Commitment and vulnerability in B2B relationship selling in the Hong Kong institutional insurance service industry

Abstract

Purpose - The purpose of this paper is to understand the impact of the antecedents of the exchange domain (use of coercive influence, ideational favor exchange, calculative resource-dependence, and decision uncertainty) on relationship building. The paper examines the link between the two mediating dynamics of embedded trust and relationship-specific customization and loyalty by developing a model of vulnerability-based commitment. Design/methodology/approach - The links between the model elements are tested using data from a survey of clients in the Hong Kong insurance service. Structural equation analysis is used to test research hypotheses and to examine the extent to which vulnerability-based commitment leads to the development of loyalty. Findings - The degree of embedded trust between parties is enhanced by the use of coercive influence, favor, and resource-dependence. Embedded trust has a negative relationship with decision uncertainty. The antecedents of coercive influence, favor, and resource-dependence have positive impacts on relationship-specific customization. Vulnerability-based commitment is positively affected both by trust and customization whilst commitment has a positive impact on loyalty. Practical implications - A vulnerability-based commitment model is developed as an analytical and managerial tool for understanding the benefits and hidden vulnerabilities of client loyalty and for implementing effective service strategies. Originality/value - By understanding the implications of the benefits/ costs in commitment vulnerabilities, the findings can help in the design of a loyalty quality system. A new measurement tool is provided to enable researchers to perform more vigorous scale development of commitment.