Title: The role of power distance in the application of relationship marketing orientation to the internal business environment

Authors: Rachel Shuk Yee Cheung; Guilherme D. Pires

Addresses: University of Newcastle, G.P.O. Box 10976, Hong Kong ' Newcastle Business School, Faculty of Business and Law, The University of Newcastle, Room SRS121, Social Sciences Building, University Drive, Callaghan, NSW 2308, Australia

Abstract: This paper examines managerial perceptions of the role of power distance as a moderator of the perceived impact of the targeting of employees with relational strategies on perceived business performance. The study examines data collected from managers in selected industries in Hong Kong, a country identified by Hofstede (1984) as characterised by high power-distance. The rationale for the application of RMO theory to businesses' internal environment, or IRMO, is discussed using the virtuous cycle conceptualisation and marketing orientation theory. Discussion of the link between IRMO adoption and business performance suggests that justification for IRMO adoption may depend on organisational structure, with particular prominence for cultural aspects associated with power-distance conditions. A view of power-distance as a moderator in the adoption of IRMO strategies is justified. It is concluded that power-distance holds a moderating effect on managerial perceptions of the impact of trust, one of six dimensions that were examined, on business performance. This finding suggests that businesses considering the adoption of IRMO may benefit from examining how success may depend on managing power distance within the firm.

Keywords: power distance; internal relationship marketing; relationship marketing orientation; IRMO; business performance; Hong Kong; virtuous cycle; organisational structure; organisational culture; trust.

DOI: 10.1504/GBER.2015.070309

Global Business and Economics Review, 2015 Vol.17 No.3, pp.330 - 343

Received: 08 May 2021
Accepted: 12 May 2021

Published online: 21 May 2015 *

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