang et al. (2008) demonstrate that the developed areas in China might accept more western lifestyles and tend to be more individualistic and retain less traditional Chinese culture. Therefore, it may be that the less the traditional Chinese culture, the more likely it is that customers become ‘fully engaged’ (or ‘proactively participatory’) in the sense that is understood in the West. That is to say, the less traditional Chinese culture influences the customer to show more ‘individualist’ engagement with firms. Consequently, by extending the above line of thinking, this study proposes the following hypotheses,

H2: Customer co-creation is related to Chinese culture.

• H2a ‘Chinese culture’ is negatively related to participation behaviours.

• H2b Chinese culture is positively related to citizenship behaviours.

Hypothesis 3

Mai and Zhao (2004) state that the characteristics of Chinese customers are distinct from those customers from Western cultural backgrounds and, to some extent, the unique behaviours of Chinese customers limit the chances of success for foreign companies in China. Additionally, China consists of a few regional markets (Tsang et al., 2003). Owing to constantly changing social environments such as the evolving personal values and the unbalanced economic developing levels among regions, there are very obviously differences on consumer behaviour among Chinese people from different regions (Davis, 2012). Moreover, Zhang et al. (2008) utilise coastal–inland dichotomy to research Chinese customer behaviours and claim that people from coastal regions (developed areas) pay more attention to their own the experience, pleasure and desire and are seldom carefully and sensitively to others’ views, feelings and comments. In contrast, people from inland regions (less well-developed areas), whose consumer behaviours are more affected by other people views, feelings and comments and who engage in more collectivism, always give priority to the interests of

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group members (Hofstede, 2001, 1980). As mentioned above, customer value co-creation behaviour has been categorised as participation behaviour and customer citizenship behaviour. Participation behaviour focuses more on in-role or personalised behaviour, while citizenship behaviour underlines extra-role and achieves higher level engagement.

Hence, if both hypotheses 1 and hypotheses 2 apply, then it would be reasonable to argue that the more developed the city tier (or region), the more likely are Chinese restaurant customers to engage in participation behaviours. By contrast, the less likely they will be to engage in citizenship behaviours (and vice versa in less well-developed city tiers and regions). It is important to know whether this applies, as it can help restaurant brands from other parts of the world understand how they need to manage service provision for local customers when they move into different parts of China. Thus, this research proposes the following hypothesis,

H3: Chinese restaurant customers to practise co-creation behaviours will vary according to the level of indigenous socio-economic development

• H3a: The more developed the city tier, the more likely the Chinese restaurant customers are to practise participation behaviour.

• H3b: The more developed the city tier, the less likely the Chinese restaurant customers are to practise citizenship behaviour.

• H3c: The more developed the geographical region, the more likely the Chinese restaurant customers are to practise participation behaviour.

• H3d: The more developed the geographical region, the less likely the Chinese restaurant customers are to practise citizenship behaviour.

Hypothesis 4

In the analysis of the relationship between economic region/city tier and behaviour, two aspects need to be considered: whether the economic region/city tier play a main or subordinate role and whether economic region/city tier have a direct or an indirect effect on the dependent variables, which could decide the role of economic region/city tier in behavioural research.

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current research can treat economic region/city tier as the independent variable which performs direct influence (hypothesis 1 - economic region/city tier and Chinese culture) or view economic region/city tier as a contextual variable and compare specific behaviour across economic region/city tier (hypothesis 4 - economic region/city tier and co-creation behaviour). Secondly, economic region/city tier can be measured as an intervening antecedent variable (subordinate role) when some other variables (e.g. Chinese culture) are assumed to be more substantial, due to the relationship of culture having a vital influence on people’s mind and behaviour, as widely agreed by scholars (Elliott and Tam, 2014; Kim et al., 2002; Chung and Pysarchik, 2000) - hypothesis 2. Thus, in this case, economic region/city tier is mostly treated as a moderator intervening in the relationship between ‘Chinese culture’ and ‘co-creation behaviour’. This study will test dual roles of ‘economic region/city tier’, which are independent variable and moderator, separately.

Based on the proposition of hypothesis 1, hypothesis 2 and hypothesis 3, if all three hypotheses are applied, then this research can argue that city tier and/or economic region actually moderates the relationship between Chinese culture and co-creation behaviour. It would be useful to test, therefore, whether a truly symbiotic relationship exists between these three variables- Chinese culture, economic region/city tier, and co-creation behaviour (participation behaviour and citizenship behaviour). This leads to the following hypothesis,

H4: City tier, geographical region moderates the relationship between Chinese culture and co- creation behaviour.

• H4a: City tier moderates the relationship between Chinese culture and participation behaviour.

• H4b: City tier moderates the relationship between ‘Chinese culture’ and citizenship behaviour.

• H4c: Economic region moderates the relationship between Chinese culture and participation behaviour.

• H4d: Economic region moderates the relationship between ‘Chinese culture’ and citizenship behaviour.

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Hypothesis 5

Wong et al. (2010) maintain that the Confucianism is probably the most significant backbone, which contributes excellent interpretations and portrays the moral principles for Chinese people on how to conduct or comport oneself, consider problems, understand and perform in both public and private domains. In particular, Confucius vigorously highlights the significance of human relations, the matter of one’s face, and preventing conflict to uphold a sense of harmony (Flynn at al., 2007).

Many scholars have identified that the three Chinese indigenous culture of face, guanxi, harmony is related to each other and, to some extent, they are overlapped. For example, Knutson et al.(2000), Huang (2008) suggest that guanxi is correlative to face and harmony; Tsang et al. (2013), King (2006) and Zhai (1995) confirm that guanxi is positively related to face; Dunning and Kim (2007) state that guanxi is steeped in China’s national culture in terms of power distance, uncertainty avoidance and collectivism. It also affects, meanwhile, the Chinese traditional culture value of harmony. Luk et al. (1999), furthermore, stress the importance of face as a vital element of guanxi; face and guanxi engage together and develop each other within harmony.

For the purposes of exploring these relationships (e.g. economic region/city tier and culture; culture and co- creation behaviour), it is necessary to understand the way that Chinese culture (CC) impacts cognition and behaviour. Thus, this study needs to know whether it should represent Chinese culture as a distinct set of different characteristics, or whether it can view Chinese Culture as a holistic entity. On the basis of the above statements, although key Chinese culture characteristics are distinct, there are common aspects in each and, in addition, they are intertwined. Therefore, hypothesis 5 is set as follows,

H5: Despite comprising discreet and individually distinct components, Chinese culture can be considered to have a holistic effect.

Hypothesis 6

Customer experience has been known to be an inherent and subjective response that customers have towards a frim when they are engaging with each other (Lemke et al., 2011; Zomerdijk and Voss, 2010; Verhoef et al., 2009). The internal and subjective nature of customer experience is identified by Pine and

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Gilmore (1998) who suggest that experience only exists in the awareness of a person who engages with a firm through intelligence, emotion, affection behaviour, and so on. Associated with experience, Yuksel and Yuksel (2001) and Engel et al. (1995) claim that satisfaction is post-evaluation of the expected outcome or process of whether individual experience achieves or surpasses the predefined expectations; while dissatisfaction is the result of undesirable experience or expectations. Furthermore, the results of satisfaction and dissatisfaction affect the future assessment of customer cognition. Hence, a satisfying experience would strengthen the future engagement between customer and firm. In contrast, a dissatisfying experience would weaken future engagement (Yuksel and Yuksel, 2001; Pizam and Ellis, 1999). Echoing this, Cambra-Fierro et al. (2013) and van Doorn et al. (2010) support that satisfaction is a precursor of engagement.

From empirical aspects, Fredrickson et al. (2003) suggest that an individual’ positive experience of can lead to cognitive improvement in an individual’s mind, emotions, learning and behaviour. Choi et al. (2013) show that customer experience positively affects customer satisfaction and, consequently, satisfaction affects the customer’ s future visiting frequency. Therefore, Brodie et al. (2013) deem that satisfaction is the association between customer and service firm and is two-way: firm engagement behaviour promotes more satisfaction and loyalty and, in turn, if the service firm is accepted by the customer, he/she will reciprocate the firm with his/her beneficial actions (e.g. trust, repurchasing, positive word-of-mouth) in the future.

Finally, as the current research has collected data from a broadly representative sample of Chinese restaurant customers, it is useful to understand and explore some of the factors (e.g. cognition) that underlie their behaviour in terms of both citizenship and participation. Furthermore, there is also the possibility that the variation in co-creation behaviours may not be impacted by Chinese culture alone, whereas it may be that the quality of recent restaurant experiences will have an impact on this relationship. Accordingly, the following hypothesis is set,

H6. Cognitive Engagement mediates the relationship between Chinese culture and co-creation behaviours

• H6a. Cognitive engagement mediates the relationship between Chinese culture and participation behaviour.

• H6b. Cognitive engagement mediates the relationship between Chinese culture and citizenship behaviour.

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In general, the Conceptual framework 2 (figure 6.3) below reveals the direct and indirect relationships between the constructs. In detail, CC represents the construct ‘Chinese culture’; CE represents construct ‘cognitive engagement’; PB represents construct ‘participation behaviour’ and CB represents construct’ citizenship behaviour’. There are four direct relationships, economic regions/city tier has a direct influence on Chinese culture (economic regionCC; city tier  CC); Chinese culture has a direct effect on co-creation behaviour (CCPB; CCCB). While the indirect relationship is that economic region/city tier moderate the relations between Chinese culture and co-creation behaviours (economic region moderates CCPB; economic region moderates CCCB; city tier moderates CCPB; city tier moderates CCCB), and cognitive engagement mediates the relationship between Chinese culture and co-creation behaviour (cognitive engagement mediates CCPB; cognitive engagement mediates CCCB).

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6.4 CONCLUSION

The above conceptual frameworks provide a comprehensive structure for the whole study based on the literature in terms of constructs ‘co-creation behaviour’, ‘Chinese culture’, and ‘customer engagement’. In addition, it explains how research aims and objectives to be achieved and how the interrelations among constructs are to be operationalised. Accordingly, conceptual framework 1 guides the development of an item pool that will be used, in conjunction with Yi and Gong’s (2013) model of co-creation behaviour, as the basis for developing scales that will ultimately be used for testing conceptual framework 2; Conceptual framework 2 represents the hypotheses that will be tested (see data analysis chapter) in this study. In the following chapter, the methodological views utilised in the current study will be represented via discourse the qualitative and quantitative research procedures involved in the item pool and the questionnaire.

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