Critical Literature Paper (1).docx

Moderating effects of Uncertainty Avoidance on Customer Satisfaction and Customer Loyalty in Islamic Bank of Pakistan Arslan Ali Business Administration FUUAST Islamabad Abstract This paper is aimed to examine the relationship between customer satisfactions on customer loyalty and to investigate the moderating effect of culture on this relationship. A significant and positive impact of customer satisfaction on customer loyalty was found and also moderating effect of uncertainty avoidness of this relationship. It is cross sectional study with small sample size, so that the generalizability is narrow in scope. The limited domain of the study is culture because culture in not generalizable. Key words: Islamic banking, Customer loyalty, Pakistan Economy, customer Satisfaction, Culture.

Introduction Banks are competing strongly in a very competitive enivronment to offer quality oriented services as indicated by client’s desires. Specialists are studying different key fragments of banking sector like operations, service quality, employee fulfillment, consumer loyalty, financing items, and effectiveness, financial execution to more readily comprehend and serve the network on the loose. Various investigations have featured the key idea of value administrations/items offered by the banks. Clients turned into middle for all saving money exercises because of expanded challenge for more prominent piece of the overall industry. Concentrating on consumer satisfaction has been the way to expanding service quality according to clients' desire in the banking sector (Zairi, 2000). On the off chance that Islamic banks just interests to

Muslims, this will normally limit the development of the Islamic banking industry. In any case, if that it advances to non-Muslims also, the development potential turns out to be a lot bigger, and might prompt the fruitful internationalization of Islamic banking (Khan, 2011). Building customer loyalty contributes you a high return on the time, effort and money. Strong customer relationship management meant shaping your full set out the level of service you plan to agree your customer types. Customer satisfaction peaks to customer loyalty with the service provider which has been represented as the customers’ positive attitudinal and behavioral answer to marketing motivations in service setting (Amin, 2013). The Asian and Western social orders are distinctive to one another by virtue of culture and their introduction towards time. For instance, social orders are characterized on the degree to which individuals are singular/aggregate, high/low-control arranged, high-/low-risk takers, and male/female (Hofsede, 2001). Culture speaks to the totality of living hood in a general public which has been utilized by advertisers to energize product and service purchase (Lowe and Corkindale, 1998). Since merchandise and enterprises vary in their qualities, the contemporary scientists propose distinctive treatment of service items as contrasted with products (Lovelock, 2011). Given the development and development of servie areas over the globe, marketing specialists have focused on the need to concentrate on administration quality to produce ideal marketing results of fulfillment and faithfulness (Ladhari, 2011). According to ( Baumanne, 2011), loyalty is a disrespectful as well as an exact behavior. The behavioral loyalty is particularly important and earnings customers’ positive response to repurchase a particular product or service (Amin et al., 2013). Current financial researchers have utilized distinctive new scales to explore benefit quality however these scales are either specialty or too broad thus don't profit the administration industries to enhance the condition of administration quality advertised (Gupta and Dev, 2012). The specialists accept there is a need to utilize and approve the socially explicit administration quality scales which are progressively explicit and complete in nature and can effectively report the condition of administration quality (Prakash and Mohanty, 2013). There are some essential information holes that must be recognized by administration advertising specialists. Initial, a vast dominant part of administration quality examinations present the Western setting where contemporary specialists trust that studies which present the Asian viewpoint are rare (Frimpong and Wilson, 2013). Besides, service quality is a cultural fact and should be examined purposely as per the limited cultural conditions (Ladhari et al., 2011). According to SBP (2012), Presently

worldwide fund has exhibited the HBL as best exchange back supplier Pakistan grant in the proprietor of giving amazing administrations and items in market to clients. In any case, for the most part banks are not concentrating on nature of administrations. In this way, benefit quality model is generally connected in this area to quantify the gap of administrations gave to clients in banks.

Method To achieve the objective of current research, 10 research articles were accessed from Data bases such as Emerald, Google, Google Scholar, Irmbr journal, iiste, Emeral Insight.

Chronological literature review Arokiasamy, (2011) find out the impact of customer satisfaction on customer loyalty and their intention to switch banks. The consequences of the investigation demonstrated that there is a positive connection between consumer loyalty and customer satisfaction however indicated that there is a significant negative relationship between intentions to switch and customer satisfaction. Data were collected over a period of two weeks using survey questionnaire from 165 walk-in customers who had accounts with the banks serving in Ipoh, Perak, Malaysia. The data collected were then analyzed using SPSS. The limitation of the research is that the population of the study is limited to two cities of Malaysia so generalizability is narrow in scope. Amin., Isa & Fontaine, (2013) investigated customer satisfaction and its effect on image, trust and customer loyalty for Islamic banks. However the consequences of this investigation show that both Muslim and non-Muslim clients are fulfilled, have trust on, and are faithful to Islamic banks; in any case, the likelihood of clients being disappointed, doubting, and unfaithful to their

banks dependably exists. At the point when clients feel distrustful of their banks, the connection between clients and banks will not be solidified. Data was collected from quota sample of 440 respondents through survey from different branches of banks. There is break between Islamic bank and dual window bank and data was collected wrongly because questionnaires were distributed through bank branches and the results were not applicable to other service industry. Gambo & Musa, (2013) measured the factors that motivate customer to manage an Islamic bank just as measuring customer’s perception of the service quality and to assess customers’ satisfaction with the performance of Ja’iz bank. Data was collected from 73 respondents using self administrated questionnaire by survey. The findings reveals that that the non-premium nature of Islamic banks is the fundamental factor that motivates clients to belittle the bank and dimensions of reliability, responsiveness, empathy, tangibles, assurance and compliance with Islamic law to be very effective. The data were assembled in a one however critical area for Islamic banking activity in Nigeria. In this manner, the outcomes' translation ought to be restricted to this gathering of clients. Kamarulzaman., & Madun, (2013) found that the absence of exertion of marketing of Islamic banking products is regarded as being caused from the mix of issues at the smaller scale level and large scale level. At the miniaturized scale level, it needs to bargain with the administration issues of the banks that are putting forth the Islamic banking items, while at the large scale level it needs to manage the totally coordinated structure of the Islamic bank and finance system. The purpose of this study is to re-examine the progress and achievements of Islamic banking in Malaysia. This study is conducted only in sales and marketing area and only in one dimension culture.

Ashraf, (2014) found that frames of mind toward the bank Halal enhance client perception about the nature of the service and his/her satisfaction with Islamic banks web based banking. The purpose of this is to analyze the impact of Islamic banking on customer satisfaction and service quality and evaluate how customer satisfaction creates customer trust and loyalty. Data was collected from 200 respondents through survey and then analyzed using SPSS. In this study, it is not checked for the relationship between the client and the Islamic Bank.\ Tufail., Hmayon., Shabbir., Javed., &

Shahid, (2014)

found that for Pakistani clients

confirmation, reliability,, tangibility and sympathy have association with client satisfaction and as per UAE clients’ assurance and tangibility have significant association with consumer satisfaction. The objective of this study is to analyze the service quality of banking sector of Bahawalpur, Pakistan. Data was collected from 160 aspirants from different conventional banks through survey using self-administrated questionnaire. Data collected was not sufficient due to limited time and budget and no specific target group of customers due to which results are not applicable to other banking sector. Arasli., Smadi., & Katircioglu, (2015) found that customers are not satisfied where the most maximum space was procured in the responsiveness-sympathy estimation. If the bank presents a sense of expertise in the services they are contributing to their clients and can provide service containing no mistakes and at the time they promise to do so. At that point, clients will be happy with their bank and make this a step further by prescribing the bank to others. This study shows that there was difficulty in conduction interview due to cross culture between the north and the south. Data was collected from 260 retail bank customers through survey in different banks. Kashif & Rehman, (2016) found that Pakistani Islamic banking clients are happy with the service quality advertised. All the dimensions of PAKSERV are found to altogether contribute

towards customer satisfaction and loyalty. Be that as it may, real focal point of client is on the measurements such as responsiveness and sincerity which are reasonable in high-risk avoiding and power-oriented Pakistani society. The aim of this paper is to quantify service quality of Pakistani Islamic banks through approving a culturally sensitive scale: PAKSERV. Furthermore, the way from administration quality to client loyalty has been introduced through applying PAKSERV service quality scale. Data was collected from 350 respondents using random sampling technique through survey. This study has few limitations such as this study has been given importance to banking sector as compare to other sectors such as healthcare, telecom, and fast food in service setting and A quantitative measure has been utilized with the end goal of this investigation which does not consider over the social discernments (ability to make a smart judgment about something) that may have brought a change in the route individuals in Pakistan, think and behave as a society. Koduah., & Farley (2016) found consumer loyalty to be a key determinant or indication for clients' preference or motivation to hold their banks. The aim of this study was to investigate relationship of customer satisfaction and customer loyalty and their impact of financial factors in retail banking sector of Ghana. The contemporary study shows that generalizability is narrow in scope due to small sample size. Data was collected from convenient sample of 160 using structured questionnaire through survey in banks.

Salman., Nawaz., Bukhari., & Baker, (2018) found that mediating effect of perception and awareness about Islamic banking services in Islamic banking system of Pakistan and despite of specific consumer age, income group, and religious factors, level of awareness additionally contribute to consumers trust. The purpose of this study is to investigate the perception of academicians with the perceived attributes and behavioral intention toward Islamic banks in Pakistan. Interpretation and collection of small sample size and common method bias as only one

single questionnaire used to construct measurement variables. Data was collected from 200 academic professionals through an online experiment.

Critical Assessment

Arokiasamy, (2011) conducted this study and found that concepts of Islamic banking system are not so similar to that of non-Islamic banking system, Islamic banking institutions face strong competition from both Islamic and conventional banks. Satisfaction is basic however insufficient to check reliability among clients. At the end of the day, we can have consumer loyalty without customer satisfaction however it is hard to knowledge having satisfaction without customer loyalty. In this manner, all associations should attempt and fulfill their clients and to guarantee their reliability. In this study PAKSERV scale is applied in collectivist cultural context of Malaysia future researcher are directed to apply this scale in individualistic context. Amin., Isa & Fontaine, (2013) applied Transaction-specific and Cumulative to operationalize the impact of customer satisfaction on image, trust, and loyalty of Muslim and non-Muslim customers in Malaysia. There is gap between Islamic bank and dual window bank and data was collected inaccurately because questionnaire were distributed through bank branches and the results were not applicable to other service industry. This study reveal that researcher should increase the number of bank branches to investigate the possible difference in consumer behavior. Gambo & Musa, (2013) found that the measurements of six dimension with Islamic law to be exceptionally successful even as they are commonly Satisfied with the execution of the bank and the non-premium nature of Islamic banks is the fundamental factor that motivates clients to belittle the bank. The information were gathered in a one but important location for Islamic banking operation in Nigeria. Thus, the results ‘Interpretation should be limited to this group of customers. Future research could likewise be directed to discover the contrasts between the service quality delivery of Islamic banks and conventional banks in Nigeria from the client’s perspective. According to Kamarulzaman., & Madun, (2013) the marketing of Islamic banking products should observe the ethical aspects as well as the religious aspects, the main push for the

development of Islamic banking and financing items is the corporate customers, and not the Muslim people. Along these lines, the advertising of Islamic banking items toward Muslim customers is as yet missing and should be addressed. The paper has mentioned about the promoting of Islamic banking products is comparatively low as compared to the conventional banking products, it is recommended that Islamic banks should provide correct data regarding the Islamic banking products and avoid falsification of information. Ashraf, (2014) conducted this study to examine the effect of Islamic bank on customer satisfaction and administration quality, and examination and assessment of consumer loyalty. The model in this study was very related to those in the age group classes because they are aged between 18 to 25 years old and younger represent only. Future researcher are guided to conduct study with difference in the age of the sample this will help to produce different results and to make a comparative study between Muslims and non-Muslim bank customers from different cultural groups in Pakistan, as well as more accurate outcomes on the observation and favorites can be acknowledged. Tufail., Hmayon., Shabbir., Javed., & Shahid, (2014) found that that tangibility, reliability, assurance, empathy and responsiveness have important relation with customer satisfaction. Data collected was not sufficient due to limited time and budget and no specific target group of customers due to which results are not applicable to other banking sector. Future researcher are directed to increase the time, area and budget of the research and researcher should focus more on efficiency. In this study Arasli., Smadi., & Katircioglu, (2015) measured the perceptions of customer satisfaction and customer loyalty of Greek Cypriot Bank customers. There was trouble in conducting interviews from the respondents because the borders between the north and the south are newly opened and the people of Cyprus are not familiar to cross-cultural this have restricted our potential sample size. Future researcher are directed to enhance service delivery and replicate this type of study in other service sectors of the island, such as travel, higher education and health care. This study will help other countries that need to restructure their banking system essential for European Union. Kashif & Rehman, (2016) measured service quality of Pakistani Islamic Banks through validating a culturally sensitive scale, PAKSERV. This study has few limitations such as this study has been given importance to banking sector as compare to other sectors such as

healthcare, telecom, and fast food in service setting and A quantitative measure has been utilized with the end goal of this investigation which does not consider over the social discernments (ability to make a smart judgment about something) that may have brought a change in the route individuals in Pakistan, think and behave as a society. The PAKSERV been employed to capture the customer perceptions of service quality. Future researcher can employ a gap analysis approach which will help to explore differences in perceptions of employees and customers. Koduah., & Farley (2016) examined relationship between the dimensions of customer satisfaction and customer loyalty, as well as the effects of socio-economic variables on customer loyalty in the retail banking sector of Ghana. Researchers keen on this region of study could incorporate other situation-specific satisfaction variables, aside from the five components of SERVQUAL. Moreover, client dependability could be examined by deciding the connection between satisfaction factors and periods of reliability (subjective dedication, full of feeling devotion, conative faithfulness and activity steadfastness), rather than client loyalty all in all. Studies could likewise be led in other areas or urban areas in Ghana, and larger sample sizes could be considered. Salman., Nawaz., Bukhari., & Baker, (2018) analyzed the importance of cultural demographic characteristics in choosing conventional and Islamic bank. Interpretation and collection of small sample size and common method bias as only one single questionnaire used to construct measurement variables. Future researcher are guided to increase the sample to allow authenticated results.

Conclusion Adding moderating variable culture (uncertainty Avoidance). In previous studies that variable is not used as a moderating variable because the research were conducted for the changing of behavior pattern of people due to culture changed. Qualitative and Quantitative both method are included in the current study to fulfill these gaps by answering the following questions. Moderating effects of Uncertainty Avoidance on Customer Satisfaction and Customer Loyalty in Islamic Bank of Pakistan. It is found that Pakistani banking customers are satisfied with the customer satisfaction with the service quality. However, major focus of customer is on the dimensions such as responsiveness and sincerity and customer satisfaction has association with

image, image has a critical association with trust and trust has a huge association with customer loyalty for both Muslim and Non-Muslims customers in Malaysia.

Limitation and future recommendation It is cross sectional study with small sample size, so that the generalizability of this study is narrow in scope. In order to study the moderating effect of uncertainty avoidness on Customer Satisfaction and Customer Loyalty in Islamic Bank of Pakistan this study is conducted with Collectivist Cultural Perspective in future it is recommended to increase sample size and conduct study in individualistic culture context.