Service quality and customer service performance - the case of Vietnam joint stock commercial bank for private enterprises

vietnam national university, HANOI school of business Nguyen Quynh Trang Service quality and customer service performance – The case of vietnam joint stock commercial bank for private enterprises Major: Business Administration Code: 60 34 05 Master of business administration thesis Supervisors: Dr.PHAM THI NHUAN DANG NGOC SU, MBA Hanoi – 2007 TABLE OF CONTENTS ACKNOWLEDGEMENTS i ABSTRACT ii TÓM TẮT iv TABLE OF CONTENTS vi LIST OF ABBREVIATIONS viii LIST OF FIGURES ix LIST OF TABLES x INTRODUCTION 1 Rationale Objectives & aims Hypotheses Scope of work Data resource & processing Methods & approaches Significance Limitations Expected results 10 Follow –up (potential) 11 Thesis structure PART 1: LITERATURE REVIEW AND RESEARCH METHODOLOGY CHAPTER 1: LITERATURE REVIEW 1.1 The nature of services and Characteristics of services 1.1.1 Why study services? 1.1.2 What is service? 1.1.3 Characteristics of services 1.2 Managing service quality 1.2.1 Service quality 1.2.2 Dimensions of service quality 1.2.2.1 Reliability 1.2.2.2 Empathy 1.2.2.3 Assurance 1.2.2.4 Responsiveness 1.2.2.5 Tangibles 10 1.2.3 Results of previous researches 10 1.2.4 The effect of employee behaviors on service quality dimensions 11 1.3 Measure of customer service performance 11 CHAPTER 2: RESEARCH METHODOLOGY 14 2.1 Study Design 14 2.2 Measures 14 2.3 Sampling 16 2.4 Data collection 17 2.4.1 Method of data collection 17 2.4.2 Questionnaire design 18 2.4.3 Questionnaire pretest 18 2.4.4 Respond rate 18 2.4.5 Procedure of Purification, Validity and Reliability 18 2.4.5.1 Procedure of purification and validation 18 2.4.5.2 Procedure of reliability 19 2.5 Summary 20 PART STATUS OF VPBANK AND DATA ANALYSIS 21 CHAPTER 3: STATUS OF VPBANK 21 3.1 General overview of VPBank 21 3.1.1 Vision and Mission 22 3.1.2 Core value and Business areas 22 3.2 Foundation and development process 23 3.3 Organization structure 25 3.4 Employees and Training Programs 26 3.5 Products & Services 26 3.6 Business operation results in 2006 26 3.7 Achievements 28 3.8 Orientation of business activities for 2007 29 CHAPTER 4: DATA ANALYSIS 31 4.1 Descriptive statistics 31 4.1.1 Demographics of the sample 31 4.1.2 Descriptive statistics of study scales 32 4.1.2.1 Descriptive statistics for five dimensions 33 4.1.2.2 Descriptive statistics of customer satisfaction 36 4.2 Reliability Test 37 4.3 Factor analysis 37 4.3.1 Factor analysis for reliability 38 4.3.2 Factor analysis for empathy 40 4.3.3 Factor analysis for tangible 42 4.3.4 Factor analysis for responsiveness 44 4.3.5 Factor analysis for assurance 46 4.4 Analysis of Relationships 48 4.4.1 Scatter grams 48 4.4.2 Collinearity problem 49 4.4.3 Multiple regressions analysis 49 4.4.4 Hypotheses Test 53 4.5 Summary 55 PART 3: CONCLUSION AND RECOMMENDATIONS 56 CONCLUSION 56 RECOMMENDATIONS 58 REFERENCES 64 APPENDICES LIST OF ABBREVIATIONS VPBank: Vietnam Joint Stock Commercial Bank for Private Enterprises CJS Bank: Commercial Joint- Stock Bank CA's: Cronbach's Alpha VIF: Variance inflation factor CS: Customer satisfaction LIST OF FIGURES Figure 1.1 Customer Perceptions of Quality and Customer Satisfaction ………… 12 Figure 3.1 VPBank's Organization Chart 25 Figure 3.2 Safety assurance ratios 27 Figure 3.3 mobilized Capital source 27 Figure 3.4 Structure of outstanding loans 28 Figure 4.1 Scree Plot of Reliability 40 Figure 4.2 Scree Plot of Empathy 42 Figure 4.3 Scree Plot of Tangible 44 Figure 4.4 Scree Plot of Responsiveness 46 Figure 4.5 Scree Plot of Assurance 48 LIST OF TABLES Table: 2.1 Measurement of five dimensions of service quality 15 Table 2.2 Measurement of Bank's Performance 16 Table 4.1 Demographic Descriptive Statistics 32 Table 4.2 Descriptive Statistics for Reliability 33 Table 4.3 Descriptive Statistics for Empathy 34 Table 4.4 Descriptive Statistics for Tangible 34 Table 4.5 Descriptive Statistics for Responsiveness 35 Table 4.6 Descriptive Statistics for Assurance 36 Table 4.7 Description Statistics of Customers' Satisfaction 36 Table 4.8 Reliability Statistics 37 Table 4.9 Total Variance Explained - Reliability 39 Table 4.10 Factor solution for Reliability 39 Table 4.11The Total Variance Explained - Empathy 40 Table 4.12 Factor solution for Empathy 41 Table 4.13 Total Variance Explained - Tangible 42 Table 4.14 Factor solution for Tangible 43 Table 4.15 Total Variance Explained - Responsiveness 44 Table 4.16 Factor solution for Responsiveness 45 Table 4.17 Total Variance Explained - Assurance 46 Table 4.18 Factor solution for Assurance 47 Table 4.19 Collinearity Statistics 49 Table 4.20 Results of Multiple Regressions 50 Table 4.21 Ranking the importance of dimensions 52 APPENDIX Appendix A: QUESTIONNAIRE 58 Appendix B: RESULTS OF DATA ANALYSIS 61 INTRODUCTION Rationale Joining the WTO, the Vietnam banking system has been heavily influenced by the international financial market in terms of exchange rates, interest rates and foreign currency reserves, while they must simultaneously carry out international obligations and commitments Competition will probably become much stronger when foreign banks expand their scale and scope of operations in the Vietnamese market Vietnamese commercial banks will need to cope with many difficulties in expanding their banking activities in the world and competing with foreign banks whose strength of capital, technology, services and global operational scale provide them with potential advantages Before these challenges, Vietnamese commercial banks, especially Joint Stock Commercial Banks have been giving out many strategies such as widening branches, interest competitiveness, or promotion campaigns, and so on However, all of them recognized that service quality was critical element to attract customers and necessary for effective competition Conscious of this fact, in recent year VPBank has placed great importance on improving service quality, thus all dimensions of service quality were concerned but the contribution level of each dimension of service quality has not identified yet Therefore, its needs to identify the relative importance of each quality dimension which impact to customer service performance of VPBank Objectives & aims Objectives of study The objective of this research is to investigate the relationship between five dimensions of service quality and Customer Service Performance of VPBank Aims of study VPBank's managers can use this instrument as a baseline for a longitudinal benchmarking program that is a means of comparing its performance from branch to branch or from year to year Hypotheses In this study, five dimensions of service quality including reliability, empathy, tangible, responsiveness and assurance were employed to evaluate the impacts of those dimensions on customer service performance of VPBank A below research model shows five relationships converted into five hypotheses Reliability Empathy Tangible Customer Service Performance of VPBank -Hanoi branch Responsiveness Assurance Hypotheses 1: A positive relationship exits between Reliability and Customer Service Performance of VPBank - Hanoi branch Hypotheses 2: A positive relationship exits between Empathy and Customer Service Performance of VPBank- Hanoi branch Hypotheses 3: A positive relationship exits between Tangible and Customer Service Performance of VPBank- Hanoi branch Hypotheses 4: A positive relationship exits between Responsiveness and Customer Service Performance of VPBank- Hanoi branch Hypotheses 5: A positive relationship exits between Assurance and Customer Service Performance of VPBank- Hanoi branch Scope of work This study focuses only on identifying the relative importance of five dimensions of service quality on customer service performance of VPBank Hanoi branch The target customers are retail customers of VPBank Because of the time and resources limitation to survey, this research surveys at VPBank Hanoi branch Data resource & processing Data resource In view of the research's nature and in order to ensure the reliability of the findings, it becomes necessary to collect data from primary source A survey was therefore undertaken through hand- distributed questionnaire technique Questionnaires were personally delivered to and collected from customers came VPBank to implement transactions during the period of survey Data Processing After collecting the raw data, these data must be transformed into information that will answer the manager's question The conversion of raw data into information requires that the data was edited and coded so the data may be transferred to a computer and SPSS software version 13.0 for Windows was used to analyze data Each possible response to each question in the questionnaire was coded in the ways that conform to the requirements of this program After the data was coded, the data were then ready to be analyzed Methods & approaches This study used quantitative method to collect information about the perceived personality through a questionnaire All responses in questionnaire expressed in numbers analyzed quantitative Significance For theoretical significance: The research enhances understanding of how five dimensions of service quality with customer satisfaction were In addition, it adds to the knowledge of services marketing and research marketing For empirical significance: This is the first empirical study to date in VPBank to examine the relationships between five dimensions of service quality and customer service performance of VPBank at Hanoi branch VPBank's managers can use this instrument as a baseline for a longitudinal benchmarking program Having a baseline will give VPBank's management a means of comparing its performance from branch to branch or from year to year Moreover, VPBank managers can use ... LIST OF ABBREVIATIONS VPBank: Vietnam Joint Stock Commercial Bank for Private Enterprises CJS Bank: Commercial Joint- Stock Bank CA''s: Cronbach''s Alpha VIF: Variance inflation factor CS: Customer. .. characteristics In the fact, the types and sources of expectations are the same for end consumers and business customers, for pure service and product-related service, and for experienced customers and inexperienced... Assurance and Customer Service Performance of VPBank- Hanoi branch Scope of work This study focuses only on identifying the relative importance of five dimensions of service quality on customer service