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DIFFERENCES IN SOCIAL AND ECONOMIC POWER:
SERVICE QUALITY IMPLICATIONS FOR RETAILERS IN AN
EMERGING MARKET


Bruce R. Klemz
St Cloud State University, USA

Christo Boshoff
University of Stellenbosch, South Africa

Noxolo Eileen Mazibuko
Nelson Mandela Metropolitan University, South Africa

Jo Ann Asquith
St Cloud State University, USA




ABSTRACT

Culture research into the influence of social power and economic power offers slightly conflicting propositions for the emergence of black-owned businesses in impoverished South African townships. Previous cultural comparative studies typically hold the business setting fixed while examining the effects of cultural power differences across countries. However, in emerging markets not only are there differences in social power between races but there are also variations in economic power between business organizations. We find that the service encounter evaluations by Xhosa township residents of black-owned businesses follow the prescriptions of the social power research while evaluations of white-owned businesses follow the prescriptions of the economic power literature. Surprisingly, reliability was found to be much more important in black-owned retailers than in white-owned retailers, a finding in conflict with the cultural power research. Consistent with Xhosa cultural norms, we find that for black-owned retailers, empathy, reliability and responsiveness are critical to their business success in South Africa’s emerging business markets.

Key words: retailing, service quality, competition, cultural differences, social power, economic power

JEL codes: M14, N17, M21, M31, N87