Cross-cultural differences: an investigation of service failures and service recoveries in hotels.

AuthorKuenzel, Sven
PositionReport
  1. INTRODUCTION

    Service failures, according to Michel (2001) are those situations when the service or product fails to live up to the customer's expectations. Day & Landon (1977) proposed a scheme which presents consumers' responses to a perceived service failure in a hierarchical manner. The first level includes the initial decision of whether or not to take action. At the second level, the action is then separated into public and private. The forms of public action that are mentioned include seeking redress directly from the firm, taking legal action and complaining to public or private agencies. Possible types of private action, on the other hand, are described as boycotting the seller and warning friends and relatives about it. Singh (1988), however, revised this scheme of categorisation by proposing one instead of two levels of complaint. Within this level, he identified three types of possible response: voice responses, including seeking redress or no action; private responses, including word-of-mouth; and third-party responses, including legal action. The author therefore integrated non-behavioural responses into the category of voice responses, and also separated action towards the company from action towards third parties. By assigning different categories to the various aspects of complaining, the author further emphasises the importance of the complaints process. Apart from the types of reaction, Day (1984) emphasises the variables which affect the decision of whether to complain or not. The author proposed a model, according to which the decision of whether to complain depends on four factors: the significance of the consumption event, including money and time spent, importance and social visibility of the product; the consumer's knowledge and experience, including previous purchases of the same product or brand, knowledge of the product, complaining experience and self perception of efficiency as a consumer; the difficulty of complaining, including estimated disruption, effort, further expenses and time needed; and the chances of success, including chances of full redress, recovery, additional compensation, product improvement, and seller, company or government awareness. The overall outcome which is affected by the aforementioned variables is mediated, according to the author, by a further variable: the personal attitude towards complaining. This includes beliefs about how distasteful, time-consuming, embarrassing, compulsory, responsible, useful, self-beneficial, frustrating, rights-defending or neurotic the act of complaining is. These variables and sub-variables constitute drivers, according to the author, which determine an individual's decision to complain. Another factor which is perceived to hold importance and influence customers' responses to failures is consumers' demographic characteristics. Although the most common variables found in the literature to discriminate between complainers and non-complainers are income, age, education and occupation, authors do not seem to agree upon the importance of each variable. Furthermore, a number of authors argue that demographics hold little or no explanatory power as to why some consumers complain and others do not (Gronhaug, 1977; Gronhaug & Zaltman, 1981). Several authors, however, agree that higher levels of income, education and social involvement provide consumers with more of the essential knowledge, confidence and motivation needed to express their complaints (e.g. Lovelock, 2001).

    This paper will look at consumers' reactions after confronting a service failure and a service recovery. In particular, it will examine customers' initial reactions to failure and the factors which affect a customer's decision about whether to complain in a tourism setting. It will examine if cross-cultural differences play a role in how customers perceive service failure and service recovery. The paper proceeds as follows: the next section contains a review of the pertinent literature; after that we will present the research methodology, followed by the findings and conclusions.

  2. CONCEPTUAL BACKGROUND

    Warland et al. (1975) found that complainants are consumers who, apart from having the attitudes and the experience, also possess the 'resources' and the knowledge to complain. By 'resources' the authors refer to characteristics such as education, income and social status. In line with this, Warland et al. (1984) illustrated complainers' active attitudes towards political and community affairs, as well as consumer issues. The authors also found a correlation between social institutions in which complainants are actively engaged and the channels that they use to express their complaints. Accordingly, Moyer (1984) found that active complainers are "upscale demographically" and more active "information seekers". Their positive attitude towards complaining perhaps derives from their pessimism towards the effectiveness of consumer organisations. Singh's (1990) findings support the argument that complainants are not alienated from the marketplace. In the same vein, Volkov et al. (2005) found that complainers have above average actual and disposable income, higher education and professional occupations. On the contrary, customers belonging to lower socio-economic levels seem more reluctant to complain, especially those who are members of particularly vulnerable groups, such as the poor or immigrants (Andreasen & Manning, 1990). Indeed, Andreasen & Manning (1990) stressed that vulnerable consumer groups (the uneducated, the elderly, children, ethnic and racial minorities, the structurally poor, the physically handicapped and those with language problems) are less likely to complain when they experience problems and are less likely to defend themselves through the usual consumer complaint processes. Another determinant of consumers' response to service failure is their perceptions about the source which generated the failure. Attribution theory, first developed by Heider (1958), states that the way individuals explain events determines their behaviour. Individuals are viewed as rational information processors whose actions and behaviour are affected by their causal inferences. The theory implies that individuals, apart from judging a situation, also attempt to determine the reasons which caused it. Heider (1958) identified that if the characteristics of an actor are positive and the act is positive too, the cause will be attributed internally, i.e. to the personality's positive characteristics. However, in a case where the act is negative, the cause will be attributed externally, i.e. to bad luck. Consequently, in a consumer complaining-behaviour approach, consumers who believe that a service failure was caused by a company and not by themselves are more likely to complain, especially in a case where they think that the company has overall control of the situation (Folkes et al, 1987). On the other hand, in the event that customers attribute the problem to themselves, they are not likely to protest (Stephens & Gwinner, 1998). However, the latter scenario is rare, according to the self-serving attribution bias, since individuals tend to attribute success to internal qualities (self-enhancing bias) and attribute failure to external causes (self-protecting bias).

    In the event of a successive service failure, however, according to attribution theory, this second failure is a reason for customers to re-evaluate a firm's competency (Maxham & Netemeyer, 2002). When customers confront a service failure, they may believe that this failure was exceptional. But at the time of a second failure customers are more likely to believe that a firm's mishaps and problems are consistent. This constitutes the fundamental attribution error. According to attribution theory, there is a tendency for individuals to over-emphasise dispositional, personality-based explanations for behaviours observed in others, while under-emphasising situational behaviours. In other words, individuals tend to assume that a person's actions depend on the qualities of a person rather than a person's social and environmental influences. Accordingly, if customers encounter multiple failures, they will perceive them as problems inherent to the firm. This theory stresses the need for companies to put significant effort into their first attempt at recovery.

    From reviewing the literature, it seems that a plethora of studies have attempted to examine and explain the issue of service failure. A significant level of emphasis has been put on understanding the causes of service failures as well as consumers' perceptions about them. Obtaining an understanding of these matters assists practitioners in implementing an effective service recovery which can satisfy consumers and minimise losses for the company, as well as preventing such situations from reoccurring. The following will present companies' responses to failures. After the discussion of the events of service failure, their causes, and consumers' responses, the next step is to look at the firm's response to the failure, namely its efforts towards service recovery. Service recovery, thus, is defined as all those actions taken by a service provider in order to try to resolve the problem that caused the service failure (Gronroos, 1990). Furthermore, service recovery strategies aim to resolve the problems in order to minimize negative outcomes and retain customers (Miller et al, 2000). Overall, the aim of an effective recovery, apart from reducing customers' negative emotions, is to create and increase positive attitudes (Gustafsson, 2009). Indeed, utilizing an effective service recovery policy as a means to stabilise the endangered relationship with dissatisfied customers has become the main focus of several customer retention strategies and programmes. A number of authors recommend that service recovery should be viewed as a moment of opportunity for firms...

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