The role of culture in the perception of service recovery

In international service settings, customers' evaluations of service encounters are influenced by their evaluations of the service failure and recovery contexts, which are shaped by their cultural orientation. Knowledge of how critical service factors are perceived by customers from different cultural background is important in the design and implementation of global service strategy. Service recovery, in the form of compensation or apology, is tested in three cross-national samples. Compensation is found to improve customers' assessment of the service encounter in all three countries, but positive effects on repurchase intention and word of mouth (WOM) are only found for the American sample and not for the Singaporean and Australian samples. Apology is found to improve satisfaction in Singapore and Australia but not in the United States. Culture's influence on the evaluation process is examined to account for the differential impact of apology and compensation on customer perception about service failure and recovery. (C) 2003 Elsevier Inc. All rights reserved.