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Services marketing research continues to be largely focused on firms’ reactive interactions for recovering from service failure rather than on proactive customer interactions that may prevent service failure from occurring in the first place. Building on previous studies that assess the efficacy of implementing proactive interaction in service provision contexts, the purpose of this paper is to compare the influences of proactive interaction to prevent service failure and reactive interaction to correct service failure on customer emotion and patronage behavior. Since proactive interaction for service failure prevention is a relatively underexplored and resource-intensive approach, the authors also assess the moderating influences of customer and firm-related characteristics.

The study hypotheses are tested with survey data from two scenario-based experiments conducted in a retail setting.

The findings reveal that customers prefer service providers that take the initiative to get to them before they have to initiate contact for themselves. The findings also identify the moderating influences of relationship quality, situational involvement, and contact person status and motive.

The research contributes to the development of service provision theory and practice by expanding on previous studies which report that proactive efforts to prepare customers for the adverse effects of service failure are favorably received. The results also shed light on moderating factors that may further inform the exploitation of resource-intensive proactive interaction for service failure prevention. An agenda is proposed to stimulate future research on proactive customer interaction to prevent service failure in service provision contexts.

Service failures are common and companies must decide how best to respond to these incidents. The purpose of this study is to examine service recovery efforts that incorporate a donation component, in addition to financial compensation. More specifically, the relative effectiveness of these recovery efforts was explored according to the regulatory focus framing (i.e. prevention- or promotion-focused) of the donation message.

Three experiments are conducted to test the hypotheses.

Drawing from regulatory focus theory (Higgins, 1997), the authors determined that prevention framing (e.g. highlighting the negative outcomes avoided by a donation) leads to better service recovery outcomes compared to promotion framing (e.g. highlighting the positive outcomes of a donation) the donation message. Furthermore, warmth (e.g. perceptions of caring and helpfulness) and competence (e.g. perceptions of capability and usefulness) underlie this effect and message trust moderates the effect of regulatory framing on warmth.

This study offers several theoretical and managerial implications. First, a novel recovery approach that benefits multiple stakeholders was illustrated, particularly when the donation message is prevention (vs promotion) framed. The authors focused on donations in particular, but future researchers should explore other corporate social responsibility activities such as those pertaining to sustainability, ethical labor practices or educational training.

Companies should consider incorporating donations into service recovery efforts. Moreover, companies should use prevention as opposed to promotion frames in their donation messages. Using a prevention frame enhances perceptions of company warmth and competence.

Very little research has explored the effectiveness of donations following service failures despite evidence that companies use donations in this context. This research highlights the importance of regulatory focus framing and demonstrates how a donation, paired with financial compensation, is more/less effective according to the framing of the communication. Thus, this research demonstrates a novel effect, identifies its underlying mechanism through warmth and competence and establishes an important boundary condition according to message trust.

The present research examines the interaction between explanation type and regulatory focus on informational justice (IJ) and satisfaction with service recovery.

The authors conducted two experiments with 538 respondents.

The findings imply that the effectiveness of the explanation type depends on the regulatory focus of the recipient and the severity of the failure. Specifically, with low severity failures, promotion-oriented respondents were sensitive to explanations about why failures happened. Conversely, their prevention-oriented counterparts were sensitive to explanations about how failures happened. With high severity failures, respondents were sensitive to how the failure happened irrespective of their regulatory focus orientation. Moreover, IJ is the psychological mechanism explaining such effects on satisfaction with service recovery.

The research contributes to the service recovery literature showing that explanations provided by the service providers should match the regulatory focus of the customers. The study provides new insights to the practicing managers to enhance the effectiveness of the explanations thus reducing recovery dissatisfaction.

Kaplan and Norton (1996b) claimed that there exists a sequential dependency between the four balanced scorecard perspectives (learning and growth, internal business processes, customer, and financial). Although theoretically supported by various researchers, the said claim has, somehow, attracted limited empirical attention. Therefore, the purpose of this paper is to investigate whether empirical evidence will support the theoretically grounded interrelations between the four balanced scorecard perspectives.

For this study, a total of 13 key performance indicators were identified and then clustered into the four perspectives of balanced scorecard, followed by the development of causal linkages. Data related to these indicators were collected from 1,001 employees and 985 customers of two Indian retail banks and then tested for hypothesized relationships using structural equation modeling. All the constructs were measured using scales developed in previous research works.

The results indicate that employee learning and growth positively influence the internal business processes which in turn influence the customer perspective. Finally, the customer perspective has a significant positive influence on the financial performance. Further, it was also revealed that internal business processes mediate the relationship between employee learning and growth and customer perspective. Also, the relationship between internal business processes and financial performance is significantly mediated by customer perspective.

Majority of the previous research on causal linkages of balanced scorecard has been theoretical in nature. Whatever little empirical research is available in this regard is limited to developed nations. In a developing nation like India, these linkages have seldom been examined in the past. The study has been conducted to plug this gap in the literature and, resultantly, provide further insights into the interrelations of the balanced scorecard perspectives.

This paper is concerned with an exploration of crises within the service sector. The paper proposes setting out a thesis that places “management”, as both a function and a process, at the centre of crisis generation and response rather than simply in terms of “continuity management” or service recovery. The paper argues that the nature of interactions within a service sector context generates significant problems of emergence that, in turn, create vulnerability within organisations. The paper aims to conclude by offering suggestions regarding the various points of intervention that are available to organisations.

The paper explores the nature of crisis with particular reference to the service industries. The paper is conceptual in its scope, although it draws on a number of research‐ and consultancy‐based investigations.

This paper has sought to identify three of the key elements of the crisis management literature: namely vulnerability, emergence and the barriers to learning. Each of these offers quite fundamental challenges to the practice of service recovery by highlighting the need to address both the prevention and response dynamics of the crisis process. The paper outlines the theoretical aspects of failure and outlines the process of vulnerable pathways within organisations.

The conceptual framework needs to be applied to specific cases of crisis in order to validate the framework.

The interdisciplinary approach seeks to outline key issues facing practitioners around the development of contingency plans and the limitations that such plans have embedded within them.

The paper seeks to develop understanding of the nature of vulnerability within organisations and outlines a conceptual framework for the analysis of escalation within organisations.

The understanding of operational failure (or loss generally) and its role as an imperative for service design is underdeveloped. This paper investigates external and internal loss categories (such as market failure, and unexploited resource development) and their relationship to the loss response; specifically, reactions to loss in the form of ex post loss control via new service design (NSD).

The investigation consists of complimentary theoretical and empirical dimensions and includes the analysis of five service design cases. This analysis deploys a model based upon the extant service design and innovation, resource‐based view and operational risk literatures.

The findings question the universal applicability of extant normative and descriptive models of service design. After arguing that their use should be limited to specific contexts, the paper proposes a new, more general conception of service design modes.

The paper comments on patterns of service design practice not discussed previously. It highlights some dangers inherent in following conventional prescription on design processes, illustrates a positive role for loss in design, and proposes new frameworks for NSD that accommodate loss as a contributor to the process.

Studies focusing on service quality management suggest that service firms spend too little effort on planning for service quality. The ensuing costs associated with poor service quality planning lead to lower profitability as part of the “cycle of service failures”. Examines how a quality planning technique (quality function deployment) (QFD) can be modified and adapted for use in a service environment to help prevent service failures. Illustrates the potential for the quality function deployment process as an effective tool at both the strategic planning level and the tactical level using the front‐desk activities in a hotel as an example. Also discusses the potential application of the QFD process to other design and planning challenges.

Firms with a strong service orientation – that is, those whose organizational policies, practices, and procedures support service excellence – often have a competitive edge in mature Western markets. In transitional economies, however – such as within the newly opened markets of Central and Eastern Europe – the impact of service orientation on current and future firm performance is largely unknown. Particularly, in areas where service quality has lagged, enhancing service orientation might catapult a firm’s competitive standing ahead of the pack. On the other hand, boosting service orientation in markets where demand continues to outpace supply may add unnecessary cost, and little visible short‐term gain. In this study, the SERV*OR scale, a measure of organizational service orientation, was administered to 105 employees from two Slovenian banks – a newly established private bank and a large, older, state‐supported bank. The private bank outperformed the state bank in service orientation and in financial performance, lending support to the idea that service orientation may enhance rather than detract from firm performance in transitional markets.

An inherent problem on risk priority number (RPN) value duplication of traditional failure modes and effect analysis (FMEA) also exists in two customer-oriented FMEAs. One has no unique value, and another has 1% unique values out of 4,000 possible values. The RPN value duplication has motivated the development of a new customer-oriented FMEA presented in this paper to achieve practically all 4,000 unique values and delivering reliable prioritization.

The drastic improvement is the result of power-law and VlseKriterijumska Optimizacija I Kompromisno Resenje (VIKOR). By having all three risk factors in a power-law form, all unique values can be obtained, and by applying VIKOR to these power-law terms, the prioritization is more practical and reliable.

The proposed VIKOR power law-based customer-oriented FMEA can achieve practically all 4,000 unique values and is tested with two case studies. The results are more logical than the results from the other two customer-oriented FMEAs.

The evaluation has been done on two case studies for the service sector. Therefore, additional case studies in other industrial sectors will be required to confirm the effectiveness of this new customer-oriented RPN calculation.

Achieving all 1,000 unique values could only be done by having experts tabulate all possible combinations for the traditional FMEA. Therefore, achieving all 4,000 unique values will be much more challenging. A customer-oriented FMEA has been developed to achieve practically all 4,000 unique risk priority numbers, and that the prioritization is more practical and reliable. Furthermore, it has a connection to the traditional FMEA, which helps explain the traditional one from a broader perspective.

The purpose of this paper is to contribute to the knowledge of how organization service orientation (OSO) influences job satisfaction and organizational citizenship behavior (OCB) of customer‐contact employees.

Questionnaires were carried out in 149 hotel firms. One customer‐contact employee and the manager provide the data in each hotel. The constructs were measured using existing scales. Structural equation models were used to examine the effects.

The empirical results enable one to identify the dimensions of OSO on which the managers of hotel firms should place greater emphasis in order to stimulate employee job satisfaction and OCB.

The results are limited by the specificity of the geographic context. It would be of interest to complete the model by incorporating other variables, such as employees' trust of management, role conflict and role ambiguity, and measures of performance such as service quality.

The results indicate that managers must use service communicative leadership and service encounter practices to influence directly employee OCB and human resource management to improve employee job satisfaction and OCB.

The paper provides empirical evidence about the positive effect of the OSO on employee job satisfaction and citizenship behavior in the hospitality industry.