(Luận văn thạc sĩ) factors affecting customer satisfaction in public sector a comparative study between administrative service and transport service in dong nai province

UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business - Phan Huynh Van Thao FACTORS AFFECTING CUSTOMER SATISFACTION IN PUBLIC SECTOR: A COMPARATIVE STUDY BETWEEN ADMINISTRATIVE SERVICE AND TRANSPORT SERVICE IN DONG NAI PROVINCE MASTER OF BUSINESS (Honours) Ho Chi Minh City – Year 2013 1|Page UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business - Phan Huynh Van Thao FACTORS AFFECTING CUSTOMER SATISFACTION IN PUBLIC SECTOR: A COMPARATIVE STUDY BETWEEN ADMINISTRATIVE SERVICE AND TRANSPORT SERVICE IN DONG NAI PROVINCE ID: MBUS111039 MASTER OF BUSINESS (Honours) SUPERVISOR: DR NGUYEN THI NGUYET QUE Ho Chi Minh City – Year 2013 2|Page ACKNOWLEDGEMENT It is my fortunate to have Dr Nguyen Thi Nguyet Que as my advisor with her strong experience and deep involment in the category related to my stated problem She provided me with sharp advice on how to approach the problem Her penetrating comments have led to revisions and clarifications of my analysis in this paper She was also helpful in narrowing down the area of research during my preparation for the final report She was always gracious with her support First and foremost, I would like to express my gratefulness to her I also thank Prof Nguyen Dinh Tho I am extremely grateful and indebted to him for his expert, valuable guidance, insightful comments, and encouragement extended to me I would like to express my gratitude to all ISB staffs that supported necessary materials and helped summit my papers I am grateful to my boss and my colleagues for their support for this study I also thank my friends for their encouragement My special gratitude goes to my parents who have supported to take care of my little baby in order for me to have time to pursue the program Last but not less, thanks to my husband who always facilitate me with good conditions to complete my study 3|Page COMMITMENT I would like to commit that this thesis, “Factors affecting customer satisfaction in public sector: A comparative study between administrative service and transport service in Dong Nai Province”, was accomplished based on my research seriously and independently The data was collected from citizens who had experiences using public service in Dong Nai province by the author in reality It has clear source Thus, the data was trustful handled and conducted by the author Phan Huynh Van Thao Dong Nai, October 1st 2013 4|Page ABSTRACT This study examined the relationships among nine dimensions of service quality and customer satisfaction toward public service in Dong Nai province and the comparation of this relationships between public administrative service and public transports service The surveys were distributed to 230 customers (120 customers rated about public administrative service and 110 customers rated about public transport service) who had an experience working with public administrative service and public transport service in Dong Nai within the last years, a customer was randomly approached to complete a survey Firstly, the research proposed a model to analyze the effect of nine dimensions (tangibility, reliability, responsiveness, competence, courtesy, credibility, access, communication, and understanding the customer) (Parasuraman et al 1985) of service quality on customer satisfaction in public service Secondly, the study used Statistic Package for Social Science (SPSS) to analyze data through Exploratory Factor Analysis (EFA) Then, the EFA results lead to the revised model identified the five service quality variables named as tangibility, reliability, competence, access and empathy The results indicated that tangible and competence have strong positive effect on customer satisfaction Finally, the research finding confirmed that the impact of dimensions on customer satisfaction toward a public service is affected by the type of public service differently (public administrative service and public transport service) Keywords: Services quality, Customer satisfaction, Public administrative service, Public transport service, and Public service 5|Page TABLE OF CONTENTS ABSTRACT .5 CHAPTER INTRODUCTION 1.1 BACKGROUND OF THE RESEARCH 1.2 RESEARCH PROBLEM 11 1.3 RESEARCH OBJECTIVES 13 1.4 RESEARCH METHOD 13 1.5 RESEARCH STRUCTURES 15 CHAPTER LITERATURE REVIEW 17 2.1 INTRODUCTION 17 2.2 LITERATURE REVIEW 17 2.2.1 PUBLIC SERVICES 17 2.2.1.1 DEFINITION OF PUBLIC SERVICES 17 2.2.1.2 CLASSIFICATION OF PUBLIC SERVICES 19 2.2.1.3 MAJOR CHARACTERISTICS OF PUBLIC SERVICES 22 2.2.2 SERVICE QUALITY 23 2.2.2.1 DEFINITION OF SERVICE QUALITY 23 2.2.2.2 SERVICE QUALITY IN PUBLIC SECTOR 24 2.2.3 MODELS OF SERVICE QUALITY IN PUBLIC SECTOR 26 2.2.3.1 THE SERVQUAL MODEL 26 2.2.3.2 THE SERVPERF MODEL 27 2.2.4 PREVIOUS STUDIES ON SERVICE QUALITY IN PUBLIC SECTOR 28 2.3 DEVELOPMENT OF RESEARCH MODEL AND HYPOTHESIS 32 2.3.1 CUSTOMER SATISFACTION 32 2.3.2 SERVICE QUALITY AND CUSTOMER SATISFACTION IN PUBLIC SECTOR 33 2.3.3 THEORETICAL MODEL 37 CHAPTER RESEARCH METHODOLOGY AND DATA ANALYSIS 39 3.1 INTRODUCTION 39 3.2 RESEARCH PROCEDURE 39 3.3 MEASUREMENT SCALE 41 3.4 QUALITATIVE PILOT STUDY 44 3.5 QUANTITATIVE MAIN SURVEY 45 3.5.1 QUESTIONNAIRE DESIGN 45 3.5.2 SAMPLING METHOD 46 3.5.3 DATA ANALYSIS METHODS 47 3.5.3.1 CRONBACH’S ALPHA 47 3.5.3.2 EXPLORATORY FACTOR ANALYSIS (EFA) 48 3.5.3.3 MULTIPLE REGRESSION ANALYSIS 49 CHAPTER RESEARCH RESULTS .50 4.1 INTRODUCTION 50 4.2 DESCRIPTIVE ANALYSIS 50 4.3 ASSESSMENT OF MEASUREMENT SCALE 52 6|Page 4.3.1 CRONBACH’S ALPHA COEFFICIENT OF RELIABILITY TEST 52 4.3.2 EXPLORATORY FACTOR ANALYSIS (EFA) RESULT 54 4.3.2.1 EFA FOR INDEPENDENT VARIABLES 54 4.3.2.2 EFA FOR DEPENDENT VARIABLES 57 4.4 HYPOTHESES TESTING 61 4.4.1 TESTING MODEL OVERALL 61 4.4.2 TESTING MODEL IN PUBLIC ADMINISTRATIVE SERVICE 65 4.4.3 TESTING MODEL IN PUBLIC TRANSPORT SERVICE 66 4.5 CONCLUSION 68 CHAPTER CONCLUSION AND IMPLICATION 69 5.1 INTRODUCTION 69 5.2 DISCUSSION OF FINDINGS 69 5.3 MANAGERIAL IMPLICATIONS 73 5.4 LIMITATION OF STUDY AND FUTURE RESEARCH 75 5.5 CONCLUSION 76 REFERENCES 77 APPENDIX 84 APPENDIX 3.1 MEASUREMENT SCALE USED IN QUALITATIVE RESEARCH 84 APPENDIX 3.2 THE QUALITATIVE RESEARCH FINDINGS 86 APPENDIX 3.3 QUESTIONNAIRE 88 APPENDIX 1: ORGANIZATIONAL CHART OF DONG NAI PEOPLE’S COMMITTEE 93 APPENDIX 4.1 FIRST TIME RUNNING- EIGENVALUES 94 APPENDIX 4.2 FIRST TIME RUNNING-FACTOR LOADING 96 APPENDIX 4.3 SECOND TIME RUNNING- EIGENVALUES 98 APPENDIX 4.4 SECOND TIME RUNNING- FACTOR LOADING 99 APPENDIX 4.5 THE EFA IMPLEMENTATION OF DEPENDENT VARIABLE (CUSTOMER SATISFACTION) 100 APPENDIX 4.6 CHARTS OF TESTING HYPOTHESES 101 7|Page LIST OF TABLES Table 3.7 Cronbach’s Alpha Reliability Coefficient 48 Table 4.1 - Descriptive statistics of the data 51 Table 4.3 - Cronbach’s Alpha coefficients for each measurement scale 52 Table 4.4 KMO and Bartlett's Test for independent variables 55 Table 4.4 Factor Loading of independent variables 56 Table 4.7 - Cronbach’s Alpha results after excluding unsatisfatory items 59 Table 4.8 Results of Pearson Correlations 61 Table 4.9 Model Summary 61 Table 4.10 Results of Multiple Regression 63 Table 4.11 Hypotheses Testing 63 Table 4.12 Coefficients of the construct for public administrative service 66 Table 4.13 Coefficients of the construct for public transport service 67 Table 4.14 Comparison Customer’s Viewpoints 67 LIST OF FIGURES Figure 2.1 Conceptual model linking nine dimensions and customer satisfaction 37 Figure 3.1 Research Process 41 Figure 4.1 The revised conceptual model 60 8|Page CHAPTER INTRODUCTION 1.1 BACKGROUND OF THE RESEARCH Dong Nai province has 11 administrative units with 171 units of communes, wards and towns, including Bien Hoa City - the political, economic and cultural center of the province, Long Khanh Town and other districts (Long Thanh, Nhon Trach, Vinh Cuu, Trang Bom, Thong Nhat, Dinh Quan, Tan Phu, Cam My and Xuan Loc) The natural area of Dong Nai is 5,097.1 km2, with total population of more than 2.56 million people, including 33.23% of urban residents and 66.73% of rural residents (Dong Nai People’s Committee Brochure, 2012) The People’s Committee of Dong Nai province consists of a network of 35 organizations provides a range of free and “at-cost” services (Appendix 1) Government as a big organization has its customers; those customers are the citizens, businesses and public and private employees Government through its agencies, departments, and ministries provides information and services for each group of its customers, and as a result this performance can be judge fairly only by the customers Service quality is an important dimension of organizational performance in the public sector as the main output of public organizations is services Moreover, profit is not the ultimate goal of these public organizations as they have to play different roles such as facilitator, pace setter and socio-economical developer (Arawati, Baker & Kandampully, 2007) 9|Page The customer is the final judge of the quality of the product or the service or the information For the private sector, managers are concerned in many aspects that relate to the customer such as loyalty and retention, but in the public sector in general the customer (citizen, business), find themselves obligated to deal with different organizations in the public sector even if they provide their services in inefficient ways For example, the administrative procedures using at governmental agencies in Vietnam in general and Dong Nai in particular are bulky and complex that are affecting the management of Dong Nai People’s Committee on its agencies from District level to local At the moment, there are quite a high number of complaints filed by the public due to delays in taking actions and providing services to them by the Vietnamese public organizations (Dong Nai Department of Internal Affairs, 2006) Headlines of some main newspapers also highlighted complaints from the public regarding to their dissatisfactions with the provided services Consequently, service quality is not as expected by the customers and therefore, it is quite low This matter is a concern to the public since they are the taxpayers and therefore; they expect good services are provided to them as the return (Thanh, 2009) At Dong Nai Department of Internal Affairs, the single window mechanism is being applied in order to simply administrative procedures However, it is not really effective for Dong Nai People’s Committee to supervise and inspect administrative procedures Consequently, there are still negative activities such as bureaucracy, corrupt, arrogant behavior of officials and services… that have made people annoy, reduce their belief on the transparency of government 10 | P a g e - III Service quality: No Statement Level of agreement Criteria : Tangibles The bureaus have up-to-date equipment Their physical facilities are visually appealing The appearance of the physical facilities of these bureaus is in keeping with the type of services provided The staff in bureaus are well dressed and appear neat Criteria : Reliability When the staff in bureaus promise to something by a certain time, they so When customers have problems, they are sympathetic and reassuring They are dependable They provide their services at the time they promise to so They keep their records accurately Criteria : Responsiveness 10 The staff in bureaus tell customers exactly when services will be performed 11 You always receive prompt service from the staff in bureaus 12 They are always willing to help customers 89 | P a g e No Statement 13 They have never been too busy to respond to customer requests promptly Level of agreement 14 When receiving document, the staff in bureaus have enough knowledge to answer questions from customer 15 They have enough knowledge and skill to handle document from customer 16 The staff are supported by the bureaus to complete their work Criteria : Competence Criteria : Courtesy 17 The staff in bureaus have willing attitude 18 They are polite and courtesy 19 They are friendly Criteria : Credibility 20 Customers can trust the staffs in bureaus 21 Customers feel safe when working with the bureaus 22 Personality of the staff in bureaus make customers feel trustful 23 Prestige of the bureaus make customers feel trustful Criteria : Access 24 Customers can easily ask for instruction to use service through telephone 25 It does not take long waiting time for customers to be served 90 | P a g e No Statement Level of agreement 26 The bureaus are in good location and easy to get there 27 The bureaus working hour is convenient for customers Criteria : Communication 28 The staff in bureaus explain clearly their services to customers 29 The bureaus provide fee table to for their service 30 The staff in bureaus ensure that all queries and complaints from customers are solved Criteria : Understanding customer 31 The bureaus always pay attention to each customer 32 The staff in bureaus always care for each customers 33 They understand clearly customers’ requirements 34 They realize their frequent customers 35 They always consider customer benefit top priority Customers satisfaction - 36 In general, I am pleased with quality of administrative service 37 Quality of administrative service has been improved significantly in recent times 38 Administrative service outcome meet my demand IV Personal information For classification purpose, please provide some information about yourself: What is your gender? 91 | P a g e Male [ ] Female [ ] How old are you? Younger than 18 [ ] 19-25 [ ] 26-35 [ ] 36-45 [ ] Older than 45 [ ] How about your education? High school [ ] College [ ] Bachelor [ ] Master [ ] Doctoral [ ] Thank you very much for your cooperation! 92 | P a g e APPENDIX 1: ORGANIZATIONAL CHART OF DONG NAI PEOPLE’S COMMITTEE Dong Nai People’s Committee Bien Hoa City Department of Planning and Investing Department of Taxation Department of Education & Training Department of Statistics Nhon Trach District Department of Internal Affairs Department of Foreign Affairs Department of Justice Department of Public Post & Telecom The Provincial Treasury Long Thanh District Department of Trade Department of Science & Technology State Owned Bank Trang Bom District Department of Construction Thong Nhat District Department of Banking The Provincial Armed Force Public Security Cam My District Department of Industry Tan Phu District Department of Transportation Department of Customs Department of Agriculture & Rural Development Department of Natural Resources & Environment Department of Labor, Invalids & Social Affairs Department of Public Health Long Khanh Town Dinh Quan District Authority of Industrial Zones Vinh Cuu District Xuan Loc District 93 APPENDIX 4.1 FIRST TIME RUNNING- EIGENVALUES Total Variance Explained Component Initial Eigenvalues Total % of Variance Extraction Sums of Squared Loadings Cumulative % Total % of Variance Rotation Sums of Squared Loadings Cumulative % Total % of Variance Cumulative % 15.887 45.393 45.393 15.887 45.393 45.393 6.077 17.363 17.363 2.005 5.728 51.121 2.005 5.728 51.121 4.820 13.770 31.134 1.575 4.499 55.620 1.575 4.499 55.620 3.485 9.956 41.090 1.339 3.825 59.444 1.339 3.825 59.444 3.410 9.744 50.834 1.238 3.536 62.980 1.238 3.536 62.980 2.846 8.133 58.967 1.010 2.886 65.867 1.010 2.886 65.867 2.415 6.900 65.867 984 2.811 68.678 893 2.552 71.230 756 2.159 73.389 10 712 2.034 75.423 11 656 1.874 77.297 12 616 1.760 79.057 13 594 1.697 80.754 14 554 1.583 82.337 15 507 1.448 83.785 16 501 1.431 85.216 17 474 1.353 86.569 18 424 1.210 87.779 19 397 1.135 88.914 20 370 1.058 89.972 21 354 1.012 90.984 94 22 334 954 91.938 23 317 906 92.844 24 313 896 93.740 25 273 780 94.520 26 267 763 95.282 27 246 703 95.986 28 240 687 96.672 29 216 616 97.288 30 195 556 97.844 31 166 476 98.320 32 162 464 98.784 33 154 439 99.223 34 139 397 99.620 35 133 380 100.000 Extraction Method: Principal Component Analysis 95 APPENDIX 4.2 FIRST TIME RUNNING-FACTOR LOADING Rotated Component Matrixa Component Understand Customer 764 Understand Customer 682 Courtesy 681 Courtesy 648 Courtesy 637 Communication 613 Understand Customer 605 Credibility 587 Communication 485 Understand Customer 495 Responsiveness 672 Reliability 651 Reliability 581 566 571 Reliability 561 Reliability 530 Responsiveness 459 520 Responsiveness 421 475 Credibility 500 709 513 523 Reliability Responsiveness 465 Understand Customer 677 Credibility 594 Credibility 573 96 Competence 529 Competence 449 Tangible 785 Tangible 765 Tangible 715 Tangible 449 Communication 726 Access 415 Competence 580 Access 705 Access 651 Access 554 Extraction Method: Principal Component Analysis Rotation Method: Varimax with Kaiser Normalization a Rotation converged in 16 iterations 97 APPENDIX 4.3 SECOND TIME RUNNING- EIGENVALUES Component Total Variance Explained Extraction Sums of Squared Loadings Initial Eigenvalues Total % of Variance Cumulative % Total % of Variance Rotation Sums of Squared Loadings Cumulative % Total % of Variance Cumulative % 14.837 44.962 44.962 14.837 44.962 44.962 5.773 17.494 17.494 1.983 6.010 50.972 1.983 6.010 50.972 4.511 13.671 31.165 1.566 4.746 55.718 1.566 4.746 55.718 4.490 13.607 44.772 1.270 3.849 59.567 1.270 3.849 59.567 3.267 9.901 54.673 1.221 3.701 63.268 1.221 3.701 63.268 2.836 8.595 63.268 966 2.927 66.194 954 2.891 69.086 843 2.556 71.641 736 2.229 73.871 10 691 2.094 75.965 11 639 1.936 77.901 12 611 1.850 79.751 13 591 1.790 81.542 14 536 1.624 83.166 15 502 1.522 84.688 16 496 1.503 86.191 17 439 1.331 87.522 18 396 1.199 88.722 19 390 1.182 89.904 20 358 1.086 90.990 21 337 1.022 92.012 Extraction Method: Principal Component Analysis 98 APPENDIX 4.4 SECOND TIME RUNNING- FACTOR LOADING Rotated Component Matrixa Component Understand Customer 704 Courtesy 696 Courtesy 688 Courtesy 687 Understand Customer 669 Understand Customer 547 Understand Customer 506 Reliability 729 Reliability 667 Reliability 587 Reliability 559 Reliability 524 Competence 675 Competence 509 Competence 569 Tangible 778 Tangible 777 Tangible 707 Access 674 Access 668 Access 511 Extraction Method: Principal Component Analysis Rotation Method: Varimax with Kaiser Normalization a Rotation converged in 15 iterations 99 APPENDIX 4.5 THE EFA IMPLEMENTATION OF DEPENDENT VARIABLE (CUSTOMER SATISFACTION) KMO and Bartlett's Test Kaiser-Meyer-Olkin Measure of Sampling Adequacy .724 Approx Chi-Square Bartlett's Test of Sphericity 250.303 df Sig .000 Total Variance Explained Component Initial Eigenvalues Total % of Variance Extraction Sums of Squared Loadings Cumulative % Total 2.287 76.233 76.233 400 13.329 89.562 313 10.438 100.000 2.287 % of Variance 76.233 Cumulative % 76.233 Extraction Method: Principal Component Analysis Component Matrixa Component Customer Satisfaction 891 Customer Satisfaction 872 Customer Satisfaction 857 Extraction Method: Principal Component Analysis a components extracted 100 APPENDIX 4.6 CHARTS OF TESTING HYPOTHESES Figure 4.6.1 Histogram of Customer Satisfaction 101 Figure 4.6.2 Normal P-P Plot of Customer Satisfaction 102 Figure 4.6.3: Scatterplot of Customer Satisfaction 103 ... that this thesis, ? ?Factors affecting customer satisfaction in public sector: A comparative study between administrative service and transport service in Dong Nai Province? ??, was accomplished based... MINH CITY International School of Business - Phan Huynh Van Thao FACTORS AFFECTING CUSTOMER SATISFACTION IN PUBLIC SECTOR: A COMPARATIVE STUDY BETWEEN ADMINISTRATIVE SERVICE AND TRANSPORT. .. rated about public transport service) who had an experience working with public administrative service and public transport service in Dong Nai within the last years, a customer was randomly approached