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Examines the issue of explanation in causal networks and expert systems through the perspective of solution reconstruction. Such reconstruction is complementary to the notion of system reconstruction as studied in systems theory. Compares explanations in causal networks with explanations in expert systems. Proposes the general concept of viewing explanation as user‐oriented solution‐reconstruction. In other words, the explanation is a solution deconstructed not only in terms of system variables, but also in terms of factors involving the user’s understanding of the problem solved by the system.

This study aims to examine the effects of organizational tactics (e.g. explanation and monetary compensation) on customers’ reactions to service termination. The mediating role of anger and the moderating role of termination strategy on the effectiveness of organizational tactics are examined to enhance the understanding of customers’ reactions to service termination.

Three experimental studies are conducted with different contexts (telecom and banking) and samples (students and consumers).

Study 1 results show that explanation and high monetary compensation reduce negative word-of-mouth and enhance corporate image and anger mediates these effects. Study 2a results show that high monetary compensation becomes ineffective when firms use a soft termination approach. Study 2b results show that an explanation is equally effective in soft and hard termination approaches. Importantly, unlike high monetary compensation, the explanation can fully eliminate the negative consequences of service termination.

Managers can mitigate negative customers’ reactions to service termination by offering a truthful explanation. Further, they should provide high monetary compensation only if they do not help dismissed customers find an alternative provider.

This paper contributes to the service termination literature by shedding more light on the effectiveness of different organizational tactics following different termination strategies. The findings challenge existing wisdom on the overrated role of monetary compensation showing that in service termination, the explanation is the most effective remedy. Further, unlike justice, anger better explains customers’ reactions to service termination.

In organizations, individual user’s compliance with business processes is important from a regulatory and efficiency point of view. The restriction of users’ choices by implementing a restrictive information system is a typical approach in many organizations. However, restrictions and mandated compliance may affect employees’ performance negatively. Especially when users need a certain degree of flexibility in completing their work activity. The purpose of this paper is to introduce the concept of directive explanations (DEs). DEs provide context-dependent feedback to users, but do not force users to comply.

The experimental study used in this paper aims at investigating how DEs influence users’ process compliance. The authors used a laboratory experiment to test the proposed hypotheses. Every participant underwent four trials for which business process compliance was measured. Two trial blocks were used to cluster the four trials. Diagrammatic DEs were provided in one of the trial blocks, while textual DEs were provided in the other. Trial blocks were counterbalanced.

The results of the experiment show that DEs influence a user’s compliance, but the effect varies for different types of DEs. The authors believe this study is significant as it empirically examines design characteristics of explanations from knowledge-based systems in the context of business processes.

This study is certainly not without limitations. The sample used for this study was drawn from undergraduate information systems management students. The sample is thus not representative of the general population of organizations’ IT users. However, a student sample adequately represents novice IT users, who are not very familiar with a business process. They are particularly suitable to study how users react to first-time contact with a DE.

The findings of this study are important to designers and implementers of systems that guide users to follow business processes. As the authors have illustrated with a real-world scenario, an ERP system’s explanation can lack details on how a user can resolve a blocked activity. In situations in which users bypass restricted systems, DEs can guide them to comply with a business process. Particularly diagrammatic explanations, which depict actors, activities, and constraints for a business process, have been found to increase the probability that users’ behavior is business process compliant. Less time may be needed to resolve a situation, which can result in very efficient user-system cooperation.

This study makes several important contributions to research on explanations, which are provided by knowledge-based systems. First, the authors conceptualized, designed, and investigated a novel type of explanations, namely, DEs. The results of this study show how dramatic the difference in process compliance performance is when exposed to certain types of DEs (in one group from 57 percent on the initial trial to 82 percent on the fourth trial). This insight is important to derive design guidelines for DE, particularly when multimedia material is used.

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.

Delighting customers by pleasant surprises is a common strategy, yet the potential downside of such a strategy (i.e. raising customer expectations) has received scant attention. The purpose of this study is to examine the role of explanations as a solution to control customers ' expectations following a surprise-delight event.

Hypotheses were tested with a 2 (surprise)×2 (explanation) between-subjects experimental design in two different service contexts (utilitarian and hedonic). University staff and faculty members served as the participant pool.

The results indicate that providing an explanation helps to avoid raising customer expectations to unsustainable levels and enhances customer delight.

Using hypothetical scenarios, single test for each context, and having the participants with high educational and income levels are identified as limitations in this study.

This study demonstrates that providing appropriate explanations can reduce escalating expectations for future consumption episodes and thus help service firms to effectively delight their customers.

This is the first empirical study to test the use of explanation as a possible solution for problems associated with surprise strategies, therefore extending the relevant literature.

The purpose of this paper is to investigate the effects of explanation and compensation, as specific accommodative management responses to negative online customer reviews, on potential customers.

The scenario-based online experiment with 306 participants investigates the effects of explanation and compensation on potential customers’ purchase intentions in the hotel segment of the hospitality industry.

The results reveal that combining an explanation with compensation is the most effective management response; providing neither an explanation nor compensation is the least effective. The effects of management responses that entail providing only an explanation or compensation do not differ significantly.

Continued research should investigate the effects of specific accommodative management responses in other service industries and other cultural settings and consider different kinds of explanations and compensation.

Hotel managers in the hospitality industry should reply to negative online customer reviews by combining an explanation with compensation. Service providers that currently lack structures and procedures to identify service failures and their causes or that cannot take corrective actions should provide compensation. Service providers that currently have limited financial resources should provide explanations.

This study analyses the effects of explanation and compensation on potential customers’ purchase intentions. In addressing the effects on potential customers, instead of on complainants, the conceptual framework represents a novel combination of management responses from service recovery research with signalling theory, the search-experience-credence framework and risk reduction methods.

In recent years, the principle of the “comply or explain” approach has become the trend in corporate governance statements that are not fully compliant with national codes. This is because managers of companies deviating from corporate governance codes try to be lawful, providing reasonable explanations; thus, they reach an impasse, copying explanations from other companies, in a mimetic behavior. The purpose of this study is to investigate whether companies listed in Greek Stock exchange tend to imitate one each other thus to be legitimate in terms of the “comply or explain: approach”.

This study focuses on the “comply or explain” approach in Greek listed companies, analyzing statements by 162 companies (80.2 per cent) listed on the Athens Stock Exchange (ASE), showing a total of 1,211 deviations from the national code. Therefore, the explanations were classified for analysis, grouping them into three main categories and investigating the degree of imitation.

In total, 96 companies deviating from the Code (56.3 per cent) provided explanations as to their legitimacy practices. Thus, the managers of these companies tried to explain their deviations from the national code in such a way that it could be considered that they tend to imitate each other, striving to be lawful.

Owing to Greece’s ongoing economic crisis, many companies listed on the ASE in previous years have suspended the trading of their shares. An examination of previous years may have led to biased results, owing to the different samples of companies. Another limitation concerns the number of companies in the sample; although it covers almost 80 per cent of listed companies, the actual number of companies is not big enough.

This study tries to investigate whether Greek listed companies comply with or deviate from the National Corporate Governance Code. For that purpose, context analysis was performed on 80.2 per cent of these companies (162 out of 202 companies) for the calendar year 2017. Most companies tried to explain their deviations from the Code in such a way that it could be considered that they tend to imitate each other.

Companies that deviate from the corporate governance code tend to imitate each other. This phenomenon occurs mainly in small companies, which, while striving to be lawful, even copy other companies’ phrases verbatim. This study reveals that managers of such companies care to provide an explanation for only deviations from the Code as a logical justification and not to capture the existing situation of their companies.

This study is the first to examine the mimetic behavior on corporate governance statements in Greece. Although the trend of imitation is a fact in developed economies, similar studies never took place on emerge economies. This study contributes to the literature by examining whether the trend of mimetic behavior exists in emerging economies as well.

The purpose of this paper is to examine whether the type of explanation (excuses, justifications, apologies and denials) provided for downsizing and the source of the announcement (CEO vs other organizational members) influences shareholders’ market reactions to downsizing announcements.

In total, 388 media-based downsizing announcements from 2006–2015 were coded for explanation type and source of message. Cumulative average return was used to assess the impact of downsizing on market reactions the day after the announcement.

As predicted, and consistent with predictions drawn from fairness theory, excuses triggered positive market reactions, whereas justifications, apologies and denials triggered negative reactions. Additionally, shareholders reacted more negatively to excuses and apologies when the announcement came from CEOs vs other organizational members.

The current research bridges the literature on market reactions to downsizing with the organizational psychology literature to advance a novel theoretical framework for predicting shareholders’ reactions to downsizing announcements. In doing so, the authors provide a more refined understanding of why different types of explanations may differentially influence shareholders’ reactions. The current research also sheds light on when the presence of the CEO in downsizing announcements may have potentially negative consequences for organizations.

The findings contribute to the sparse literature examining variations in the content of downsizing announcements on shareholders’ reactions. The present research is also the first to examine whether shareholders would react less negatively if downsizing explanations came from top organizational leaders (e.g. CEOs).

Low‐income transitional countries in the region of the Caucasus and Central Asia lack the existence of a solid assessment of public perceptions regarding the causes of poverty during transition. The purpose of this paper is to fill that gap in the existing literature.

This paper uses the secondary analysis of a recent cross‐sectional multinational survey to shed light on public beliefs of the causes of poverty in seven countries of the region – Armenia, Azerbaijan, Georgia, Kazakhstan, Kyrgyzstan, Tajikistan, and Uzbekistan. In addition, Russia and Ukraine are used as a comparison point. The theoretical framework for this study is that the subjective beliefs regarding the explanations of poverty can be classified into three broad groups: individualistic, fatalistic, and structural. Hence, regression coefficients and marginal effects of the multinomial logit regression model (MNLM) are estimated to associate the set of various individual, households, and community characteristics selected in the conceptual framework with the likelihood of choosing one of the three afore‐mentioned explanations of poverty.

The results of cross‐tabulation reveal that in a majority of the countries studied, the predominant explanation for poverty is structural, with the exception of Tajikistan and Uzbekistan, where predominant explanations are, respectively, fatalistic and individualistic. The results of MNLM show that most individual, household, and community characteristics possess the expected direction and are in line with previous findings. However, some of the characteristics have a similar significant effect across several countries, while other characteristics are significant for a single country only.

These findings demonstrate that despite the dominant post‐socialist ideology which favors individualistic and fatalistic explanations of poverty based on the economic rationality of market capitalism, the efforts of the elites in promoting and imposing these ideologies has not been fully successful. Nevertheless, no single unified model of the determinants of beliefs regarding the causes of poverty in the countries of the region is observed.

This is one of the very few papers aimed at assessing public perceptions regarding the causes of poverty in transitional countries of the Caucasus and Central Asia.

Limited research has explored the potential marketing strategies to counter the damage associated with delayed recovery. Based on the construal level theory, this study seeks to suggest that customers tend to focus on different aspects of the compensation according to the speed of recovery. Thus, providing an adequate explanation to customers corresponding to expected recovery speed can effectively alleviate customer dissatisfaction with a delayed recovery.

This study examined the proposed hypotheses using a 2 (immediate vs delayed) by 2 (explanation: process-focused vs outcome-focused) experimental design.

The analytical results show that when an immediate recovery is available, an outcome-focused explanation will result in higher post-failure satisfaction than will a process-focused explanation. Conversely, when a delayed recovery is expected, post-failure satisfaction is higher for customers who receive a process-focused explanation than for those who receive an outcome-focused explanation.

This study thus recommends that firms should provide explanations compatible with expected recovery speed to better enhance post-failure satisfaction.

This study contributes to the body of service recovery literature by examining the differential effectiveness of outcome-focused and process-focused explanations under immediate and delayed recovery conditions. The findings provide a guideline that managers can use to formulate suitable explanations to alleviate the detrimental effects of delayed recovery.