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

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)

Andreas Wittmer


Internal Service Systems and Cultural Differences:
An Exploratory Study of Switzerland, Australia, and Singapore
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)
The University of St. Gallen, Graduate School of Business
Administration, Economics, Law and Social Sciences (HSG) hereby
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

Acknowledgements
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

would like to thank the managers of Swissôtel in Zurich-Oerlikon, Sydney and
Singapore, who enabled me to conduct interviews in their hotels.

St. Gallen, April 2005, Andreas Ernst Wittmer
Internal Service Systems and Cultural Differences:
An Exploratory Study of Switzerland, Australia, and Singapore
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
Internal Service Systems and Cultural Differences:
An Exploratory Study of Switzerland, Australia, and Singapore
Table of contents
1

INTRODUCTION 1

1.1

T

HE MULTICULTURAL DIMENSION OF INTERNAL SERVICE SYSTEMS
2

1.2

G
EOGRAPHICAL RESEARCH SETTING
3

1.3

P
ROBLEM STATEMENT
3

1.4

A
IM 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

D
ELIMITATION
11

1.6

C
OURSE AND STRUCTURE OF THE THESIS
12

2

THEORETICAL FRAMEWORK 14

2.1

M
ANAGEMENT
S
YSTEMS
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

C
ULTURE 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
Internal Service Systems and Cultural Differences:
An Exploratory Study of Switzerland, Australia, and Singapore
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
Internal Service Systems and Cultural Differences:
An Exploratory Study of Switzerland, Australia, and Singapore
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
Internal Service Systems and Cultural Differences:
An Exploratory Study of Switzerland, Australia, and Singapore
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
Internal Service Systems and Cultural Differences:
An Exploratory Study of Switzerland, Australia, and Singapore
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: A GLOCAL 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

Internal Service Systems and Cultural Differences:
An Exploratory Study of Switzerland, Australia, and Singapore
Table of figures
F
IGURE 1: HYPOTHESES FOR THE SWISSÔTEL CASE STUDY 8
FIGURE 2: CONCEPTUAL MODEL AND HYPOTHESES 10
FIGURE 3: STRUCTURE OF THE DISSERTATION 13
FIGURE 4: THE SERVICE MANAGEMENT SYSTEM 15
FIGURE 5: SERVICE FRAMEWORK 18
FIGURE 6: INTEGRATING FACTORS OF AN INTERNAL SERVICE SYSTEM 19
FIGURE 7: THE INTERNAL SERVICE SYSTEM 22
FIGURE 8: THREE LEVELS OF CULTURE 30
FIGURE 9: THREE LEVELS OF CULTURE 32
FIGURE 10: MASLOW’S HIERARCHY OF NEEDS AND THE ASIAN EQUIVALENT 34
FIGURE 11: LEVELS OF CULTURE AND THEIR INTERACTION 42
FIGURE 12: RELATION BETWEEN CULTURE TYPES AS REGARDS CONSTRAINTS ON
INDIVIDUALS’ FREEDOM 45
FIGURE 13: SERVICE QUALITY CHAIN 46
FIGURE 14: FROM EMPLOYEE SATISFACTION TO CUSTOMER SATISFACTION AND
OPPOSITE 47

FIGURE 15: EXTERNAL – INTERNAL SERVICE CULTURE 48
FIGURE 16: POWER DISTANCE INDEX (PDI) VALUES FOR 50 COUNTRIES AND 3
REGIONS 94
FIGURE 17: UNCERTAINTY AVOIDANCE INDEX (UIA) VALUES FOR 50 COUNTRIES
AND THREE REGIONS 96
FIGURE 18: INDIVIDUALISM INDEX (IDV) VALUES FOR 50 COUNTRIES AND THREE
REGIONS 98
FIGURE 19: MASCULINITY INDEX (MAS) VALUES FOR 50 COUNTRIES AND THREE
REGIONS 100
FIGURE 20: LONG-TERM ORIENTATION INDEX (LTO) VALUES FOR 29 COUNTRIES 102
FIGURE 21: COMPARISON OF FIVE DIMENSIONS FOR SWITZERLAND, AUSTRALIA AND
SINGAPORE 104
FIGURE 22: CULTURAL DIMENSIONS AND THE INTERNAL SERVICE SYSTEM 105
FIGURE 23: EUROPEAN FOUNDATION FOR QUALITY MANAGEMENT (EFQM)
EXCELLENCE MODEL 113
FIGURE 24: ISO 9000 FRAMEWORK 115
FIGURE 25: THE INTERNAL SERVICE QUALITY MODEL 119
F
IGURE 26: RELATIONSHIP BETWEEN DETERMINANTS OF INTERNAL GAP 1 AND
INTERNAL GAP 3 120
Internal Service Systems and Cultural Differences:
An Exploratory Study of Switzerland, Australia, and Singapore
FIGURE 27: RELATIONSHIP BETWEEN CULTURE AND SERVICE QUALITY 123
FIGURE 28: INTERNAL SERVICE QUALITY AND THE INTERNAL SERVICE SYSTEM 125
FIGURE 29: THE FORM, STATE AND OUTCOMES OF EMPOWERMENT 128
FIGURE 30: EMPLOYEE EMPOWERMENT AND THE INTERNAL SERVICE SYSTEM 133
FIGURE 31: WORKING HOUR COMPARISON ACROSS COUNTRIES 155
FIGURE 32: EXPECTATION FRONTLINE COMPARISON 156
FIGURE 33: PERCEPTION FRONTLINE COMPARISON 158
FIGURE 34: ACTUAL PERFORMANCE IN RELATIONS TO INTERNAL SERVICE

STANDARDS FRONTLINE COMPARISON 159
FIGURE 35: CULTURAL DIFFERENCES OF INTERNAL SERVICE DIMENSION
IMPORTANCE AND EXPECTATION IN RELATION TO INTERNAL SERVICE
STANDARDS 165
FIGURE 36: THE CONJOINT AND DISCRETE CHOICE ANALYSES COMPARED 183
FIGURE 37: PROFILE MAP FOR SWITZERLAND, AUSTRALIA AND SINGAPORE BASED
ON PHD STUDENT TEST 223
FIGURE 38: CULTURAL MAP ACROSS COUNTRIES BASED ON CHOICE DATA 243
FIGURE 39: ATTRIBUTE SENSITIVITY 245
FIGURE 40: THE INTERNAL SERVICE SYSTEM 271
FIGURE 41: THE SWISS INTERNAL SERVICE SYSTEM 273
FIGURE 42: THE AUSTRALIAN INTERNAL SERVICE SYSTEM 275
FIGURE 43: THE SINGAPOREAN INTERNAL SERVICE SYSTEM 277
FIGURE 44: THE GLOCAL INTERNAL SERVICE SYSTEM 279
FIGURE 45: INTERACTION HOTEL GUEST – FRONTLINE – SUPPORT 318

Internal Service Systems and Cultural Differences:
An Exploratory Study of Switzerland, Australia, and Singapore
Table of tables
T
ABLE 1: CONVERSATION BETWEEN SUPERIOR AND EMPLOYEE IN A MULTICULTURAL
CONTEXT 23
TABLE 2: TOP PERSONAL AND SOCIETAL VALUES BETWEEN ASIANS AND WESTERNERS
33
TABLE 3: TYPES OF ORGANISATIONAL CULTURES 43
TABLE 4: BASIC PROBLEMS, VARIATIONS IN ADDRESSING THEM, AND POTENTIAL
MANAGERIAL IMPACT 51
TABLE 5: SOME CONSEQUENCES OF SMALL AND LARGE POWER DISTANCE FOR
MANAGERIAL DECISION STRUCTURES 58
TABLE 6: SOME CONSEQUENCES OF WEAK AND STRONG UNCERTAINTY AVOIDANCE

FOR MANAGEMENT 59
TABLE 7: SOME CONSEQUENCES OF COLLECTIVISM AND INDIVIDUALISM FOR
MANAGEMENT 59
TABLE 8: SOME CONSEQUENCES OF FEMININITY AND MASCULINITY FOR
MANAGEMENT 61
TABLE 9: SOME CONSEQUENCES OF SHORT- AND LONG-TERM ORIENTATION FOR
MANAGEMENT’S TIME HORIZON ON BUSINESS 62
TABLE 10: RECOGNISING THE DIFFERENCES FOR DOING BUSINESS – UNIVERSALIST VS.
PARTICULARIST CULTURES 64
TABLE 11: RECOGNISING THE DIFFERENCES FOR DOING BUSINESS – INDIVIDUALIST VS.
COMMUNITARIST CULTURES 65
TABLE 12: RECOGNISING THE DIFFERENCES FOR DOING BUSINESS – AFFECTIVE VS.
NEUTRAL CULTURES 67
TABLE 13: RECOGNISING THE DIFFERENCES FOR DOING BUSINESS – SPECIFIC VS.
DIFFUSE CULTURES 69
TABLE 14: RECOGNISING THE DIFFERENCES FOR DOING BUSINESS – ACHIEVEMENT-
ORIENTED VS. ASCRIPTION-ORIENTED CULTURES 70
TABLE 15: RECOGNISING THE DIFFERENCES OF TIME FOR DOING BUSINESS – PAST,
PRESENT, FUTURE 72
TABLE 16: RECOGNISING THE DIFFERENCES FOR DOING BUSINESS – INTERNAL
CONTROL ORIENTED VS. EXTERNAL CONTROL ORIENTED CULTURES 74
TABLE 17: CULTURAL CONSTRUCT DEFINITIONS AND SAMPLE QUESTIONNAIRE ITEMS76
TABLE 18: EXLANATION OF LOW VERSUS HIGH POWER DISTANCE SOCIETIES 77
T
ABLE 19: EXLANATION OF HIGH VERSUS LOW UNCERTAINTY AVOIDANCE SOCIETIES79
TABLE 20: EXLANATION OF HIGH VERSUS LOW HUMAN ORIENTATION SOCIETIES 80
Internal Service Systems and Cultural Differences:
An Exploratory Study of Switzerland, Australia, and Singapore
TABLE 21: EXLANATION OF COLLECTIVISTIC VERSUS INDIVIDUALISTIC SOCIETIES 82
TABLE 22: EXLANATION OF HIGH VERSUS LOW GENDER EGALITARISM SOCIETIES 82

TABLE 23: EXLANATION OF HIGH VERSUS LOW GENDER EGALITARISM SOCIETIES 84
TABLE 24: EXPLANATION OF HIGH VERSUS LOW FUTURE ORIENTATION SOCIETIES 85
TABLE 25: EXPLANATION OF HIGH VERSUS LOW PERFORMANCE SOCIETIES 86
TABLE 26: COMPARISON OF FOUR CONCEPTS OF CULTURAL DIMENSIONS 89
TABLE 27: COMPARISON OF CULTURAL DIMENSIONS FOR SWITZERLAND, AUSTRALIA
AND SINGAPORE 103
TABLE 28: COMPARISON OF WORKING HOUR STATISTICS IN SWITZERLAND, AUSTRALIA
AND SINGAPORE
,
135
TABLE 29: ADVANTAGES/DISADVANTAGES OF QUALITATIVE AND QUANTITATIVE
SOCIAL RESEARCH 137
TABLE 30: USE OF DIFFERENT METHODOLOGIES 140
TABLE 31: SAMPLE CHARACHTERISTICS CASE STUDIES 146
TABLE 32: CULTURAL SERVICE PROFILES FOR SWITZERLAND, AUSTRALIA AND
SINGAPORE BASED ON HIGHEST IMPORTANCE PER DIMENSION 160
TABLE 33: CULTURAL SERVICE PROFILES FOR SWITZERLAND, AUSTRALIA AND
SINGAPORE BASED ON LOWEST IMPORTANCE PER DIMENSION 161
TABLE 34: CULTURAL SERVICE PROFILES FOR SWITZERLAND, AUSTRALIA AND
SINGAPORE BASED ON HIGHEST LEVEL OF EXPECTATION PER DIMENSION
163
TABLE 35: CULTURAL SERVICE PROFILES FOR SWITZERLAND, AUSTRALIA AND
SINGAPORE BASED ON LOWEST LEVEL OF EXPECTATION PER DIMENSION
164
TABLE 36: COMPARISON OF CULTURAL DIMENSIONS ACROSS THE THREE COUNTRIES
167
TABLE 37: THREE MOST IMPORTANT INTERNAL SERVICE CRITERIA IN SWITZERLAND,
AUSTRALIA AND SINGAPORE 168
TABLE 38: CULTURAL DIMENSIONS SCORES BY HOFSTEDE 172
TABLE 39: INTERNAL SERVICE DIMENSION AVERAGE PERCEPTION SCORES BASED ON

SWISSÔTEL DATA 173
TABLE 40: CORRELATION COEFFICIENTS BETWEEN CULTURAL AND INTERNAL SERVICE
DIMENSIONS BASED ON SWISSÔTEL DATA 174
TABLE 41: CULTURAL INTERNAL SERVICE QUALITY INDEX (CISQI) FOR THE THREE
COUNTRY CLUSTERS BASED ON THE
SWISSÔTEL DATA 177
TABLE 42: ANOVA 179
Internal Service Systems and Cultural Differences:
An Exploratory Study of Switzerland, Australia, and Singapore
TABLE 43: ORTHOGONAL FRACTIONS TO ESTIMATE MAIN EFFECTS FOR THE TWO
OPTIONS IN THE QUESTIONNAIRE 198
TABLE 44: ENDPOINT DESIGN FIST OPTION 200
TABLE 45: ENDPOINT DESIGN SECOND OPTION 201
TABLE 46: 32 FIRST AND SECOND CHOICE OPTIONS IN THE MODEL 202
TABLE 47: AN EXAMPLE OF AN INTERNAL SERVICE EXPECTATION CHOICE-SET 210
TABLE 48: VARIABLES IN THE CHOICE MODEL 212
TABLE 49: SAMPLE CHARACTERISTICS 214
TABLE 50: MODEL VALIDITY – PREDICTION OF CHOICES 220
TABLE 51: FIRST INDICATION CULTURAL SERVICE PROFILES FOR SWITZERLAND,
AUSTRALIA AND SINGAPORE 224
TABLE 52: ESTIMATED BINARY LOGIT CHOICE MODEL FOR SWITZERLAND 226
TABLE 53: ESTIMATED BINARY LOGIT CHOICE MODEL FOR AUSTRALIA 229
TABLE 54: ESTIMATED BINARY LOGIT CHOICE MODEL FOR SINGAPORE 231
TABLE 55: ESTIMATED BINARY LOGIT CHOICE MODELS FOR THE THREE NATIONS 234
TABLE 56: BINARY LOGIT MODELS WITH ONLY SIGNIFICANT VARIABLES FOR THE THREE
COUNTRIES 237
TABLE 57: SUMMARY OF MODELS (NORMAL BETA VALUES) WITH ONLY SIGNIFICANT
VARIABLES 240
TABLE 58: EXPLANATORY POWER OF EACH INTERNAL SERVICE ATTRIBUTE FOR THE
SWISS DATA 247

TABLE 59: EXPLANATORY POWER OF EACH INTERNAL SERVICE ATTRIBUTE FOR THE
AUSTRALIAN DATA 247
TABLE 60: EXPLANATORY POWER OF EACH INTERNAL SERVICE ATTRIBUTE FOR THE
SINGAPOREAN DATA 248
TABLE 61: RELATION OF CULTURAL DIMENSION TO SERVICE DIMENSIONS BASED ON
THE MODEL LOG-LIKELIHOOD AND BETA SENSITIVITY 258
TABLE 62: INTERNAL SERVICE DIMENSION COMPARISON BASED ON DIFFERENT STUDIES
261
TABLE 63: SUMMARY OF MANAGERIAL IMPLICATIONS IN EACH OF THE THREE COUNTRY
CLUSTERS 265
TABLE 64: PRACTICAL IMPLICATION OF A GLOCAL INTERNAL SERVICE SYSTEM 282
TABLE 65: COMPARISON OF IMPORTANCE RATINGS OF PHD STUDENTS IN
SWITZERLAND, AUSTRALIA AND SINGAPORE WITH RESPECT TO THE
INTERNAL SERVICE DIMENSIONS – THE PRE-STUDY 310
TABLE 66: CHOICE SETS IN FULL TEXT 319
Internal Service Systems and Cultural Differences:
An Exploratory Study of Switzerland, Australia, and Singapore
TABLE 67: CHOICE SETS BOTH OPTIONS IN SHORT TEXT 320

Internal Service Systems and Cultural Differences:
An Exploratory Study of Switzerland, Australia, and Singapore
List of Abbreviations
AGSM Australian Graduate School of Management
CA Conjoint Analysis
CH Switzerland
CISQI Cultural Internal Service Quality Index
CSQI Cultural Service Quality Index
DCA Discrete Choice Analysis
EFQM European Foundation of Quality Management
e.g. exempli gratia (for example)

et al. et alii (and others)
etc. et cetera (and so on)
HR Human resource
HRM Human resource management
HSG Hochschule St. Gallen (University of St. Gallen)
HQ Headquarters
IDV Individualism Index
INTSERVQUAL Internal Service Quality model
ISMS Internal Service Management System
i.e. id est (that is)
LTO Long-Term Orientation Index
MAS Masculinity Index
MLE Maximum likelihood estimator
MNL Multinomial Logit Model
M&A’s Merger and acquisition’s
NUS National University of Singapore
OLS Ordinary least squares
Internal Service Systems and Cultural Differences:
An Exploratory Study of Switzerland, Australia, and Singapore
PDI Power Distance Index
PRC People Republic of China
RUT Random Utility Theory
SERVQUAL Service Quality model
TQM Total Quality Management
UAI Uncertainty Avoidance Index
UNISG University of St. Gallen
USA United States of America
Vol. Volume
vs. versus
Internal Service Systems and Cultural Differences:

An Exploratory Study of Switzerland, Australia, and Singapore
1
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
Internal Service Systems and Cultural Differences:
An Exploratory Study of Switzerland, Australia, and Singapore
2
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 T
HE 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.
Internal Service Systems and Cultural Differences:
An Exploratory Study of Switzerland, Australia, and Singapore
3
1.2 G
EOGRAPHICAL 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 P
ROBLEM 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
Internal Service Systems and Cultural Differences:
An Exploratory Study of Switzerland, Australia, and Singapore
4
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 A
IM 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
Internal Service Systems and Cultural Differences:
An Exploratory Study of Switzerland, Australia, and Singapore
5
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