ARE WE SATISFIED WITH INCOMPETENT SERVICES?

A SCALE DEVELOPMENT APPROACH FOR SERVICE

RECOVERY

Nidhi Sabharwal Harmeen Soch Harsandaldeep Kaur

Customers weigh service failures more heavily than outcomes of services received.
These service failures are the main cause of customer switching behavior. Service
recovery is one of the alternatives to restore customer satisfaction with the
organization. In this study we propose a framework to investigate the impact of
service failure and recovery procedures on customer satisfaction and their
behavioral intentions based on equity and social exchange theory. According to
these theories customers' perceived justice plays significant role in shaping customer
satisfaction after service failure and recovery. The study intends to examine the
effect of procedural justice, distributive justice, interactional justice and severity of
service failure on customer satisfaction and to examine whether a service recovery
paradox exists or not. This article describes the development and refinement of the
measure to assess service recovery and its impact on behavioral intentions. The
study examines the reliability, internal consistency and validity of the scale. The
study resulted in 33 item scale which measures behavioral intentions of customers
after seeking redress.

INTRODUCTION

T
he ever growing competition and continuous increase in
customer expectations and demands have made customer
satisfaction and related constructs to be the main focus of research
in services (Kandampully, 1998; Chumpitaz and Paparoidamis, 2004).
To overcome this cut-throat competition, every organization is trying
to improve efficiency, increase customer loyalty and build long-term
relationships with their customers without sacrificing quality of service
(Javalgi and Moberg, 1997). Improving quality and customer
satisfaction reduces costs associated with defective goods and services
such as warranty costs, replacing defective goods and complaint
handling (Anderson et al., 1997). High quality will lead to high customer
retention which in turn is strongly related to profitability (Reichheld
and Sasser, 1990; Fornell, 1992). Because services are intangible,
perishable, heterogeneous, consumed and produced at the same time,
zero defect service is impossible (Gronross, 1992). One negative service
encounter or service has the potential to lower consumers’ overall
satisfaction permanently (Hocutt et al., 2006). Therefore, the ability to
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©2010 by Institute for International Management and Technology. All Rights Reserved.
126 Are we Satisfied
get it right the first time is thought to offer significant benefits to the
organization in terms of higher loyalty, more repurchase intentions
and significantly lower switch and external response intentions than
those with unresolved problems (Zeithaml et al., 1996; Schoefer and
Ennew, 2005).
Recovery is a management philosophy that embraces customer
satisfaction as primary goal of business (Hart et al., 1990). Customers
who become dissatisfied due to service failure and subsequent recovery
may dissolve the buyer seller relationship or move to competitors
(Dwyer et al., 1987). The research has provided evidence that the
negative evaluation of services by customers initiate behavioral
responses that translate directly into losses for service firms (Smith and
Bolton, 1998). An increasing number of complaints make the customer
more prone to desert the firm so the objective of complaint handling is
to turn a dissatisfied customer into a loyal one (Fornell, 1992). Service
recovery is one of the reasons a customer may stay or exit a service
organization after a service failure (Colgate and Norris, 2001). Service
recovery is defined as “the actions of a service provider to mitigate
and repair the damage to a customer that results from the providers’
failure to deliver a service as designed” (Hoffman and Kelley, 2000).
Service failure and recovery encounters represent critical ‘moments of
truth’ in a service provider's relationship with its customers (Smith and
Bolton 1998).
When customers encounter a service failure, they can choose one
of the two alternatives either to complain or give the service provider
an opportunity to correct the problem or not to complain at all (Colgate
and Norris, 2001). According to Dube and Maute (1996) all of the
dissatisfied customers do not complain, some of those dissatisfied
customers just move away without complaining. Only 5% to 10% of
the dissatisfied customers complain. Therefore, companies that want
to build the capability of recovering from service problems should
measure the cost of effective recovery, break customer silence and
listen closely for complaints, anticipate needs for recovery, act fast,
train employees, empower the front line and close the customer feedback
loop (Hart et al., 1990).
The present study is designed (a) to examine the effect of service
failure and recovery on customers satisfaction and behavioral intentions
after complaint handling, (b) to examine the impact of service failure
severity on customers' post recovery satisfaction (c) to examine whether
customers who experience service failure and recovery encounters are

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 127 Sabharwal, Soch, Kaur
more satisfied with the service provider, than had they not experienced
failure also called as ‘service recovery paradox’.
The present study is conducted in telecommunication sector in India.
This sector is characterized by both high customer turnover and high
customer acquisition costs (Bolton, 1998), given that the cost of
retaining an existing customer is less expensive than prospecting for a
new customer (Spreng et al., 1995). In the field of marketing strategies
for telecommunication services it is frequently pointed out that once
customers have been acquired and connected to the telecommunications
network of a particular operator, their long-term links with the focal
operator are of great importance to the success of a company in
competitive markets than they are in any other industry (Gerpott et al.,
2001). Thus, service recovery appears to be a relevant concept in the
Indian service industry, as it will help companies to formulate strategies
to retain their customers by understanding and solving their complaints
with justice at the right time.
SERVICE RECOVERY FRAMEWORK
The promise to provide fairness is central to any transaction, but more
important in service transactions is the fact that services are difficult to
evaluate prior to purchase and sometimes even following the purchase
(Seiders and Berry, 1998). Service failure aims to return the customers
back to the state of satisfaction (Sparks and McColl-Kennedy, 2001).
The evaluation of service recovery is based on equity theory (Goodwin
and Ross, 1992; Tax et al., 1998; Hoffman and Kelley, 2000). Customers
often perceive inequity when they encounter a service failure, so equity
theory seems tenable in service failure context (Maxham III, 2001).
The fairness of complaint resolution procedures, interpersonal
communications and the outcomes are antecedents of customer
satisfaction, which are referred as perceived justice (Hoffman and
Kelley, 2000). Justice is critical because customers expect service firms
to treat them fairly and if they are not treated fairly, they will feel annoyed
and be distrustful (Seiders and Berry, 1998). Perceived justice is a three
dimensional concept including distributive justice, procedural justice
and interactional justice (Goodwin and Ross, 1992; Tax et al., 1998;
Maxham III and Netemeyer, 2002).
Distributive Justice: This justice is based on the assumption that human
beings are motivated instrumentally in their relationships with others
(Tax et al., 1998; Martinez-Tur et al., 2006). Distributive justice reflects
perceived fairness of the tangible outcome of service recovery i.e. what

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128 Are we Satisfied
did the service firm offer to pacify the offended customer to recover
from service firm and whether the outcomes offset inputs of service
failure (Hoffman and Kelley, 2000; Weun et al., 2004). “Distributive
justice can be conceptualized as customers’ evaluations of whether
they got 'their money's worth’; it also can include non-monetary inputs
and outputs involving such intangibles as emotions (anger and
embarrassment), complaining costs (time and effort) and ego benefits"
(McCollough et al., 2000).
The fairness of compensation is affected by customers’ prior
experience with the firm, awareness of other customers' resolution and
perceptions of one’s own loss (Tax et al., 1998). The amounts of
compensation expected by customers depend upon the severity of
service failure (Hocutt et al., 2006). Distributive justice outcomes include
compensation such as discounts, refunds, replacements, coupons,
apologies and free ancillary etc. (Tax et al., 1998; Hoffman and Kelley,
2000). Researchers have shown that distributive justice plays an
important role in shaping customer satisfaction with specific service
recovery transaction. Goodwin and Ross (1992); Tax et al. (1998);
Smith et al. (1999) and McCollough et al. (2000) have found that
perceptions of distributive justice affects customers post recovery
satisfaction and customers prefer to receive tangible outcome in service
delivery. Hence, we hypothesize that:
H1a: Distributive justice will have a positive effect on customers' post
recovery satisfaction.
Procedural Justice: Procedural justice is the perceived fairness of the
process through which ends are achieved (Tax et al., 1998). The
perceived fairness of procedural justice is influenced by voice (Goodwin
and Ross, 1992) and neutrality (Sparks and McColl-Kennedy, 2001).
Voice means that the consumer has been given the opportunity to present
information. Goodwin and Ross (1992) defined value expressive and
functional role of voice, where according to functional view, voice of
consumers can enhance the fairness perceptions by influencing the
outcome, whereas value expressive model offers cathartic satisfaction
by presenting ones’ view. Neutrality takes place when organization
follows a set procedure to redress the situation (Sparks and McColl-
Kennedy, 2001). Procedural justice aims to resolve the conflict in a
way that encourages the continuation of productive relationships (Tax
et al., 1998). Researchers have suggested that procedural justice is one
which is easy to access, is flexible, convenient, timely, accurate,

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 129 Sabharwal, Soch, Kaur
consistent and gives the consumers freedom to communicate views on
a decision process (Tax et al., 1998; Seiders and Berry, 1998).
Service literature shows that customers perceive fairness not only
by outcomes received, but also by perceived fairness of the procedures
by which outcomes are accomplished (Goodwin and Ross, 1992; Smith
et al., 1999). Researchers have shown that procedural justice has an
important role in influencing customer satisfaction with service recovery
(Tax et al., 1998; Smith et al., 1999; Hocutt et al., 2006). Based on
literature we hypothesize that:
H1b: Procedural justice will have a positive effect on customers’ post
recovery satisfaction.
Interactional Justice: Interactional justice is the extent to which
customers feel that they have been treated fairly while personally
interacting with the employees of company while going through the
recovery process (Maxham III and Netemeyer, 2002). It refers to “the
fairness of the interpersonal treatment people receive during the
enactment of the procedures” (Tax et al., 1998). This justice includes
aspects of change related to communication processes and treatment
of individuals with courtesy, respect and explanation (Collie et al.,
2000). The ability and willingness of the contact employees to respond
and handle service failures can result in the service encounter being
remembered as satisfactory or dissatisfactory (Bitner et al., 1990).
Goodwin and Ross (1992) showed that one aspect of interactional justice
i.e. an apology represents an important component for retaining
customer satisfaction. Tax et al. (1998) referred to interactional justice
as service employees’ honesty, politeness, effort, empathy and
explanation in dealing with the customers who complain to firm about
their service failure. Researchers have shown that interactional justice
affects customer satisfaction with service failure and recovery encounter
(Tax et al., 1998; McCollough et al., 2000). In line with previous
research, we hypothesize that:
H1c: Interactional justice will have a positive effect on customers’ post
recovery satisfaction.
Severity of Service Failure: Severity of failure is the magnitude of
loss that customers experience due to failure (Hess Jr. et al., 2003). It is
customers’ perceived intensity of service failure (Weun et al., 2004).
Service criticality is the perceived importance of successful service
delivery in a given service encounter (Levesque and McDougall, 2000).

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130 Are we Satisfied
Smith et al. (1999) found that service failures are weighted more heavily
than gains from service recovery. Researchers have proved that
customer' expectations for service recovery rise with the severity of
failure and excellent recoveries can reduce the dysfunctional
consequences of failure (Hess Jr. et al., 2003). Ostrom and Iacobucci
(1995) proved that when a service purchase event is more severe to
customer, he is likely to value different properties than when the
purchase occasion is less severe. The magnitude or severity of service
failure may vary according to some individual and situational factors
(Hoffman and Kelley, 2000). Researchers have proved that as size of
loss gets larger due to failure, customers will view exchange as
inequitable and become dissatisfied than when the loss is less (Ostrom
and Iacobucci, 1995; Smith et al., 1999; Hess Jr. et al., 2003). Both the
magnitude of service failure and type of recovery efforts affect
satisfaction and post purchase intentions of customers (Smith et al.,
1999; Levesque and McDougall, 2000). Weun et al. (2004) found that
despite positive effect of service recovery on satisfaction the impact of
severe service failure remains negative on satisfaction. Based on
literature we hypothesize that:
H2: Severity of service failure will have a significant effect on customers’
post recovery satisfaction.
Satisfaction with Service Recovery and Behavioral Intentions:
Research has shown positive relationship between satisfaction and
behavioral intentions of customers (Zeithaml et al., 1996). Quality of
service or good quality product leads to higher levels of customer
retention (Hart et al., 1990) which in turn leads to profitability (Reichheld
and Sasser, 1990; Fornell, 1992). Intentions are said to be solely a
function of satisfaction (Oliver and Swan, 1989a). Service recovery
benefits a firm because it positively influences customers’ expected
utilities of a purchase, their perception of product quality and word-of-
mouth (Blodgett and Anderson, 2000). Effective service recovery
significantly improves all facets of behavioral intentions (Zeithaml et
al., 1996).
l Word of Mouth: Word of mouth (WOM) intention is the likelihood
that one would favorably recommend a firms' product or service after
a service failure and recovery encounter (Maxham III and Netemeyer,
2002). It is an informal communication between consumers about
features of company's product or service (Westbrook, 1987). WOM
provides information to customers about firm which helps them to decide

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 131 Sabharwal, Soch, Kaur
whether to repatronize it or not (Zeithaml et al., 1993). WOM is
perceived as highly incredible information and a customers’ negative
WOM is the most detrimental response to a business (Singh, 1990).
Blodgett et al. (1995) found that customers who receive fair treatment
and perceive that justice has been done to them are more likely to
repatronize the seller and may engage in positive WOM, thus spreading
goodwill for the seller.
l Repurchase Intentions: Repurchase intentions are the individual's
judgments about buying a designated product or service from the same
company again while considering his current situations (Hellier et al.,
2003). It is the degree to which customers intend to purchase firms'
products or services in future (Maxham III and Netemeyer, 2002).
Researchers have proved a positive relationship between service
recoveries and repurchase intentions (Goodwin and Ross, 1992; Kelley
et al., 1993). A good service recovery will positively influence
repurchase intentions whereas bad service recovery will have negative
effect on repurchase intentions. Researchers have proved a positive
relationship between service recovery and repurchase intentions
(Goodwin and Ross, 1992; Kelley et al., 1993). Based on the above
literature we hypothesize that:
H3a: Satisfaction with service recovery will have a positive effect on
WOM of complainants.
H3b: Satisfaction with service recovery will have a positive effect on
repurchase intentions of complainants.
Service Recovery Paradox: Service marketing researchers have explored
‘service recovery paradox’. It is based on the grounds that if consumers
received excellent service recovery in response to service failure, it
will lead to enhanced customer satisfaction and increased repatronage
intentions that would not have been attained if they had not had a
service failure or recovery experience with the service provider (Smith
and Bolton, 1998; McCollough et al., 2000; Hocutt et al., 2006). If a
service recovery paradox exists, firms should focus learning efforts on
recovery. Smith and Bolton (1998) found that “excellent service
recovery can lead to increased customer and repatronage intentions.
However, the result was only obtained at the very high level of
customers’ recovery ratings”. The authors suggested that the
organizations might be better off reducing service failures rather than
using recovery as an opportunity to increase satisfaction. McCollough
et al. (2000) conducted a scenario-based experiment with passengers

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132 Are we Satisfied
from 50 departures at the airport. The authors found no evidence for
a recovery paradox. Even excellent recovery did not yield higher
satisfaction levels compared to error-free service delivery. So, there
are contradictory views about the existence of service recovery
paradox and both academicians and practitioners have not reached
on a consensus about whether the service recovery paradox exists or
not. Based on literature we hypothesize that:
H4: Given high recovery efforts customers’ post recovery satisfaction
will be lower than the satisfaction, had there been no service failure.
BEHAVIORAL INTENTIONS OF NON COMPLAINANTS
Past research has shown that all of the dissatisfied customers do not
complain about the service failure they faced. Only 5% to 10% of the
dissatisfied customers complain and rest just move away without
complaining (Dube and Maute, 1996). So, the dissatisfied customers
who do not complain to the firm or service providers about their
experiences may either exit the firm or may engage in negative word
of mouth (NWOM) behavior (Kau and Loh, 2006; Blodgett et al., 1995).
When dissatisfied customers do not complain to firm and move away
silently it may cost to the firms as they will lose benefits to retain
customers, redress the problem through feedback from customers, incur
higher costs in attracting new customers and loss from advertising
through NWOM (Colgate and Noriss, 2001, Chebat et al., 2001).
Hirschman (1970) emphasized that in competitive markets it is not
necessary that buyers will voice their complaints because they can
easily exit and go elsewhere. Moreover, before making a complaint
buyers make a trade-off of cost benefit i.e. whether their actions will
yield positive outcomes (Huppertz, 2007). There are certain factors
which influence customers' complaint behavior: level of dissatisfaction
or severity of service failure (Colgate and Noriss, 2001; Weun et al.,
2004), level of control over environment and self-monitoring (Bodey
and Grace, 2006), firm's response to failure (Richins, 1983), attribution
of blame (Bitner et al., 1994) and time and effort (Voorhees et al.,
2000).
Exit is voluntary separation from service provider (Farrell, 1983).
Exit is an escape from an objectionable situation or it is an active effort
by customer to terminate relationship with the seller (Hirschman, 1970).

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 133 Sabharwal, Soch, Kaur

It means voluntary termination of exchange relationship (Singh, 1990).

As per Hirschman (1970) exit means that customers discontinue
purchasing from the seller or firm. Anderson (1998) found that
dissatisfied customers engage more in WOM than satisfied customers
and negative communications may be delivered with greater force than
positive ones. Negative word of mouth (NWOM) is the intentions
wherein customers recommend others not to purchase the goods or
services of a particular firm or service provider (Richins, 1983).
Spreading WOM indicates that consumers try to convince themselves
of their decision by convincing others, which is one of the strategies
most often employed by individuals for reducing post decision
dissonance (Wangenheim, 2005). Based on literature, we hypothesize
that:
H5a: Dissatisfied non complainants will exit the service provider after
facing service failure.
H5b: Dissatisfied non complainants will engage in NWOM behavior
about the service provider after facing service failure.
The framework presents the relationship between justice dimensions
and customer satisfaction with service recovery which in turn affects
their behavioral intentions.
Distributive WOM
justice Satisfaction intentions
with service
recovery
Complaints
who seek Procedural
justice Repurchase
redress
intentions
Severity of
service failure
Interactional
justice
Service failure

Exit

Non-complainants
who don’t seek
redress

Negative WOM

Figure 1: The proposed framework of customer satisfaction and

behavioral intentions after service failure and recovery encounter

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134 Are we Satisfied
METHODOLOGY
Domain of the Constructs and Item Generation
As suggested by (Churchill, 1979) the first step involved was specifying
the domain of the construct to delineating exactly what is included in
the definition. Therefore, each construct has already been specifically
defined to make clear what is included in that construct. The process
followed for purification and refinement of scale is as suggested by
Churchill (1979) and Walsh and Beatty (2007).
Item Generation
After defining all constructs specifically a measure with 52 items was
developed through reviewing extant literature and summarizing
opinions of a few selected customers. Each item in the measure was
formed on a 7-point Likert Scale ranging from “very strongly agree”
to “very strongly disagree”. Almost thirty percent of the items in each
of the construct of scale were negatively stated to avoid response set
bias (Churchill et al., 1974; Churchill, 1979).
Content Validity
This 52 item measure was subjected to further review by inviting
comments from three renowned academic researchers in the area of
service failure and recovery. On the basis of suggestions given by these
experts, the scale items were rephrased and a few vague and ambiguous
items were deleted. After this process, we left with a measure of 42
items.
Data Collection
To further reduce this measure to a more reasonable number, a pretest
with a convenience sample of 241 students who were using mobile
phones was conducted. The sample consisted of 112 males and 129
females. The sample included 166 complainants and 75 non-
complainants. The average age of respondents was 21.97 years. Table
1 shows the demographic characteristics of total sample as well as for
complainants and non-complainants and. The major portion of sample
is using prepaid connections (68.46%) as compared to post paid
connections (31.54%).

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 135 Sabharwal, Soch, Kaur
Table 1: Demographic Characteristics of Sample
Total Total (%) Complainants Non-complainants
Characteristics
(%) (%)
Gender
Male 112 46.47 75.90 24.10
Female 129 53.53 62.80 37.20
Type of Connection
Prepaid 165 68.46 62.42 37.58
Postpaid 76 31.54 82.90 17.10
Level of Education
Post Graduate 81 33.61 75.31 24.69
Graduate 93 38.59 68.82 31.18
Undergraduate 67 27.80 61.19 38.81

Reliability and Measure Purification

Reliability is an indication of the amount of measurement error inherent
in an instrument (Churchill et al., 1974). It can be defined as the degree
to which measures are free from errors and therefore yield consistent
results (Peter, 1979). The measurement error affects the internal
consistency of the scale (Nunnally and Bernstein, 1994). Internal
consistency assesses the interrelatedness of the scale and the common
principle used for assessing internal consistency of scale is: the reliability
coefficients, the average inter-item correlation and corrected item-to-
total correlation (Churchill, 1979 and Nunnally and Bernstein, 1994).
Stage 1: Item-to-Total Score - I
In this stage the correlation of each item with the total score for that
dimension has been computed to determine whether each item correlates
with the hypothesized dimension. If the item-to-total correlation in a
measure is low, it indicates that some of the items are not drawn from
the appropriate domain or they are measuring different things, and
producing error and affecting the reliability of the scale (Churchill,
1979). The items with relatively low correlations with the dimension to
which they are hypothesized are deleted (Churchill et al., 1974, Ruekret
and Churchill, 1984). The items that correlate highly with the
dimensions' total scores are best items for the test and are retained
(Gerbing and Anderson, 1988). In this step three items are deleted as
they had low item-to-total correlation and we were left with 39 items.
Stage 2: Item-to-Total Score - II
In this stage the items of each construct were correlated with the total
score of other constructs. The items that did not have statistically
significant higher correlation with the dimension to which it was
hypothesized to belong in comparison to item correlations with

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136 Are we Satisfied
remaining dimensions total scores were also deleted (Ruekret and
Churchill 1984; Berden et al., 1989, Tian et al., 2001). In this step two
items were deleted and we were left with 37 items thereafter.
Stage 3: Corrected Item-to-total Correlation
In this stage corrected-item-to-total correlation is calculated. This is
the correlation between the score on item and the sum of scores on all
other items making up the dimension to which the item was assigned
(Parasuraman et al., 1988). Items that do not correlate with the total
score should be carefully inspected (Nunnally and Bernstein, 1994).
Items that did not have corrected item to total correlation above 0.4
were deleted (Nunnally and Bernstein, 1994; Ngobo, 1999; Sin et al.,
2002). In this step, two items were deleted and we were left with 35
items in the scale.
Stage 4: Mean and Variance
To minimize skewness and maximize variance, items with both larger
means and variances are to be retained and those with low mean and
variances are to be deleted (Kumar and Beyerlein 1991; Thomson et
al., 2005). After this step two items were deleted and we were left with
a total of 33 items in the scale.
Table 2 presents the alpha values of all constructs before and after
deletion at each stage item deletion. The alpha values of all the
constructs were above 0.6 which is acceptable (Nunnally and Bernstein,
1994; Peterson, 1994; Donio et al., 2006).
Table 2: Cronbach Alpha Values of the Constructs
Constructs Alpha before Alpha after Alpha after Alpha after Alpha after
Purification Stage 1 Stage 2 Stage 3 Stage 4
Distributive Justice .7807(7)* .7807(7) .7807(7) .8053(5) .8663(3)
Procedural Justice .7922(6) .8388(5) .8388(5) .8388(5) .8388(5)
Interactional Justice .6449(6) .6449(6) .6003(5) .6003(5) .6003(5)
Severity of Service Failure .7578(2) .7578(2) .7578(2) .7578(2) .7578(2)
Satisfaction with Service Recovery .8671(6) .8671(6) .9099(5) .9099(5) .9099(5)
Repurchase Intentions .4545(3) .7534(2) .7534(2) .7534(2) .7534(2)
Word of Mouth (WOM) .7036(5) .7355(4) .7355(4) .7355(4) .7355(4)
Negative WOM .8915(3) .8915(3) .8915(3) .8915(3) .8915(3)
Exit .9477(4) .9477(4) .9477(4) .9477(4) .9477(4)

* Figures in parentheses depict the number of items left with after deletion of items in different
stages.

ASSESSMENT OF VALIDITY
Validity means how well a scale measures what it purports to measure
in the context in which it is to be applied (Nunnally and Bernstein,
1994).

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 137 Sabharwal, Soch, Kaur

CONTENT VALIDITY
The measure is said to have content validity if the sample is appropriate
and the items “look right” (Churchill, 1979). It involves examining
two aspects: (i) the thoroughness with which the construct to be scaled
and its domain were explicated and (ii) the extent to which scale items
represents the constructs' domain (Parasuraman et al., 1988). Following
the scale development process and to reveal the content validity of
scale items the researchers reviewed the initial pool of scale items which
lead to deletion of ambiguous and repetitive items.
CONSTRUCT VALIDITY
The construct validity of a scale can be established when the distinct
factors are in fact structurally related as predicted by theory and more
desirably, related to other constructs with which they are known to be
related (Matsuno et al., 2000). Construct validity refers to the vertical
correspondence between a construct which is at an unobservable,
conceptual level and a purported measure of it which is at an operational
level (Peter, 1981). Construct validity deals with the measurement of
psychological attributes (Nunnally and Bernstein, 1994). The major
aspects of construct validation are: (i) specifying the domain of
observables related to the construct; (ii) determining the extent to which
observables tend to measure the same thing, several different things or
many different things; and (iii) performing subsequent individual
differences studies or experiments to determine the extent to which
supposed measures of the construct are consistent with “best guesses”
about the construct (Nunnally and Bernstein, 1994). To identify the
construct validity of the measure, factor analysis was used in which all
the factors loaded highly on a single factor ensuring the uni-
dimensionality of the scale. All the constructs had an average variance
extracted more than 0.5 and thus all the items were retained. The
percentage of average variance extracted for each construct is shown
in table 3.

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138 Are we Satisfied
Table 3: Percentage of Average Variance Extracted of Constructs
Constructs %age if Variance Extracted
Distributive justice 79.013
Procedural justice 60.973
Interactional justice 59.314
Severity of service failure 80.505
Satisfaction with service recovery 73.621
Repurchase Intentions 80.218
Word of mouth 56.077
Exit 86.438
Negative WOM 82.184

CONCLUSION
The main objective of this study was to develop a measure for
measuring customers’ behavioral intentions after facing service failure
and recovery process and to examine the behavioral intentions of
those who don’t seek redress. The purification of scale resulted in a 9
factor 33 item scale. This newly refined measure will be used for the
final survey of 1000 mobile phone users in Northern India which
will indicate the impact of service recovery efforts on the part of firm
on customers’ behavioral intentions after assessing the firm's recovery
procedure.
MANAGERIAL IMPLICATIONS
This study will add to our understanding of how justice perceptions
influence customer satisfaction when they lodge complaint and
undergo recovery procedure. It may be risky for companies to view
service recovery as an opportunity to delight customers. Therefore,
the companies should use proactive approach towards its consumers
to retain them. The present study contributes to literature by providing
a reliable and valid scale of service recovery process which will help
companies to formulate strategies to retain their customers by
providing superior and equitable service recovery when a service
failure occurs.

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 139 Sabharwal, Soch, Kaur
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Nidhi Sabharwal, Lecturer, Department of Commerce & Business

Management, Guru Nanak Dev University, Amritsar, Punjab, India.
Harmeen Soch, Sr. Lecturer, Department of Commerce & Business
Management, Guru Nanak Dev University, Amritsar, Punjab, India.
Harsandaldeep Kaur, Lecturer, Department of Commerce & Business
Management, Guru Nanak Dev University, Amritsar, Punjab, India.

Journal of Services Research, Volume 10, Number 1 (April - September 2010)

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