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.
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.
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.
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.
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.
