Perspective on bank-client cooperation: A survey of selected commercial banks in Uganda

The ineffective communication channels, mistrust and uncommitted tendencies between banks and its clients continue to exist as evidenced by the continuous increase in the number of dormant account holders. Customers’ switch from one bank to another and decline in customers’ profile has persisted thereby affecting Bank-client cooperation. The purpose of the paper is to examine the relationship between communication, trust, relationship commitment and Bank-Client cooperation among selected commercial banks in Uganda. To achieve this objective, data were collected through a survey using a structured questionnaire administered to the accounts relationship managers and their clients. A total of 170 usable responses were collected. Reliability and validity of the measurement model was conducted and correlation tests were carried out to examine the relationship between study variables. Empirical findings suggest that communication, relationship commitment and trust have significant positive effects on Bank-client cooperation. In other words, efforts to these constructs can result into improved Bank-client cooperation. Findings of this paper are expected to benefit commercial banks in designing a structural operating framework for effective communication, relationship commitment and trust in the banking industry.


INTRODUCTION
Cooperation refers to situations in which parties work together to achieve mutual goals, leading to outcomes that exceed what any of the firms involved would achieve if it acted solely in its own best interests (Anderson and Narus, 1990).Cooperative relationships are characterized by high levels of trust, relationship commitment and communication (Morgan and Hunt, 1994).Trust assumes a central role in building long term relationships between the banks and its clients.It represents one of the most essential ingredients in the creation and development of cooperation between both parties involved (Anderson and Narus, 1990).However, when comparing future intentions of customers with weak and strong relationships, Garbarino and Johnson (1999) found that cooperation is driven by both trust and relationship commitment, meaning that these two dimensions are essential mediators of cooperation.Matama (2005) revealed that over 62% of the clients in Commercial Banks in Uganda are not open to their clients on matters concerning transactions and other related issues.Lack of openness in these commercial Banks may result into distrust since openness signals reciprocal trust a confidence that neither the information nor the individual will be exploited and recipients can feel the same confidence (Mishra, 1996).
Anecdotal evidence reveals that there is poor relationships between Banks and its clients which have led banks to embrace the concept of nurturing their relationships with clients.Poor relationships result into uncooperative relationships evidenced by lack of trust, poor communication and uncommitted parties which are further reflected in the financial reports of Commercial Banks and Bank of Uganda reports.These account for an increase in the number of dormant account holders and persistent decline of their customers profile across all Banks (Bank of Uganda, 2005).
Based on related literature, this paper proposes a model consisting of three dimensions, including communication, relationship commitment and trust to examine their relationships with Bank-client cooperation.The four dimensions are respectively explained as follows.

Communication
Communication is defined as the formal as well as informal sharing of meaningful and timely information (Anderson and Narus, 1990).Communication especially timely communication (Moorman et al., 1993) fosters trust by assisting in resolving disputes and ambiguities, and aligning perceptions and exceptions (Etgar, 1979).Morgan and Hunt (1994) have used past communication as an antecedent of trust.The variables that constitute communication are openness, speed of response and quality of information.This is in agreement with braendshoi (2001) who states that good communication is timely, accurate and relevant information and this is important for relationship success.Trust is negotiated through openness in communication and is specific to the individual customers involved and their relationship with the Bank.The extent to which the bank can enhance its social communication in terms of openness, speed of response and quality of information will influence the ability of the Bank to address needs for the customers, who in turn will respond to it.Thus, the higher the degree of social communication displayed by the Bank, the greater the influence on customers and increased likelihood of them engaging in the transactions.Morgan and Hunt (1994), find that communication between the business and the customer is positively related to trust and also has a positive and direct impact on relationship commitment.Berkun (2005), argue that it is easier to build enough trust to get honest opinions from the right people through informal conversations and relations.Jan et al. (2008), reveal that it is important to communicate the intentions and goals, openly if possible, so that all parties where the others are standing and this will lead to greater trust.If one party trusts the other, then one shares more information with other party (Jan et al., 2008).Morgan and Hunt (1994) define relationship commitment in a business-to-business context as "an exchange partner believing that an ongoing relationship with another is so important as to warrant maximum efforts at maintaining it".Most definitions of relationship commit-Nkuutu and Ntayi 11351 ment have in common that it is referred to as an enduring construct and that it reflects a positive valuation of a relationship (Steenkamp and Scheer, 1996).Morgan and Hunt (1994) consider the concept of relationship commitment to be central to relationship marketing not only because the construct is strongly related to buyer trust, but also because it can lead to important relationship outcomes.Moorman et al., (1992), define relationship commitment as an enduring desire to maintain a valued relationship.However, relationship commitment exits only when the relationship is considered important and when a committed partner wants the relationship to endure indefinitely and is willing to work at maintaining it (Moorman et al., 1992).

Relationship commitment
According to Morgan and Hunt (1994), a critical complement of trust in exchange relationships is commitment.Trust influences relationship commitment (Moorman et al., 1992).The dimensions of commitment are the degree of association, length of association and sense of belonging.Commitment is also the belief that the trading partners are willing to devote energy to sustaining this relationship (Dion et al., 1992).That is through commitment, customers dedicate resources to sustain and further the goals of the relationship.Commitment is the willingness of the customers to adapt and it implies that the customers view relationship as being important enough that is worth the effort of ensuring that it will endure indefinitely (Zineldin and Johnson, 2000).It comes from the belief that relationship between the actors is so important as to warrant at maintaining it and the committed party believes the relationship endures indefinitely.Brennan and Turnbull (1999), find that high levels of trust lead to adaptations of customer and this leads to increased cooperation.Morgan and Hunt (1994) urged that when both commitment and trust are present, they produce outcomes that promote efficiency, productivity and effectiveness.Therefore as trust increases, relationship commitment increases also.Zineldin (2000) examine the importance of underlying dimensions such as willingness of the supplier to adapt to the dealer, built-up relationship bonds, costs of terminating the relationship, level of shared values, opportunistic behavior and perceived level of satisfaction in relationship for achieving high commitment and trust within a relationship.

Trust
Trust is willingness to rely on an exchange partner in whom one has confidence (Moorman et al., 1993).Morgan and Hunt (1994) felt trust exists when one party has confidence in an exchange partner's reliability and integrity.It can also be said to be the dimension of business relationship that determines the level to which each party feels that can rely on the integrity of promises offered by the other party (Callaghan et al., 1995).
According to Deutsch (1960), trust consists of two components which include confidence in ability and intention.Perrien and Ricard (1995), find that trust, confidence, and satisfaction play the key role in the development of a relationship (Ganesan, 1994).
Compared to goods markets, the social interactions between the managers of banks and customers are less clear and highly variable.While Smith (1989) states that the bank's service quality is important for the quality of the lending relationship.Perrien and Ricard (1995) concluded that the bank managers differ in their perceptions of the relationship orientation of both their own bank and competitors.
Goran ( 2001) adopts a conceptual framework developed by Swan et al. (1985) and Swan and Trawick (1987) which is based upon on five dimensions of trust and these include; dependability, honesty, competence, customer orientation and friendliness.However, since this research looks at dyads relationships, then it is important that the same dimensions be adopted for the study.Goran (2001) find that in general there is lower perceived level of reliability, slightly higher perceived level of honesty, slightly lower perceived level of competence, slightly lower perceived level of orientation and slightly higher level of friendliness towards the suppliers than towards the customers.Atkinson et al. (2006) claims that such new and temporary relationships increase the importance of trust, since parties may have little or no prior knowledge of the other parties' technical standards, and there is a lack of time for familiarity to develop from shared experience or demonstrations of non-exploitation of vulnerability.This view is supported by Ford et al. (2003) who argue that every relationship is unique in its content, its dynamics in how it evolves, and how it affects the parties involved.Katherine and Edmund (2007) find that even when trust is developed between the bank and its clients, it has little impact on the services that a bank would deliver for a client company if these inclined the bank towards risk and banks do not act benevolently or incline themselves towards risk on the basis of trust.Katherine and Edmund (2007) further state that despite stressing the importance of mutual trust, the bank conceptualization of trust is calculative, non-negotiable and rigorously policed and is connected principally to the minimization and containment of bank risk and control than on customer relationship management, customer service or quality.However, affective trust is a personnel behavior of the bank relationship manager and operationalised in an adhoc manner and bankers are quick and fast to eliminate clients from their portfolio who did not in their view provide full disclosure of pertinent facts (Katherine and Edmund, 2007).This argument confirms the status that banks do not trust their clients and it is for this reason that they have continued to increasingly use technology in their relationship which largely distances themselves from the clients.

Bank-client cooperation
Cooperation refers to situations in which parties work together to achieve mutual goals, leading to outcomes that exceed what any of the firms involved would achieve if it acted solely in its own best interests (Anderson and Narus, 1990), and cooperative relationships are characterized by high levels of trust (Morgan and Hunt, 1994).However, when comparing future intentions of customers with weak and strong relationships, Garbarino and Johnson (1999) found that cooperation is driven by both trust and relationship commitment, meaning that these two dimensions are essential mediators between component attitudes and cooperation.In fact, because relationships characterized by trust are so highly valued, partners will desire to commit themselves to such relationships (Morgan and Hunt, 1994).
Alter and Hage (1993) find that cooperation is quality of the relationship between human actors in a system consisting of mutual understanding, shared goals and values, and an ability to work together on a common task.This is in line with Duarte and Davies (2004) who stated that cooperation is the joint striving toward individual and mutual goals.Wilson and Nielson (2000) find that inter organizational cooperation is the set of specific firm-level behaviors directed towards advancing the individuals and or mutual goals of the firms within an association with a customer.Cooperation includes four dimensions; information sharing, organizational flexibility, joint working and harmony between firms (Wilson and Nielson, 2000).This is in line with Heide and Miner (1992) who revealed that behavioral cooperation is voluntary joint activities or programs between a set of parties.It includes flexibility, information exchange, shared problem solving and restraint in the use of power.Rokkan and Buvik (2003) further describe cooperation as achieving benefits through coordination of logistic activities, purchasing and marketing activities.Hewett and Bearden (2001) found that the main aim of cooperation was to nurture long-term relationships by means of a structure of mutual benefits for the parties involved.These benefits can be achieved through cooperative actions undertaken by the parties.Morgan and Hunt (1994) suggested that cooperation requires the two parties in a relationship to participate actively to achieve mutual benefits and that cooperation promotes success in the relationship.Janice (2007), find that cooperation is an orientation that one firm has about working with another organization and this is in reflection with the previous definitions which states that cooperation is an orientation that reflects a spirit of willingness of one organization to work with another organization.Janice (2007) further state that it is important to recognize that coordinative behavior is not prima facie evidence that there is also a cooperative orientation between organizations but they may be other reasons that an organization may participate or not participate in coordinate behaviors beyond just having a cooperative orientation with another organization.

OPERATIONAL DEFINITION OF RESEARCH VARIABLES
The research framework was developed based on previous studies.The operational definition of each variable considered in this paper was also made according to related literature.The definition of each sub construct is provided in Table 1.

DEVELOPMENT OF HYPOTHESES
Relationship commitment and cooperation Moorman et al. (1992) define commitment to the relationship as an enduring desire to maintain a valued relationship and their valued relationship corresponds with our belief that relationship commitment exists only when the relationship is considered important.Similarly, their enduring desire to maintain corresponds with the view that a committed partner wants the relationship to endure indefinitely and is willing to work at maintaining it.Boot and Thakor (1994), find that participation in the relationship improves exchange of information between a bank and the borrower, and is also important where the lending involves collateral that needs to be monitored.He further argues that this relationship could permit the funding of the loans even when they are not profitable for the bank in the short run (Boot and Thakor, 1994), demonstrate that the length of the bank-borrower relationship may be important in determining loan prices even in a model without learning.They also found that collateral require-ments are related to the length of the relationship.Borrowers pay a high rate and pledge collateral early in the relationship, and then pay a lower rate and do not pledge collateral later in the relationship after they have demonstrated some project success.Therefore we propose that: H 1 : Relationship commitment is positively related to bankclient cooperation.

Communication, trust, relationship commitment and cooperation
Morgan and Hunt's (1994) theory holds that both commitment and trust are key variables, essential to the process of building cooperative marketing relationships.More recently, Morgan (2000) suggests that the development of the mediators and effective cooperation in marketing relationships depends on the following dimensions -economic, resources, and social contents.

Nkuutu and Ntayi 11353
For example, relationships that provide partners with superior economic benefits will foster effective cooperation, and thus relationship preservation and success.
The development of trust and commitment requires a long-term cooperative business relationships and a willingness not to try to exploit the new relationship at the expense of long-term cooperation, patience-payoff often takes time.Trust and commitment lead directly to cooperative behaviors that are conductive to relationship success.Morgan and Hunt (1994) find that a successful relationship requires relationship commitment and trust, on the basis that relationship commitment and trust give rise to cooperation.
Consequently, a lack of relationship commitment gives rise to acquiescence and a propensity to leave and a lack of trust gives rise to a functional conflict and to feelings of uncertainty.Berkun (2005) argue that trust is built through effective commitments and defines commitment as the simplest kind of agreement between two people about something they both agree to do.In addition Berkun (2005) believe that trust is built through meaningful commitments.Likewise in bank-client cooperation, high commitment is clearly important for building trust in a relation (Jan et al, 2008).However, Jan et al. (2008) show that trust is important for building a well-functioning relationship.Trust can be seen as a result of a good relation and it is reciprocal.Trust is something that must be earned and that it can easily be lost (Jan et al., 2008).Jan et al. (2008) further find that parties should be aware of how trust is built in relations and which factors are important in building trust.Parties should put efforts in improving their communication skills, showing commitments, behaving reliably and work towards reaching and establishing common goals in order to cooperate.Therefore we propose: Based on the foregoing hypotheses, we built our research framework as shown in Figure 1.This framework consists of communication, relationship commitment and trust as independent variables and Bank-client cooperation as a dependent variable.The relationships between these variables were examined subsequently in this paper.

METHODOLOGY
A cross sectional research design was adopted for the study.The questionnaire was used to collect data.To test the proposed model, data collected from the survey were statistically processed using

Openness
The ways in which bank employees and clients are open with information Speed of response Timely feedback from the bank to its clients Quality of information The quality of information communicated to its clients

Relationship commitment
Degree of association, The level of interactions between the bank employees and their clients Length of association The duration of their interactions with clients Sense of belonging Feeling part of the relationship

Dependability
The level to which one is dependable to the relationship Honesty The level to which one perceives honest in the relationship Competence The level to which one is competent enough to handle issues Customer orientation Perceived level of orientation towards the clients Friendliness The level of friendliness towards the clients

Information sharing
The level to which one shares information Organizational flexibility The level to which one is flexible in this organization Joint working The level to which one works together as a group Harmony The level to which one feels harmony in the relationship the following sections of this paper.

Trust
Bank-client cooperation frequency, correlation analysis and regression analysis.
The survey was administered based on stratified random sampling.A total of 250 questionnaires were distributed and 170 valid responses were collected.The response rate was 68%.Communication, relationship commitment, trust and Bank-client cooperation were anchored on a five point likert scale.Communication dimensions were operationalized in terms of openness, speed of response and quality of information; relationship commitment dimensions were operationalized in terms of degree of association, length of association and sense of belonging; Trust dimensions were operationalized in terms of dependability, honesty, competence, customer orientation and friendliness; Bank-client cooperation were operationalized in terms of information sharing, organizational flexibility, joint working and harmony.
The Reliability of the instrument was ascertained using the Cronbach's alpha coefficient (Cronbach, 1946).The Cronbach reliability test was found to be satisfactory since the results were all above the required cut off of 0.7 (Sekaran, 2000).This means that the scales used to measure the variables were consistent and reliable in line with the Nunally (1976) and the results are summarized in Table 2.

RESULTS AND DISCUSSIONS
The respondents' characteristics were as follows; majority of the respondents were male, with their age brackets ranging between 26-34 years, being degree holders and had spent an average duration of 5-10 years in the relationship.

Results on the study hypotheses
This section examines the relationship between research variables through Pearson's product-moment correlation analysis shown in Table 3.As shown in Table 3, relationship commitment was positive and significantly related to Bank-client cooperation.Overall, the Pearson coefficient was 0.44 with p-value≤0.01,indicating that with a higher level of commitment, there is a higher level obligation to make the Bank-client relationship succeed and to make it mutually satisfying and beneficial which finally leads to cooperation.More committed customers tend to form a positive impression towards the whole relationship duration including different transactions (both positive and negative), thus supporting H1.This finding concurs with Janice (2007) who avers that cooperation is an orientation in which one firm works with another organization.Commitment is higher among individuals who believe that they receive more value from a relationship.Highly committed customers should be willing to reciprocate effort on behalf of a firm due to past benefits received.Committed customers tend to exhibit a stronger intention to stay in the relationship than less committed customers (amy and amrik, 2002).
As shown in Table 3, trust was positive and significantly related to relationship commitment.Overall, the Pearson coefficient was 0.49 with p-value≤0.01,indicating that trust improves relationship commitment.In other words, trust can increase relationship commitment of parties involved in a relationship, thereby supporting H2.These results are in agreement with Morgan and hunt (2004).
As shown in Table 3, trust was positive and significantly related to Bank-client cooperation.Overall, the Pearson coefficient was 0.44 with p-value≤0.01,indicating that higher trust is significantly related to Bank-client cooperation.In other words, this means that when there is mistrust between the Banks and its clients, cooperation will diminish.This study has demonstrated that trust greatly affects the nature and intensity of how banks cooperate with their clients.For example if the bank advances credit to its client on the basis of the information provided and later discover that the information was not true, then this leads to distrust and finally cooperation will fail, thereby supporting H3.These findings support Jan et al (2008) who showed that trust is important for building a well-functioning relationship.This too supports Garbarino and Johnson (1999) in which they found that cooperation is driven by both trust and relationship commitments, meaning that these two dimensions are essential mediators between attitudes and cooperation.The client trust has a significant impact on the overall bank-client cooperation.Apparently customers value trusting Bank staff and consider trust an important prerequisite for building long term relationships and hence cooperation.
As shown in Table 3, communication was positive and significantly related to relationship commitment.Overall, the Pearson coefficient was 0.34 with p-value≤0.01,indicating that communication is significantly and related to relationship commitment.In other words, when parties are involved in undertaking, the aspect of communication greatly affects the relationship commitment of both parties.For example if the banks do not clearly communicate dealings and or transactions with their clients in terms of the costs and benefits that may accrue, then clients may become less committed to that particular bank and vice versa, thereby supporting H4.These findings are in agreement with Morgan and Hunt (1994) who found that communication between the business and the customer had a positive and direct impact on relationship commitment.Further the findings support Berkun (2005) who argues that it is easier to build enough trust to get honest opinions from the right people through informal conversations and relations.Therefore basing on the above findings, it is generally true that for the Banks as lender to its Clients, relationship commitment is demonstrated through frequent and timely communication.This greatly affects the relationship success negatively if not properly handed well.
As shown in Table 3, communication was positive and significantly related to Bank-client cooperation.Overall, the Pearson coefficient was 0.54 with p-value≤0.01,indicating that communication is significantly and related to Bank-client cooperation.In other words, proper   communication existing in the relationship will greatly strengthen the cooperation between parties, thereby supporting H5.These findings are in accordance with Jan et al. (2008) who revealed that it is important to openly communicate the intentions and goals.This will lead to greater trust and if one party trusts the other, information sharing with other party and cooperation between parties improves.Therefore based on the results presented in Table 3, we can conclude that communication, relationship commitment trust, Bank-client cooperation are positive and significantly related, thereby supporting H1, H2, H3, H4 and H5.

Results on the effects of independent variables on the dependent variable
In this section, we perform multiple regression analysis to examine the effect of communication, relationship commitment and trust on the Bank-client cooperation.
The results are provided in Table 4.
Findings derived from the statistics in Table 4.The multiple regression analysis suggests that trust, relationship commitment and communication have significant effects on bank-client cooperation explaining 42.7% of its variances and F-test =32.83 with p-value ≤0.01.However in terms of the individual predictors, communication was the highest predictor with 44%, relationship commitment (24%) and least predictor was trust with 19%.As shown in Figure 2 total variance of Bank-client cooperation explained by communication, relationship commitment and trust reached 42.7%.Therefore overall, these three independent variables are significant predictors of Bank-client cooperation.

Conclusion
Based on the results, the study concludes that communication, trust and relationship commitment are significantly related to one another and predict Bank-client cooperation.Therefore in order to improve bank-client cooperation, the study suggests that these three key aspects should be structurally operationalised within the organizational systems.Banks need to approach trust and commitment in the structured way in which they would consider other important elements of their business practice.
Trust-commitment building behaviors and operationalisation of trust and commitment is currently done through the informal and unscripted approval of actions by bank staff, often over the telephone, before the formal paperwork has been completed.The research findings indicate that communication is important.Therefore parties who seek to develop Bank-client cooperation are required to demonstrate their honesty and willingness to forsake all forms of misleading as they communicate openly and with frankness.In order to improve communication we suggest having more focus on building informal relations in the formal relations.

H 2 :
Trust is positively related to relationship commitment.H 3 : Trust is positively related to Bank client cooperation.H 4 : Communication is positively related to relationship commitment.H 5 : Communication is positively related to Bank client cooperation.

Figure 2 .
Figure 2. The effects of independent variables on bank-client cooperation.

Table 1 .
Definition of each sub constructs.

Table 2 .
Presents reliability results of the research instrument.

Table 3 .
Correlation between communication, relationship commitment, trust and bank-client cooperation.

Table 4 .
Effects of communication, relationship commitment and trust on cooperation.
significant predictors of Bank-client cooperation.