New Directions in Service Failure Research

Ismail Karabas

Across two essays, my dissertation highlights two understudied areas within the literatures of services marketing and service failures. Complementing and extending recent work on customer responses to uncivil behavior in retail settings, essay 1 examined third party observer responses to failed service failure recoveries in a restaurant setting. Study 1 revealed that, relative to a neutral response, negative server responses increase desire for revenge and negative attitudes toward a firm, which subsequently reduce tip likelihood, tip percentage, return intentions and recommending. Study 1 revealed no benefits of a highly positive server response. Study 2 demonstrated that perceptions of deontic injustice mediate the effect of negative server responses on desire for revenge and firm attitudes, which mediate the effect of deontic injustice on tipping, return intentions, and recommending. Study 2 further highlighted the full buffering effect of management intervention (apologies) on firm-related outcomes (attitudes, return intentions, recommending) which did not extend to employee-related outcomes (desire for revenge, tip likelihood, and tip percentage). In the second essay, I studied customer response to non-voluntary tipping systems as an emerging trend. A non-voluntary tipping system is when service establishments use a form of service inclusive pricing (e.g., increasing menu prices, automatically charging a percentage of tip on the final bill). I studied psychological (perceived autonomy, competence, relatedness) and emotional mechanisms (i.e., customer anger) that explain customers’ response, and service quality as a boundary condition to aforementioned effects. Studies 1a (restaurant setting) and 1b (hair salon setting) showed that non-voluntary tipping led to higher customer anger than voluntary tipping, which led to lower return intentions. Studies 1a and 1b also showed a larger difference in customer response (customer anger, return intentions) to non-voluntary and voluntary tipping systems under high service quality than low service quality. Study 2 mostly replicated the previous findings comparing service quality medium against high. Study 3 drew on self-determination theory and showed that the negative response to non-voluntary tipping was due to a lack in customers’ ability to satisfy their autonomy and relatedness needs. Finally, study 3 showed that service quality moderated effect of perceived autonomy on anger and return intentions.

New Directions in Service Failure Research

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