3231THS Managing Hospitality Service Experiences – T2, 2018
Written Assignment:
Recommendations for practice based on theory
Student name: Seung Bin Lim (Harry)
Student number: s2886892
Tutorial: 2:00-3:00 (Tuesday)
Organization: Emirates Airlines
Theme: Guaranteeing service quality
Introduction
Literature Review
There are a wide range of definitions of service guarantee that can be discovered in the literature. Some people argue that it is a firm promise, while some consider it as policy. According to Wirtz et al. (2000), a service guarantee is regarded as the signaling of service quality in the company, while Linden and Sanden (2004) viewed it as a service development process for the business. For a more recent definition, Hovgreve and Gremler (2009) says that service guarantees are the firm commitment by service companies to deliver service of certain standards, and if not fulfilled, it will be solved by the company by a form of compensation. Hart (1988) initially regarded a service guarantee as service promised by the company to provide customers with the service they should expect and what the company will do in the future so as to rectify the situation if the services fails to meet the customer’s expectation. In addition, Hart (1988) argued that it should be unconditional, so that the service operators should not set a limit on the guarantee, and customers who are not satisfied with service offerings should be compensated regardless of the cause of the service failure. He believed that service guarantees could make organizations to achieve a competitive advantages over competitor (Hart, 1988). He provided the basis for a new stream of research on implementing guarantees for service offerings. According to Hart (1994), the service guarantee is a legally binding contract. In contrast, Evan, Clark, and Knuston (1996) stated that the service guarantee is a policy indicating a service firm’s commitment for customer satisfaction in the service organization. Kennett (1995) claimed that the service guarantee enables customers to be aware of service recoveries and compensations they can receive by service firms when customers are not satisfied with the service offerings. According to Callan and Moore (1998), a service guarantee is a promise with customers that service operators undertake to offer as stated.
In general, a service guarantee can be viewed as the firm commitment on the service offerings and the compensation for customers in case of service failure. It can be also considered as promises between customers and service operators to offer a certain level or quality of service and reduce their perceived risk during the service consumption. The guarantee has several impacts on the management services, as they clearly states the level at which the service will be delivered to the customers and indicates the cost that the service organization will bear if they fail to do so (Hovgreve & Gremler, 2009). Some of these effects include increasing customer’s satisfaction and retention, serving as a competitive advantage, setting service delivery standards for both customers and employees, and learning from failure of service (Tax ; Brown, 1998). In other words, the service guarantees influenced on the reputation of the firm, operations and service quality, so that understanding the outcomes of the service guarantees is essential for an organization (Hays ; Hill, 2006). It is necessary that the firm’s commitment is communicated to customers through the involvement, motivation and participation of employee (Kini & Hobson, 2002). For these reasons, the business have to hire and train qualified employees to provide customers with a quality of service. Service guarantees make differences between high and low quality service organization and organization with higher bond credibility will offer better service as stated.
Kini, R. B., & Hobson, C. J. (2002). Motivational theories and successful total quality initiatives. International Journal of Management, 19(4), 605.
Tax, S., & Brown, S. (1998). Recovering and learning from service failure. Sloan Management Review, 40(1), 75-75.
Hays, J. M., & Hill, A. V. (2006). Service guarantee strength: The key to service quality. Journal of Operations Management, 24(6), 753-764. doi:10.1016/j.jom.2005.08.003
Wirtz, J., Kum, D., & Sheang Lee, K. (2000). Should a firm with a reputation for outstanding service quality offer a service guarantee? Journal of Services Marketing, 14(6), 502-512. doi:10.1108/08876040010347615
Björlin Lidén, S., Sandén, B., Fakulteten för ekonomi, kommunikation och IT, & Karlstads universitet. (2004). The role of service guarantees in service development. The Service Industries Journal, 24(4), 1-20. doi:10.1080/0264206042000275163
Hogreve, J., & Gremler, D. D. (2009). Twenty years of service guarantee research: A synthesis. Journal of Service Research, 11(4), 322-343. doi:10.1177/1094670508329225
Hart, C. W. L. (1994). Extraordinary guarantees. Boulder: Curtco Freedom Group
Evans, M. R., Dana Clark, J., & Knutson, B. J. (1996). The 100-percent, unconditional, money-back guarantee. Cornell Hotel and Restaurant Administration Quarterly, 37(6), 6,56-6,61. doi:10.1016/S0010-8804(97)89962-4
Kennett, P. A. (1995). The impact of service guarantees on the consumer’s evaluation process
Callan, R. J., ; Moore, J. (1998). Service guarantee: A strategy for service recovery. Journal of Hospitality ; Tourism Research, 22(1), 56-71. doi:10.1177/109634809802200106
