Offshoring

Offshoring is an equally alike custom to outsourcing in terms of the service division to another country. Detail differentiate offshoring from outsourcing is the non-existence of the third-party merchant. The assigned service stays “in-house” so business maintains running the operations on its own though situated overseas. The drive of offshoring does not differ from outsourcing; it is executed so as to reduce the expenses. Offshoring does not differ among whereabouts, therefore no matter where to the Customer Care is located, the term offshoring is used. Offshoring and outsourcing typically take an advantage of a comparatively low-cost and well-educated workforce in such countries like India, Latin America, Philippines, or Eastern Asia (Le Bon and Hughes, 2009)

There are numerous purposes for the services outsourcing/offshoring. Gilley and Rasheed (2000) call attention to that three most usual aims are saving expenditures, refining the service quality by assigning the activity to the specialized firm or focusing on the vital business while outsourcing the other business related responsibilities.

2.3. Service quality perceptions in the call center context

The following segment inspects the content linked to service quality perception in the situation of call centers taking customers’ opinion. Terms as customer expectations and total perceived quality are justified at first. Aspects as company and country image correspondingly are considered in detail at the same time as other potential influencing issues are recommended and explained concisely. A brief debate on the cultural differences follows as the thesis purposes for comparing between two

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different nations. On the related note, as study goals for finding the variances in sensitivity of non-local speakers between people less than 30 years, so called Generation Y, and people being over 30 years old, the chapter 2.3.2.4 examines Generation Y personalities. Conclusively, current frameworks for service quality perception and customer satisfaction measurement are presented. Part 2.3.4 is devoted to the role of language in the call center setting. Primarily, the role of language in service confronts, particularly in call centers is examined. Then, the view of language representing the part of belonging to a nation is presented. Because of the thesis purpose, the focus is on the second language acquisition and its key attributes. In chapter 2.3.4.4, the most shared features of the second language use are examined fully.

2.3.1 Service quality perception framework

Because of the service quality perception being a comprehensive term, debate is limited to two features with the respect to the study’s purpose. Initially customer’s expectations concerning the service encounter are deliberated and subsequently the

concept of total perceived service quality is presented.

2.3.1.1 Customer expectations

This study emphasize on expectancies and service perception towards Customer Care.

In this matter, it is secondary whether customer´s call concerns on the services or goods acquired. Consequently, no dissimilarity is made regarding the fact if service or goods were acquired prior to communication.

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Zeithaml, Berry and Parasuraman, (1993) describe expectancies as “needs or wants of consumers, i.e., what they feel towards a service provider should provide rather than would provide”. Although the knowledge can be new for client prior to interaction, s/he holds at least some image of what should occur. Expectancies are formed based on many influences, i.e. customer‟s earlier occurrence and company‟s marketing message. Obviously, expectations differ differing on the type of service. For instance Ojasalo (2001) varies among three key types of prospects customers may have.

Primarily, the condition when customer is unsure what would precisely occur and which way are called fuzzy prospects. It is the job for the company to recognize and subsequently resolve the exact difficulty. The identification happens through the conversation. As Ojasalo (2001) further call attention to just as fuzzy prospects can be concentrated, implicit prospects can be discovered and discussed over. Lastly, the prospects of customers may be as well obvious meaning that they have a well-defined picture about the service progress. Clients regularly listen to the service content and consequently whether their expectancies are fulfilled.

In the call center setting, there occurs some unfairness regarding customer expectations. Dean (2004) recommends that clients have very high anticipations prior to calling. High anticipations in this context meaning to the capability of call center to resolve all customer problems and response potential queries within one call. This assumption is also supported by Monger, Rudick and O‟Flahavan (2004) affirming that the customer fulfillment will be 5 to 10 percent lower in case that in excess of one call is needed so as to resolve the issue. Dean (2004) further varies between expected expectation level and satisfactory level of expectations. Expected expectations are based on the earlier experiences together with customer´s prediction of communication course.

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As stated above, clients’ expectations are created in very individual ways and are outcome of person´ s own experiences and manners. Next parts deliberate furthermore the effect of firm image, country where Customer Care is outsourced, cultural dissimilarities and age on the expectancies and total perceived quality. Other aspects (attitude, demographical variables) included in the chapter.

2.3.1.2 Total perceived service quality

Total perceived quality is dissimilarity between what client projected and what really

practiced (Grönroos, 2007). The total perceived qualities of service is prejudiced by many features such as earlier and present service incidents, prospects towards on the whole this sort of service and emotions from both customer and service provider areas.

Clients identify two kinds of qualities. The technical value is the result of the course, in other words what clients obtain as result of service. Functional quality includes the service course, so how clients receive a service. To achieve high customer fulfillment both functional and technical values should be exceptional meaning that customer obtains a great service in a good way. (Grönroos, 2007).

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Figure 1 Total Perceived Quality (Gronroos, 2007)

The Figure 1 provides an outline of aspects influencing the total perceived quality listing individually features of anticipated and skilled quality. Significant role of emotions is recommended by sorting out this feature from the two others. As stated in the figure 1, predictable service quality image contains of many features, like marketing communication and customer desires. Alter locally, experienced quality is formed by two vital features, technical and functional process quality, as mentioned above.

Through physical and visual mechanisms missing in the call center setting, clients frequently perceive the whole company´s quality based on the communication with AGENT (Burgers, Ruyter, Keen and Streukens, 2002). As Barker and Härtel (2004) states once the communication is finalized both parties go through a process of attributing effects to outcomes and satisfaction. Additionally, some researches point to that the competence measurement used in some call centers does not take to account the customer satisfaction (Feinberg et al., 2000; Miciak and Desmarais, 2001 all cited in Keiningham et al., 2006).

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2.3.2 Factors causing the service quality perception

In many cases service quality perception is not formed on the basis of expectations towards service encounter and subsequent real experience. Regularly there are side aspects influencing one concrete service episode. In the next part some of those aspects are talked about with highlights on the company image, image of country where service is offshored, cultural and age dissimilarity.

2.3.2.1 Company image

Company image plays a role during service episode. Consequently, interacting with company influences its company´s image in the client´s eyes. Many companies are getting aware of the influence which offshoring may have on their representation. The fact that call center is situated in different country and calls handled by non-local speakers can change customer´s perception of a firm. Company´s concerns are often related to brand image, property rights; lower customer satisfaction and as consequences increased clients‟ complaints and lower brand loyalty (Sharma et al., 2009). It has been proved that service quality and customer satisfaction correlate (Selnes, 1993; Sharma et al., 2009). Therefore, low quality service has a negative influence on the customer fulfillment. On the other hand, service of a first-class influences positively customer´s satisfaction and as an outcome, business image.

Roggeveen, Bharadwaj and Hoyer (2007) have carried out a study aiming to find out how location and reputation influence on customer´s expectations regarding upcoming service encounter. Based on their findings call center location does not affect the expectations prior to interaction if the firm has a good image and reputation.

This is, however, not the case for less known companies when clients predict lower level of service. (Roggeveen et al., 2007). The suggestion is based on the fact that if

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the company is lesser known, customers will expect poorer service from call center offshored than in case of good reputation firm which, as Roggeeveen et al. (2007) state out, will guarantee the quality service regardless where the call center located.

This discovery is somewhat supported by Sharma (2009) stating that” the more reputed or well known a service company is, the less likely are its clients to criticize against its offshored call centers and more likely to continue using its services.”

Furthermore, if company emphasizes its origins being in a certain country, this fact possibly influences customer’s expectations towards the Customer Care being also provided from this country. The truth that call center is located to a different location may cause more negative reactions than in case of firms not basing their image on a country.

2.3.2.2 Country Image

Findings point out that many countries are allocated various images by the clients. As a result, this fact also causes on the service quality perception (Huber and McGann, 1982; Thelen et al., 2010). Huber and McGann (1982) recommend that in case that customers are incompetent to identify the service quality on the source of own experiences, they are subject to estimate it on the basis of their attitudes towards countries. Consequently, the country image is significant determinant of service quality.

Thelen et al. (2010) have conducted a study where customers were asked to estimate the imaginary service quality on the basis of the country service was offshored to. As Thelen et al. (2010) completed “the most preferred countries to American consumers

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for services offshoring are not vitally the ones with the highest trained labor, lowest cost, or geographic closeness to the origin country.” From the chosen countries (India, China, Canada, Philippines & Pakistan), customers anticipated to obtain quality service respectively, with Canada receiving the highest and Pakistan the lowest preferences (Thelen et al., 2010). Roggeveen et al. (2007) based on the research concluded that call center location influences callers’ expectations only for slighter known firms having no contact on the expectations from well known firms with a good reputation. On the contrary, Barker and Härtel (2004) point out that customer have low prospects towards the quality of service provided by AGENT with different cultural and ethnic background.

Thelen et al. (2010: 196) recommends that companies should be conscious of customers´ country perceptions prior to offshoring. Nevertheless, it is uncertain to what extent the country perception varies within Asian/Asian countries and as a result, to what Asian/Asian countries the service can be offshored without damaging the company´s image. Nonetheless, a Asian/Asian country sensitivity may differ from one country to another and as a result, conducting the research is advantageous prior to offshoring.

2.3.2.3 Cultural differences

Hofstede (1997) describes culture as “collective programming of the mind which differentiates the members of one group or category of people.” Cultural differences are numerous of the aspects explaining differences in customers´ behavior. As this report is conducted in Philippines and Taiwan, variance in manners based on the cultural behavior may come into view. In case countries´ cultures are similar they are referred to as low cultural distances countries (Stringfellow et al., 2008).

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Hofstede (1997) provides four dimensions of cultural classification

(1) Power distance

As Hofstede (1997) stated, the power distance is “the extent to which the less powerful members of institutions and organizations within a country anticipate and believe that power is scattered unequally.”

(2) Collectivism versus individualism

The degree of collectivism and individualism points out how human distinguishes himself – as a part of the society or individual.

(3) Femininity versus masculinity

Based on IBM company study, Hofstede (1997) projected a set of characteristics normally perceived as masculine (earnings, challenge) and feminine (cooperation, employment security). Taking the studies into account, Hofstede finished off that some country´s citizens are likely to act more masculine or feminine than it is usual in other countries.

(4) Uncertainty avoidance

Some nations appear to accept higher level of impulsiveness while others like to manage the forthcoming (by technology, laws). (Hofstede, 1997).

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For achieving in a different way in the above mentioned features, countries (and subsequently cultures) do not need to be located geographically distant. Regardless of Asia being relatively small area on the globe, many cultural variations can be found even in neighboring countries.

2.3.2.4 Age dissimilarity

It has been recommended that typical personalities are shared by customers born in a certain time (Yoon and Niehm, 2006). Generations have dissimilar life approaches and value. Heaney (2007) reviews key personalities of three generations. Although in the table 1 generation Y refers to those born after 1977, some studies note that Generation Y covering people born between 1977 and 1994 (Yoon and Niehm, 2006) or 1995 (Barlett, 2004)

Table 1. Generational characteristics Heaney (2007) Context Baby Boomers identify service performed by non-local speaker in a different way compared to other age groups. As stated in the table 1, Generation Y is distinguished by their experience with use of media and high technology (computers, mobile phones). Members of this

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generation are personalized to globalization and they are more likely to learn foreign languages (Ramirez, 2008). Thus, it may be supposed that their approach towards non-local speakers is more positive compared to other generations. This assumption is based on the fact Generation Y members are more likely to interact with foreigners and consequently also with non-local speakers (through the use of technological devices). Taking this assumption to account, it may be supposed that they may perceive non-local speakers in call centers in a different way compared to other generations.

2.3.2.5 Other factors

As stated above, there are many aspects both on the customers and AGENT´s sides influencing the service encounter. Barker and Härtel (2004) stated out that prior to communication, both parties bring with them their exclusive “makeup” containing demographic variables such as race and gender as well as knowledge, dispositions, beliefs, attitudes and previous experiences. The present mood and customer´s and Customer Care representative´s (AGENT´s) personalities also determine to a definite scale on how well the communication will be. Customer´s expectations towards service whether with or without previous experiences affect the service encounter´s way as well. It is AGENT´s task to focus fuzzy expectations, reveal inherent expectations and debate over with customer possible too high or low expectations towards service (Ojasalo, 2001). All this should happen in a pleasant and calm manner.

In addition, Sharma et al. (2008) states that “negative attitudes towards offshored call centers result in feelings of dissatisfaction, raise in complaints and decrease in purchases”. With customers experiencing the negativity with some call center their attitude towards all call centers may be negative.

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2.3.3 Service quality perception measurement

Multiple methods to measure service quality perception (from the customer´s point of view) have been recommended. In forthcoming chapters attention is given to those being applied in call center related research, SERVQUAL and RECOVSTAT.

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2.3.3.1 Service Quality (SERVQUAL)

Parasuraman et al. (1988) developed a service quality evaluation tool using a multi-item scale called SERVQUAL, a 22-multi-item instrument that includes five service dimensions of responsiveness, empathy, tangibles, assurance, and reliabilty (Badri, Abdulla and Al-Madani, 2005). SERVQUAL represents the gap between the service performance level expectations and actual perceptions (Jaishwal, 2008). As Badri et al.

(2008) further point out SERVQUAL has been tested and used to measure service quality in various contexts such as professional services, telecommunication, retailing or hospitality. Naturally, each service has its particular meaning that SERVQUAL elements and aspects should be modified accordingly prior to current study. In the call center setting Keiningham et al. (2006) projected to use four SERVQUAL with leaving out the tangibles (physical) item.

Jaishwal (2008) disagrees that SERVQUAL does not pleasing clarify whether high expectations towards the service result in positive service estimation while low expectations indicate a high quality service evaluation. In addition, opponents of this measurement tool, Cronin and Taylor (1992) suggested that service performance evaluations are directly linked to the service quality and therefore use of SERVQUAL is inadequate. On the basis of this argument Cronin and Taylor (1992) projected SERVPERF framework for evaluating the service performance. However, SERVPERF has not been widely used in the call center context.

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2.3.3.2 Recovery Quality (RECOVSTAT)

Boshoff (1999) projected a scale tool called RECOVSTAT in order to establish the customer satisfaction with the observe to the service recovery. (Boshoff, 1999). In later study Boshoff (2005) removes 4 items leaving the scale instrument to consist of 6 dimensions and 13 items. Given that call centers regularly play significant role in the service recovery the RECOVSTAT scale is very popular in this background.

Burgers et al. (2000) projected to assess call center performance on the basis of following 8 attributes suggested by Boshoff (1999): “reliability, time, communication style, perceptions of commitment to service quality and customer satisfaction;

empowerment; staff attitude; and explanation” included within the four-scale model including dimensions of adaptiveness, assurance, empathy, authority. (Burgers et al, 2000)

Regardless of which scale instrument is used for service quality perception dimension, researchers should constantly keep in mind to adapt the items with regard to research question. For instance, when applying SERVQUAL in call center associated research, tangible item is frequently missing due to its irrelevance in this particular setting.

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2.3.4 The role of language in the call center context

In this section the content related to the function of language within the call center setting is presented. Initially, the role of language in service encounters, especially in call centers is reviewed. The concept of language representing the part of belonging to a nation is introduced subsequently. Due to the thesis topic, the focus is on the second language acquisition and its main attributes. In this respect, chapter 2.3.4.3. presents the most common characteristics of the second language use are discussed.

2.3.4.1 Language in service encounters

Language is the very important part of any communication. In call centers it is mainly noticeable, lack of visual features makes both, customers and agents rely on the language skill only. If the company and customer lack the common language, interaction is naturally more problematic than in case of using the same local language. Currently, large numbers of studies state out at the increasing customer disappointment with offshored call centers originating from the communication insufficiency (Compass, 2007; Sharma et al., 2009). In addition to cultural and geographical distance related barriers, the language distance forms another potential challenge to successful interaction. The language may be explained as a difficulty created by the condition when customer and agent do not share the same language (Stringfellow, 2008).

Among factors related to language distance are considered among others accent, speech understandability and vocabulary used. Naturally, geographical and cultural factors play important role as well. With outsourcing raises the likelihood of technical difficulties such as difficult telephone lines making the communication even harder.

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2.3.4.2 Language as expression of belonging to the nation

Isaacs (1975) states out, the role of a person and its belonging to the nation has been

Isaacs (1975) states out, the role of a person and its belonging to the nation has been