Customer emotions in service failure and recovery encounters

Emotions play a significant role in the workplace, and considerable attention has been given to the study of employee emotions. Customers also play a central function in organizations, but much less is known about customer emotions. This chapter reviews the growing literature on customer emotions in employee–customer interfaces with a focus on service failure and recovery encounters, where emotions are heightened. It highlights emerging themes and key findings, addresses the measurement, modeling, and management of customer emotions, and identifies future research streams. Attention is given to emotional contagion, relationships between affective and cognitive processes, customer anger, customer rage, and individual differences.

Justice strategy options for increased customer satisfaction in a services recovery setting

This study investigates the influence of justice (procedural, interactional and distributive) on measures of customer satisfaction within a hotel setting. Specifically, the study investigates the levels of satisfaction associated with various combinations of procedural, interactional, and distributive justice related service recovery strategies. Using especially designed video vignettes of a hotel service breakdown, respondents rated their levels of satisfaction for the video vignettes that depicted varying levels of. (a) level of concern shown by the service provider, (b) whether policy was adhered to, (c) degree of 'voice' given to the customer, and (d) type of compensation. Between subject MANOVA analyses revealed a number of main effects and interactions. Results clearly show that satisfaction varied significantly depending on the various combinations of recovery measures. In particular, a two-way interaction between adherence to policy and type of compensation was found. Furthermore, it was found that respondents expressed higher satisfaction with the service when a 50% refund was given, and the provider was seen to be adhering to policy, rather than doing a special favor for the customer. In contrast, when a token measure of compensation is given (i.e. giving away a couple of drink vouchers), respondents expressed higher levels of satisfaction if the service provider was doing a special favor rather than merely adhering to company policy. Implications for managers and scholars are discussed. (C) 2001 Elsevier Science Inc. All rights reserved.

Credibility and staff conduct make or break bank customer service quality

Service quality is assessed by customers along the dimensions of staff conduct, credibility, communication, and access to teller services. Credibility and staff conduct emerge as the highest loading first-order factors. This highlights the significance of rectifying mistakes while keeping customers informed, and employing branch staff that are responsive and civilized in their conduct. Discovery of a valid second-order factor, namely, overall customer service quality, underscores the importance of providing quality service across all its dimensions. For example, if the bank fails to rectify mistakes and keep customers informed but excels in all other dimensions, its overall customer service quality can still be rated poorly.

Capacity utilisation and profitability: A decomposition of short-run profit efficiency

The principal aim of this paper is to measure the amount by which the profit of a multi-input, multi-output firm deviates from maximum short-run profit, and then to decompose this profit gap into components that are of practical use to managers. In particular, our interest is in the measurement of the contribution of unused capacity, along with measures of technical inefficiency, and allocative inefficiency, in this profit gap. We survey existing definitions of capacity and, after discussing their shortcomings, we propose a new ray economic capacity measure that involves short-run profit maximisation, with the output mix held constant. We go on to describe how the gap between observed profit and maximum profit can be calculated and decomposed using linear programming methods. The paper concludes with an empirical illustration, involving data on 28 international airline companies. The empirical results indicate that these airline companies achieve profit levels which are on average US$815m below potential levels, and that 70% of the gap may be attributed to unused capacity. (C) 2002 Elsevier Science B.V. All rights reserved.

Application of fairness theory to service failures and service recovery

This article presents a fairness theory-based conceptual framework for studying and managing consumers’ emotions during service recovery attempts. The conceptual framework highlights the central role played by counterfactual thinking and accountability. Findings from five focus groups are also presented to lend further support to the conceptual framework. Essentially, the article argues that a service failure event triggers an emotional response in the consumer, and from here the consumer commences an assessment of the situation, considering procedural justice, interactional justice, and distributive justice elements, while engaging in counterfactual thinking and apportioning accountability. More specifically, the customer assesses whether the service provider could and should have done something more to remedy the problem and how the customer would have felt had these actions been taken. The authors argue that during this process situational effort is taken into account when assessing accountability. When service providers do not appear to exhibit an appropriate level of effort, consumers attribute this to the service provider not caring. This in turn leads to the customer feeling more negative emotions, such as anger and frustration. Managerial implications of the study are discussed.

The role of gender in reactions to service failure and recovery

Male and female consumers place different emphasis on elements of the service recovery process. Perceptions were influenced by gender of the service provider and by a match of customer and service provider gender. The study, an experimental design with 712 respondents, found that when service providers, irrespective of gender, display concern and give customers voice and a sizable compensation, both men and women reported more positive attitudes compared with when this was not so. Combinations of high voice with high outcome and high voice with high concern were especially important in positively influencing perceptions of effort, regardless of gender. However, the authors also found that there were significant differences between male and female respondents regarding their perceptions of how service recovery should be handled. Women want their views heard during service recovery attempts and to be allowed to provide input. Men, in contrast, do not view voice as important.

A reduced load approximation accounting for link interactions in a loss network

This paper is concerned with evaluating the performance of loss networks. Accurate determination of loss network performance can assist in the design and dimen- sioning of telecommunications networks. However, exact determination can be difficult and generally cannot be done in reasonable time. For these reasons there is much interest in developing fast and accurate approximations. We develop a reduced load approximation that improves on the famous Erlang fixed point approximation (EFPA) in a variety of circumstances. We illustrate our results with reference to a range of networks for which the EFPA may be expected to perform badly.

Hedge accounting no mercado acionário brasileiro : efeitos na qualidade da informação contábil e disclosure

Este trabalho investiga, no mercado acionário brasileiro, o efeito da contabilidade de hedge na qualidade das informações contábeis divulgadas, no disclosure dos instrumentos financeiros derivativos e na assimetria de informação. Para medir a qualidade da informação contábil, foram utilizadas as métricas de relevância da informação contábil e informatividade dos lucros contábeis. Para a execução deste trabalho, foi constituída uma amostra geral com empresas brasileiras, não financeiras, listadas na Bolsa de Valores de São Paulo, compreendendo as 150 empresas com maior valor de mercado em 01/01/2014. A partir da amostra geral, foram constituídas amostras para a aplicação dos modelos de value relevance, informativeness, disclosure e assimetria de informação. A amostra para relevância contou com 758 observações firmas-anos, para o período de 2008 a 2013. A amostra para informatividade contou com 701 observações firmas-anos, para o período de 2008 a 2013. A amostra para disclosure contou com 100 observações firmas-anos, para o período de 2011 a 2012. A amostra para assimetria de informação contou com 100 observações firmas-anos, para o período de 2011 a 2012. Para as análises dos dados, utilizou-se regressões com errospadrão robustos com abordagem POLS e Efeitos Fixos, aplicadas sobre dados em painel. Complementarmente, para as análises do efeito do hedge accounting sobre o disclosure e assimetria de informação, foi aplicado o método de Propensity Score Matching. As evidências encontradas para a influência da contabilidade de hedge na relevância da informação contábil apontaram uma relação positiva e significante na interação com o LL. Na análise da informatividade dos lucros contábeis, a pesquisa evidenciou uma relação negativa e estatisticamente significante do lucro quando interagido com a variável dummy de hedge accounting. Quanto às evidências encontradas para a influência do hedge accounting sobre o disclosure dos derivativos, verificou-se uma relação positiva e estatisticamente significante da dummy de hedge accounting com o indicador de evidenciação dos derivativos. Em relação às evidências para a assimetria de informação, embora os coeficientes se mostrassem no sentido esperado, os mesmos não foram estatisticamente significativos. Adicionalmente, incorporamse às análises econométricas uma análise descritiva, na amostra geral, da utilização do hedge accounting no Brasil, para o ano de 2013. Dentre as 150 empresas da amostra, 49 empresas utilizaram hedge accounting, onde 41 empresas adotam apenas 1 tipo de hedge. O hedge de fluxo de caixa é o tipo de hedge mais adotado pelas empresas, sendo utilizado por 42 companhias.

Determinants of environmental disclosure in the annual reports of large companies operating in Portugal

Similarly to what has happened in other countries, since the early 1990s Portuguese companies have developed corporate environmental reporting practices in response to internal and external factors. This paper is based on empirical research directed to both the study of environmental reporting practices developed by Portuguese companies and the identification of the factors that explain the extent to which these companies disclose environmental information. This study focuses on the environmental disclosures made in the annual reports by a sample of 109 large firms operating in Portugal during the period 2002-04. Using the content analysis technique we have developed an index in order to assess the presence of the environmental disclosures in companies’ annual reports and their breadth. Based on the extant literature, several characteristics relating to firms’ attributes were selected and their influence on the level of environmental disclosure was tested empirically. The selected explanatory variables were firm size, industry membership, profitability, foreign ownership, quotation on the stock market and environmental certification. The results reveal that, in spite of the fact that the level of environmental information disclosed during the period 2002-04 is low, the extent of environmental disclosure has increased as well as the number of Portuguese companies that disclose environmental information. Moreover, the firm size and the fact that a company is listed on the stock market are positively related to the extent of environmental disclosure. This study adds to the international research on environmental disclosure by providing empirical data from a country, Portugal, where empirical evidence is still relatively unknown, extending the scope of the current understanding of the environmental reporting practices.

Organizational and accounting change within the context of the environmental agenda: evidence from Portugal

Purpose – The purpose of this paper is to explore the process of organizational change undergone by a large Portuguese business group within the context of the environmental agenda and the role of accounting as a mechanism for change. Design/methodology/approach – The paper reports the results of a case study conducted between 2006 and 2009. Information was obtained from semi-structured interviews and secondary sources. Organizational changes were analyzed using Laughlin’s model in order to identify which category reflected most of the changes introduced to address environmental matters. Findings – This paper offers evidence that change is not a homogeneous phenomenon. Additionally, it confirms previous studies’ findings which found that accounting did not play a significant role in the process of organizational change within the context of the environmental agenda. Originality/value – This paper seeks to complement the research in this area by integrating observations from a case study into an existing model of levels of organizational change according to how a Portuguese business group incorporated environmental issues into its processes, policies and corporate culture.