Academic journal article Journal of Management and Organization

Employee/customer Interface in a Service Crisis: Impact of Senior Management Attributes and Practices on Customer Evaluation

Academic journal article Journal of Management and Organization

Employee/customer Interface in a Service Crisis: Impact of Senior Management Attributes and Practices on Customer Evaluation

Article excerpt

ABSTRACT

Customer power is an ever-increasing phenomenon, particularly in relation to service failure. Service failures not only elicit strong emotional reactions from disgruntled customers, but may ultimately lead to a severing of the service provider-customer relationship. A significant but overlooked area of research relates to the behavioural processes which shape customers' perceptions of service failure and recovery. As front-line staff are frequently the customer's only contact in the service encounter, they act as the key referent point in the literature with regard to service quality, speed and convenience. However, it is asserted that as employees of the organisation, senior management also plays an important role. This conceptual paper draws from research in the field of services marketing and organisational behaviour to provide evidence which suggests that customer responses to a service crisis are likely to be affected by perceptions of senior management behaviours and character attributes as generally just. We propose a cumulative effect of these justice perceptions on customer emotions and trust. In the wake of exceptional service failure, we argue, these factors play a vital role in shaping how customers may respond to such events.

Keywords: services marketing; service failure; service recovery; emotions; trust; justice

Customer satisfaction is central to business success and is linked to profits and market share (Sparks & McColl-Kennedy 2001). On the other hand, a crisis in customer confidence as a consequence of exceptional service failure (determined by the number of customers affected and/or the impact of the failure) can occur in any organisation and because of the enormous effects on stakeholders and business viability, it is an important area for management and academic concern (LaPlant 1999; Pearson & Clair 1998). For example, after the Enron crisis, Arthur Andersen surrendered its licences to practise and lost nearly all of its clients and most of its worldwide staff of approximately 85,000 employees (Stephens 2002). Similarly, an unofficial strike by British Airways check-in staff in 2003 resulted in thousands of stranded passengers and a five per cent drop in the value of BA shares (Elliott, Harris & Baron 2005).

The process of handling service failures is referred to as service recovery (Sparks & McColl- Kennedy 2001). Tax et al (1998) suggest that the ability to recover service failures contributes to customers' positive evaluations of the service and the organisation, thereby increasing the potential for customer loyalty, retention rates and bottom-line performance. In terms of the front-line employee's responses for redressing service failure, these generally include apologising to the customer, providing customers with explanations as to the nature of the service failure, empowering front-line staff to resolve the issue and/or offering compensation (Sparks and Callan 1996; Sparks & McColl- Kennedy 2001). In practical terms, such remedies may translate into customers being upgraded to business class on a flight, being allocated more comfortable accommodation, being compensated with a free meal or drinks, having an extra night's free accommodation, assistance in solving the problem, and so forth. The responses of front-line employees to service failures, however, are shaped by senior management's commitment to service demonstrated by their actions, values, and communications. When an extreme service failure, such as a crisis occurs, senior management take on the critical interface role between the customers and the organisation and thus directly influence the perceptions and attitudes of customers.

Researchers have shown that the communication a company provides regarding a crisis, as well as the message source, influence the crisis outcome (Griffin, Babin & Attaway 1991; Jorgensen 1994, 1996). These findings raise the possibility that the characteristics and behaviours of company senior managers, impact the way in which an exceptional service failure is likely to be framed by customers. …

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