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Service Recovery Performance: The Role of Internal Market and Technology Orientations
Authors: Samiha Mjahed Hammami (College of Business Administration , King Saud University, Saudi Arabia), Muslim Amin (Taylor’s Business School, Taylor’s University Subang Jaya, Selangor Darul Ehsan, Malaysia), Heyam Almoosa (College of Business Administration , King Saud University, Saudi Arabia)
Although managers and staff are well acquainted with the idea of external customer recovery, what the organisation does to contain the negative feelings internal customers, who have recovered external customers from service failure, may experience in recovery situations is not well understood (Bowen and Johnston 1999). Employees differ in the degree to which they are and feel supported in their task of dealing with complainants, depending on the extent to which the organization invested in the service recovery (Vaerenbergh and Orsingher,2016). Research in marketing has extensively explored how acquiring and developing valuable assets and capabilities affects business performance, assessed on a variety of financial dimensions (e.g, profitability, growth) and non financial dimensions (e.g., quality and customer satisfaction). However, prior research was mainly conducted in noncritical context. This study, raise the question whether the many and broadly recognized benefits of capabilities persists in an adverse situation particularly in a service failure recovery encounter. Firms need to develop particularly internal orientation (IO) and technology orientation (TO), as capabilities, simultaneously because both provide a foundation for sustained competitive advantage. Nevertheless, resources are limited, and firms are faced with the challenge of balancing the two orientation. These two sets of capabilities requires substantial resource commitments and management attention. Firms are forced to prioritize their resources and determine the extent to which they will emphasize one strategic orientation over another. While some organizations may focus on either technology or human resources capabilities, other can put less emphasis on one type over the other. Whereas both theoretical prediction and empirical evidence suggest that TO and IO matter, it remains unclear how technological and human resources capabilities affect employee satisfaction and loyalty in service recovery encounter. To address these gaps, this research address the ways knowledge based intangible assets contribute to employee performance in service recovery encounter. Based on data collected from managers with primary responsibility of complaint management from 100 service firms, we test our posited hypotheses using PLS. The results showed that the relationships between IO and recovery capability, job satisfaction and employee loyalty were significant. The relationship between recovery capability and job satisfaction and employee loyalty were significant. The mediating effects test shows a significant mediating effect in the relationship between IO and job satisfaction and employee loyalty. Interestingly, the TO relationship with recovery capability and job satisfaction were not significant Meanwhile, there is no mediating effect in the relationships between TO and job satisfaction and employee loyalty. These finding provide support to the suggestion that IO do not directly lead to better performance, rather the link depends on recovery capability and underscore the need for managers to focus more on management behaviors and actions that are related to employees’ well-being.