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Airline Travelers' Causal Attribution of Service Failure and Its Impact on Trust and Loyalty Formation: The Moderating Role of Corporate Social Responsibility

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Airline Travelers' Causal Attribution of Service Failure and Its Impact on Trust and Loyalty Formation: The Moderating Role of Corporate Social Responsibility
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  This article was downloaded by: [Universiti Sains Malaysia]On: 27 May 2015, At: 01:20Publisher: RoutledgeInforma Ltd Registered in England and Wales Registered Number: 1072954 Registered office:Mortimer House, 37-41 Mortimer Street, London W1T 3JH, UK Click for updates Asia Pacific Journal of Tourism Research Publication details, including instructions for authors and subscriptioninformation:http://www.tandfonline.com/loi/rapt20 Airline Travelers' Causal Attribution ofService Failure and Its Impact on Trust andLoyalty Formation: The Moderating Role ofCorporate Social Responsibility Davoud Nikbin a , Sunghyup Sean Hyun b , Mohammad Iranmanesh c , AminMaghsoudi c  & Chul Jeong ba  Faculty of Business, Multimedia University, 75450 Melaka, Malaysia b  School of Tourism, Hanyang University, 17 Haengdang-dong, Seongdonggu,Seoul 133-791, Republic of Korea c  School of Management, Universiti Sains Malaysia, 11800 Penang, MalaysiaPublished online: 27 May 2015. To cite this article:  Davoud Nikbin, Sunghyup Sean Hyun, Mohammad Iranmanesh, Amin Maghsoudi & ChulJeong (2015): Airline Travelers' Causal Attribution of Service Failure and Its Impact on Trust and LoyaltyFormation: The Moderating Role of Corporate Social Responsibility, Asia Pacific Journal of Tourism Research,DOI: 10.1080/10941665.2015.1048265 To link to this article: http://dx.doi.org/10.1080/10941665.2015.1048265 PLEASE SCROLL DOWN FOR ARTICLETaylor & Francis makes every effort to ensure the accuracy of all the information (the “Content”)contained in the publications on our platform. However, Taylor & Francis, our agents, and ourlicensors make no representations or warranties whatsoever as to the accuracy, completeness, orsuitability for any purpose of the Content. Any opinions and views expressed in this publicationare the opinions and views of the authors, and are not the views of or endorsed by Taylor &Francis. The accuracy of the Content should not be relied upon and should be independentlyverified with primary sources of information. Taylor and Francis shall not be liable for anylosses, actions, claims, proceedings, demands, costs, expenses, damages, and other liabilitieswhatsoever or howsoever caused arising directly or indirectly in connection with, in relation to orarising out of the use of the Content.This article may be used for research, teaching, and private study purposes. Any substantialor systematic reproduction, redistribution, reselling, loan, sub-licensing, systematic supply, or  distribution in any form to anyone is expressly forbidden. Terms & Conditions of access and usecan be found at http://www.tandfonline.com/page/terms-and-conditions    D  o  w  n   l  o  a   d  e   d   b  y   [   U  n   i  v  e  r  s   i   t   i   S  a   i  n  s   M  a   l  a  y  s   i  a   ]  a   t   0   1  :   2   0   2   7   M  a  y   2   0   1   5  AirlineTravelers ’ CausalAttributionofServiceFailureand Its Impact on Trust and Loyalty Formation: TheModerating Role of Corporate Social Responsibility Davoud Nikbin 1 , Sunghyup Sean Hyun 2 , Mohammad Iranmanesh 3 ,Amin Maghsoudi 3 and Chul Jeong 2 * 1 Faculty of Business, Multimedia University, 75450 Melaka, Malaysia 2 School of Tourism, Hanyang University, 17 Haengdang-dong, Seongdonggu, Seoul 133-791,Republic of Korea 3 School of Management, Universiti Sains Malaysia, 11800 Penang, Malaysia This study examines airline travelers ’  causal attribution (stability and controllability) and its impact on trust and loyalty formationand investigates the moderating role of corporatesocial responsibility (CSR) in this process. Based on a literature review, theoretical relationships between stability, controllability, CSR, trust, and loyalty were derived, and the moderating effects of CSR on relationships between stability/controllability and trust/loyalty were examined. To empirically test these theoretical relationships, quantitat-ive data werecollected from271 airline passengerswhoexperienceda service failurein the past year. The results provide support for effects of stability and controllability on trust aswell as the effect of stability on loyalty. In addition, the perception of CSR had positiveeffects on trust and loyalty. Finally, a favorable CSR perception weakened the negativeeffects of a service failure on trust and loyalty, particularly when the failure was attributed to a stable cause. The results highlight the important role of CSR in service failure situ-ations and have important implications for airline managers. Key words:  airline travelers, corporate social responsibility, casual attribution, stability,controllability, trust, loyalty, Malaysia Introduction Although airline companies continuously seekto provide error-free service, this goal israrely attained in the field. In reality, servicefailures are common in the airline industrybecause its services rely heavily on employeeexperience and involve close interactions Asia Pacific Journal of Tourism Research , 2015http://dx.doi.org/10.1080/10941665.2015.1048265 *Email: jeong72@hanyang.ac.kr© 2015 Asia Paci fi c Tourism Association    D  o  w  n   l  o  a   d  e   d   b  y   [   U  n   i  v  e  r  s   i   t   i   S  a   i  n  s   M  a   l  a  y  s   i  a   ]  a   t   0   1  :   2   0   2   7   M  a  y   2   0   1   5  between employees and customers. Therefore,it is critical that airline companies learn howto effectively cope with service failure (Bitner,1990). The effects of service failure and theimportance of recovery have been examinedby business scholars focusing on the airlineindustry (e.g. Sánchez-García & Currás-Pérez, 2011; Siu, Zhang, & Yau, 2013). Suc- cessful service recovery can lead to a varietyof positive outcomes, including customer satis-faction, repurchase intention, and positiveword-of-mouth communication (Gelbrich &Roschk, 2011; Maxham & Netemeyer, 2002; Orsingher, Valentini, & de Angelis, 2010).However, if not managed well, service failurecan be very costly because customers mayengage in negative word-of-mouth communi-cation or may engage in switching (Blodgett,Hill, & Tax, 1997).Many studies have focused on definingrecovery tactics most likely to restore customersatisfaction and behavioral intentions follow-ing a service failure (Maxham, 2001; McCol- lough, Berry, & Yadav, 2000; Smith &Bolton, 2002). Nevertheless, because custo-mers are not always satisfied with its results,servicerecoverymaynotbetheonlykeytomiti-gating the problems resulting from servicefailure.Previousstudieshavehighlightedcogni-tive factors such as failure attribution and cus-tomers ’  expectations, which may limit theeffectivenessofanyrecoverymeasures.Attribu-tionreferstoacustomer ’ sbeliefthattheserviceprovider could have prevented the failure ormitigated its effects (Weiner, 2000). This attri- bution can minimize or magnify customers ’ negative responses and satisfaction judgmentsfollowing a service failure (e.g. Hess,Ganesan, & Klein, 2003; Smith & Bolton,1998; Smith, Bolton, & Wagner, 1999). Recent studies have indicated that airlinecompanies should introduce corporate socialresponsibility (CSR) as a strategy to developlong-term customer relationships and gain acompetitive advantage (Martínez & Bosque,2013). CSR perceptions can be important. Pre-vious studies have demonstrated that a firm ’ sCSR reputation can increase customers ’  posi-tive attitudes toward and identification withthe firm (e.g. Berens, van Riel, & vanBruggen, 2005; Bhattacharya & Sen, 2003; Luo & Bhattacharya, 2006) and that it alsohas a halo effect, influencing customers ’  judg-ments in nonroutine situations. Studies haveshown that socially responsible activities canhelp organizations create a desirable image(e.g. Lii & Lee, 2012) and that a prosocialimage can protect organizations from conse-quences of negative events or crises (Caruana,1997; Ulmer, 2001). Godfrey, Merrill, and Hansen (2009) found that CSR activity pro-vides firms with an insurance-like benefit thatcan temper customers ’  negative judgmentsand sanctions during a negative event. FirmsthatactivelyengageinbuildingtheirCSRrepu-tation are more likely to be protected whenthey make mistakes (Luo & Bhattacharya,2009). Klein and Dawar (2004) examined this halo effect and found that a firm ’ s CSRreputation has a spillover effect on consumers ’ brand evaluation and purchase intentions byacting as a type of insurance for reducing therisk of an adverse evaluation when there is adamaging assertion about the firm. However,scholars have yet to make concerted efforts toexamine the insurance-like properties of CSRactivity in the context of recovering from aservice failure. In this regard, this studyexplores how CSR perceptionsinfluence custo-mers ’  evaluation following a service failure.More specifically, the study investigates howattribution, CSR perceptions, and prior expec-tations interact to influence customers ’  evalu-ation of the service provider after a servicefailure in terms of their identification andpost-recovery satisfaction.2  Davoud Nikbin et al.    D  o  w  n   l  o  a   d  e   d   b  y   [   U  n   i  v  e  r  s   i   t   i   S  a   i  n  s   M  a   l  a  y  s   i  a   ]  a   t   0   1  :   2   0   2   7   M  a  y   2   0   1   5  As documented in previous literature, CSRconsists of several dimensions (Carroll, 1991;Salmones, Crespo, & Bosque, 2005) and themajority of these studies have focused on thephilanthropic dimension, which is a dimensionof cause-related marketing (Barone, Miyazaki,&Taylor,2000;Creyer&Ross,1997).Never- theless, in comparison to the philanthropicdimension, the ethical – legal dimension ismore appropriate and more closely related tocompany ethics. Specifically, service failureand recovery constitute a context in which afirm ’ s sense of ethical responsibility may betested. Consequently, this study focuses onthe ethical – legal dimension to investigate repu-tationforCSRand other keyconstructs associ-ated with service recovery.This study addresses a number of issues per-taining to services and service failure. First, thestudy examines the roles of two dimensions of failure attribution, namely stability and con-trollability, as well as CSR on customers ’ trust and loyalty in service failure encounters.Although previous studies have examined therelationships of failure attribution to customersatisfaction and loyalty (e.g. Nikbin, Ishak, &Marimuthu, 2012a, 2012b), the relationships of stability and controllability to customertrust remain unexplored. In addition, thestudy empirically tests the relationshipbetween CSR and customer loyalty in aservice-oriented industry. The study empiri-cally explores the relationship between CSRand customer trust based on Paine (2000),who claimed that ethical standards are thebasis for trust, building reputation, and deliv-ery of quality services. Finally, the study exam-ines the moderating effects of CSR on therelationships of stability and controllability totrust and loyalty. Although previous studieshave emphasized the halo effect of CSR(Godfrey et al., 2009), no study has examined its moderating effect in service failure andrecovery contexts, which may yield importantinsights for both service providers and scho-lars. In fact, very few studies have investigatedCSR in service failure and recovery contexts(Albus, 2012; Choi & La, 2013). Literature Review Stability and Controllability According to the attribution theory, individ-uals ’  behaviors are based on the causal infer-ences they process about the world aroundthem (Folkes, 1984). Understanding the classi- fication of causes is crucial for predicting beha-viors from attribution. According to theattribution theory, customers make judgmentsabout causal relationships that subsequentlyinfluence their emotions, attitudes, and beha-viors based on three dimensions: stability,control, and the locus (Weiner, 1985). In a service failure context, stability refers towhether a failure is relatively temporary orfairly permanent and unchanging. Controll-ability is related to the extent to which thecause of a service failure is managed bychoice. The locus addresses whether the causeis located on the side of customers themselvesor the service provider. Many studies of service failure and recovery have not con-sidered the locus of control because, in someservice failures, customers typically perceivethat a service failure is produced by the provi-der, not by themselves. Therefore, the locus of control becomes less relevant in most of thesesituations (Hess et al., 2003; Nikbin, Mari-muthu, Ismail, & Hyun, 2014; Smith et al.,1999). The present study focuses only onthose failures occurring within the service pro-vider.Stability is related to a customer assessing aservice failure and identifying whether the Causal Attribution and Trust and Loyalty Formation  3    D  o  w  n   l  o  a   d  e   d   b  y   [   U  n   i  v  e  r  s   i   t   i   S  a   i  n  s   M  a   l  a  y  s   i  a   ]  a   t   0   1  :   2   0   2   7   M  a  y   2   0   1   5
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