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Article
Publication date: 4 May 2022

Andreas Edström, Beatrice Nylander, Jonas Molin, Zahra Ahmadi and Patrik Sörqvist

The service recovery paradox (SRP) is the phenomenon that happens when customer satisfaction level post-service failure and recovery surpasses the customer satisfaction level…

6023

Abstract

Purpose

The service recovery paradox (SRP) is the phenomenon that happens when customer satisfaction level post-service failure and recovery surpasses the customer satisfaction level achieved at error-free service. The aim of this study was to identify how large the size of compensation has to be at recovery for customer satisfaction to surpass that of error-free service (i.e. to identify a threshold value for SRP). The purpose of this is to inform managers how to restore customer satisfaction yet avoid overcompensation.

Design/methodology/approach

The paper covers two studies. Study 1 used the novel approach of asking participants who had experienced a service failure in the hotel industry what amount of money (recovery) would make them more satisfied than in the case of error-free service. Study 2 then tested the compensation levels expressed by Study 1 participants to be sufficient for the service recovery paradox to occur.

Findings

Study 1 indicated that the threshold for the SRP was (on average) around 1,204 SEK, or just over 80% of the original room reservation price of 1,500 SEK (approx. $180). Study 2 found that (on average) the customer satisfaction of participants who received 1,204 SEK in compensation for service failure marked the point where it surpassed that of error-free service. Participants who received 633 SEK were less satisfied; participants who received 1,774 SEK were more satisfied.

Research limitations/implications

The findings are context-specific. Future research should test the findings' generalizability.

Practical implications

The approach used in this paper could provide managers with a tool to guide their service recovery efforts. The findings could help hotel managers to make strategic decisions to restore customer satisfaction yet avoid overcompensation, given a legitimate service failure in which the organization is at fault.

Originality/value

Numerous previous studies have investigated the occurrence or absence of the SRP at predetermined compensation levels. This paper used a novel approach to find a quantitative threshold at which the magnitude of the recovery effort makes customer satisfaction surpass that of error-free service.

Details

Journal of Service Theory and Practice, vol. 32 no. 7
Type: Research Article
ISSN: 2055-6225

Keywords

Available. Open Access. Open Access
Article
Publication date: 27 January 2023

Fredrik Hartwig, Emil Hansson, Linn Nielsen and Patrik Sörqvist

The purpose of this study is to examine the relationship between auditing/non-auditing and accounting timeliness among Swedish private firms.

1837

Abstract

Purpose

The purpose of this study is to examine the relationship between auditing/non-auditing and accounting timeliness among Swedish private firms.

Design/methodology/approach

This paper uses regression analysis to test the relationship between auditing and two measurements of timeliness; lead time and late filing. The sample consists of Swedish private firms.

Findings

This paper finds that audited firms, when compared with unaudited firms, are significantly less timely. Moreover, greater profitability was associated with more timeliness but only for audited firms. The results of this paper also show that firms being audited by a big 4 auditor are significantly timelier than firms being audited by a non-big 4 auditor.

Practical implications

The findings in this paper suggests that one aspect of accounting quality, timeliness, does not seem to benefit from auditing in a Swedish context. There is a debate about whether the threshold levels in Sweden should be raised so that more firms voluntarily can opt out of audit. Those opposing a raised threshold level claim that auditing has positive effects on accounting quality and consequently that a raised level would have adverse effects. The findings in this paper do not support such a claim.

Originality/value

Little is known about timeliness in private firms compared to public firms and this paper fills that void. Contrary to prior research, findings show that unaudited firms in a Swedish regulatory setting actually are timelier than their audited counterparts. This questions one of the (presumed) benefits of auditing and should stimulate more research on this issue.

Details

Journal of Financial Regulation and Compliance, vol. 31 no. 3
Type: Research Article
ISSN: 1358-1988

Keywords

Available. Open Access. Open Access
Article
Publication date: 25 August 2023

Nathalie Kron, Jesper Björkman, Peter Ek, Micael Pihlgren, Hanan Mazraeh, Benny Berggren and Patrik Sörqvist

Previous research suggests that the compensation offered to customers after a service failure has to be substantial to make customer satisfaction surpass that of an error-free…

2071

Abstract

Purpose

Previous research suggests that the compensation offered to customers after a service failure has to be substantial to make customer satisfaction surpass that of an error-free service. However, with the right service recovery strategy, it might be possible to reduce compensation size while maintaining happy customers. The aim of the current study is to test whether an anchoring technique can be used to achieve this goal.

Design/methodology/approach

After experiencing a service failure, participants were told that there is a standard size of the compensation for service failures. The size of this standard was different depending on condition. Thereafter, participants were asked how much they would demand to be satisfied with their customer experience.

Findings

The compensation demand was relatively high on average (1,000–1,400 SEK, ≈ $120). However, telling the participants that customers typically receive 200 SEK as compensation reduced their demand to about 800 SEK (Experiment 1)—an anchoring effect. Moreover, a precise anchoring point (a typical compensation of 247 SEK) generated a lower demand than rounded anchoring points, even when the rounded anchoring point was lower (200 SEK) than the precise counterpart (Experiment 2)—a precision effect.

Implications/value

Setting a low compensation standard—yet allowing customers to actually receive compensations above the standard—can make customers more satisfied while also saving resources in demand-what-you-want service recovery situations, in particular when the compensation standard is a precise value.

Details

Journal of Service Theory and Practice, vol. 33 no. 7
Type: Research Article
ISSN: 2055-6225

Keywords

Available. Open Access. Open Access
Article
Publication date: 26 September 2024

Bo Bergman, Bengt Klefsjö and Lars Sörqvist

The aim of this paper is to investigate the development of the quality movement in Sweden since the mid-20th century. The authors are convinced that a summary of the Swedish…

349

Abstract

Purpose

The aim of this paper is to investigate the development of the quality movement in Sweden since the mid-20th century. The authors are convinced that a summary of the Swedish quality journey so far will offer important lessons for further quality improvements in Sweden and elsewhere.

Design/methodology/approach

The authors study how the quality movement has been included in the industrial agenda and how it has been adopted in student curricula and in research. The authors have a focus on how business leaders have learnt, adopted, adapted and innovated with respect to quality development. often in collaboration with academia.

Findings

Although the quality movement has fit well with the Swedish culture and that successful corporate leaders have successfully used the specific cultural characteristics there is still a lot to be learnt with respect to the public sector, where the ideas from the quality movement have problem to overcome institutional barriers.

Research limitations/implications

The study is limited to the Swedish context.

Practical implications

There is a serious need to revitalize the public sector by getting leaders and politicians to understand the need for systematic quality improvement.

Social implications

If future Swedish achievements with respect to healthcare and other social welfare elements are to once again become world-class, the public sector needs to be open-minded and collaborate with the industrial sector and academia to find cost-effective strategies for making quality improvements. However, the private sector must also be alert not to be overtaken by some highly active Asian countries.

Originality/value

Swedish large companies have been very successful in applying quality leadership – however, in the public sector, this has not been the case. Suggestions for improvement are made.

Details

International Journal of Lean Six Sigma, vol. 15 no. 6
Type: Research Article
ISSN: 2040-4166

Keywords

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