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Exploring customer loyalty Customer

loyalty
following service recovery: following
service recovery
a replication study in the
Ghanaian hotel industry
George Oppong Appiagyei Ampong Received 20 March 2020
Revised 30 May 2020
Department of Management, Ghana Communication Technology University, 9 August 2020
Accra, Ghana 1 October 2020
Accepted 1 October 2020
Aidatu Abubakari
Department of Marketing and Entrepreneurship,
University of Ghana Business School, Accra, Ghana
Majeed Mohammed
Department of Marketing, Tamale Technical University, Tamale, Ghana
Esther Theresa Appaw-Agbola
Department of Hospitality and Tourism Management, Ho Technical University,
Ho, Ghana
John Agyekum Addae
Department of Banking and Finance, Ghana Communication Technology University,
Accra, Ghana, and
Kwame Simpe Ofori
School of Business and Social Sciences, International University of Grand-Bassam,
Grand-Bassam, C^ote d’Ivoire;
School of Management and Economics,
University of Electronic Science and Technology of China, Chengdu, China and
Center for West African Studies,
University of Electronic Science and Technology of China, Chengdu, China

Abstract
Purpose – The study sought to assess the nexus between components of perceived justice and satisfaction,
trust and loyalty with service recovery.
Design/methodology/approach – Survey data were gathered from a sample of 300 clients from 8 midscale
hotels in Ghana. Partial least squares structural equation modeling was used to test the hypothesized
relationships.
Findings – Perceived distributive justice has no effect on customer satisfaction with service recovery.
Interactional justice had the greatest effect on customer satisfaction with service recovery. No significant
relationship was found between procedural justice and trust. Also, trust had a significant effect on loyalty post-
service recovery.
Research limitations/implications – Empirical data were taken from one service industry; thus, it is
reflective of only that service industry, generalizations should be mindful of our context bounded results.
Practical implications – The study offers suggestions for managers to leverage the dimensions of perceived
justice in order to build trust and loyalty post-service failure. Hotels should treat customers with fairness and
respect at every point of contact during the service recovery process. Reward based compensation should be Journal of Hospitality and Tourism
offered to customers to build trust. Insights
Originality/value – The study is among a few to assess service recovery and its link with loyalty from a © Emerald Publishing Limited
2514-9792
developing economy context. The study revealed that perceptions of justice with service recovery influences DOI 10.1108/JHTI-03-2020-0034
JHTI customer loyalty and satisfaction post-service recovery and extend the understanding of service recovery in
the Ghanaian hotel sector.
Keywords Service recovery, Distributive justice, Procedural justice, Interactional justice, Trust, Loyalty
Paper type Research paper

1. Introduction
The importance of service quality in the hotel industry cannot be over emphasized, as it has
become one of the major means used to gain competitive advantage (Chang et al., 2012; Mathwick
et al., 2001). The experience customers have with a service is essential in service evaluation (Chang
et al., 2012). Hence, issues relating to service quality, service failure and customer complaint
behavior have generated a lot of scholarly discourse (Choi and Choi, 2014; Wen and Geng-qing
Chi, 2013). A preponderance of literature exists on attributes and effectiveness of service recovery
and its relationship with consumers (Choi and Choi, 2014). Currently, there seems to be a shift
toward the utilization of justice theory in analyzing customers’ evaluation of service recovery (Wu
and Huang, 2015). The justice theory indicates that in all exchanges that occur, individuals assess
the input vis-a-vis the outcome and make comparisons between them and others in similar
situations. The crux of the justice theory is equity; therefore, it offers a solid theoretical foundation
for studies in service recovery. Previous studies applying this theory to service recovery have
derived important findings (Migacz et al., 2018; Wen and Geng-qing Chi, 2013). In addition, it has
been found useful in explaining customers’ response to service recovery, because it is in line with
services marketing literature, which identifies the significance of procedure and personal
communication in the service encounter (Blodget et al., 1997).
Customers’ perceptions of justice have been identified to have a major influence on their
formation of evaluative judgments of the service recovery process. Despite this, only a limited
number of studies have explored customers’ response to service recovery efforts in Sub-
Saharan Africa using the perceived justice theory. This is surprising, since previous studies
seem to suggest that service recovery entails not just replacing the failed service but also
handling customers’ negative emotions which is heavily culture laden (Chebat et al., 2020; Lee
and Carolina, 2018; Park et al., 2014). As such, the extent to which firms succeed in managing
service recovery relies on the understanding of the customer’s culture (Chebat et al., 2020);
however, fewer studies have been carried on the phenomenon in Sub-Saharan Africa
contexts. In spite of the fact that contextual issues like level of economic development and
culture influenced customers’ evaluation of services (Wang et al., 2011; Malhotra et al., 1994),
studies on service recovery seem to be limited in terms of empirical evidence from least
developed economies in Sub-Saharan Africa. Studies on the hospitality industry in Sub-
Saharan Africa abound however they have usually focused on sanitation, food safety and the
servicescape (Amoako et al., 2019). Less attention has been paid to service recovery and its
effects on customers. Thus, we replicate the justice theory in the Sub-Saharan Africa context
to highlight the dimension(s) of perceived justice that are sufficient to gain customer loyalty
post-service failure in such contexts.
The current study intends to contribute to the extant literature by extending the perceived
justice theory to the Ghanaian context to assess the effect of service recovery efforts. As
international hotel brands are gradually expanding their businesses in emerging markets like
Ghana, a study of this kind will improve comprehension of context-specific issues in dealing
with service failures and offer insights to hotel managers on how to handle service failures.
The remaining sections of the study are organized in this order: first, we present the
theoretical perspective guiding the research, then the research model and hypothesized
relationships. This is followed by a discussion of the research methodology and findings.
Afterward, the conclusions, implications, limitations and future research directions are
discussed.
2. Theoretical perspectives Customer
Theories on satisfaction perceptions abound however the commonest theories used in service loyalty
recovery studies are the affect control theory, justice theory and cognitive appraisal theory.
These theories are important because consumers normally perceive some degree of
following
unfairness in response to service failures (Belen et al., 2009). Perceived justice is vital when service recovery
assessing people’s reactions in a situation of conflict (Wen and Geng-qing Chi, 2013). Service
failure presents a classic case of a conflict condition; thus, it is crucial to understand
perception of justice among consumers to effectively recover failed services (Blodgett et al.,
1997; Wu and Huang, 2015).
The conceptual foundations of justice derive its roots from social psychology, and it is
extensively applied to explain individuals’ responses to diverse situations of conflict.
According to the perceived justice theory, in any exchange relationship, individuals evaluate
the input against the output, if equity exists, the encounter is deemed fair; however, if the
output fails to meet expectations then it results in inequity (Adams, 1963). Service failure
occurs when customers recognize inequities between inputs and outputs; thus, perceived
justice is a good starting point for explaining the behavior of consumers’ post-service failure
(Blodgett et al., 1997). Based on this theorization, fair service recovery processes, employee
interactions with clients and the outcome are prime factors that influence customer
evaluations of service recovery (Ding and Lii, 2016).
Prior studies tended to reveal that justice has psychological (satisfaction, loyalty, trust) and
behavioral consequences (repurchase intentions). Three dimensions of justice have been
identified in theory: distributive, procedural and interactional justice (Clemmer and Schneider,
1996). Distributive justice concentrates on perceptions of fairness of outcomes, whereas the
procedural aspect focuses on the fairness regarding rules and processes through which outcome
is derived (Clemmer and Schneider, 1996). Interaction justice deals with interpersonal treatment
people receive during the conflict resolution process (Clemmer and Schneider, 1996).

2.1 The Ghanaian hotel industry

The hotel industry in Ghana is marked by a unique culture, colorful festivities, immaculate
beaches, historical slave castles, beautiful sultry climate and more importantly a hospitable
and sociable people (Mensah, 2006). The arrival of international guests into the country
reached 1,093,000 in 2014 and the hotel sector accounted for 4.8% of gross domestic product
(GDP) as at the end of 2015. Majority of guests came from the United States, the United
Kingdom and Nigeria. The purposes of these arrivals included business, conferences,
training, holiday and transit. As at May 2017, there were 2723 hotels and lodges in Ghana.
Records from the Ghana Tourism Authority (2018) depict that there were 4 five-star hotels in
Ghana as at 2019. Also there are 5 four-star hotels, 26 three-star hotels, 147 two-star hotels
and 180 one-star hotels as at 2009 (Ministry of Tourism, 2012). Most of the five-star hotels are
situated in the capital. Regarding the number of rooms occupied, the high-end hotels received
the highest number of guests. The hotel sector was chosen for this study because of its high
contact services and its reliance on social meaning to deliver quality services. This feature
makes service failures imminent; hence, it is a good context to assess customers’ perceptions
of service recovery efforts.

2.2 Service recovery

According to Bell and Zemke (1987, p. 32), service failures refer to “situations in which customers
are dissatisfied because their perception of the service they have received is worse than their
expectation.” Service recovery refers to the activities of a business “designed to resolve problems,
alter negative attitudes of dissatisfied customers and to ultimately retain these customers” (Miller
et al., 2000, p. 388). Firms need to effectively recover failed services because it leads to customer
JHTI satisfaction, loyalty and long-term relationships (Migacz et al., 2018). Service recovery acts as a
businesses’ last resort against customer switching and it plays a vital role in influencing
consumer attitudes and behavior (Guchait et al., 2019; Migacz et al., 2018).
Justice theory posits that customers experience inequity as a result of service failure;
however, their perceptions of inequity reduce when service providers use appropriate service
recovery strategies (Ding and Lii, 2016). Consumers’ evaluation of service recovery relies on
their perceptions of justice of the recovery process. For consumers to perceive the service
recovery process as just, the organization should offer adequate levels of distributive,
interactional and procedural justices. Service firms should take actions like acknowledging
the failure, apologizing, rapid correction, offering explanations for the failure, training staff to
deal with service failures and being empathetic (Ding and Lii, 2016). The theory suggests that
if customers’ perceptions of procedural, distributive and interactional justice are positive,
complainants perceive a high degree of justice and are more likely to show positive attitudes
toward the organization (Blodgett et al., 1997).
Furthermore, culture has been identified as crucial in influencing consumer response to
service recovery (Chebat et al., 2020; Mattila and Patterson, 2004). Firms need to pay attention
to the behavior of customers’ in different cultures and their expectations of service delivery as
literature suggests that consumers from different cultures exhibit different types of
complaint behavior, attitudes about complains and distinct perceptions about service
recovery efforts (Park et al., 2014). Identifying the patterns of complaint behavior across
cultures is vital in generating customized strategies for service recovery (Park et al., 2014).
Prior studies have depicted that service recovery creates a positive relationship between
customers and businesses since satisfaction after service recovery was a salient antecedent of
customer loyalty (Bitner et al., 1990). The frequency of service failures have been linked to the
intangibility of services and the unpredictable human interaction accompanied with it
(Migacz et al., 2018). The regularity of service failures in the hotel industry may be partly due
to the high level and varied interaction between customers and service providers (Swanson
and Hsu, 2011). Customers who have suffered service failures usually go to great lengths to
take revenge against the organization (Migacz et al., 2018). Empirical findings suggest that
failed service recovery efforts can impact negatively on corporate image and reputation
(Swanson and Hsu, 2011). Similarly, successful service recoveries have been linked to higher
profits, customer satisfaction and loyalty (Miller et al., 2000; Swanson and Hsu, 2011).

2.3 Post-service failure loyalty

Customer loyalty is defined as a strong commitment to continuously repurchase from the
same service provider in the future (Cheng et al., 2019). There are diverse ways customers
demonstrate loyalty to a firm (e.g. showing preference for a specific firm, repeat patronage,
positive word of mouth, premium prices) (Zeithaml et al., 1996). A major benefit of loyalty to a
firm is that it inspires commitment to a firm, improves financial and operational efficiency
and leads to continued purchase from the same firm (Hua et al., 2017).
Increasing market competition points to the relevance of preserving customer loyalty; so,
the topic has been extensively studied among service marketing researchers and
practitioners (El-Adly and Eid, 2015). Available studies point to the fact that there is a
positive relationship between loyalty and customer satisfaction, continued existence of a
business and attraction and retention of customers (Chen, 2012; Rather and Hollebeek, 2018).
In the context of service recovery, good systems of solving customer complaints have been
linked with customer loyalty (Cheng et al., 2019; Choi and Choi, 2014; Wang et al., 2011).
In line with the foregoing discussions, Kumar and Shah (2004) assert that strengthening
customer loyalty increases the profitability of hotels. They further argue that since the cost of
customer acquisition is higher than the cost associated with retaining existing customers, it
behooves on hotels to focus on building loyalty particularly after a service failure. We argue Customer
that customers who are satisfied with the way hotels handle their complaints are more likely loyalty
to trust the hotel, this trust could influence their loyalty toward the hotel.
following
service recovery
3. Research model and hypothesis development
3.1 Distributive justice
Distributive justice relates to the perceptions of fairness of the tangible outcomes of disputes,
negotiations or decisions that involve two or more parties (Blodgett et al., 1997). It is crucial
because customers want to be fairly compensated after a service failure (Lee and Carolina,
2018). The efforts of businesses to cooperate with customers to arrive at an amicable solution
maximize the effectiveness of distributive justice (Roggeveen et al., 2012). In the context of
service recovery, distributive justice is achieved if customers obtain what they would have
received prior to the occurrence of the service failure (Cheng et al., 2019). If customers consider
the remedy offered them as fair, it restores their perceptions of distributive justice (Migacz
et al., 2018; Wen and Geng-qing Chi, 2013). If consumers recognize that the rewards offered
are reasonable compared to investments made in terms of monetary and psychological
efforts, then they feel there has been a fair treatment which results in positive behavioral
outcomes (Bahri-Ammari and Bilgihan, 2017).
Empirical studies have indicated that distributive justice is positively linked with post-
service recovery satisfaction (Cheng et al., 2019; Roggeveen et al., 2012). Reasonable tangible
outcomes have been found to have a greater likelihood to positively influence service
recovery judgments and customer satisfaction when a service failure occurs (Choi and Choi,
2014). This study postulates that positive perceptions of distributive justice in the hotel
context will increase customer satisfaction with service recovery efforts.
According to Morgan and Hunt (1994), trust occurs when a buyer has confidence in a
supplier and is prepared to depend on a firm’s integrity. Service recovery justice is positively
related to trust (Wen and Chi, 2013). The current study conceptualizes distributive justice as
the degree to which a buyer’s investments (e.g. money, time and efforts) are fairly rewarded.
When customers consider distributive justice to be fair, it results in higher levels of trust
(Belen et al., 2009; Blodgett et al., 1997). A buyer’s trust in a firm will be built when services
they receive are proportionate to their investments. Based on the foregoing discussions and in
line with the perceived justice theory, we argue that if consumers’ perceptions of distributive
justice are positive, it will likely influence their satisfaction with service recovery by hotels;
therefore, the following relationships are hypothesized:
H1a. Perceived distributive justice positively influences satisfaction with service
recovery.
H1b. Perceived distributive justice positively influences trust.

3.2 Procedural justice

Procedural justice relates to the perceptions of fairness of the policies and procedures that are
utilized by decision makers in reaching a settlement for a dispute or negotiation. It ensures
consistency, impartial and unprejudiced representation of the interests of all parties. Its
effectiveness depends on correct information and high ethical standards (Blodgett et al., 1997).
Customers’ perceptions of adequacy of fairness of processes are keys in generating
positive behavioral outcomes (Blodgett et al., 1997). This dimension of justice requires that the
service recovery procedure be expedient, accessible and responsive to allow customers to ask
for compensation (Cheng et al., 2019). It covers all formal operating regulations and tools used
to facilitate the service recovery process to reduce the time needed to manage complaints
JHTI (Mattila and Patterson, 2004). This aspect of justice is manifested in the flexibility,
accessibility, convenience and speed of complaint handling processes (Cheng et al., 2019).
Procedural justice is viewed as a means of understanding service quality, satisfaction,
trust and loyalty during service recovery (Bahri-Ammari and Bilgihan, 2017). It influences a
customer’s perception of justice of the processes that should be followed in service recovery
(Mattila and Patterson, 2004). Accordingly, a customer may be satisfied with the type of
recovery provided; however, the evaluation of the service recovery may be poor if the
processes involved in obtaining the outcome are perceived as unfair (Hoffman and Kelley,
2000). Justice in the complaint handling processes is important in service recovery in hotels
because it settles conflicts in a manner that engenders satisfaction and loyalty between
disputants even when outcomes are not satisfactory to one or both parties (Greenberg, 1990).
Firms can increase customer satisfaction with service recovery by enhancing their
awareness of procedural justice (Nadiri, 2016). Also, research has shown a positive
relationship between procedural justice and trust (Nadiri, 2016; Tax et al., 1998). In line with
the perceived justice theory and the foregoing discussions, the following hypotheses are
expected to hold true:
H2a. Perceived procedural justice positively influences satisfaction with service
recovery.
H2b. Perceived procedural justice positively influences trust.

3.3 Interactional justice

Interactional justice relates to the manner people are treated during conflict resolution, i.e.
either they are treated courteously or rudely (Blodgett et al., 1997). Previous studies across
varied contexts have shown that truthfulness, provision of explanation, politeness,
friendliness, sensitivity, acceptance of blame, apology and honesty are linked to
interactional justice (Aurier and Siadou-Martin, 2007; Nadiri, 2016). Interactional justice is
essential in understanding a consumer’s post-complaint behavior in high contact services like
hotels. Though perceptions of the outcome and procedure of complaint handling may be
reasonable, customers might still feel ill-treated if they think the manner in which the
message was presented to them was unfair (Bahri-Ammari and Bilgihan, 2017). The way
employees communicate during complaint handling influences satisfaction, trust and
reinforces the maintenance of relationships between disputing parties (Jeong and Seonjeong,
2017; Moorman et al., 1992). Interactional justice improves evaluation of service quality,
assessment of complaint handling and repurchase intentions (Aurier and Siadou-Martin,
2007; Blodgett et al., 1997; Wang et al., 2011).
Empirical studies have also indicated that interactional justice promotes satisfaction,
enhances perceptions of service quality and leads to positive evaluation of complaint
handling (Aurier and Siadou-Martin, 2007; Nadiri, 2016; Torres et al., 2018). In the context of
service recovery, positive perceptions of interactional justice have been found to influence
trust (Ding and Lii, 2016; Tax et al., 1998). Hence, it is hypothesized that:
H3a. Perceived interactional justice positively influences satisfaction with service
recovery.
H3b. Perceived interactional justice positively influences trust.

3.4 Satisfaction with service recovery, trust and post-service failure loyalty
Trust normally occurs when consumers are confident in the service firm’s ability, reliability
and integrity (Morgan and Hunt, 1994). Customers’ satisfaction with service providers would
increase their perceptions of reliability and integrity of the provider, this will in turn
contribute to the formation of trust (Ding and Lii, 2016). Effective application of procedural, Customer
distributive and interactional justice allows firms to retain ongoing relationships with loyalty
customers (Blodgett et al., 1997). Customer loyalty after a service failure is linked to
perceptions of fairness during the restoration of a failed service (Jeong and Seonjeong, 2017;
following
Maxham and Netemeyer, 2002). Fairness during service recovery is essential in influencing service recovery
trust which will consequently result in customer loyalty (Torres et al., 2018).
Furthermore, customers’ satisfaction is influenced by their expectation prior to the
interaction which is assessed against the actual service delivery (Hollebeek and Rather, 2019).
A positive relationship has also been established between satisfaction with service recovery,
trust and loyalty (Kim et al., 2009). Word of mouth intentions and repeat purchase intentions
after a service failure are influenced by how satisfied customers are with service recovery
process (Ding and Lii, 2016). Effective service recovery increases customer satisfaction, trust
and loyalty (Cheng et al., 2019; Kanje et al., 2020). Hence, the following relationships are
hypothesized:
H4a. Satisfaction with service recovery positively influences trust.
H4b. Satisfaction with service recovery positively influences loyalty.
H5. Post-service failure trust has a positive effect on loyalty.
Figure 1 provides an illustration of the relationships between the variables as proposed in the
hypotheses above.

4. Methodology
4.1 Measurement instrument
In accordance with the recommendations of Straub et al. (2004), the authors adopted items
that had been validated in previous studies. These items were reworded to reflect the context
of the current study. To guarantee that the survey instrument was comprehensible and
respondent friendly, it was given to subject matter experts to review. Their comments were
incorporated to make the questionnaire more comprehensible. Interactional justice and
procedural justice were measured with four items each derived from Maxham and Netemeyer
(2002). Questions for distributive justice were sourced from Homburg and F€urst (2005). Items
used to measure satisfaction with service recovery were derived from Wen and Chi (2013) and
Kim et al. (2012). The three items used to determine trust were adopted from DeWitt et al.
(2008), while items for loyalty were sourced from Wang et al. (2011).

Procedural
Justice
H1a
H1b Satisfaction
H4b

H2a Loyalty
Distributive H4a
Justice
H2b
H5
H3a Trust

H3b Figure 1.
Interactional Hypothesized model
Justice
JHTI 4.2 Sample and data collection
A survey design was adopted to collect the data used to validate the proposed research model.
The authors sought permission from managers of 8 mid-scale (3-star) hotels situated in Accra.
These hotels were chosen based on convenience and proximity to the researchers. To limit the
effect of bias due to social desirability, the authors sent out eight research assistants to each of
these hotels to administer the questionnaires. Using the vignette in Appendix 1, guests who
were checking out or those who were relaxing in the lobby were asked if they had experienced
any service failure event(s) during their stay. Guests who had experienced some service
failure and were prepared to take part in our survey were handed questionnaires to fill out. In
all, 400 questionnaires were handed out, 50 at each hotel. From the 336 questionnaires that
were returned, 300 were useful for data analysis. Table 1 provides information on the
demographic characteristics of the respondents.

5. Results and analysis

The proposed research model was tested using partial least squares-structural equation
modeling (PLS-SEM). PLS-SEM was adopted as a suitable technique because unlike other
SEM techniques, the PLS-SEM techniques have fewer demands when it comes to
measurement scales and sample size (Hair et al., 2011). In addition, the technique makes no
distributional assumptions (Hair et al., 2011). PLS-SEM allows researchers to handle models
that are relatively complex. PLS-SEM is preferred over the covariance-based approaches in
cases where the main objective is to predict some target variable rather than confirmatory
analysis (Henseler et al., 2009). This study employs the PLS approach, first, because an initial
assessment of the data reveals that the data is non-normal and second because the model is
relatively complex.

5.1 Measurement model assessment

The measurement model was assessed based on reliability, convergent validity and
discriminant validity. Cronbach’s alpha, composite reliability and Rho A were used to
evaluate the reliability of the measurement model. Reliability for a construct to be deemed
reliable, its reliability statistics must be greater than 0.7 (Henseler et al., 2016). From Table 2 it
can be seen that the three reliability statistics for all constructs are higher than the 0.7
threshold. The assessment of convergent validity is done using the average variance
extracted (AVE). The measurement model is seen to show sufficient convergent validity
when AVE values for all constructs are greater than 0.5 Henseler et al. (2009). It is evident
from Table 2 that the thresholds suggested by Henseler et al. (2009) have been met.
The present study adopts two methods of assessing discriminant validity, first, the
Fornell–Larcker criterion, which requires that the square root of the AVE of a particular
latent construct to be greater than correlation between the said construct and any other
(Fornell and Larcker, 1981). Second, the heterotrait-monotrait (HTMT) criterion proposed by
Henseler et al. (2015) was also used to evaluate discriminant validity. As suggested by
Henseler et al. (2015), there are no issues with discriminant validity if the HTMT ratio of
correlations is below 0.85. Table 3 and Table 4 provide evidence of both requirements for
discriminant validity being met.

5.2 Structural model assessment

The significance of the path coefficients in the hypothesized model were tested using the
bootstrapping procedure with 5000 resamples drawn with replacement from the original 300
samples. Results for the structural model assessment are presented in Table 5 and Figure 2
Variables Frequency %
Customer
loyalty
Gender following
Male 168 0.56
Female 132 0.44 service recovery
Age group
18–20 years 17 0.06
21–25 years 28 0.09
26–30 years 34 0.11
31–35 years 39 0.13
36–40 years 45 0.15
41–45 years 40 0.13
46–50 years 50 0.17
>50 years 47 0.16
Educational level
High school 63 0.21
University degree 125 0.42
Postgraduate 74 0.25
Others 38 0.13
Region of origin
North America 71 0.24
South America 25 0.08
Europe 123 0.41
Africa 29 0.10
Asia 31 0.10
Australia and New Zealand 21 0.07
Monthly income
<1000 21 0.07
1000–2000 49 0.16
2001–3000 98 0.33
3001–4000 56 0.19
4001–5000 44 0.15
>5000 32 0.11
Duration of stay
1–3 Nights 125 0.42
4–6 Nights 61 0.20
7–9 Nights 48 0.16
10–15 Nights 41 0.14
>15 Nights 25 0.08
Partner
Family 121 0.40 Table 1.
Friend 102 0.34 Background
Alone 77 0.26 information

Contrary to our hypothesis stated earlier, it was found that distributive justice did not
significantly affect Satisfaction with Service Recovery (β 5 0.049, p 5 0.449). A significant
relationship was however found to exist between Distributive Justice and Trust (β 5 0.398,
p 5 0.000). In support of hypothesis H2a, a significant relationship was found to exist between
Procedural Justice and Satisfaction with Service Recovery (β 5 0.213, p 5 0.004). Same could
not be said of the relationship between Procedural Justice and Trust (β 5 0.126, p 5 0.072).
The strongest effect on Satisfaction with Service Recovery was exerted by Interactional
JHTI Items LTY CA CR rho A AVE PLS RMSE Q2_predict LM RMSE Q2_predict

LTY1 0.838 0.883 0.915 0.885 0.682 0.667 0.290 0.666 0.292
LTY2 0.825 0.697 0.204 0.721 0.148
LTY3 0.841 0.658 0.259 0.651 0.276
LTY4 0.835 0.671 0.228 0.675 0.221
LTY5 0.790 0.752 0.233 0.777 0.181
DJ1 0.869 0.884 0.920 0.884 0.741
DJ2 0.867
DJ3 0.854
DJ4 0.853
IJ1 0.865 0.897 0.928 0.899 0.764
IJ2 0.904
IJ3 0.882
IJ4 0.845
PJ1 0.898 0.918 0.942 0.920 0.803
PJ2 0.906
PJ3 0.898
PJ4 0.882
SSR1 0.831 0.908 0.932 0.909 0.731
SSR2 0.875
SSR3 0.854
SSR4 0.858
SSR5 0.857
TRU1 0.845 0.815 0.89 0.815 0.730
TRU2 0.859
Table 2.
Loadings and cross- TRU3 0.859
loadings (discriminant Note(s): DJ — Distributive Justice, IJ — Interactional Justice, PJ — Procedural Justice, LTY — Loyalty, SSR —
validity and Satisfaction with Service Recovery, TRST — Trust, CA — Cronbach’s alpha, CR — Composite Reliability,
convergent validity) AVE — Average Variance Extracted#

DJ IJ LTY PJ SAT TRST

Distributive Justice 0.861

Interactional Justice 0.508 0.874
Loyalty 0.431 0.590 0.826
Table 3. Procedural Justice 0.468 0.576 0.517 0.896
Fornell–Larcker Satisfaction 0.374 0.591 0.479 0.492 0.855
criterion (discriminant Trust 0.633 0.594 0.634 0.524 0.518 0.855
validity) Note(s): Square root of AVEs are shown on the diagonal

DJ IJ LTY PJ SAT TRST

Distributive Justice
Interactional Justice 0.570
Table 4. Loyalty 0.486 0.662
Heterotrait-Monotrait Procedural Justice 0.522 0.633 0.575
ratio (discriminant Satisfaction 0.418 0.654 0.532 0.538
validity) Trust 0.745 0.694 0.742 0.604 0.603
Hypotheses Hypothesized path Path coefficient t-statistics p-values Result
Customer
loyalty
H1a DJ → SAT 0.049 ns 0.758 0.449 Not supported following
H1b DJ → Trust 0.398*** 5.940 0.000 Supported
H2a PJ →SAT 0.213** 2.848 0.004 Supported service recovery
H2b PJ → Trust 0.126 ns 1.800 0.072 Not supported
H3a IJ →SAT 0.444*** 5.879 0.000 Supported
H3b IJ → Trust 0.212* 2.523 0.012 Supported
H4a SAT → Trust 0.182* 2.413 0.016 Supported
H4b SAT → LTY 0.205* 2.349 0.019 Supported
H5 Trust → LTY 0.527*** 6.445 0.000 Supported

Model fit

SRMR 0.046
NFI 0.869 Table 5.
Chi-square 708.21 Hypotheses testing
Note(s): ***Significant at p 5 0.001; **Significant at p 5 0.01; *Significant at p 5 0.05; ns – not significant (structural model)

Procedural
Justice
0.213
Satisfaction
0.126 R2 = 0.386
0.205

0.049 Loyalty
Distributive 0.182 R2 = 0.432
Justice
0.398
0.527
0.444 Trust
R = 0.538
2
Figure 2.
0.212 Estimated
Interactional structural model
Justice

Justice (β 5 0.444, p 5 0.000). A significant relationship was also fount to exist between
Interactional Justice and Trust (β 5 0.212, p 5 0.012). Results also show that Satisfaction with
the service recovery process was significantly predicting both Trust (β 5 0.182, p 5 0.016)
and Loyalty (β 5 0.205, p 5 0.019). Finally, in support of H5, Trust was also seen to have the
significant effect on Loyalty (β 5 0.527, p 5 0.000). In all, 43.2% of the variance in Loyalty
was explained by our model. The standardized root mean residual (SRMR) composite factor
model was used to evaluate model fit (Henseler et al., 2016). As recommended by Hu and
Bentler (1999), values of SRMR, less than 0.08 is indicative a good model fit. Our model
exhibits good model fit since the SRMR value recorded was 0.046. In addition, we applied the
PLS-Predict technique to assess the out-of-sample predictive capabilities of our model. We
performed the PLS-Predict procedure with 10 folds and 10 replications and compared PLS-
SEM RMSE values with those from a naive linear benchmark. As a rule of thumb, Shmueli
et al. (2019) suggest that a model has moderate predictive power when the RMSE (prediction
errors) values for most PLS-SEM measurement indicators are lower than the RMSE values
for the naive linear benchmark. From Table 2, most RMSE values for PLS-SEM are less than
those for the naive linear benchmark, thus providing support for our model’s high
predictive power.
JHTI 6. Discussion and conclusions
6.1 Conclusions
The study sought to examine service recovery strategies that assuage customers’ intention to
switch due to a failed service. The data indicates that the components of perceived justice
have differential effects on customer satisfaction, loyalty and trust. The study attempts to aid
hotels in least developed economies to better strategize during a service failure to gain strong
recovery effects.

6.2 Discussion
Contrary to previous studies, our results indicate that distributive justice does not influence
customer satisfaction (Ding and Lii, 2016; Nadiri, 2016). Replacement, reimbursement and
correction have been found to produce lower levels of distributive justice (Cheng et al., 2019).
As Maxham and Netemeyer (2002) assert, it is hard for customers to assess the fairness of
service recovery outcomes in pure service industries; hence, they assign more weight to
process variables than tangible outcomes of the service recovery process. Distributive justice
was the strongest predictor of trust post-service failure. This supports the findings of Aurier
and Siadou-Martin (2007) and Nadiri (2016). Though customers in collectivist cultures like
Ghana will normally prioritize relationships, tangible outcomes increase their trust in service
providers’ post-service failure. Beyond treating customers with courtesy and respect, offering
tangible forms of compensation is an indication that the firm has taken responsibility for the
failure and it is an assurance that the firm has the interest of customers at heart. This
increases customers’ trust and subsequently loyalty.
Of the three perceived justice dimensions, the relationship between interaction justice and
customer satisfaction was the strongest. This is in line with prior studies conducted by Martinez-
Tur et al. (2006). In the service recovery context, customers will probably assess employees’ prior
reactions and attitudes toward a service failure before cooperating (Huang et al., 2020). This
gives an indication that customers use their total impression of fair treatment during service
recovery as proxy for interpersonal trust (Kandampully and Zhang, 2018; Lind, 2001).
The positive relationship between procedural justice and recovery satisfaction
controverts the results of Dayan et al. (2008), it is however consistent with the findings of
Chebat and Slusarczyk (2005) who found procedural justice to be a significant predictor of
customer’s recovery satisfaction. The insignificant relationship between procedural justice
and trust contradicts previous works (Aurier and Siadou-Martin, 2007; Blodgett et al., 1997).
This result may be because the perceptions of procedural justice may be too abstract to be
captured by individuals in high contact services like hotels; hence, it is an insignificant effect.
Our results depict a positive effect of service recovery satisfaction on loyalty and trust. A
positive relationship was also found between trust and loyalty. Service recovery satisfaction
plays a key role in stimulating positive emotional feelings among customers, this in turn
affects customers’ trust in firms. Recovery satisfaction is linked with trust (Nadiri, 2016).
As such, hotel managers should not always perceive recovery satisfaction as costs to the
organization because customers feel more valued and they trust a hotel when attempts are
made to recover failed services. Trust was found to positively influence loyalty. Thus, a
hotel’s fair complaint handling effort can have an influence on customer loyalty. This finding
confirms the results of Hamid (2008). This demonstrates that aside the ability of service
recovery to rectify service failures, they can also help maintain strong relationships.
Our study further highlights contextual differences in service recovery effort in developed
and developing economies. The findings of Hui and Au (2001) suggests that customers from
collectivist cultures are not affected by service recovery efforts that are based on
compensation but will rather appreciate service recovery efforts where they have the
chance to express their concerns to an sympathetic, attentive manager. The reverse was
however reported among Western Canadian guests. Similar results were reported on service
recovery on banks in Ethiopia (Assefa, 2014). Furthermore, our replication study buttresses Customer
the assertion that customers from high collectivist and high power distance contexts such as loyalty
Ghana are satisfied with service recovery fairness that is hinged on social outcomes, rather
than economic rewards (Kwortnik and Han, 2011).
following
service recovery
6.3 Practical implications
Our study demonstrates that the justice theory can be utilized to propose strategies to
increase trust and satisfaction post-service failure. Particularly, managers should be aware
that interactional justice is the strongest predictor of customer satisfaction, while distributive
justice is the most significant predictor of trust. Customers should receive fair compensation
in the event of service failure in addition to being treated with dignity. High levels of
interactional justice can supplement lower levels of distributive justice; hence, the two should
be used to complement each other. Managers who pay attention to interactional justice in
developing economies like Ghana can retain their customers, cut down on cost of service
recovery and enhance profitability.
A study by Mensah-Kufuor (2015) revealed only 10% of customers who visited three to
five star hotels in Ghana have rarely experienced service failure. Hotel managers in these
contexts can positively influence consumer emotions and enhance satisfaction with service
recovery programs by enhancing customer perceptions of activities linked with procedural
justice. It is noteworthy for managers to understand that all three aspects of perceived justice
are interlinked and play a role in influencing attitudes post-service failure regardless of
culture and context.
More importantly, hotel managers in developing economies like Ghana should not merely
concentrate on expected outcomes (e.g. offering competitive price, clean and comfortable
facilities). Merely fulfilling service promises is not an assurance of customer loyalty post-
service recovery in such contexts as the results suggests. The practical implication for hotel
managers operating in developing economies like Ghana is that achieving customer
satisfaction post-service failure does not depend on reward based compensations, rather the
concern and politeness of staff members matter more to customers, this deserves serious
attention in managing hotels in these contexts.

6.4 Theoretical implications

Our replication study has made some contributions to the literature on service recovery. We
found procedural and interactional justice to be important to customer satisfaction
irrespective of setting. It is important to assess what shapes customers’ expectations of
fair treatment and processes. Distributive justice was less relevant in influencing satisfaction;
thus, it seems that merely offering tangible outcomes will not assuage aggrieved customers.
A key conclusion we can make from our results is that the process of fostering satisfaction
post-service recovery is intricate, and it is influenced by perceptions of justice notably
procedural and interactional justice.
Our study confirms the multidimensionality of service fairness and the relative effect of
justice perceptions in influencing trust and satisfaction (Blodgett et al., 1997; Martinez-Tur
et al., 2006; Mattila and Patterson, 2004). Our results in the Ghanaian context contributes to
theory development by supporting the validity and reliability of past studies in other
contexts, hence, verifying the universal applicability of the justice theory. The insignificant
effect of distributive justice dimension on satisfaction post-service recovery indicates that
customers from developing economies like Ghana do not value outcome-based equity in
service exchanges. This may be due to the Ghanaian culture of brotherhood that prioritizes
interpersonal relationships above business and personal gains.
JHTI 6.5 Limitations and future research directions
Though the study makes contribution to the literature, certain limitations exist that offer
avenues for future research. First, the empirical data were taken and is reflective of only one
service industry; thus, generalizations should be mindful of our context bounded results. Future
research could examine the effect of dimensions of justice in different service sectors to see if
any differences exist. The results indicate distributive justice has no significant relationship
with customer satisfaction; however, the study did not assess the type and level of
compensation that would make an unhappy customer happy. Future studies could examine the
degree of distributive justice which is appropriate for different types of service failures.

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Further reading
Hu, M., Huang, F., Hou, H., Chen, Y. and Bulysheva, L. (2016), “Customized logistics service and online
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JHTI Appendix 1
Service failure conditions

During my stay in this hotel, I found that . . .

Building/room. The hotel did not look very clean, looking at the hotel from the outside it seemed the
hotel was poorly maintained. The hotel building appeared damp, and a part of the wallpaper in the room
was mouldy. The hotel room appeared small, and the carpet was covered with dust and hair.

Furniture/equipment. The built-in dressing mirror on the wardrobe was cracked. The bed looked
smaller than the standard double-bed size, and the mattress was not very comfortable. The pillows on
the bed in the hotel were not too comfortable, and the hotel claimed that it did not have alternative
pillows after you asked about this. The texture of the sheets and duvet cover was quite rough, and they
had light-coloured stains on them. A small TV was installed in the room, but the remote control did not
work at all. The Wi-Fi did not work most of the time in my room, I had to come to the lobby to access the
Wi-Fi. The hotel failed to replace the toiletries after the first night.

Service. The room was cleaned on the first two days. On the second two days, the room was only
cleaned if required. Only two tea bags and instant coffee sachets were available in the room, and these
were not re-filled after being consumed. The breakfast buffet was served from 7:00 A.M. to 10:00 A.M. with
a very limited choice. A call to reception was not answered on the third night. A request to change the
room was rejected out of hand. The reception staff worked rather inefficiently, and check-in and check-
out took about 15 minutes.

Appendix 2

DISTRIBUTIVE JUSTICE
DJ1 In resolving the complaint, the hotel gave me what I needed.
DJ2 In resolving my complaint, I did not receive what I required. (R)
DJ3 I got what I deserved.
DJ4 The result I received from the complaint was fair.

PROCEDURAL JUSTICE
PJ1 I was pleased with the length of time it took for them to resolve my complaint.
PJ2 The Hotel gave me a chance to tell them the details of my problem.
PJ3 The Hotel adapted its complaint handling procedures to satisfy my needs.
PJ4 Overall, the procedures followed by the Hotel in handling the problem were fair.

INTERACTIONAL JUSTICE
IJ1 The employees of the Hotel seemed to be very interested in my problem.
IJ2 The employees of the Hotel understood exactly my problem.
IJ3 The employees of the Hotel were very keen on solving my problem.
IJ4 Overall, the employees’ treatment during the complaint handling was fair.
 Customer
SATISFACTION WITH SERVICE RECOVERY (SSR)
loyalty
SSR1 I am satisfied with the treatment from the employees in resolving the problem. following
SSR2 I am satisfied with the procedure and the resources used to solve the problem. service recovery
SSR3 In my opinion, my Hotel provided a satisfactory solution to this problem.
SSR4 I am satisfied with the compensation offered by the Hotel.
SSR5 I am satisfied because the steps taken by the Hotel to resolve the problem were fast and
efficient.

TRUST
TRU1 This Hotel has the necessary skills and knowledge to fulfil its tasks.
TRU2 This Hotel keeps its promises.
TRU3 This Hotel keeps customers’ interests in mind.

CUSTOMER LOYALTY
LTY1 I will go on using the services of this Hotel.
LTY2 I would prefer this Hotel next time I am on vacation or business.
LTY3 I recommend this Hotel to people.
LTY4 I encourage friends who are planning a vacation to choose this Hotel.
LTY5 Even if other Hotels’ charges were cheaper, I would go on using this Hotel.

Corresponding author
Kwame Simpe Ofori can be contacted at: ofori.k@iugb.edu.ci

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