The Impact of Cultural Value Orientation

Revision with unchanged content. It is now well recognised that an effective service recovery program is essential to generating customer satisfaction and loyalty. A number of studies have investigated the impact of service recovery efforts (compensation, speed of response, etc) on post-recovery satisfaction. However, despite the importance of global markets, none have examined the impact of value orientation (cultural values measured at the individual level) in implementing effective service recovery programs. This research uses an experimental design to investigate how customer evaluations of service recovery efforts are influenced by interplay of the consumer's cultural value orientation and service recovery attributes (apology, compensation, cognitive control, recovery initiation, and formality). The results reveal that cultural values of power distance, uncertainty avoidance and collectivism do indeed interact with a firm's recovery tactics to influence perceptions of fairness (justice). In other words, the impact of a firm's tactics is culturally dependent, and consumer expectations and perceptions of service recovery efforts vary, depending on customers' cultural value orientation. Finally, all three forms of justice (distributive, procedural, interactional) along with disconfirmation of expectations, positively impact on overall service recovery satisfaction.