Service recovery and satisfaction: The moderating role of religiosity - Theory and Practice in Hospitality and Tourism Research - page 536

2 LITERATURE REVIEW from mistakes. Komunda and Osarenkhoe (2012)

stated that service recovery may enable the track-
ing of common complaints and a database could
be developed to better manage it. As a result, the
company will become aware of the problems and it
can be avoided from occurring again.

2.1 Service failure
Service failure is inescapable and it can jeopard-
ize company's reputation. According to Patterson,
Cowley, and Prasongsukarn (2006), service failure
is defined as a problem that happens in exchange
where a customer perceives a loss due to a failure
on the part of service provider. However, Komunda
and Osarenkhoe (2012) argued that service failure
is the failure of the company's core service. It may
include failure to withdraw money from the Auto-
mated Teller Machine, or the failure of product/
service provided by the company.
Service failure may happen due to a number of
reasons such as new staff, newly-introduced tech-
nology, or new customers (Michel, 2001). In the
event of service failure, the action taken by the
company is crucial to either fortify the existing rela-
tionship or turn the situation into a major problem
(Dong, Evans & Zou, 2008). Thus, it is vital for the
company to ensure that they take immediate action
in resolving customer's problem.
Service failure can result in negative word of
mouth, problematic relationship between the cus-
tomer and company, and negative future behaviors
(Ha & Jang, 2009). Unresolved customer's problem
will only bring negative impact to the company's
reputation. Customers will become more dissatis-
fied and they will share the unhappy experiences
with others (Ha & Jang, 2009). Therefore, good
service recovery efforts are critical to avoid such
problems.

2.3 Recovery satisfaction
Generally, customer satisfaction is defined as a
customer's judgment towards a particular product
or service. It is a judgment that a product or service
provides a pleasurable level of consumption-related
fulfillment (Oliver, 1997). Customer satisfaction is
a critical issue in the area of marketing and con-
sumer behavior (Ghalandari, Babaeinia & Jogh,
2012). It has become a key component in measur-
ing business performance and guiding principle in
the development in new product or service (Feng &
Yanru, 2013). Satisfied customers will enhance
company's reputation by sharing positive experi-
ences with others.
Service failure is inevitable and therefore, com-
panies will face challenging time to ensure satisfied
customers will remain loyal to them. Poor service
recovery will lead to double-deviation and may
threaten the relationship that has been developed
for years. An excellent recovery effort will improve
customer's overall satisfaction, will promote brand
loyalty and positive word of mouth (Choi & La,
2013). In specific, Kim et al. (2009) described recov-
ery satisfaction as a positive emotion perceived by
the customers as a result of service recovery efforts
taken by the company.

2.2 Service recovery
Service recovery refers to the actions taken by the
organization in responding to a service failure
(Gronroos, 1988). Service failure and recovery is
the 'moment of truth' in testing the strength of
relationship between the company and customers
(Smith, Bolton & Wagner, 1999). Customer will
evaluate the recovery efforts taken by the company
following the service failure. This is critical espe-
cially if it involves long term or loyal customers.
Service recovery is important to return upset
customers to a state of satisfaction. This can be
done if the employees act quickly, being friendly,
express empathy and demonstrate generous man-
ner in resolving customer's problem (Michel, 2001).
A good recovery effort will enhance customers'
opinions towards the company, promote positive
word of mouth, improve customer satisfaction and
develop long term relationship (Michel & Meuter,
2008). Service failure and recovery should not be
viewed as an obstacle, rather it should be seen as an
opportunity to improve weaknesses and learning

2.4 Justice theory in service recovery
Justice theory states that a customer evalu-
ates a service recovery attempt as fair or unfair
(DeWitt, Nguyen & Marshall, 2008). A number of
researches in western countries have considered the
application of justice theory in service recovery.
According to Patterson et al. (2006), justice theory
was derived from the social exchange and equity
theory. It can be categorized into three dimensions
namely distributive justice, procedural justice, and
interactional justice. Justice theory has been used
in a number of service recovery studies including
airline industry (Chang & Chang, 2010); restaurant
(Ok, 2004); retail industry (Lin, 2012); and hotel
industry (Prasongsukarn & Patterson, 2012).
Previous service recovery studies demonstrated
that the three dimensions of justice theory influ-
ences recovery satisfaction. According to Ok
(2004), the three dimensions of justice have posi-
tive effects on recovery satisfaction in restaurant
setting. Effective service recovery will not only
improve satisfaction, however it can lead to trust