| Organizations strive for flawless customer service, but service failures (i.e., breakdown in service) are inevitable and unavoidable. How organizations respond to this service failure can impact a customer's satisfaction, loyalty, or negative word-of-mouth intentions. To understand these behaviors, researchers utilized organizational justice theory as the main theoretical framework for service recoveries. Organizational justice theory consists of distributive justice (i.e., outcome the customer receives), procedural justice (i.e., organizational protocol followed), and interactional justice (i.e., treatment the customer receives). Recent research suggests the positive influence that providing interactional justice (i.e., explanations) and having a prior relationship with the organization has on these outcomes.;Therefore, this study addressed explanations in terms of cause (i.e., accepting or blaming someone for the failure) and reason (i.e., increasing detail of explanation). Additionally, the study replicated previous research on the customer's prior relationship with an organization. Lastly, interactional justice (i.e., explanations) was manipulated to examine satisfaction as a mediator for the relationship between explanations (i.e., cause and reason) and loyalty and negative word-of-mouth.;A 2 x 3 x 2 between subjects scenario based design was used to measure satisfaction, loyalty and negative word-of-mouth intentions following a restaurant service failure. The independent variables were internal cause versus external cause, three reasons with increasing levels of detail and prior relationship versus no prior relationship. Participants were randomly assigned to one of 12 written scenarios in which they placed a dinner order and when the order arrived it was incorrect. Each scenario contained information regarding why the service failure occurred. Following the scenario participants were asked to complete a survey measuring adequacy of the explanation, perceptions of justice, satisfaction, loyalty intentions, and negative word-of-mouth intentions.;The results suggest that (1) An external cause had a significant impact on satisfaction compared to an internal cause. (2) Providing a detailed explanation increased satisfaction, loyalty and decreased negative word-of-mouth. (3) Prior relationship resulted in increased loyalty and decreased negative word-of-mouth behavior, but had no effect on satisfaction. (4) A mediation model fully supported satisfaction as a mediator for the relationship between explanations (i.e., cause and reason) and loyalty and negative word-of-mouth. |
