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

Ernest Emeka Izogo

Management Research Review, 2016, vol. 39, issue 1, 115-131

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 Rafiqet 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.

Keywords: Customer loyalty; Partial least squares; Expertise; Relationship quality; Customer orientation; Information sharing (search for similar items in EconPapers)
Date: 2016
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Persistent link: https://EconPapers.repec.org/RePEc:eme:mrrpps:v:39:y:2016:i:1:p:115-131

DOI: 10.1108/MRR-10-2014-0232

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