Love All Trust a Few: Does Culture Matter with Online Trust?

Trust is often cited as a precondition for e-commerce transactions and has been an area of interest for researchers; an understanding of how culture impacts on an individual’s perception of trust will allow website managers to better segment their markets and develop appropriate online stimuli to target specific cultures. This empirical study examines if cultural differences play a part in trust online. The paper begins by presenting a literature review of online trust, then presents the methodology and discusses the findings before presenting the conclusions that the use of Hofstede’s Individualist/Collectivist dimension may not be an appropriate tool from which to identify cultural effects on online trust and showing that acculturation may have an impact on attitudes towards online trust and security. Introduction and Purpose Virtual businesses face numerous challenges to overcome their physical separation of the buyer and seller, physical separation of buyers and product, and an overall perception of insecurity (Jarvenpaa et al. 1999; Warrington et al. 2000). One of these challenges is the lack of trust as an inhibitor in e-commerce adoption (Gefen 2000; Ribbink et al. 2004; Tang et al. 2003). Supporting this view, academics suggest trust is a precondition for e-commerce transactions (Clarke 2002; Doney et al. 1998; Jarvenpaa et al. 1999; Quelch and Klein 1996; Warrington et al. 2000), with others regarding the most common reason for the underutilization of the internet for commercial transactions is due to lack of trust (Hoffman et al. 1999a; Mehrotra 2004). Despite the importance of trust in e-commerce, many say that trust has been given too little attention (Clarke 2002; Ha 2004). Various definitions of trust include: “...when one party has confidence in an exchange partner’s reliability and integrity” (Morgan and Hunt 1994:22); and“...confident reliance by one party about the behavior of other parties” (Clarke 2002:56). A multitude of definitions of trust exist across disciplines where there is no agreed definition, some suggest the common theme among the definitions is ‘uncertainty’ (Dutton et al. 2005). Adding to the difficulty in defining this issue, trust is described as a complex and multidimensional construct, (Butler 1991; Lewis and Weigert 1985; Salam et al. 2005). Online, trust is not a feature of a website but is a judgment made by the visitor or buyer based upon their experience and perception of the merchant (Sisson 2002). Trust is a concept that most people have an interpretation, however, trust means different things to different people and thus it is subjective in nature. Personality and cultural factors have been identified as influencing an individual’s disposition to trust (Papadopoulou et al. 2001). Online trust literature can be divided into two levels, micro and macro. Micro-level elements influencing trust include: the individual, their experience and website features. Macro-level elements influencing trust include: institutional dimensions, society and cultural influences. At the micro-level, the basic question for consumers is ‘will I get the products or services that I have ordered and what will the firm do with my personal details?’ The potential effect of consumer privacy concerns may result in billions of dollars in lost sales (Moores 2005). A significant body of research examines the concern for personal data privacy and security (Dutton et al. 2005; Hoffman et al. 1999b; Kemper 2001; Luo 2004; Moores 2005; Smith and Manna 2004; Warrington et al. 2000) and the individuals’ confidence in the internet (Dutton and Shepherd 2004; Uslander 2004). The consumers’ experience is also considered important as customer loyalty is achieved through service, quality, satisfaction and trust (Ribbink et al. 2004). Trust is a critical part customer relationship management to attract and retain customers (Papadopoulou et al. 2001) and is developed through user experience (Uslander 2004). The consumer experience involves assessing website cues to facilitate buyer trust (Tang et al. 2003). Specific cues include: branding (Ha 2004); website seals and digital certificates (Backhouse et al. 2005; Moores 2005; Wakefield and Whitten 2006); and website design (Cyr et al. 2005). Egger (2001) calls for firms to go beyond the website design to develop trust via a strategic marketing approach. At the macro-level, institutional characteristics influence trust formation (Jarvenpaa 2000) and include legislation, contracts, warrantees and guarantees. These constructs are socially constructed mechanisms to improve the security and privacy components of trust between transactional partners (McKnight and Chervany 1996; Papadopoulou et al. 2001). Social-trust research posits that there is a relationship between the level of trust in society and ecommerce activity (Mutz 2005). A rise in the measure of trust has a positive effect on the growth rates of income per capita (Knack and Keefer 1997). Similar results were identified in an examination of the level of trust across various countries where a significant association was observed between the level of trust to increasing internet adoption rates and economic growth, where low-trust countries tend to be low or middle income countries (Hoffman et al. 1999b; Huang et al. 2003). Some argue that an individualistic culture is more prone to adopt the internet than those of collectivist cultures (Park 2000). Knack et al (1997) contends that a country’s psychological or cultural predispositions (Hofstede 1991; Yamagishi and Yamagishi 1994) manifest themselves in varying levels of trust. Few studies address the impact cultural factors that affect trust online (Cyr et al. 2005) yet it is important to determine how the effects of various cultures relate to an individual’s perception of trust (Jarvenpaa et al. 1999). Cyr et al. (2005) study of e-loyalty across website design and culture comparing countries individualist to collective cultures, is unable to determine the impact of trust using culture as a discriminating factor. Furthermore, there have been numerous studies into the impact of acculturation on consumer behaviour and subsequent purchasing decisions. Lee (1993) investigated levels of acculturation and attitudes towards advertising, and Khairullah and Khairullah (1999) investigated acculturation and attitudes towards advertising and purchase decisions. If Khairullah and Khairullah (1999) findings are true, then time spent in a country may change an individual’s perception of trust and online security. This paper builds on Cyr et al. (2005) and others research through the examination of cultural values impact on trust. Convention marketing consumer behavior models such as Theory of Reasoned Action (Fishbein and Ajzen 1975) and Kotler’s behavioural choice model (Kotler et al. 2004) recognize the importance on culture on a buyer’s decision making process. Furthermore, the consensus of the literature suggests that reducing uncertainty and developing trusting relationships with customers is an important concern for e-commerce managers (Warrington et al. 2000). By understanding the effects of culture on an individual’s perception of trust, website managers can better segment their markets and develop appropriate online stimuli to target specific groups. Through a deeper understanding of culture related nuances, businesses will be able to better service the needs of global markets. As such three propositions have been identified as: Proposition 1: That an individual’s score on the Individualism/Collectivism scales will have a relationship with their attitudes towards online trust. Proposition 2: That an individual’s score on the Individualism/Collectivism has a relationship with their attitudes towards online security issues. Proposition 3: That acculturation will have an impact with an individual’s attitude towards online trust. Methodology This study uses Hofstede’s Individualism/Collectivism dimension to explore the perceptions of online trust from two distinct groups of people, those who are categorized at either end of the dimensions scale. The findings provide exploratory and descriptive data from which to base future research. Trust can be generated either by experience or ‘cues’ (Beatty et al 1996), with cue based trust this can occur when the website provides indicators that are relevant to the consumer to indicate that it can be trusted (such as return policy, look of the website etc); we suggest that these cues maybe culture specific. Explorative research methods were used to examine the issue of online trust. An intervieweradministered survey instrument was selected is an appropriate method to describe what is happening and to explore the phenomena. It has the benefits of an inexpensive, efficient and accurate collection method of assessing information (Zikmund 2003). The population under investigation was adult internet users in Australia who we separated into individualist or collectivist using Hofstede’s dimensional scale (1980). There is general agreement among authors that Eastern Cultures rate differently on this scale than Western cultures and that these differences result in implications for global marketers. For example, Cutler et al (1997) claim that individualism (or a society’s ranking on this scale) impacts on the way in which global products can be marketed. With this in mind it was concluded that this dimension was an appropriate identifier of cultural difference for this exploratory study. A female trained interviewer (aged between 20 and 25) administered the questionnaire (trained in sample selection, asking questions and recording responses). The interviewer identified herself as a University researcher. A sample of 200 respondents was collected using mall intercept interviews in the Sydney CBD. Respondents were selected based upon judgment criteria to ensure that a multicultural sample was collected. The mall intercept method was used for its inherent speed and low cost in data collection (Bush and Hair, 1985). Respondents were asked a series of questions by interviewer who recorded the responses; they did not have to identify themselves. Of the 200 respondents; 93 respondents were male and 107 were female; 121 reported that they a nationality other than Australian; 152 had resided in Australian more than 2 years (including Australian nationals); and 143 respondents reported that they had conducted a monetary transaction online. Respondents identified themselves as being born in 19 countries (including Australia). The length of time in Australia was collected with responses ranging from less than six months to more than 10 years. Once the sample of 200 was collected we used the Hofstede methodology to categorize cases; this resulted in 119 falling in the individualist range and 81 on the collectivist range. Once this calculation was completed we then separated the two groups into separate data files for analysis. There were several limitations to the study. The sample was selected using a non-probability judgment selection at one location using mall intercept interviews; therefore random sampling error reduced the findings to be applicable to the respondents under investigation. Furthermore, response bias may have also occurred as a result of deliberate falsification, unconscious misrepresentation (such as inability to recollect past internet activity), extremity bias, interviewer bias (such as the interplay between the relative age differences between the interviewer and the respondents), and auspices bias (the interviewer identified herself as a University researcher). Thus, the findings are not statistically generalisable to the population. Analysis and Discussion Firstly, the individualism scales of the respondents were calculated using Hoftstede’s methodology and we looked for relationships between the score that respondents recorded on the Hoftstede individual/collectivism scale and responses to internet security concerns and trust issues, this study accepts that respondents who score divergently on this scale hold divergent values. Non-parametric data was collected and therefore the Chi Squared test for relatedness as well as Spearman’s bivariate correlation was the appropriate technique for analysis (Churchill, 1999). We found no statistical relationship existed between the individualism scale and attitudes towards online trust; therefore we conclude that the sample provides no support for proposition one. The findings suggest that culture as measured by the individualism does not impact an individual’s online attitude towards trust. However, we observed a positive correlation (rho = .142, p =0.041) between the Individualism index and a respondents willingness to give personal information, this means that the higher a respondant scores towards the individual end of the Hofstede scale the more likely they are to be prepared to give out personal information over the internet. These findings on online security support the literature (Park, 2000). Therefore we concluse that proposition two is supported in part, and that attitudes towards security issues maybe related to the individualism cultural dimension. We then looked to time spent in Australia (one measure of acculturation in the literature) to see if this influenced the responses. In this case we found that several concepts within our internet security questions were related. Awareness of Security items (p = 0.001), importance of security (p = 0.003) and concern for internet security (p = 0.001) reported significant relationships with time spent in Australia. Concern for internet security was negatively correlated with time spent in Australia (rho = -.284, p =0.000), a possible reason is that the longer an individual resides in Australia, the less concerned they were about internet security. Given the large adoption of internet technology in Australia, we believe this finding reflects accultration and self efficacy issues found in the literature (Park and Lessig, 1981; Karahanna et al, 1999; Park, 2000) which were not specifically tested or anticipated hence the weak correlation between our two variables as time in Australia is only part of an Accultration measure. We found some support for proposition three and propose that time spent in Australia may impact on an individual’s attitude towards online security. To further investigate the data we then our data set based on responses to the Hofstede Individualism scale into two groups those scoring either on the individualist or the collectivist side of the mid-point. By running analysis on both the trust and security constructs by data set we found that there was no significant difference in responses to the items of trust and security; however, we did find differences between the data sets on the relationships between the factors of the constructs. For instance, we found differences in the response to not only the awareness of security items (on a website) but also their importance with aspects of the trust construct. Individualists linked these security construct items firmly with the trust construct while collectivists did not. Conclusions Trust is a very complex construct. Previous researchers have linked internet usage with the individualism measure, this exploratory study has found no such link with trust; this is supported by previous studies such as Jarvenpaa et al (1999) who also found no difference based upon Hoftstede’s dimensions. We have found a relationship between the time spent in Australia and a respondents increased “trust behaviour” towards conducting financial transactions online. Australia has a large internet usage pattern, our findings may indicate the effects of acculturation and self efficacy issues rather any cultural difference in usage and behaviour. Of the two ways in which trust can be established with consumers (experience and cues) we suggest that the way in which experience occurs is common across cultures (i.e. once someone has had a positive purchasing experience from a site their level of trust in that site will increase and the internet); while cue based trust (where trust is based on the cue’s provided by the website itself) will be affected by culture (in that the cues will need to be different between cultures). Websites amount to a form of marketing communications we suggest that cultural differences such as colour (Jacobs et al 1991), language, context as well as navigational techniques (Luna and Peracchio 2000) are impacted by culture and these concepts are integral to cue base trust. We therefore suggest research needs to be conducted to examine cue and experience based trust so as to examine if (a) cue based trust is established differently between cultures and (b) if experience based trust is established in the same way between cultures. We suggest further that future research use Hall’s (1976) concept of low/hi context culturaldifferences to examine the concept of trust. Hall’s framework suggests that some culturesplace importance on how something is said (high context) more so than what is said. 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