We examine how power distance belief (PDB) -the prevalence of inequality in society -affects consumers&apos; satisfaction with loyalty programs. Five studies support the counterintuitive hypothesis that high (vs. low) PDB contexts decrease, rather than increase, nonloyalty-status consumers&apos; satisfaction with such businesses, and illuminate the underlying mechanisms

Ashok K Lalwani

Jessie J Wang

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ASSOCIATION FOR CONSUMER RESEARCH 
 
Labovitz School of Business & Economics, University of Minnesota Duluth, 11 E. Superior Street, Suite 210, Duluth, MN 55802 
 
 
First Come, Last Serve: How Does Power Distance Influence Non-Loyalty Status Customers’ Satisfaction With Businesses?
Ashok K. Lalwani, Indiana University, USA 
Jessie J. Wang, Indiana University, USA 
 
We examine how power distance belief (PDB) – the prevalence of inequality in society – affects consumers’ satisfaction with loyalty
programs. Five studies support the counterintuitive hypothesis that high (vs. low) PDB contexts decrease, rather than increase, non-
loyalty-status consumers’ satisfaction with such businesses, and illuminate the underlying mechanisms.
 
 
[to cite]:
Ashok K. Lalwani and Jessie J. Wang (2013) ,"First Come, Last Serve: How Does Power Distance Influence Non-Loyalty Status
Customers’ Satisfaction With Businesses?", in NA - Advances in Consumer Research Volume 41, eds. Simona Botti and Aparna
Labroo, Duluth, MN : Association for Consumer Research.
 
[url]:
http://www.acrwebsite.org/volumes/1015601/volumes/v41/NA-41
 
[copyright notice]:
This work is copyrighted by The Association for Consumer Research. For permission to copy or use this work in whole or in
part, please contact the Copyright Clearance Center at http://www.copyright.com/.
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Advances in Consumer Research
Volume 41, ©2013
The Role of Power Distance in Influencing Non-Loyalty Status Customers’ Satisfaction
Jessie J. Wang, Indiana University, USA
Ashok K. Lalwani, Indiana University, USA
EXTENDED ABSTRACT
Loyalty programs are increasingly being preferred by busi-
nesses as a tool to increase customer retention (Dreze and Nunes 
2009). We explore how power distance belief – the extent to which 
hierarchy and inequality is prevalent in society – influences non-loy-
alty-status consumers’ satisfaction with businesses that offer loyalty 
programs (Hofstede 1980, 2001).
Current conceptualizations of power distance suggest that, be-
cause they expect and observe inequalities, non-loyalty status con-
sumers in high (vs. low) power distance contexts would be more 
tolerant of preferential treatment given to loyalty status consumers. 
Hence, they should be less dissatisfied when loyalty-status consum-
ers receive priority. Contrary to this hypothesis, we suggest that in 
high (vs. low) power distance contexts, people low in the social hi-
erarchy dislike being at the low end of the rung, and desire equality. 
Hence, they are more dissatisfied with businesses giving preferential 
treatment to loyalty-status consumers (H1).
Although research has not directly explored the link between 
power distance and desire for equality, some limited research points 
to the relationship. Based on a study of 116,000 respondents from 
over 50 countries, Hofstede (2001) suggested that inequality is rarely 
considered desirable and especially so in high power distance con-
texts. Similarly, Carl et al. (2004) found a negative correlation be-
tween the level of inequality in a country (which they referred to 
as power distance-in-practice) and its citizens’ desire for hierarchy 
(which they referred to as power distance-values). Accordingly, we 
propose and find that because consumers in high (vs. low) power 
distance contexts have a stronger desire for equality, the inequality of 
loyalty programs affects consumers in high (vs. low) power distance 
contexts more negatively. In brief: non-loyalty-status consumers’ de-
sire for equality mediates power distance’s effects on their satisfac-
tion with businesses that offer loyalty programs (H2).
Furthermore, we identify boundary conditions that strengthen 
our conceptualization and moderate the effects of power distance on 
non-loyalty-status consumers’ satisfaction. First, when non-loyalty-
status consumers in high (vs. low) power distance contexts are in-
formed that loyalty-status consumers are older, they become more 
satisfied with businesses that give preferential treatment to such el-
derly consumers. People in high (vs. low) power distance contexts 
believe that the elderly – who are considered to be less powerful 
– need to be uplifted  from their current state to attain the objective 
of equality (i.e., non-loyalty status consumers in high power distance 
contexts desire equality for the elderly, as opposed to themselves). 
Hence, we propose: when the old age of loyalty-status consumers is 
highlighted, non-status consumers in high (vs. low) power distance 
contexts are more satisfied with businesses (H3).
Second, when non-loyalty-status consumers perceive loyalty-
status consumers to be wealthier, power distance does not influence 
their satisfaction with businesses offering loyalty programs. We pro-
pose that when loyalty-status consumers’ wealth is highlighted, non-
loyalty-status consumers in high power distance contexts believe that 
they cannot match status consumers. Hence, their desire for equality 
is mitigated, and their dissatisfaction is reduced. In brief, we pro-
pose: highlighting loyalty-status consumers’ wealth attenuates high 
(vs. low) power distance non-loyalty-status consumers’ satisfaction 
with businesses that offer loyalty programs (H4).
A multi-method approach was used to establish reliability and 
generalizability across four studies. In study 1, a regression analy-
sis revealed a significant effect of non-loyalty-status participants’ 
power distance (ß = -.36, t(55) = -2.82, p < .008) on their satisfac-
tion with businesses that give preferential treatment to loyalty-status 
consumers, supporting H1. In study 2, we again found a significant 
negative effect of power distance on non-loyalty-status consumers’ 
satisfaction (β = -.18, t(136) = -.43, p < .04). We also found that non-
loyalty-status consumers’ power distance has a significant positive 
effect on their desire for equality (β = .37, t(136) = 4.63, p < .001). 
Non-loyalty-status consumers’ desire for equality has a significant 
negative effect on their satisfaction (β = .23, t(136) = -.31, p < .007). 
When both power distance and desire for equality are included as 
the independent variables, non-loyalty-status consumers’ desire for 
equality has a significant negative effect on satisfaction and power 
distance has a non-significant effect on satisfaction. The four regres-
sion analyses together suggest that desire for equality fully mediates 
the effect of power distance on consumers’ satisfaction with the busi-
ness (Baron and Kenny 1986). 
In study 3, we highlighted (vs. not) the old age of loyalty-status 
consumers and found evidence for a reversal effect. A regression re-
vealed a significant interaction between power distance and old age 
highlighted (vs. not highlighted) (ß = .346, t(72) = 3.13, p < .004). In 
the old age not highlighted condition, non-status consumers in high 
(vs. low) power distance contexts were less satisfied with the busi-
ness (Mhigh = 3.73, Mlow = 5.28; F(1,31) = 2.32; p < 0.03); however, in 
the old-age-highlighted condition, they were more satisfied (Mhigh = 
4.94, Mlow = 3.77; F(1,41) = -2.08; p < 0.05), supporting H3.
Study 4 examined the moderating role of highlighting loyalty-
status consumers’ wealth. A regression revealed a significant interac-
tion between power distance and loyalty-status consumers’ wealth 
highlighted (vs. control) (ß = .44, t(41) = 2.73, p < .01). In the con-
trol condition, power distance was negatively associated with par-
ticipants’ satisfaction with the office supply company (r = -.46, p < 
.03); this association was non-significant in the wealth-highlighted 
condition (r = .32, p > .15). These results support H4. 
These findings support our framework and suggest that loyalty 
programs have a stronger negative effect on high (vs. low) power 
distance non-loyalty-status consumers’ satisfaction. Further, high 
(vs. low) power distance consumers’ desire for equality mediates the 
effect. Finally, we have provided support for two moderators for the 
relationship.
REFERENCES
Dreze, Xavier and Joseph C. Nunes (2008), “Feeling Superior: 
The Impact of Loyalty Program Structure on Consumers’ 
Perceptions of Status,” Journal of Consumer Research, 35 
(April), 890-905.
Dale Carl, Mansour Javidan and Vipin Gupta (2004), “Power 
Distance,” in Culture, Leadership, and Organizations: The 
Globe Study of 62 Societies, ed. Paul J. Hanges Robert J. 
House, Mansour Javidan, Peter W. Dorfman and Vipin Gupta, 
Thousand Oaks, California: Sage 513-59.
Hofstede, Geert H. (1980), Culture’s Consequences: International 
Differences in Work-Related Values, Newbury Park, CA: Sage.
_____ (2001), Culture’s Consequences: Comparing Values, 
Behaviors, Institutions and Organizations across Nations,  2nd 
ed., Thousand Oaks, CA: Sage.


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