Internal Service Systems and Cultural Differences: An Exploratory Study of Switzerland, Australia, and Singapore pot

125 2.6.1 Employee empowerment and the cultural dimensions ...130 2.6.2 Employee empowerment and the internal service quality ...132 2.6.3 Employee empowerment and internal service syste

D I S S E R T A T I O N

of the University of St Gallen, Graduate School of Business Administration, Economics, Law and Social Sciences (HSG)

to obtain the title of Doctor of Business Administration

submitted by

Andreas Wittmer

from Niedererlinsbach (Solothurn)

Approved on the application of Prof Dr Thomas Bieger

and Prof Dr Martin Hilb

Dissertation no 3064 (Difo-Druck GmbH)

Internal Service Systems and Cultural Differences:

An Exploratory Study of Switzerland, Australia, and Singapore

D I S S E R T A T I O N

of the University of St Gallen, Graduate School of Business Administration, Economics, Law and Social Sciences (HSG)

to obtain the title of Doctor of Business Administration

submitted by

Andreas Wittmer

from Niedererlinsbach (Solothurn)

Approved on the application of Prof Dr Thomas Bieger

and Prof Dr Martin Hilb

Dissertation no 3064 (Difo-Druck GmbH)

consents to the printing of the present dissertation, without hereby expressing any opinion on the views herein expressed

St Gallen, April 19, 2005

The President:

Prof Ernst Mohr, PhD

This Doctoral Thesis emerged mainly in the last two years and represents a big personal challenge The work of this dissertation would not have been possible without the professional and personal support of many different people and it is

to these people I extend my warmest thanks They have helped in their way to successfully finish this thesis

My special thanks go to my doctoral advisor Prof Dr Thomas Bieger for the supervision of this thesis He provided surroundings in which I was able to follow my ideas freely, and he was there for discussions and supported with constructive help I would like to thank Prof Dr Martin Hilb for the support as a co-referent and also for the organisation of the fruitful doctoral seminars in Multicultural Management His ability to get international scholars from all over the world together is unique

A large part of this research developed during my research visits at the Australian Graduate School of Management in Sydney and the National University of Singapore My special thanks go to Prof Dr Timothy Devinney in Sydney He introduced me to his institute and taught me new empirical methods, which set the path of my dissertation Further thanks go to Prof Dr Glenn Nosworthy for providing me the opportunity to work in his department in Singapore and for the support of his team

I would like to thank to Dr Angela Bennet, who reviewed my texts and helped

to improving my English skills Special thanks go to Tudor Maxwell, who advised me methodologically and supported me with his English language skills

My deepest thanks go to Margot Pamminger, who always supported me morally and was patient and optimistic during the time I worked on the dissertation Furthermore, she supported me during my visits in Sydney and Singapore, although she was far away in Europe The probably most essential support to the achievement of this thesis came from my parents On one hand through their strong support, throughout my education, and on the other hand through their generous financial support during the time of my studies

Many more people contributed to this thesis by giving their time and knowledge

in the interviews I conducted I am very grateful to all of them In particular, I

St Gallen, April 2005, Andreas Ernst Wittmer

Content Overview

I Acknowledgements

II Table of contents

III Table of figures

IV Table of tables

V List of abbreviations

1 Introduction……… ……… 1

2 Theoretical framework……… …… ………14

3 Empirical part……… ……… 134

4 Insights, recommendation and further research………….…….……269

5 References……….………….… 286

6 Bibliography……… ……… 299

7 Appendix……… ………310

Curiculum Vitae……… …333

Table of contents

1 INTRODUCTION 1

1.1 THE MULTICULTURAL DIMENSION OF INTERNAL SERVICE SYSTEMS2 1.2 GEOGRAPHICAL RESEARCH SETTING 3

1.3 PROBLEM STATEMENT 3

1.4 AIM OF THE THESIS AND RESEARCH 4

1.4.1 Research gap 5

1.4.2 Definition of research objective 5

1.4.3 What can be learned from this research 11

1.5 DELIMITATION 11

1.6 COURSE AND STRUCTURE OF THE THESIS 12

2 THEORETICAL FRAMEWORK 14

2.1 MANAGEMENT SYSTEMS 14

2.1.1 Service management systems 15

2.1.2 Internal service systems 16

2.1.3 Analytical model: The internal service system 20

2.2 CULTURE MATTERS 22

2.2.1 Understanding culture 24

2.2.1.1 Definition of culture 24

2.2.1.2 Purpose of culture 28

2.2.1.3 Cultural levels: National – business – corporate – service 29

2.2.1.3.1 National culture 30

2.2.1.3.1.1 The Asian culture perspective in relation to Western cultures

31

2.2.1.3.1.2 Singaporean culture 35

2.2.1.3.1.3 Swiss culture 39

2.2.1.3.1.4 Australian culture 40

2.2.1.3.2 Business culture 40

2.2.1.3.3 Organisational culture 41

2.2.1.3.4 Service cultures 45

2.2.1.3.4.1 External service culture 46

2.2.1.3.4.2 Internal service culture 47

2.2.2 Cultural dimensions 49

2.2.2.1 Value orientation 50

2.2.2.2 Beyond culture 53

2.2.2.2.1 Time 53

2.2.2.2.2 Space 54

2.2.2.2.3 Context 55

2.2.2.2.4 Summary – Beyond culture 56

2.2.2.3 Culture's consequences 57

2.2.2.3.1 Power Distance (PDI) 57

2.2.2.3.2 Uncertainty avoidance (UAI) 58

2.2.2.3.3 Individualism (IDV) 59

2.2.2.3.4 Masculinity (MAS) 60

2.2.2.3.5 Long-term orientation (LTO) 61

2.2.2.3.6 Summary – Culture’s consequences 62

2.2.2.4 Riding the waves of culture 63

2.2.2.4.1 Relationships with people 64

2.2.2.4.2 Attitudes to time 71

2.2.2.4.3 Attitudes to the environment 73

2.2.2.4.4 Summary – Riding the waves of culture 75

2.2.2.5 The Globe Study 75

2.2.2.5.1 Power distance 77

2.2.2.5.2 Uncertainty avoidance 78

2.2.2.5.3 Human orientation 80

2.2.2.5.4 Individualism and collectivism 81

2.2.2.5.5 Assertiveness 82

2.2.2.5.6 Gender egalitarism 84

2.2.2.5.7 Future orientation 85

2.2.2.5.8 Performance orientation 86

2.2.2.5.9 Summary – The Globe Study 88

2.2.2.6 Discussion and conclusion of the cultural dimensions concept

88

2.2.2.7 Cultural profiles of Switzerland, Australia and Singapore 92

2.2.3 Cultural dimensions and internal service systems 104

2.3 CROSS-CULTURAL MANAGEMENT 105

2.3.1 Culture and management 106

2.3.2 Cross-cultural management research 108

2.3.3 Fields of cross-cultural management 109

2.4 DIVERSITY MANAGEMENT ISSUES 110

2.5 INTERNAL SERVICE EXPECTATION, QUALITY AND CONTROL 111

2.5.1 Service quality control models – a comparison 112

2.5.2 European foundation for quality management (EFQM) 112

2.5.3 ISO 9000… 114

2.5.4 Internal service quality dimensions: The INTSERVQUAL model 115 2.5.5 Concluding remarks abaout service expectation, quality and control concept 121

2.5.6 Internal service quality and the cultural dimensions 122

2.5.7 Internal service quality and internal service systems 124

2.6 EMPLOYEE EMPOWERMENT 125

2.6.1 Employee empowerment and the cultural dimensions 130

2.6.2 Employee empowerment and the internal service quality 132

2.6.3 Employee empowerment and internal service systems 133

3 EMPIRICAL PART 134

3.1 INTERNAL SERVICE MANAGEMENT SYSTEMS IN SWITZERLAND, AUSTRALIA AND SINGAPORE –AN EMPIRICAL APPROACH 134

3.1.1 Methodologies and course of the empirical work 136

3.1.1.1 The hotel case studies based on the internal service quality

measurement model (INTSERVQUAL) 141

3.1.1.1.1 Case study data Switzerland 143

3.1.1.1.2 Case study data Australia 150

3.1.1.1.3 Case study data Singapore 150

3.1.1.1.4 The results across the three countries 152

3.1.1.2 The cultural internal service quality index 169

3.1.1.2.1 The data 172

3.1.1.2.2 The results 174

3.1.1.3 Conjoint methods 180

3.1.1.3.1 Basic assumptions of conjoint analyses 182

3.1.1.3.2 The basic conjoint model 182

3.1.1.3.3 Choice based conjoint: The discrete choice analysis 182

3.1.1.3.3.1 Introduction to logistic regression and log linear models 185

3.1.1.3.3.2 The multinomial logit model 189

3.1.1.3.3.3 Binary logistic regression 191

3.1.1.3.3.4 Conditionality – dependent options 191

3.1.1.3.3.5 Basic assumptions of discrete choice analysis 193

3.1.1.3.4 The choice model for this research 194

3.1.1.3.4.1 The choice modelling questionnaire 194

3.1.1.3.4.2 The variables 211

3.1.1.3.4.3 The sample 213

3.1.1.3.4.4 Specific assumptions concerning this study 219

3.1.1.3.4.5 The models for this study 219

3.1.1.3.4.6 The results 221

3.1.2 Summary of results 249

3.1.2.1 The Swissôtel case across the three countries 249

3.1.2.2 The cultural internal service quality index 254

3.1.2.3 Choice differences across the three countries 255

3.1.2.3.1 Results from the choice analysis 255

3.1.2.3.2 Results from attribute analysis 256

3.1.2.3.3 Answering the hypotheses 258

3.1.2.4 Comparison of results 259

3.2 DISCUSSION OF EMPIRICAL FINDINGS 260

3.2.1 Cultural dimensions and internal service dimensions 260

3.2.2 Cultural differences and internal service systems: A practical application 262

3.3 INSIGHTS FROM EMPIRICAL FINDINGS 263

4 INSIGHTS, RECOMMENDATION AND FURTHER RESEARCH 269

4.1 THE INTERNAL SERVICE SYSTEM:AGLOCAL SYSTEM FOR PRACTICE 269

4.2 CONCLUDING SUMMARY 280

4.3 PRACTICAL RECOMMENDATION 281

4.4 FURTHER RESEARCH 284

5 REFERENCES 286

6 BIBLIOGRAPHY 299

7 APPENDIX 310

7.1 PRE-STUDY RESULTS 310

7.2 EXPLORATORY RESEARCH –PERSONAL INTERVIEW GUIDELINES311 7.3 INTERNAL SERVICE QUALITY QUESTIONNAIRE 312

7.4 INTERACTION HOTEL GUEST – FRONTLINE – SUPPORT 318

7.5 CHOICE MODEL QUESTIONNAIRE SET UP 319

7.6 CHOICE MODELLING QUESTIONNAIRE 321

Table of figures

F IGURE 1: H YPOTHESES FOR THE S WISSÔTEL CASE STUDY 8

F IGURE 2: C ONCEPTUAL MODEL AND H YPOTHESES 10

F IGURE 3: S TRUCTURE OF THE DISSERTATION 13

F IGURE 4: T HE SERVICE MANAGEMENT SYSTEM 15

F IGURE 5: S ERVICE F RAMEWORK 18

F IGURE 6: I NTEGRATING FACTORS OF AN INTERNAL SERVICE SYSTEM 19

F IGURE 7: T HE INTERNAL SERVICE SYSTEM 22

F IGURE 8: T HREE LEVELS OF CULTURE 30

F IGURE 9: T HREE LEVELS OF CULTURE 32

F IGURE 10: M ASLOW ’ S HIERARCHY OF NEEDS AND THE A SIAN EQUIVALENT 34

F IGURE 11: L EVELS OF CULTURE AND THEIR INTERACTION 42

F IGURE 12: R ELATION BETWEEN CULTURE TYPES AS REGARDS CONSTRAINTS ON INDIVIDUALS ’ FREEDOM 45

F IGURE 13: S ERVICE Q UALITY C HAIN 46

F IGURE 14: F ROM EMPLOYEE SATISFACTION TO CUSTOMER SATISFACTION AND OPPOSITE 47

F IGURE 15: E XTERNAL – INTERNAL SERVICE CULTURE 48

F IGURE 16: P OWER D ISTANCE I NDEX (PDI) V ALUES FOR 50 COUNTRIES AND 3 REGIONS 94

F IGURE 17: U NCERTAINTY A VOIDANCE I NDEX (UIA) V ALUES FOR 50 COUNTRIES AND THREE REGIONS 96

F IGURE 18: I NDIVIDUALISM INDEX (IDV) VALUES FOR 50 COUNTRIES AND THREE REGIONS 98

F IGURE 19: M ASCULINITY INDEX (MAS) VALUES FOR 50 COUNTRIES AND THREE REGIONS 100

F IGURE 20: L ONG - TERM ORIENTATION INDEX (LTO) VALUES FOR 29 COUNTRIES 102 F IGURE 21: C OMPARISON OF FIVE DIMENSIONS FOR S WITZERLAND , A USTRALIA AND S INGAPORE 104

F IGURE 22: C ULTURAL DIMENSIONS AND THE INTERNAL SERVICE SYSTEM 105

F IGURE 23: E UROPEAN F OUNDATION FOR Q UALITY M ANAGEMENT (EFQM) E XCELLENCE M ODEL 113

F IGURE 24: ISO 9000 FRAMEWORK 115

F IGURE 25: T HE INTERNAL SERVICE QUALITY MODEL 119

F IGURE 26: R ELATIONSHIP BETWEEN DETERMINANTS OF INTERNAL GAP 1 AND INTERNAL GAP 3 120

F IGURE 27: R ELATIONSHIP BETWEEN CULTURE AND SERVICE QUALITY 123

F IGURE 28: I NTERNAL SERVICE QUALITY AND THE INTERNAL SERVICE SYSTEM 125

F IGURE 29: T HE FORM , STATE AND OUTCOMES OF EMPOWERMENT 128

F IGURE 30: E MPLOYEE EMPOWERMENT AND THE INTERNAL SERVICE SYSTEM 133

F IGURE 31: W ORKING HOUR COMPARISON ACROSS COUNTRIES 155

F IGURE 32: E XPECTATION FRONTLINE COMPARISON 156

F IGURE 33: P ERCEPTION FRONTLINE COMPARISON 158

F IGURE 34: A CTUAL PERFORMANCE IN RELATIONS TO INTERNAL SERVICE STANDARDS FRONTLINE COMPARISON 159

F IGURE 35: C ULTURAL DIFFERENCES OF INTERNAL SERVICE DIMENSION IMPORTANCE AND EXPECTATION IN RELATION TO INTERNAL SERVICE STANDARDS 165

F IGURE 36: T HE CONJOINT AND DISCRETE CHOICE ANALYSES COMPARED 183

F IGURE 37: P ROFILE MAP FOR S WITZERLAND , A USTRALIA AND S INGAPORE BASED ON P H D STUDENT TEST 223

F IGURE 38: C ULTURAL MAP ACROSS COUNTRIES BASED ON CHOICE DATA 243

F IGURE 39: A TTRIBUTE SENSITIVITY 245

F IGURE 40: T HE I NTERNAL S ERVICE S YSTEM 271

F IGURE 41: T HE S WISS I NTERNAL S ERVICE S YSTEM 273

F IGURE 42: T HE A USTRALIAN I NTERNAL S ERVICE S YSTEM 275

F IGURE 43: T HE S INGAPOREAN I NTERNAL S ERVICE S YSTEM 277

F IGURE 44: T HE G LOCAL I NTERNAL S ERVICE S YSTEM 279

F IGURE 45: I NTERACTION H OTEL GUEST – FRONTLINE – SUPPORT 318

MANAGERIAL IMPACT 51

PRESENT , FUTURE 72

T ABLE 21: E XLANATION OF COLLECTIVISTIC VERSUS INDIVIDUALISTIC SOCIETIES 82

T ABLE 22: E XLANATION OF HIGH VERSUS LOW GENDER EGALITARISM SOCIETIES 82

T ABLE 23: E XLANATION OF HIGH VERSUS LOW GENDER EGALITARISM SOCIETIES 84

T ABLE 24: E XPLANATION OF HIGH VERSUS LOW FUTURE ORIENTATION SOCIETIES 85

T ABLE 25: E XPLANATION OF HIGH VERSUS LOW PERFORMANCE SOCIETIES 86

T ABLE 26: C OMPARISON OF FOUR CONCEPTS OF CULTURAL DIMENSIONS 89

T ABLE 27: C OMPARISON OF CULTURAL DIMENSIONS FOR S WITZERLAND , A USTRALIA AND S INGAPORE 103

T ABLE 28: C OMPARISON OF WORKING HOUR STATISTICS IN S WITZERLAND , A USTRALIA AND S INGAPORE , 135

T ABLE 29: A DVANTAGES /D ISADVANTAGES OF QUALITATIVE AND QUANTITATIVE SOCIAL RESEARCH 137

T ABLE 30: U SE OF DIFFERENT METHODOLOGIES 140

T ABLE 31: S AMPLE CHARACHTERISTICS CASE STUDIES 146

T ABLE 32: C ULTURAL SERVICE PROFILES FOR S WITZERLAND , A USTRALIA AND S INGAPORE BASED ON HIGHEST IMPORTANCE PER DIMENSION 160

T ABLE 33: C ULTURAL SERVICE PROFILES FOR S WITZERLAND , A USTRALIA AND S INGAPORE BASED ON LOWEST IMPORTANCE PER DIMENSION 161

T ABLE 34: C ULTURAL SERVICE PROFILES FOR S WITZERLAND , A USTRALIA AND S INGAPORE BASED ON HIGHEST LEVEL OF EXPECTATION PER DIMENSION 163

T ABLE 35: C ULTURAL SERVICE PROFILES FOR S WITZERLAND , A USTRALIA AND S INGAPORE BASED ON LOWEST LEVEL OF EXPECTATION PER DIMENSION 164

T ABLE 36: C OMPARISON OF CULTURAL DIMENSIONS ACROSS THE THREE COUNTRIES 167

T ABLE 37: T HREE MOST IMPORTANT INTERNAL SERVICE CRITERIA IN S WITZERLAND , A USTRALIA AND S INGAPORE 168

T ABLE 38: C ULTURAL DIMENSIONS SCORES BY H OFSTEDE 172

T ABLE 39: I NTERNAL SERVICE DIMENSION AVERAGE PERCEPTION SCORES BASED ON S WISSÔTEL DATA 173

T ABLE 40: C ORRELATION COEFFICIENTS BETWEEN CULTURAL AND INTERNAL SERVICE DIMENSIONS BASED ON S WISSÔTEL DATA 174

T ABLE 41: C ULTURAL INTERNAL SERVICE QUALITY INDEX (CISQI) FOR THE THREE COUNTRY CLUSTERS BASED ON THE S WISSÔTEL DATA 177

T ABLE 42: ANOVA 179

T ABLE 43: O RTHOGONAL FRACTIONS TO ESTIMATE MAIN EFFECTS FOR THE TWO

OPTIONS IN THE QUESTIONNAIRE 198

T ABLE 44: E NDPOINT DESIGN FIST OPTION 200

T ABLE 45: E NDPOINT DESIGN SECOND OPTION 201

T ABLE 46: 32 FIRST AND SECOND CHOICE OPTIONS IN THE MODEL 202

T ABLE 47: A N EXAMPLE OF AN INTERNAL SERVICE EXPECTATION CHOICE - SET 210

T ABLE 48: V ARIABLES IN THE CHOICE MODEL 212

T ABLE 49: S AMPLE CHARACTERISTICS 214

T ABLE 50: M ODEL VALIDITY – P REDICTION OF CHOICES 220

T ABLE 51: F IRST INDICATION CULTURAL SERVICE PROFILES FOR S WITZERLAND , A USTRALIA AND S INGAPORE 224

T ABLE 52: E STIMATED BINARY LOGIT CHOICE MODEL FOR S WITZERLAND 226

T ABLE 53: E STIMATED BINARY LOGIT CHOICE MODEL FOR A USTRALIA 229

T ABLE 54: E STIMATED BINARY LOGIT CHOICE MODEL FOR S INGAPORE 231

T ABLE 55: E STIMATED BINARY LOGIT CHOICE MODELS FOR THE THREE NATIONS 234

T ABLE 56: B INARY LOGIT MODELS WITH ONLY SIGNIFICANT VARIABLES FOR THE THREE COUNTRIES 237

T ABLE 57: S UMMARY OF MODELS ( NORMAL BETA VALUES ) WITH ONLY SIGNIFICANT VARIABLES 240

T ABLE 58: E XPLANATORY POWER OF EACH INTERNAL SERVICE ATTRIBUTE FOR THE S WISS DATA 247

T ABLE 59: E XPLANATORY POWER OF EACH INTERNAL SERVICE ATTRIBUTE FOR THE A USTRALIAN D ATA 247

T ABLE 60: E XPLANATORY POWER OF EACH INTERNAL SERVICE ATTRIBUTE FOR THE S INGAPOREAN DATA 248

T ABLE 61: R ELATION OF CULTURAL DIMENSION TO SERVICE DIMENSIONS BASED ON THE MODEL LOG - LIKELIHOOD AND BETA SENSITIVITY 258

T ABLE 62: I NTERNAL SERVICE DIMENSION COMPARISON BASED ON DIFFERENT STUDIES 261

T ABLE 63: S UMMARY OF MANAGERIAL IMPLICATIONS IN EACH OF THE THREE COUNTRY CLUSTERS 265

T ABLE 64: P RACTICAL IMPLICATION OF A GLOCAL INTERNAL SERVICE SYSTEM 282

T ABLE 65: C OMPARISON OF IMPORTANCE RATINGS OF P H D STUDENTS IN S WITZERLAND , A USTRALIA AND S INGAPORE WITH RESPECT TO THE INTERNAL SERVICE DIMENSIONS – THE PRE - STUDY 310

T ABLE 66: C HOICE SETS IN FULL TEXT 319

T ABLE 67: C HOICE SETS BOTH OPTIONS IN SHORT TEXT 320

List of Abbreviations

AGSM Australian Graduate School of Management

CISQI Cultural Internal Service Quality Index

EFQM European Foundation of Quality Management

HSG Hochschule St Gallen (University of St Gallen)

INTSERVQUAL Internal Service Quality model

M&A’s Merger and acquisition’s

PDI Power Distance Index

SERVQUAL Service Quality model

1 INTRODUCTION

This doctoral thesis introduces the reader to the research conducted in order to obtain a doctoral degree Culture plays an important role for companies which work around the globe Managers of multinationals know the difficulties of communication, not only due to different languages, but also due to different expectations and perceptions A critical issue for most of the organisations is the creation of customer value not only through excellent products, but also through excellent customer service, which evolves on one hand through service settings

of the company and on the other hand through the frontline employees who personally interact with the customers For them, it is essential that the internal support services are according to their need and expectation, so they are enabled

to deliver the external customer service which is expected Service expectations and perceptions are different in each culture The problem is the management and control of services across cultures Standardised service settings are not good enough to satisfy internal and external customers These settings have to

be globally effective and locally adaptive For this reason, the purpose of this thesis is to find the differences of internal services based on culture and introduces a framework and recommendation for managers to increase global internal service quality

In this first part of the thesis, some general information about the research topic

is provided Based on this, research questions and objects are defined and hypotheses to be tested in later parts of the thesis are stated The introductory section explains the multicultural setting of internal services The geographic setting for this research is argued about and decided on The hypotheses follow the research questions and the structure of the dissertation is presented

The second part of the dissertation, the theoretical part, introduces the reader to the relevant literature and theoretical frameworks relating to culture on national and corporate levels which are relevant for the analyses of this study It explains the writers’ understanding of internal service culture and systems and why these topics are of interest Different methodologies which could be used to collect data and do research on this topic are discussed, and one method is proposed for use in the doctoral study Then a specific research plan is provided Specific

frameworks are selected based on the need to successfully answer the stated hypotheses

A third part of the dissertation will cover the empirical analysis Research was conducted in Switzerland, Australia and Singapore A quantitative approach based on a choice-based conjoint analysis which was conducted in the three countries (Switzerland, Australia, and Singapore) indicates the influence of national culture on internal services Qualitative case studies in the three countries help to answer questions of internal service management issues A discussion of the empirical findings with respect to different service systems and cultures is then provided and the hypotheses are answered at the end of the empirical part of this thesis

In the last chapter, both the empirical and theoretical parts of the dissertation are concluded Differences between the three national cultures with respect to internal services are outlined The research questions are answered Implications for practice are described, recommendations are drawn and questions for further research are stated

1.1 THE MULTICULTURAL DIMENSION OF INTERNAL SERVICE SYSTEMS

Internal service systems are frameworks with the purpose of structuring the course of internal services between the support and the frontline employees Cultural elements come into the system in multicultural settings, where companies operate in different cultural contexts with employees of different cultural backgrounds Culture does not depend on a system or on management, but rather the opposite A successful system is based on the multicultural pot of people in the organisation or team The same counts for managerial activities In the case of this thesis different dimensions of culture will be discussed and are the foundation of the internal service evaluations From what is learnt from the cultural dimension and the service dimensions, an internal service system evolves It is based on a multicultural context, namely the cultures of Switzerland, Australia and Singapore – the countries of research in this thesis

1.2 GEOGRAPHICAL RESEARCH SETTING

Not all countries, in which internal service systems are relevant, can be considered in the present study Two criteria, however, have to be fulfilled by these countries that are to be included: One, they need to differ with regard to their cultural backgrounds, and two, they ought to be multicultural themselves Although the cultures are very different within different continents, the cultural differences of the three chosen countries for this study, Switzerland, Australia and Singapore are of high interest and relevance Switzerland, with its four national languages and three different subcultures, Singapore, a multicultural place based on three main cultures, namely the Chinese, Malay and the Indian culture backgrounds, and Australia, based on British culture, but strongly influenced by American culture Australia also has a lot of Asian people from different Asian countries and European people from different European countries, not to mention aboriginal tribes This geographical choice is supported by Hilb (2000) by pointing out their specific ways of approaching management He states that each country has its own local approaches to management, theory, and practice In Switzerland it is leadership through consensus (Hilb 2000), in Singapore, heaviliy influenced by Chinese culture, but also with some of western influence, it is a mixture of leadership through

“family and richness”, systems and power In Australia, management practice is based more on leadership through systems like those in Great Britain

1.3 PROBLEM STATEMENT

The aim of the thesis is to introduce an internal service system in an international context The internal service system will incorporate culture on the national level and relate to internal service dimensions Theoretical frameworks that are touched upon include: Internal service quality and systems, culture, cross cultural management, and employee issues such as employee empowerment

The doctoral thesis intends to explain the influence of national culture on the relationship between internal service culture, internal service quality, and internal service systems by focusing on the internal service gaps and the impact

of dimensions of national culture and internal services The research focuses on internal service cultures in multinational companies in Switzerland, Australia and Singapore The leading question of this research is: Does local national culture influence internal services, what is the influence of the local national culture on internal services and how can an internal service culture be implemented in the form of an internal service system in multinational companies in Switzerland, Australia and Singapore?

1.4 AIM OF THE THESIS AND RESEARCH

The aim of this research is to develop an internal service system for managers of internal service departments based on internal service behaviours and preferences of local employees of glocal (Hilb, 2000) hotels and students of local universities A comparison of internal service preferences with Hofstede’s cultural dimensions leads to an internal service system Hotels were chosen because not all international hotel chains are completely internationalised and often represent the local culture Many big international companies and hotel chains have an international culture, but have lost the local touch Swissôtel, which is owned by a Singaporean holding company, is still individually organised and tries to represent the specific national culture of the place of each hotel at the four and five star level The idea is that the guest is not visiting them

to experience exactly the same as at home and everywhere else There is an attempt to provide some culturally specific extras That is why Swissôtel was chosen for this research An overview of the cultural differences is provided It

is the aim that the model can be used internationally in Australia, Singapore and Switzerland, where the research took place The internal service quality gaps can

be measured and compared to the internal service standards for a further indication of different internal service cultures in the different countries This procedure fits into the comparative multi case study method, which is the one preferred for this research for the hotel case studies Furthermore, a quantitative approach is used by using a choice based conjoint method, where postgraduate students had to choose among different internal service options From this, preferences with regard to internal services evolve Internal service patterns are

compared among the three countries Having gained all that knowledge, it is the aim to provide a framework, an internal service system for practical application

1.4.1 Research gap

Many articles have been written in the field of service quality Most of them though about external service quality and some about internal service quality Measurement tools such as SERVQUAL (Augustyn 1998) and INTSERVQUAL (Frost and Kumar 2000) also known as the gap models are developed, tested and used in many writings The research gap lies within an integrated service system which I have not found any valuable texts about except some statements that such a system is needed to successfully control internal service Furthermore, there is very limited literature about the relationships between national culture and internal service perceptions Putting a system or model in an international context comparing specific different cultures, in this case the Swiss, Australian and Singaporean cultures, is unique It is the goal to analyse what relation exists between Hofstede’s cultural dimensions and the internal service dimensions, the different gaps stated in the internal service quality model (INTSERVQUAL) (Parasuraman 1985)

The issue of cultural dimensions on internal service systems, by focusing on the internal service quality gaps and ensuing consequences for organisations, has not yet been extensively researched and defines the gap of my research

1.4.2 Definition of research objective

The research objectives are national internal service cultures in multinational companies as a major part of internal service systems which are present in Switzerland, Australia and Singapore These have to be relevant with respect to service quality on an internal basis For research purposes managers, employees, experts such as professors, other industry leaders and students have been interviewed The idea of the internal service system is that they focus on the gaps of the INTSERVQUAL model in relation to Hofstede’s cultural dimensions There will be open, qualitative questions and also a quantitative survey These will assume an internal service system and involve cultural and behavioural questions according to Hofstede’s dimensions The goal is to

conclude that along Hofstede’s cultural dimensions there are different preferences according to the internal service dimensions; thus, national cultures

do influence internal services

The doctoral thesis has the purpose of explaining what relation exists between the cultural dimension (Hofstede 2001) and internal service dimensions Hence, the explanation objective is the influence of national cultures on the internal services and internal service systems

The hypotheses are:

H1: National culture has an impact on front-line staff’s expectation and

perception of internal service quality based on the internal service quality dimensions (Swissôtel case)

H2: National culture has an impact on support staff’s perception of front-line

staff’s expectation of internal service quality based on the internal service quality dimensions (Swissôtel case)

H3: National culture has an impact on the organisational hierarchy levels

which have an influence on the internal service quality based on the internal service quality dimensions (Swissôtel case)

H4: National culture has an impact on working hours, which have an influence

on the internal service quality based on the internal service quality dimensions (Swissôtel case, national statistics)

H5: National culture has an impact on employee empowerment in connection

with organisational culture (Swissôtel case)

H6: There are different internal service patterns in Switzerland, Australia and

Singapore based on the internal service dimensions (Choice based conjoint analysis)

H7: There are significant differences in internal service quality among the

three countries: Switzerland, Australia and Singapore (Cultural Internal Service Quality Index, CISQI)

H8: There are different sensitivities to different service dimensions within

Switzerland, Australia and Singapore (Choice based conjoint analysis)

H9: The service dimensions with the highest sensitivities are different in the

different cultures (Choice based conjoint analysis)

Figure 1: Hypotheses for the Swissôtel case study

Source: Own presentation

The figure above highlights the hypotheses which were evaluated and tested with case study data mainly based on Swissôtel The following figure shows the hypotheses which were empirically tested based on the choice data, and hypothesis 7 is answered by calculating the cultural internals service index, which is based on Hofstede’s cultural dimension scores (Hofstede 2001) and the internal service dimension scores which resulted from the Swissôtel case research

Figure 2: Conceptual model and Hypotheses

Frontline employee (internal customer) Employee

empowerment

Internal Serice Quality

Power Distance

Individualism

Uncertainty Avoidance

Masculinity Long Term Orientation

Feed-back, control National cultural surrounding

Internal Service Dimensions:

empowerment

Internal Serice Quality

Power Distance

Individualism

Uncertainty Avoidance

Masculinity Long Term Orientation

Feed-back, control National cultural surrounding

Internal Service Dimensions:

Frontline employee (internal customer) Employee

empowerment

Internal Serice Quality

Power Distance

Individualism

Uncertainty Avoidance

Masculinity Long Term Orientation

Feed-back, control National cultural surrounding

Internal Service Dimensions:

empowerment

Internal Serice Quality

Power Distance

Individualism

Uncertainty Avoidance

Masculinity Long Term Orientation

Feed-back, control National cultural surrounding

Internal Service Dimensions:

Source: Own presentation

Based on Hofstede’s definitions of culture, the importance of each internal service quality dimension is likely to differ across people with different cultural backgrounds For example, in cultures with large power distance, there are most probably considerable differences between the behaviours of powerful and weak

internal customers towards service delivery departments Powerful internal customers might expect internal service providers to be weaker than them and therefore, they will expect extremely good treatment and attach greater importance to different internal service dimensions Weak internal customers, on the other hand, might be more likely to tolerate failure from more powerful service providers They might be treated as less important by powerful service providers Therefore, weak internal customers might not attach too much importance to different service dimensions

1.4.3 What can be learned from this research

From this research it can be learned that cultures have an influence on service dimensions and that an internal service system has a positive influence on internal service quality and internal service culture with respect to different national cultures The service system intends to provide a framework for companies to increase stakeholder satisfaction and through this also performance and efficiency The following questions will be answered with this PhD thesis:

• What is the influence of the local culture on internal services and how can internal services be implemented in the form of an internal service system in multinational companies?

o How is cultural internal service measured and defined?

o What is an effective model to explain the importance of culturally adopted internal services and service systems?

o What are the consequences for the implementation of an internal service system in Switzerland, Australia and Singapore?

1.5 DELIMITATION

There are many topics and theories other than service management, culture and employee empowerment related to the topic of this thesis These will not be explained in depths, but sometimes just mentioned with a source included The focus of this doctoral research is the relationship between internal services and

national culture For the comparative analysis Hofstede’s cultural dimensions represent the foundational framework and for the internal service the INTSERVQUAL dimensions are used as the starting point INTSERVQUAL is assumed to include relevant attributes for the Swiss, Australian and Singaporean culture, although there is critical literature about the relevance of the INTSERVQUAL dimensions for non-Western cultures Significant answers are provided by the choice research with students in the different countries, but not from the case studies, because the sample sizes of the different case studies are too small to be of statistical significance for general conclusions

1.6 COURSE AND STRUCTURE OF THE THESIS

The structure of the dissertation is related to the research process

In the first part of the thesis the questions are presented and underlined with a problem definition From this a promising research methodology is introduced

In the second part of the dissertation an in depth literature review and theoretical framework is provided to the reader Different existing models are introduced and explained with respect to the topic of cultures and internal service systems

In the third part the results from the research conducted are provided and interpreted The findings are put into relation with the models from the theoretical part and the hypotheses are answered

In the final part of the thesis some insights, recommendations and an outlook is provided Conclusions are drawn with a practical view

Figure 3: Structure of the dissertation

Part 1Introduction, statement of the problem, research questions,

definitions, research methodologies, structure

Part 2Literature review, theoretical framework, models

Part 3Empirical Analysis, research results are provided and explained

Part 4Conclusions, recommendations and outlook

Part 1Introduction, statement of the problem, research questions,

definitions, research methodologies, structure

Part 2Literature review, theoretical framework, models

Part 3Empirical Analysis, research results are provided and explained

Part 4Conclusions, recommendations and outlook

Source: Own presentation

2 THEORETICAL FRAMEWORK

This part of the thesis introduces the reader to some background information and theoretical frameworks, based on a literature review, that constitute the basic understanding of the writer The reader is taken through different frameworks and methods concerning cultures, service quality, service systems and employee empowerment, and a basic model for this thesis is presented

2.1 MANAGEMENT SYSTEMS

Management philosophies and practices should fit the sociological context in which they are placed (Hofstede 1993) Taking into account that there are differences in the sociological context in different countries, management systems must be different as well In this research, it is intended that Swiss, Australian and Singaporean approaches to management will be compared with each other Countries may manage hard issues like strategy, structure and systems similarly (Calori 1994), but their management approach towards soft issues like skills, style, staff and shared goals differ Interdependence is valued

as a mode of relationship in the Singaporean context, whereas Swiss and Australians generally value independence Competition, profit, individualism and professionalism are important characteristics of management systems in Switzerland and Australia Singaporean management systems value long-term growth, quality, consensus and integration much more (Calori 1994) Although there are some similarities between Swiss values and Singaporean values, when taking Hofstede’s cultural dimensions into account Furthermore, management systems are dependent on the history of nations The socio-political context and education systems are foundational elements of management systems and the business cultures of a country

The key concepts of management systems in the context of this thesis are culture, empowerment and internal service quality With these three concepts the national cultural differences which are present in multinational organisations are dealt with The empowerment of service employees who have to deliver excellent customer service is examined as well as the need for them to be empowered to make quick decisions when demanded by customers This

involves internal service quality which influences the highest possible external service which frontline employees are able to deliver

2.1.1 Service management systems

According to Norman (1991), successful services are simple and uncomplicated

He states, that service is a social process, whereas management is the ability to direct social processes Internal service is defined as any contribution provided

at some cost (in effort, time or resources) by an employee to benefit a colleague

in another group (Llewellyn 2001) A service management system creates the ability to produce and reproduce a service, while maintaining its quality deals with social relationship much more than with products The enforcement of a service system is based on identifying its essential elements and on designing effective ways of controlling and recreating these elements (Norman 1991) Key determinants of success have to be reflected in the management and culture of a service organisation

Figure 4: The service management system

Thecultureandphilosophy

The image

Thecultureandphilosophy

The image

Source: Norman (1991)

The market segment refers to the types of customers for which the service system was designed and to whom the service is delivered (Norman 1991) The service concept consists of values or benefits offered to the client, which can be physical, psychological, emotional or often a combination of all three There is a difference between core services and peripheral services which are relevant for the creation of external and internal customer satisfaction (Norman 1991) The service delivery system defines the way the services are distributed to the customer and involves personnel, clients and technological or physical support (Norman 1991) The image can be an information tool or a tool which influences the clients’ perception of the company or product It is important for the positioning and cost efficiency process (Norman 1991) The core, on which Norman’s model is built, is the culture and philosophy of the company It frames the social processes leading to the delivery of services and benefits to the customers It provides the customer with an overview of the way in which services are delivered and helps to understand what service can be expected (Norman 1991)

In a service management system there are two kinds of customers, the customer

in the market segment and the internal customer (frontline employee) in the service delivery system (Norman 1991) Focusing on the internal customer, Norman’s model can be combined with the idea of internal service networks described by Llewellyn (2001) for the development of an internal service system

2.1.2 Internal service systems

An internal service system should integrate national, business and organisational culture, internal and external service culture, and internal and external service quality Within internal services the employees are seen and treated as internal customers, hence employees have to be satisfied not only by their leaders, but also by the other employees in supporting functions Service employees have to

be empowered to answer to the external and internal customers and make quick decisions about how to solve a problem

The external cultural surroundings of a company (the national culture and business culture), and the customers’ and potential customers’ influence the

internal service system as well as the internal social and organisational aspects like communication, hierarchy, service mindedness, employee empowerment, and so on The following figure starts with factors that influence and define the companies’ internal framework (internal service culture, quality and system) leading to the external perceptions or expectations such as external service culture, quality and system for stakeholders

An internal service system can be evaluated by measuring internal service quality, but also external service quality This can be done by using the so called gap analysis introduced with the two models Servqual and Intservqual (Zeithaml 1990) In this case different national cultures play an important role, namely those from Switzerland, Australia and Singapore Hence, cultural dimensions (Hofstede 2001) can be crossed with the gap’s to achieve new relevant data to be used to create an internal service system Employee empowerment plays an important role in the whole internal service system and is introduced later in the thesis Furthermore, there are other factors or topics, which influence an internal service system like work-life-balance, internal customer relations, internal communications, employee services, managerial behaviour, information systems, internal control systems and so on, but these are not elaborated in detail

in this context and are excluded from this thesis

Figure 5: Service Framework

External Service System

External Service Quality

External Service Culture

Internal Service System

Internal Service Quality

Internal Service Culture

Na tio

External Service System

External Service Quality

External Service Culture

Internal Service System

Internal Service Quality

Internal Service Culture

Na tio

Source: Own presentation

The internal service system is a system which integrates and depends on culture, empowerment and service quality as shown in the following figure It leads down to a knot called “moment of truth” This is the actual interaction between the frontline employee and the external customer The goal is to serve the customer in the best possible way to gain his loyalty towards the company in any culture of the world In a multicultural setting, employees of one company are from different nationalities and the same applies to the customers they serve Understanding each others cultural background and the service quality expectations are the gaps to be understood to provide that perfect service

Figure 6: Integrating factors of an internal service system

Moment of truth

Internal Service Quality Internal Service Culture Organisational Culture

National culture

Business culture

Source: Own presentation

Employee empowerment is understood differently in every cultural context, but

it takes its place in a management’s system which focuses on increasing service quality by mostly depending on so called soft, cultural or human aspects The focus of this model is on two stakeholder groups, the employees and the customer, but it is the same for the other stakeholders like suppliers, public communities, and shareholders as these groupings are multinational too and need to be taken care of in an internationally acceptable and caring way Hence, the cultural aspects are some of the most important issues of an international organisation and can only be taken care of by well trained and educated employees who are the recipients of efficient internal service and know what their external contacts, cultural settings with respect to service expectations, and behaviours are According to Randolph and Sashkin (2002) empowerment must

focus on the structural elements in any national cultural setting, but these structural elements are influenced by the culture when they are set up

2.1.3 Analytical model: The internal service system

The internal service system, proposed as an analytical framework for this thesis,

is an integrating model structured along the cultural dimensions (Hofstede 2001), the concepts of internal service quality (Parasuraman 1985) and employee empowerment (Honold 1997) The foundation of the model is culture which is operationalised in this study along Hofstede's cultural dimensions (Hofstede 2001) These dimensions are seen as a basic theory The internal service quality attributes are considered to be dependent on the cultural dimensions For the understanding in this thesis, internal service quality is structured along the internal service quality dimensions (Parasuraman 1985) The structure of employee empowerment theory relates to a model of Lashley (1999)

The receiver of the internal service, the frontline employee, can be seen as the starting point of the internal service process provided He precieves and by this influences the organisational culture in the internal service system according to his implicit perception by communicating internal service failures to support departments In the system the link between the organisational culture and the interaction with the customer determins how organisational culture based on internal service perceptions between frontline and support employees is influenced by the frontline employee The information which is transferred back from frontline to support staff is an indicator of the internal service organisation that shows if the service organisation is in line with the external customers’ service expectation The external customer has to be satisfied and frontline employees' best feel what the expected, external values are The whole model is placed into a national cultural surrounding The focus of this study lies on the national cultural influence on internal services which is tested in three different countries The organisational, internal cultural factors are not followed up in detail in this research because they are influenced by the national cultures It is the goal to just discover the influence of national cultures on internal services