Does service recovery affect satisfaction and loyalty? An empirical study of medical device suppliers

Successful supply chain management can provide hospitals with new competitive advantages. Customer loyalty or repeat purchasing is critical to the survival and success of medical device suppliers. Previous studies have confirmed that trust and commitment are considered necessary components for maintaining a long-term service relationship. Thus, the purpose of this study was to assess the relative effects of distributive justice (DJ), procedural justice (PJ), and interactional justice (IJ) on satisfaction with service recovery and to examine the relationships between recovery satisfaction and three relationship outcome variables: trust, commitment, and loyalty. In addition, in the research model, service recovery justice was proposed as a formative second-order construct driven by DJ, PJ, and IJ. This study conducted a survey of medical centres, regional hospitals, and district hospitals in Taiwan and used structural equation modelling to show that recovery satisfaction was a significant positive predictor of trust and commitment and that commitment was a significant positive predictor of loyalty. The study also showed that the three dimensions of justice were crucial components of service recovery justice, which in turn had a strong positive effect on recovery satisfaction for medical device suppliers. The paper concludes with an examination of the theoretical and practical implications of our study.