What Makes Customers Discontent with Service Providers? An Empirical Analysis of Complaint Handling in Information and Communication Technology Services

Hubert C.Y. Chan, Wai Ting Ngai

Research output: Journal article publicationJournal articleAcademic researchpeer-review

17 Citations (Scopus)

Abstract

The effectiveness of complaint handling and service recovery policies in customer retention has been the focus of both scholars and service organizations. In the past decade, Justice Theory has provided the basis of the dominant theoretical framework for complaint management and service recovery. However, it does not explicitly address unfair trade practices, which constitute an ethical issue. Favorable outcomes in complaint handling may not be able to restore the reputation of a company and the potential harm perceived by consumers. Using face-to-face interviews, this study applies Fairness Theory to explore the psychological responses of consumers in the post-complaint phase, particularly in ethical judgment. The findings suggest that an unfavorable outcome in the post-complaint stage leads to counterfactual thinking by the consumer about the consumer's state of well-being. The complaint must be due to the discretionary actions of the service provider whose accountability is assessed. Those harmful actions are then judged against an ethical standard. Explanations can reduce blame, and their effectiveness is moderated by outcome favorability but not ethical judgment. Favorable outcome, captured by "Would Perception," has only limited influence on Perceived Potential Harm (PPH), which is an important determinant of ethical judgment. This study makes both theoretical and practical contributions. It is the first study to validate Fairness Theory empirically and apply it to complaint handling as a complement of Justice Theory in the information and communication technology (ICT) service context. The study indicates that customers may condemn a service provider because of PPH even though the outcome is favorable. Unfair trade practices are what make customers hate ICT service providers.
Original languageEnglish
Pages (from-to)73-110
Number of pages38
JournalJournal of Business Ethics
Volume91
Issue numberSUPPL. 1
DOIs
Publication statusPublished - 9 Aug 2010

Keywords

  • complaint handling
  • ethical judgment
  • Fairness Theory
  • Justice Theory
  • Perceived Potential Harm

ASJC Scopus subject areas

  • Business and International Management
  • Business, Management and Accounting(all)
  • Arts and Humanities (miscellaneous)
  • Economics and Econometrics
  • Law

Cite this