A time(ly) perspective of the service recovery paradox: How organizational learning moderates follow-up recovery effects

Abstract

The extant literature on the service recovery paradox has produced inconsistent evidence about its occurrence. Addressing these mixed findings, the conceptual model developed by the authors posits that organizational learning pursuant to a service failure moderates the effect of follow-up recovery, explaining why the service paradox is most likely to be observed. Three experiments support the framework. When customers experience a satisfying immediate recovery, the service recovery paradox is not observed, but when they see some action taken during the follow-up recovery, proving that the service firm has learnt from its failure, the service recovery paradox is indeed observed. In addition, when organizational learning is demonstrated, perceived customer centricity and anger mediate the effect of a satisfying follow-up recovery on the service recovery paradox. Finally, it appears that rapidly implementing new processes following the service failure assists the recovery process, as does the perceived learning effort.