Service quality and customer satisfaction as antecedents of financial sustainability of the water service providers
ISSN: 1754-2731
Article publication date: 4 May 2021
Issue publication date: 14 December 2021
Abstract
Purpose
Service quality and customer satisfaction influence the financial performance of service organizations. Hence, the purpose of this paper is to investigate the path relationship of service quality to customer satisfaction to financial sustainability in the water service sector, which is vital to the sustainable future of mankind. Further, these three interrelated constructs and their dimensions are clearly articulated.
Design/methodology/approach
SERVQUAL questionnaire responses were collected from 635 household families, and the financial sustainability indicators of 56 water providers were gathered as well. Cronbach's alpha and factor analysis were conducted to measure the internal consistency and convergent validity. Path analysis was utilized to evaluate the causal diagram by examining the relationships among service quality, customer satisfaction and financial sustainability using the AMOS software package.
Findings
The results showed that the five dimensions of service quality explain 58% of the customer satisfaction variation. The responsiveness, empathy, assurance and reliability have significant impact on the customer satisfaction where p < 0.05, while the tangible dimension has an insignificant effect. The results also revealed that customer satisfaction has a significant impact on the financial sustainability indicators of the water providers, where p = 0.000 for the debt collection ratio indicator, and p = 0.003 for the financial efficiency ratio indicator.
Research limitations/implications
This research on financial sustainability is based on evidence about service quality and customer satisfaction in the Palestinian water sector. Future research on financial sustainability of the water sector may focus on the pricing mechanism and debt collection of water service.
Practical implications
The findings suggest that water providers should recognize the importance of service quality dimensions, which strengthen the customer satisfaction, which, in turn, is a significant driver for their financial sustainability. It is, therefore, sound to draw action-oriented managerial implications from these results.
Originality/value
The study adds to the literature of water service sector and is based on empirical evidence from primary data of household families and secondary data of water service providers from developing countries. This paper also contributes toward the strengthening of sustainability of the water service sector in Palestine – a worthy humanitarian cause. The study provides evidence useful for policy makers toward carving out policies aimed at strengthening the financial sustainability of the water service sector.
Keywords
Acknowledgements
This research publication has been made possible through the support from MEDRC Water Research at the Sultanate of Oman. The deepest gratitude is also expressed to Palestinian Water Authority (PWA), for their continual support of this project. We acknowledge and appreciate the contributions of professor Johan Dugger from Eastern Michigan University and professor Veronica Paz from Indiana University of Pennsylvania in this manuscript.
Citation
Murrar, A., Batra, M. and Rodger, J. (2021), "Service quality and customer satisfaction as antecedents of financial sustainability of the water service providers", The TQM Journal, Vol. 33 No. 8, pp. 1867-1885. https://doi.org/10.1108/TQM-05-2020-0104
Publisher
:Emerald Publishing Limited
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