At present, every business sector in the market needs to face several challenges to survive and compete. Micro Finance Institutions (MFI’s) is one of the business sectors that facing strong, multifaceted competition. Due to competition, customer drop out (exit/switching) is taking place. To achieve sustainability, MFIs need to reduce the dropout rate and to retain the customer by developing a relationship commitment (RC). Drawing on the relational exchange theory, this study investigates the direct and indirect relationship among relational norms (solidarity, the role of integrity, flexibility) on customer relationship commitment. This study is quantitative research where the data was collected from the respective population. The PLS-SEM technique is utilized for the analysis of data collected from 409 consumers of different MFI’s of Bangladesh. The study employed a survey method for getting responses from MFI customers about solidarity, the role of integrity, flexibility, happiness and relationship commitment related statements. The study revealed that that solidarity, role of integrity, and flexibility have a significant effect on relationship commitment. Again, happiness mediates all the relationship between solidarity, the role of integrity, flexibility and relationship commitment. The study revealed that that solidarity, role of integrity, and flexibility have a significant effect on relationship commitment. Again, happiness mediates all the relationship between solidarity, the role of integrity, flexibility and relationship commitment. Hence, the study recommends that policymakers and the practitioners should apply this model to enhance relationship commitment in the MFI’s in developing economy context. The study differentiated itself from other similar studies by examining the mediating roles of happiness in the relationship between relational norms and relationship commitment in the context of a developing country.
Micro Finance Institution, relational exchange theory, relational norms, relationship commitment, happiness, Partial Least Square PLS
Cite this paper
Selvan Perumal, Shaikh Rafiqul Islam, Maha Mohammed Yusr. (2020) Happiness! Does It Facilitate the Relationship Between Relation Norms and Customer Relationship Commitment?. International Journal of Economics and Management Systems, 5, 254-275
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