Service Recovery in B2B Markets

SERVICE RECOVERY IN BUSINESS-TO-BUSINESS MARKETS
Elective module
Erhversvakademi Aarhus
Top-up programme in international sales and marketing management
No. of characters: 30.100
Supervisor: Liza Castro Christiansen

Students: Nives Vukusic & Diana Florentina Rosu
Specialisation module 15.06.2018
Nives Vukusic and Diana Florentina Rosu
Table of Contents
Abbreviations .........................................................................................................................................4
1. Introduction......................................................................................................................................1
1.1 Structure of paper ..........................................................................................................................1
1.2 Limitations and further research ....................................................................................................2
1.3 Delimitation ....................................................................................................................................2
1.4 Key terms.......................................................................................................................................3
2. Discussion .......................................................................................................................................4
2.1 Seller related research on recovery ..............................................................................................4
2.1.1 Pre-recovery phase ................................................................................................................4
2.1.2 Immediate recovery phase .....................................................................................................5
2.1.3 Follow-up recovery phase ......................................................................................................6
2.1.5 Seller-related requirements for recovery ...............................................................................7
2.1.5 Seller related consequence of recovery ................................................................................7
2.2 Customer related evaluation of recovery response ......................................................................8
2.2.1 Distributive justice ..................................................................................................................8
2.2.2 Procedural justice ...................................................................................................................8
2.2.3 Interactional justice ................................................................................................................9
2.2.4 Consumer related consequence of recovery .........................................................................9
Conclusion and implications ..............................................................................................................11
Abbreviations
B2B Business-to-business
B2C Business-to-consumer
WOM Word of mouth
ROS Return on Sales
1. Introduction
Many organizations use relationship selling to develop a sustainable business through development
of positive customer-salesman relationships. Relationship selling is a customer-oriented approach
where seller has a role of a consultant and a problem solver for the buyer (Atkins, 2011). In business
markets, products or service supplied by seller company have a sizeable impact on operations of a
customer company. Therefore, in order to retain them, seller has to focus on addressing customer
concerns, cocreating value, attaining customer satisfaction and resolving any conflict that may arise
during and after the transaction (Gonzalez et al.,2010). This way, seller has to focus more attention
on postsale service than it would in more traditional selling. However, even when salespeople
proactively approach the postsale service, events of failure are likely.
Under certain circumstances these failure situations can result in termination of the relationship.
However, considering the significant share of revenue customer brings into the company, termination
of the relationship poses a significant threat to the profitability of the seller company. With respect to
this consequence, Smith and Bolton (1998) (as cited in Gonzalez et al., 2010) suggested investment
into relationship recovery is particularly valuable in B2B context. In a specific failure situation,
response of sales force has the possibility to effectively recover from the failure or to exacerbate both
the sale and the relationship. Therefore, recovery efforts should be perceived as opportunities to
reinstate customer relationship and improve repurchase intention (Lages, Lancastre and Lages,
2008).
There has been a vast number of studies emphasising fundamental importance of right recovery
practices in developing feasible long-term customer relationships (Lages, Lancastre and Lages,
2008). Empirical findings stress the relevance of failure analysis for the effective complaint handling
which then enhances customer satisfaction, reinforces customer relationship, improves intention to
repurchase and generates positive word of mouth. However, there have been only few studies
investigating and evaluating recovery management in business-to-business context when compared
to the research made on business-to-customer markets (La and Choi, 2012; Chung and Kates, 2009).
Congruent with these deficiencies it is required to conduct further research into details concerning the
company’s recovery strategies or procedures.
By selecting relevant literature, the written paper intends to offer a holistic approach through
theoretical and empirical understanding of the vital asset of customer’s satisfaction: failure recovery
and its perceived fairness.
Hence the research question is:
How does service recovery affect the buyer-seller relationship in business markets?
Sub question 1: What are the fundamental dimensions of recovery in a business-to-business context?
Sub question 2: What is the impact of recovery dimensions on relationships in a business-to-business
context?
Sub question 3: What is the impact of perceived justice on customer evaluation of service recovery?
1.1 Structure of paper

This paper can be divided into two parts: seller’s company recovery management and buyer’s
company evaluation of recovery.
Seller related part explores three aspects of recovery; recovery phase, immediate recovery phase,
follow-up phase. Each phase contains recovery measure related to the phase.
Second part of the paper assess those measure through perceived fairness of recovery efforts.
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1.2 Limitations and further research
Despite several contributions that this paper has, there are empirical limitations encountered during
the process of collecting the literature material.
Regardless of theoretical implications the paper highpoints the impact of recovery management on
customer relationship from a service point of view. For instance, mainly the service industries can be
linked to the paper, not the product failures. Moreover, the paper is not generalizable in any other
context than the services field and further research that integrates quantitative investigations should
be initiated to be applicable on real life circumstances.
Furthermore, as little emphasize was put on the cultural dimension of business to business markets,
the findings from this paper might be considered appropriate for a specific country, but not
transferable to a different culture significantly different from the chosen country. Due to a continuous
process of globalisation, the seller’s company has to discuss and examine the different cultural
background of the customer to offer a common view of the involved rapport. Thus, the service
recovery is analysed and defined from a buyer-seller perspective and the scope of the recovery can
be further expanded to a global perspective.
1.3 Delimitation
As given in research question, this paper discuses three aspects of customer satisfaction: failure
event, recovery management and customer evaluation of recovery strategies. For the purpose of
comprehensively understanding these aspects, connecting them and answering the research
question, some aspects of customer satisfaction have to be excluded. Furthermore, it has to be taken
into consideration failure is a multi-faceted subject, however, only behavioural examples related to the
failure are included while factors such as characteristics and origin of the failure are chosen to be
excluded. It is acknowledged that these failure events and recovery efforts have an impact on
financial performance of the organization, however, this paper does not concern them. Moreover,
factors such as personality and human nature that play a role in customer evaluation are noted but
chosen to be excluded. Lastly, external factors such as competitors or and parts of PESTLE are
recognized to influence recovery strategies but are considered stable for the sake of this paper.
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1.4 Key terms
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2. Discussion
2.1 Seller related research on recovery
Terminological foundation of service recovery
There are several terms for recovery commonly referred to in papers that are recovery culture,
recovery management and service recovery. The term service recovery is predominant in academic
literature of recovery research, so it will be used from here onward.
Delineation of service recovery
In academic literature, the concept of recovery has been frequently mixed or used interchangeably
with the term complaint management. While complaint management refers to the recovery measures
as a response to a customer voicing a complaint, service recovery handles failure situations in the
absence of complaints. This way seller company is able to handle failure events even when
customers are reluctant to voice a complaint or before the customer have realized failure occurred.
Second, complaint management entails handling complaints in every stage of purchase, whereas,
service recovery focuses on post-purchase phase.
Measures of recovery
In the failure situation, a company have a choice – either to put efforts into resolving the failure or to
disregard it. Miller, Craighead and Karwan (2000) have structured recovery measures along the
recovery process and as a result developed the recovery phase model, which is separated into a pre-
recovery phase, an immediate recovery phase and a follow-up recovery phase.
Figure 1: The recovery phase model

Source: Miller, Craighead and Karwan (2000)
2.1.1 Pre-recovery phase
The pre-recovery phase starts with the occurrence of the failure event and ends with realization of the
situation by the seller company (Miller, Craighead and Karwan 2000). The customer forms
expectations for the recovery phase. Focus is on failure prevention.
Recovery measures adopted in the pre-recovery phase:
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Employee rapport is an important aspect in a recovery process therefore, it has been

defined as the manifestation of an enjoyable interaction and the development of a personal
connection towards the customer (Gremler and Gwinner 2000, p. 92). Nonetheless, the implications
of a better rapport within service employees ought to include lessons on “conflict resolution,
empathetic listening skills” according to DeWitt, Nguyen and Marshall (2008). By developing a
baseline for products’ and services’ knowledge, the seller effectively understands the clients’ needs
and propose one suitable solution, rather than seeking for multiple solutions.
Prevention of failures is a vital part of recovery and it can be linked to the procedures
contained by the seller firm to diminish the potential failures that can result in a recovery phase. Thus,
observing and watching closely the areas which are predisposed to encounter failures, the occurrence
of those unfavourable events can be set to a minimal level (Hart, Heskett and Sasser 1990, p.152).
The prevention of failures aims to integrate the seller firms’ attempts concerning the customers in
order to decrease the possibility of a generated failure due to the customer’s situation. (Johnston
1995, p.219).
The identification of failures is considered a fundamental procedure of recovery according to Miller,

Craighead and Karwan (2000). In the recovery phase there are certain activities that are related to the
identification of failures with higher occurrence rate and it is the seller firm responsibility to seize those
mistakes. (Hart, Heskett and Sasser, 1990). The identification of failures refers to the seller firm ability
to understand if the customer’s expectations are met. Then by knowing this to prevent the eventual
complaints that may arise. (Gonzalez et al. 2010, p 223)
2.1.2 Immediate recovery phase
The immediate recovery phase begins with seller company being aware of their failure and lasts until
situation has been resolved (Miller, Craighead and Karwan 2000). Focus is on failure resolution.
Recovery measures adopted in the immediate recovery phase:
The notification of customers has been acknowledged as an important factor of service recovery in
business markets (Miller, Craighead and Karwan, 2000). Main benefit of early failure notification
allows customers to switch to an alternative rather than arriving at the point where are no alternatives.
Immediately informing customers about the failure to enable making a different choice has been
proven to increase an overall effectiveness of recovery process. Furthermore, with customers being
able to detect failures themselves, employees charged with recovery should not try to conceal current
or potential failure from customers.
Moreover, considering the likeliness of the situation escalating and higher impact that follows, seller
firm has a limited timeframe to resolve a problem and reinstate customer satisfaction. The issue of
timing and responsiveness is considered to be an essential element of recovery and coinciding
satisfaction (Smith, Bolton and Wagner, 1999).
The analysis of the failure is known to be one of the most important steps of the recovery process.
Failure analysis generally involves “recognizing the failure, identifying its source, evaluating its
stability, and assessing its controllability” (Gonzalez et al., 2010). Studying failures and learning from
them transforms service recovery (otherwise a transactional activity) into a management activity with
an objective to ensure customer satisfaction and reduction of costs through improved systems and
processes (Michel, Bowen and Johnston, 2009; Lovelock et al., 2009). However, many companies
overcollect but underutilize data making it harder to detect root of the failure, appoint most effective
corrective measures and reduce likelihood of the failure (Michel, Bowen and Johnston, 2009;
Schneider and Bowen, 1995).
The feedback by the seller’s firm on recovery status has been considered critical for the successful
failure resolution. Regular feedback is particularly important in situations when instantaneous
recovery is improbable. Since customers generally expect to be informed on the development of the
situation, meaningful feedback can largely ease the process of recovery and mitigate negative effects
on customer satisfaction in inexpensive manner.
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The ultimate goal of any recovery process is a successful resolution of the failure event and equity
restoration in damaged business relationship event. Resolution indicates whether recovery has been
effective, and it is specifically important in business markets. The compensation is a principal
measure of recovery and customers normally expect a certain type of remuneration (i.e. discount,
repair, replacement, refund) to make up for a loss experienced by the failure. Satisfactory
compensation depends on the surrounding conditions and loss the customer has incurred. Various
studies on recovery management have confirmed complexity of recovery (Swanson and Kelley,2001)
and stability of the failure situation (Grewal, Roggeveen and Tsiros, 2008) suggest the effectiveness
of measures. For instance, as opposed to short and simple recovery, it is presumed that in case of
extensive recovery it is required to offer a more profound compensation.
Effective recovery has been furthermore described with following attributes: reliability, commitment
and empathy. While reliability is seen as a fundamental element of recovery, empathy is considered
to be a critical and central determinant of recovery process. Commitment is defined as the “staff’s
apparent commitment to their work, including the pride and satisfaction they apparently take in their
job, their diligence and thoroughness” (Johnston,1995). Literature suggest failures provide an
opportunity for the seller company to renew its commitment to the buyer. In addition to reliability,
incorporation of empathic behaviour in the context of commitment as to supplement compensation is
results in an approach that is nowadays preferred and expected.
2.1.3 Follow-up recovery phase
The follow-up phase begins as the customer receives a restitution and includes customer evaluation
of the response. The ending is dependent on the success of resolution (Miller, Craighead and Karwan
2000). Focus is on process improvement. Recovery measures adopted in the follow up recovery
phase:
The term apology can be defined as a valuable intrinsic reward that remedies a relationship issue
(Walsler, Berscheid, and Walster 1973). However, how effective and relevant an apology is in means
of recovery has been questioned. (Johnston 1995, p.221). Empirical findings show that apologies
alone have a small impact on the recovery procedures and they rather support the outcome from
other recovery implications. (Miller, Craighead and Karwan, 2000, p.397)
The tracking of failures is necessary for seller firms when areas with high potential risk of mistakes
are identified (Gonzalez et al. 2010). When a problem occurred in a specific situation, then the
likelihood of reoccurring exists. (Hart, Heskett and Sasser 1990, p. 152). Hence, the failures that
already took place should be traced and compared afterwards to previous failures so that problematic
areas can recover (Gonzalez, Hoffman and Ingram 2005, p. 62).
Training for failure has been highlighted in recovery literature (Smith, Karwan, Markland 2009).
More specifically, the employees should acquire the skills for handling with dissatisfied customers in
failure situations (Gonzalez, Hoffman and Ingram 2005, p. 58). In addition, training in various areas
such as recovery systems, service recovery or customer interaction is mandatory. This training is
composed of clear instructions of seller firm employees concerning recovery and conjunction of
internal processes within the recovery system (Hart, Heskett and Sasser 1990, p.154). Besides a
proper training, the empowerment of employees for failure circumstances has been acknowledged to
have a positive effect on the recovery (Miller, Craighead and Karwan 2000). Particularly,
empowerment is defined as the “authority, responsibility, and incentives to recognize, care about, and
attend to customer needs” (Hart, Heskett and Sasser, 1990, p. 154). Empowerment of service
employees facilitates the effectiveness of a recovery system (Smith, Karwan and Markland 2009, p.
267)
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2.1.5 Seller-related requirements for recovery
Obviously, importance and relevance of recovery activities and needed requirements are mutually
dependent. Set forth below are some organizational requirements necessary for the development and
execution of recovery measures.
Figure 2: Organizational requirement for service recovery
2.1.5 Seller related consequence of recovery
In 2014, DeJong and DeRuyter explained outcomes of recovery activities from a perspective of a
seller. It is to say, there is a conflict between productivity goals of the seller company and customer’s
expectations of the recovery. Often, highly customized recovery strategy requires more dedicated
employee approach to resolve a failure situation. Therefore, operational processes incur
consequences which require optimal allocation of recovery resources. Management has to carefully
weigh and decide on the balance between the customer satisfaction measures and seller-based
measures taking into account higher customer satisfaction often implies higher employee productivity.
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With that, being one pole of the spectrum, organizational consequences reflect the results of the
recovery activities on organization of the seller company such as employee satisfaction and loyalty.
Employee satisfaction is largely achieved through an organizational environment – recovery culture,
and empowerment for failure handling (Sageer, Rafat and Agarwal, 2012; Wright, Dunford and Snell,
2001). The provision of training further on prompts job satisfaction through reducing role conflict and
ambiguity.
As an inherent part of recovery management, financial consequences reflect positively in higher ROS
when customer is satisfied with the resolution. Innovation and development of recovery systems and
resources also include substantial costs which have been empirically identified to exert impact on
financial performance of the seller company.
2.2 Customer related evaluation of recovery response

The justice theory
Service recovery refers to the strategy organization takes to resolve a failure in order to achieve the
ultimate goal - pacify dissatisfied customers and strengthen the relationship. In order to more
fundamentally understand what makes the strategy effective, researches often utilize justice theory as
the main tool for examining the procedures. The theory, as proposed by Adams (1965), states: “In any
trade-off relationship equity exists when the ratio between the investment and the return of an
individual is perceived as being identical in terms of ratio to that of other people or groups, such that
the recognition and relevance of inputs and investments are shared both by who is investing and who
is the recipient of the investment (Ballassiano and Salles, 2012: Adams, 1965). In instances when the
identical ratio is not achieved the relationship is regarded inequitable.
The vast potential of this theory is broad and informative; however, it is important to note propositions
the theory is built upon in order to understand general judgement for the equity evaluation. According
to Walster, Bersheid and Walster (1973) there are five fundamental propositions:
I. Man is selfish and as such will strive towards maximization of the outcomes
II. Collective outcome of groups can be maximized with development of distribution systems
for allocation of benefits
III. The group will entice its members to follow these system; offer rewards to members
reflecting equitable behaviour and penalties to ones reflecting inequitable behaviour
IV. An individual who participates in inequitable relationship experiences certain level of
distress
V. Individuals who experience such distress seek to eliminate it by restoring relationship
equity
A justice theory framework suggests three fundamental dimension of equity which serve as a
conceptual basis for the evaluation in exchange situations: distributive justice, procedural justice and
interactional justice.
2.2.1 Distributive justice
Distributive justice refers to the fairness of tangible outcome, generally when the profits (refund,
repair, replacement, etc.) equals the investment (skill, effort, experience). Studies have provided
empirical evidence that when distributive justice is achieved in dyadic exchange relationships,
outcome has a positive effect on evaluation of recovery (Nikbin et al., 2012; Boshoff,1997; Hoffman et
al., 1995).
2.2.2 Procedural justice
Procedural justice refers to the methods (procedures and policies) a company uses to handle a failure
and how the resolution is reached. In general, procedural justice is facilitated through six dimensions:
flexibility, accessibility, process control, decision control, response speed and acceptance of
responsibility. This justice dimension is reached when individual perceives fairness of the system that
regulates the outcome.
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2.2.3 Interactional justice
Interactional justice is facilitated through recovery process and it is reflected in manner customer is
treated. Employees are expected to exhibit courtesy and courtesy, provide an apology and
explanation as to why the failure had happened. Based on those expectations, customers evaluate
fairness of the treatment. Interaction justice has a substantial influence on WOM and it is an important
antecedent of customer satisfaction.
2.2.4 Consumer related consequence of recovery
During the immediate recovery phase customers are notified about the failure and become active
participants in the recovery process. In the follow-up phase they evaluate recovery measures giving
the input for improving the service recovery. In the table below, immediate recovery phase is
evaluated through dimension of equity theory and it is concluded with result of such evaluation - thus
indicating the role it gives in buyer-seller relationship.
Figure 3. Justice dimensions

Source: Own illustration
Data substantiating prevalence of single dimension over the others is sparse. While some reference
procedural justice to be the most impactful dimension, others emphasize vast acceptance of
distributive justice as a proof of eminent dimension.
The impact of distributive justice has been positively related to customer satisfaction (Ismail,
Marimuthu, Jalakamali, 2010). Consistent with findings of Smith et al. (1999), distributive justice will
maximize satisfaction if supplemented with interactional justice. Thus, effective way of compensation
and fair customer treatment have a significant role in returning back the customer satisfaction.
Another way of increasing satisfaction is by increasing employee productivity through empowerment
and implementing fair procedures and policies. Additionally, customers who found recovery
measures satisfactory show higher intention to repurchase from the company.
With respect to the effect of recovery on customer satisfaction, various studies have confirmed the
existence of recovery paradox (e.g., Maxham and Netemeyer, 2002, McCollough, 2009; Matos,
Henrique and Rossi, 2007), or phenomenon that superior service recovery can leave customer more
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satisfied than a customer, who has not experienced any failure situation. The idea of a recovery
paradox is of interest because service managers might not strive to identify and eliminate all sources
of service failure but rationalizing instead that a problem actually might create more of an opportunity
than if there had been no service failure initially. Such a position would be at stark odds with the work
of researchers who stress the importance of identifying and eliminating all potential sources of failure
prior to the consumption experience (Crosby 1979; Deming 1986).
Moreover, when recovery resolution lacks distributive justice customer may “take advantage of the
firm with little regard to principles” (Wirtz and McColl-Kennedy, 2010). In many business cases,
customers held unrealistic expectations or ignored contract which resulted in making illegitimate
claims to the seller after failure occurred. This is supported even more with first proposition of equity
theory claiming man is selfish and will seek to increase it outputs. Therefore, seller company must
counteract such opportunistic behaviour through developing fair procedures (McCollough, 2009).
Fair procedures generally positively affect consumer trust in service provider. Trust is formed around
two different facets- one is the trust related to the firm and the other one is the employee’s trust.
Consequently, because trust is considered a multidimensional construct it is highly important that
employees the company had hired possess soft skills 1, are trained in conflict resolution and are
acculturated in order to exert trust in the company (Santos and Fernandes, 2008). There is an
emphasis on employee training ability to decode emotional cues such as anger, disappointment
(Smith and Bolton, 2002).
Consumer trust in the seller company can be enhanced by increasing employee commitment.
Cranage (2004) underlines commitment can be increased through giving the customer an alternative
for a possible failure whether it is risky or safe choice combined with an apology and/or
compensation. Failures are inevitable to occur in service industries thus, giving a choice, customers
feel to a certain degree that they have to blame themselves for the unforeseen output of the event.
Regardless of choice, customers may want to be compensated for the inconvenience. (Cranage,
2004).
Depending on the current quality of the relationship between customer and the service provider,
relationship quality has a “double-edge” role in recovery as it represents both exogenous and
moderating variable. In particular, positive perception of relationship quality will have a positive impact
on the commitment and trust. Relationship quality is uniformly dependent on customer perception of
trust, commitment and satisfaction.
In the same manner, relationship quality is impactful or impacted in situations where buffering and
modifying effects exist. The buffering effect relates to the negative experience of a failure created by
the existing perception of the buyer-seller relationship and lower recovery expectations. If this logic is
accepted, higher quality of relationship lessens negative emotions associated with the service failure.
On the other side of the spectrum, when relationship amplifies the impact of failures it results in the
magnifying effect governed by high customer recovery expectations. In this context, procedural justice
can be achieved through monitoring the situation, developing failure scenarios and empowerment of
employees.
Elements of interactional justice politeness, concern and empathy diminish negative and pass along
favourable WOM. Interactional justice dimension is generally affected by organizational recovery
culture in place. Supportive recovery culture can be defined as an organic approach that must be
undertaken in organizations doing B2B transactions (Gonzales et. Al 2010). It is related to the ability
of the company’s leadership to acknowledge that customer’s expectations are not always met and re-
establishing the client’s satisfaction by supporting employee’s active efforts in the recovery measures.
1
personal attributes that enable someone to interact effectively and harmoniously with other people such as
communication skills, problem solving, empathetic behaviour, strong work ethic.
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Conclusion and implications

This paper serves the purpose of exploring the connection between recovery measures and
outcomes on customer behaviour in B2B environment assuming customer perceived justice acts as a
determinant of a successful service recovery. Recovery process can be perceived through three
stages: the pre-recovery phase when failure is identified, the immediate recovery phase when failure
is resolved and the follow-up recovery phase when future failures are avoided. Each stage affects the
effectiveness of the overall process; however, only immediate-recovery phase can reveal customer
perception of the quality of service recovery.
Successful service recovery can strengthen and prolong the relationship between the buyer and the
seller (Komunda and Osarenkhie, 2012). In B2B context, it is acknowledged distributive and
procedural justice have the greatest impact on customer satisfaction which may be rationalized
through costly exchanges and fast paced business environment. In congruence with the academic
literature, service providers should aim towards constant improvement of the maturity level of
recovery measures in order to structure ideal recovery process that can disguise failure and leave
customer satisfied with overall business transaction.
Several managerial implications arise from this paper. Firstly, considering the importance of the
procedural justice in B2B resolution, seller company has to set fair procedures and policies and train
employees to ensure effective handling of failure situation. In general, failure handling responsibility is
spread across different departments so effective service recovery requires successful integration of all
departments into ‘recovery teams’ to ensure consistency and efficiency of recovery process.
Secondly, employees should be empowered since pre-defined procedures know to fail in

unpredictable situations. Empowerment implies taking the responsibility to anticipate and attend
customer needs and it positively reflects in buyer-seller relationship quality which, if of high quality,
may leave customers more forgiving in failure situations.
Thirdly, by developing fair procedures that reflect fair compensation seller firm limits the possibility of
contract manipulation and prevent opportunistic behaviour which prolong the recovery process and
damages the relationship.
Additionally, company should learn from every failure, develop scenarios for potential failures and
innovate their internal systems to support service recovery. Learning from the failure and the situation
it emerged from has a dual purpose: preventing future failures and develop efficient recovery
framework.
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15/15
Appendix 1:
Learning objectives
Knowledge: to have a better understanding of different ways how to approach business failure in
most effective manner by researching academic literature, noticing patterns in strategies and learning
from each case we come upon
Skills: As an extension of the knowledge objective: to recognize patterns so as to be able to identify
issues and appropriate recovery measures particularly in relationship selling by using
cognitive knowledge developed from readings, discussions and submission of the report
Competency: To be able to understand and respond quickly to a failure situation, plan the strategy
and asses risk of a future strategy. Doing this through incorporating the new knowledge of recovery
management and relationship selling into previously learned theories and model
Appendix 2:
Service recovery in business to business markets literature overview:
Article Research Methodology Conclusion/ Definition Independent/ Personal Limitatio Recommendatio

No. and question/ results of the topic dependent use ns n
author purpose variable and future
research
1 Gonzales et To provide a Survey Organic-based The recovery Independent Relevance New sales Factors that
al.: Sales more conducted on recovery culture variable: of recovery moderate sales
Organization comprehensive 177 B2B sales culture directly construct in recovery recovery practices recovery effects
Recovery conceptualizati managers influences the the study culture culture in on firm
Management on of sales firms closely Dependent B2B performance
and organization mechanistic- parallels the variable: markets
Relationship recovery based efforts organic recovery Empirically
Selling: A management pertaining to approach to management based research
Conceptual the systematic recovery; that integrates
model and process steps reflects the service/sales
Empirical test of failure supportivenes interface and
analysis and s of internal examines
feedback environment to recover
efforts complaint management
handling effort in sales
organization
2 McCollough: To investigate Scenario Post recovery post recovery Independent Importanc Lack of Investigation into
The recovery proposition that based satisfaction is satisfaction variable: e of studies possibility of full
paradox: superior experiment directly equal to or recovery recovery investigati recovery given
effect of recovery can with travellers influenced by greater than if performance efforts ng harm the harm caused
recovery leave the in the airline both the there had been and harm made it by the failure
performance customer as industry in recovery no service caused by the unable to when considering
and service satisfied, if not United States performance failure to begin failure introduce the trade-off
failure severity more satisfied, Survey and the harm with Dependent moderatin involved in
on post- than if nothing (simple caused by the variable: g variable allocating
recovery had gone wrong random service failure. recovery that additional
customer sampling Recovery paradox recovery recourses in
satisfaction method) and paradox to paradox assuring superior
observations emerge the may be service reliability
service failure possible versus accepting
severity must when the lower levels of
be very modest recovery readability while
and the effort can focusing on
recovery effort completely superior recovery
superior. mitigate in service failure
the harm
caused by
failure
3 Michel, Bowen Why does Interdisciplinar Service Service Independent Service Implement
and Johnston: service recover y summary on recovery often recovery refers variable: failure and ation of a
WHY so often fail and service fails due to the to the actions a perspective of process unified
SERVICE what can recovery using unresolved company customer improvem service
RECOVERY managers do 141 academic tensions found takes in recovery, ent system
FAILS: about it sources between the response to a process
TENSIONS conflicting service failure recovery and
AMONG perspectives of employee
CUSTOMER, customer recovery
EMPLOYEE, recovery,
AND process Dependent
PROCESS recovery and variable:
PERSPECTIV employee Service failure
ES recovery
4 Flores & Better Case study. There are 7 Set of activities Independent Complaint Data Deeper
Primo: knowledge and Interviews factors that a variable: handling analysis understanding of
Recovery understanding with affecting company factors Recovery and how companies
Management of the process employees success of performs to influencing managem interpretati deal with failures
in of failure involved failure resolve service ent and on were in distribution of
Performance recovery in the strategic and recovery. complaints recovery case based on products/service
of Logistic B2B context operational Analysis of and to change examples the s and how to set
Services in issue related those factors attitude of Dependent knowledge up procedures on
B2B Context to failure define efforts unsatisfied variable: and the failure
recovery and/or customers customer subjectivit recovery
processes structure trying to keep loyalty y of one of management.
needed to them as loyal. the More attention
resolve a authors should be given
failure. profession to explore failure
al in the recovery in
area. logistic and/or
There was supply chain
no services
survey/inte
rview with
the
customers
to evaluate
performan
ce of the
company
to evaluate
the
recovery
processes.
5 Pizzutti dos Consequence Interview with Interactional an expression Independent Consumer Generaliza Understand how
Santos and of consumer 405 justice explains of security variable: trust in bility of the type of
Fernandes: trust after the complainers largest between relationship Post data connection
Antecedents complaint from 201 percentage of partners when quality and recovery Cultural between client
and handling airline variance of making an trust situations aspect of and company
Consequence companies trust in the exchange, or Dependent the study can influence
s of Consumer and 204 banks company in another type variable: evaluation of
Trust In the of relationship evaluation of recovery process
Context of service and their
Service recovery consequences
Recovery Explore other
antecedents of
the dimension of
trust other than
approached
therein.
6 Komunda & To examine the Research Communicatio those actions Independent Outcome Service A more
Osarenkhoe: relationship paper with n has a designed to variable: of service recovery is comprehensive
Remedy or between service questionnaire significant resolve communicatio recovery process qualitative study
cure for recovery, to investigate impact on problems, alter n, oriented
service failure consumer causes of service negative responsivenes therefore
satisfaction and service failure recovery attitudes of s and does not
loyalty and to develop success. dissatisfied interaction assess
recovery Employee customers and Dependent whether
strategy responsivenes to ultimately variable: problem
s and retain these customer that led to
interaction customers evaluation the
have positive complaint
impact on has been
costumer resolved.
evaluations
7 David A. Understanding 218 Customer The pre- Independent How to The use of For further
Cranage, the implications undergraduat satisfaction emptive variable: turn a college investigation over
Anna S. of a service e students and loyalty strategies lead apology and failure into students the service failure
Mattila: recovery participated in were higher to customer compensation a success. instead of and to generalize
Service strategy the study after the satisfaction Use of a actual the findings it is
recovery and where they service and loyalty Dependent recovery customers required to
Pre-Emptive had to choose recovery variable: strategy is the first change from the
Strategies for between strategy customer without limitation. restaurant
Service different offered an satisfaction losing The service to
Failure: Both scenarios apology and/or and loyalty customers’ second another industry
lead to related to compensation. satisfactio limitation that provides
Customer service n and is the use services.
Satisfaction failures loyalty of
and Loyalty, scenarios
But for that might
different result in a
reasons lack of
accuracy
or
believabilit
y.
8 Zhen Zhu, K. Understanding Framework Based on a Service Independent It The Empirical testing
Sivakumar, A. the nature of developed to mathematical failures and variable: incorporat robustnes of the proposed
Parasuraman service failure extent the model derived optimal service failure, es both the s of the model.
A and their impact literature over from a recovery service customer model Show of potential
Mathematical on customer the service framework, strategies and recovery and the predictions interactions
Model of responses failures and optimal their effect on Dependent firm’s must be between
Service recovery recovery the customer variable: perspectiv examined parameters and
Failure and efforts. strategies were customer es in various examining their
Recovery Mathematical identified evaluation settings, impact on the
Strategies approach of not optimum
the topic isolated. recovery
solutions.
9 Amy K. Smith, Do customers’ Questionnaire Customers are Customer’s Independent How The Data showed that
Ruth N. emotional with open focusing on emotional variable: emotions studies customers
Bolton: responses to ended distributive response to Emotional have an were experience
The Effect of service failures questions gains as service failure response impact on conducted different
Customers’ influence their after the first discounts and influence their the in the emotional
Emotional service questions. vouchers do satisfaction Dependent satisfactio hospitality responses after
Responses to encounter Then a role- recovery with the variable: n industry. different types of
Service satisfaction? play occurs. efforts must service customer judgments Thus, service failure.
Failures on Do customers’ focus on encounter. satisfaction towards more Anyway, anger
Their emotional improving the failure research is disappointment
Recovery responses to outcome from needed to and self-pity
Effort service failures the customer’s examine differ significantly
Evaluations influences how viewpoint. the effects during the study.
and they process of The
Satisfaction and “weigh” the emotions
Judgments organization’s in various
recovery contexts.
efforts?
10 Schoefer: The Cross reference Survey with Justice key cognitive Independent Role of Problems Efforts should be
role of of justice 186 perception influence in the variable: emotional associated made to capture
cognition and research on customers affect recovery formation of cognition and response with dynamic nature
affect in the service who have satisfaction sub- sequent affect in a memory of recovery
formation of recovery experience a both directly customer Dependent service loss or process.
customer experiences to service and indirectly satisfaction variable: recovery enhancem Inter- and
satisfaction emotional recovery emotions. judgements Customer situation. ent could intraorganisation
judgements research encounter. satisfaction have al dynamics
concerning potentially should be studied
service impacted more in detail.
recovery the
encounters findings.
It was
based
upon a
purposive
rather than
a truly
random
sample.
11 La and Choi: To investigate 199 survey After service customer trust Independent Rebuilding Biased Longitudinal
Consumer the dynamics of respondents failure and is a willingness variable: trust relationshi data since study.
affection and customer from students recovery to rely on a Dependent ps after the
trust in loyalty affection and in customer service variable: service research is Consider
rebuilding customer trust metropolitan affection has a provider or a Customer failure. based on affective and
after service on customer cities in South greater firm loyalty retrospecti cognitive aspects
failure and loyalty intention Korea influence on ve reports. of satisfaction
recovery after cases of customer trust separately.
service failure but less in The study
and recovery. loyalty didn’t Severity of
intention, explore service failures
whereas anteceden might be a future
customer trust ts of moderator as
becomes more customer most likely has an
influential in trust and influence on
loyalty affection dependent
intention in after variable.
comparison to service
the time prior to recovery
a service
failure.
12 Lin: Influence of Managerial More empowerment Independent Insight into Different Operate different
Exploration of empowerment cadre empowered is the act of variable: what styles of algorithms and
lead factors on service employees will strengthening leadership affects leadership enhance the will
affecting recovery from adopt more an individual style service can to fill out the
service the viewpoint of active failure Dependent recovery influence questionnaire to
recovery managers recovery variable: strategy adoption increase the
strategies, and service of number of valid
tougher recovery recovery return
corporate strategy. questionnaires.
cultures Explore issue by
passive the longitudinal
recover aspect.
strategies
13 Van Der Holst To enlarge the By a literature The neural Trust strongly Independent How does Specificall Research on
and Hensler: box of trust in study on coordinates of influences variable: trust trust affect y, the consequences of
Thinking B2B context by neuroscientific trust not only relationship Dependent B2B neural distrust and
outside the introducing insights on show that trust commitment, variable: relationshi difference personal
box: a neuroscientific trust, this entails because the relationship ps between differences with
neuroscientific insights into paper cognitive and most valued commitment trust and trust and distrust.
perspective on trust to the B2B examines how affective relationships distrust
trust in B2B marketing neuroscience elements, but are those might
relationships domain can help to also that these defined by shape the
solve existing elements are trust; future
problems so intertwined therefore, research
within trust that they parties want to agenda for
research and cannot be commit trust
how it can completely themselves to research
address separated. such within
problems that What can and relationships industrial
otherwise should be marketing.
might not be separated are It is likely
considered. the concepts of that the
trust and process of
distrust: the distrust
neural goes
coordinates of quick,
trust are clearly whereas
different from trust
the neural comes
coordinates of slower.
distrust
14 Adams: Antecedents Literature Equity exists Inequity exists Independent What are Theory Need for direct
Inequity in and review when under for person variables: conseque delivers on tests of
social consequences two whenever he input and nces of predictions propositions
exchange of injustice in circumstances: perceives that output inequity . made in theory as
human when person’s the ratio of his Dependent: well as empirical
exchanges and other’s outcomes to equity tests of novel
outcomes are inputs and the derivations from
equal and their ratio of other’s the theory.
inputs are outcomes and
equal inputs are
unequal.
15 DeWitt, Positive and cognitive emotions and loyalty is a Independent How does the Further research
Nguyen and negative appraisal trust have function of variable: service findings into the
Marshall: emotions model that important customer service recovery are not mediating roles
Exploring following por- trays trust mediating roles perceptions of recovery affect necessaril of emotions and
customer service and emotions during the trust following Dependent customer y trust in service
loyalty recovery have as key service service variable: intention to generaliza recovery in other
following an effect on mediators in recovery recovery customer repurchas ble to settings may be
service customer loyalty the relation- process. loyalty e other con- fruit- ful (e.g.,
recovery ship between texts. hedonic service
perceived consumption,
justice and retail, health
Second,
customer care).
the
loyalty.
research
methodolo The validity of the
gy used in current findings
this study would be
involved a enhanced by
single further testing of
scenario the proposed
and model using
elementar multiple
y scenarios and
manipulati more
ons of comprehensive
service manipulations of
recovery service failure
actions. and recovery
incidents.
16 Rauyeren, There is a The survey service quality relationship Independent How to the data in acknowledge
Miller and positive targeted at can be quality is a variable: enhance this study advantages and
Barret: relationship business considered as higher relationship relationshi is from the disadvantages of
relationship between customers a condition for construct quality p quality courier using telephone
quality as a relationship relationship comprising as to service recruitment to
predictor of quality (second- quality. trust, Dependent maintain industry, increase
B2B customer order construct) commitment, variable: customer which may response rate of
loyalty and customer satisfaction customer loyalty limit the mail survey.
loyalty. This and service loyalty generaliza
relationship quality. These tion to
must be dimensions of other
evidence the relationship industries
following quality can and
hypotheses. reasonably business-
explain the to-
influence of business
relationship settings.
quality on
customer
The target
loyalty.
sample for
this
research
were the
decision
makers of
the SMEs.
17 Maxham and examine repeated satisfactory Independent Understan Although explore customer
Netemeyer: A complaining measures recoveries can variable: ding of the bank responses to
Longitudinal customers' (RM) field produce a preference for service encourage proactive service
Study of perceptions of study with "recovery recovery recovery complaints recoveries
Complaining two service bank paradox" after sequence, attributes , it was the initiated by the
Custorners' failures and complainants one failure, expectation, that result responsibil firm.
Evaluations of recovery efforts across a 20- they do not failure in ity of investigate when
Multiple month time trigger such severity, repurchas customers retrospective
Service span. paradoxical failure e intenion to initiate a measures offer
Faiiures and increases after similarity, lags complaint. reasonably
Recovery two failures. between it still accurate proxies
Efforts unsatisfactory failures remains
recovery unclear
followed by a Dependent when
satisfactory variable: WOM retrospecti
recovery recommendati ve
reported on and measures
significantly repurchase are
higher ratings intent accurate
at the second and when
postrecovery they are
period than did biased.
customers
reporting the
opposite
recovery
sequence.
captures The data is For a better How to deal cumulative Relevant Not The service area
Christine complaining collected from buyer-seller with different satisfaction to generaliza is dominated by
Choua, Ya-Hui customers' Taiwanese relationship, types of and patronage emphasize ble as the ethical questions
Hsub , Yeong- perceptions of manufacturing the interaction service failure intentions the data was if data is
Jia Gooc: their overall companies during the then how to increase resource collected manipulated by
Service satisfaction with that communication allocate above allocation only from researches.
Failures and the firm, experienced process with organizational prefailure in case of the Additionally,
Recovery likelihood of at least one the clients resources, levels when failure semicondu biases regarding
Strategies word-of-mouth failure in the should not be when deciding respondents ctor the numbers can
from the recommendatio past year. neglected. which recovery are very manufactu be diminished by
Service ns, and strategy to satisfied with ring gathering more
Provider repurchase adopt. the recovery companies secondary data.
Perspective intent efforts. .
managing Focus groups A customer- Customers Independent Training of One A survey could
McColl- consumers’ formed by 24 friendly asses certain variable: the limitation replicate many of
Kennedy & A. emotions during females and 8 approach is situation fairness employees is that the findings and
Sparks service males were desired when different dimensions is a natural different increase
Application of recovery observed. All dealing with a considering Dependent outcome in methods generalizability
Fairness attempts of the recovery procedural, variable: efficient should be
Theory to participant procedure. interactional recovery recovery used to
Service experienced and procedural process measures. confirm
Failures and events within justice when the
Service tourism dealing with findings
Recovery sector. failures. instead of
one.
20 Lee, Y. and explore the In depth This study The possibility Independent This paper The The convenience
Sparks, B cultural values interviews with aims to explore of a service variable: reveals the interviews sampling method
Appraising that Chinese participants the cultural failure will lead cultural values importanc are was used so the
tourism and hold for service between 20 to values Chinese to a recovery Dependent e of revealed result might not
hospitality failure and 80 years ols hold for service strategy that variable: interaction from the be representative
service failure service failure and becomes more service al justice. customer’s for the broad
events: A recovery service efficient after recovery point of population.
Chinese recovery. each incident. evaluation view who
perspective appreciate
s the
interaction
al justice.

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SERVICE RECOVERY IN BUSINESS-TO-BUSINESS MARKETS

No. of characters: 30.100

Supervisor: Liza Castro Christiansen

Hence the research question is:

1.1 Structure of paper

1.2 Limitations and further research

1.4 Key terms

Delineation of service recovery

Figure 1: The recovery phase model

2.1.1 Pre-recovery phase

Recovery measures adopted in the pre-recovery phase:

Employee rapport is an important aspect in a recovery process therefore, it has been

The identification of failures is considered a fundamental procedure of recovery according to Miller,

2.1.2 Immediate recovery phase

Recovery measures adopted in the immediate recovery phase:

2.1.3 Follow-up recovery phase

2.1.5 Seller-related requirements for recovery

Figure 2: Organizational requirement for service recovery

2.1.5 Seller related consequence of recovery

2.2 Customer related evaluation of recovery response

2.2.1 Distributive justice

2.2.3 Interactional justice

2.2.4 Consumer related consequence of recovery

Figure 3. Justice dimensions

Conclusion and implications

Secondly, employees should be empowered since pre-defined procedures know to fail in

Atkins, S. (2011). [online] Atkinsmarketingsolutions.com. Available at:

Broncak, T. (2012). [online] Recovery management. Available at

Orsingher, Valentini, De Angelis, C. (2018). Perceived justice, emotions and post-complaint

Rinker, A. (2018). Trust-based relationship selling: A Transformation of the Traditional Selling

Adams, J. (1965). Inequity in social exchange. [online] Web.mit.edu. Available at:

Rauyruen, P. and Miller, K. (2007). Relationship quality as a predictor of B2B customer

Gremler, D. and Gwinner, K. (2000). Customer-Employee Rapport in Service Relationships. Journal

Srinivas Durvasula, Steven Lysonski, Subhash C. Mehta, (2000) "Business‐to‐business marketing

Crosby, P. (1980). Quality is free. New York: Mentor, pp.50-61.

Wirtz, J. and McColl-Kennedy, J. (2009). Opportunistic customer claiming during service

Article Research Methodology Conclusion/ Definition Independent/ Personal Limitatio Recommendatio

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