Perceived Justice

Customers’ assessment of service recovery offered by service provider is termed perceived justice (Rio-Lanza et al., 2008; Schiffman & Kanuk, 2007). Ha &Jang 2009) also defined perceived justice as the professed fairness of a firm’s recovery effort. Cohen (2001) in his study suggested that perceived justice is associated with reasoning and behavioral reactions to result, and the result of using services could influence customer emotions and behaviors. Adams (1963) stated that justice theory appeared in every exchange in life, when people consider the inputs with the results then compare them with others in similar circumstances to make assessment. In the situation that

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there is an equivalent balance between them, the exchange is perceived as ‘fair’, but if the results fail to meet the customer’s expectations, these outcomes are considered unfair. Moreover, customers evaluate perception of fairness by 3 following factors: procedural fairness, outcomes, and interactional treatment (Smith et al., 1999; Tax et al., 1998; Goodwin and Ross,1992)

In service recovery literature, justice theory appeared to be the main theoretical framework for assessing the effectiveness of firms’ service recovery. The framework stated that the level of satisfaction and the intention behavior in the future of customers depends on their evaluation of how fairly they are being treated (McColl-Kennedy & Sparks, 2003).

For service recovery context, previous studies suggest three dimensions of justice:

distributive justice, procedural justice and interactional justice.

2.4.1 Distributive Justice

Distributive justice emphases on the outcome fairness and compensation offered for customers’ damage and/or inconvenience (Smith et al., 1999; Tax et al., 1998). For example, many service providers provide different combinations of credits, refunds, discounts and apology to remain relationship with the unsatisfied customers.). Distributive justice is also clarified by the professed equity of an outcome or a decision and explained as the allocation of costs and benefits in terms of exchange relationships (Smith et al., 1999; Homans, 1961). Furthermore, distributive justice can also be defined in term of nonmonetary which includes cost incurred, emotions, and ego benefits (Sparks and McColl-Kennedy,2001).

The concept of distributive justice is the outcome of the society’s exchange theory that focused on the part of justice in determining future behaviors (Adams, 1963). Equity theory is the core proponent of distributive justice is (Pinder, 1998). According to equity theory, customers can be satisfied with the outcome-to-input proportion of an individual that greater than others’. By contrast, if a person’s outcome-to-input ratio is smaller than another source’s outcome-to-input ratio, it will lead to dissatisfaction. That means customers want to follow their outcomes to maximize gains and minimize losses (Adams, 1965).

McCollough, et al. (2000) suggested that distributive justice and interactional justice can essentially predict recovery satisfaction. Spark and McColl-Kennedy (2001) showed the existence

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of the influence of perceived justice on customer satisfaction in a hotel industry. A similar study was conducted by Holbrook Jr. and Kulik (2001), stated that justice is healpful in understanding a customer’s reations in a service background. Thus, this argument leads to the following hypothesis:

H1: Distribute justice will have a positive influence on customer satisfaction

2.4.2 Procedural Justice

Procedural justice can be defined as the perceived justice of the procedures, policies, and criteria used by the service firms in the result of an argument or compromise (Blodgett, 1997). One crucial factor in procedural justice is the speed or time taken to solve the problem (Tax, Brown, and Chandrashekaran, 1998). Therefore, it is important to make sure that immediate action is taken to resolve customer’s inconvenience. This can be attained by having less bureaucracy, and employees should be trained how to response when service failure happens. Since procedural justice is mostly relevant to service business strategies, this perception deals with subjects of accessibility and promptness (Blodgett Hill, & Tax, 1997; Tax, Brown, & Chandrashekaran, 1998) Procedural justice is vital in service recovery, because a consumer may be pleased with the recovery strategy being provided, but they may become dissatisfied with the slow procedures (Kelley et al., 1993). Based on this study, it can be stated that when customers experience fair process, they satisfied. The procedure could be considered equity, if it is unbiased, consistent, and impartial, and emphasizes on interests of all parties and is created on accurate information and ethical values (Blodgett et al., 1997). Under this argument, the following hypothesis is proposed:

H2: Procedural justice will have a positive influence on customer satisfaction

2.4.3 Interactional Justice

Interactional justice refers to how customers be treated during the recovering process. To be more detailed, interactional justice focuses person-to-person interactions during the recovery process. It means the assessment of the degree to which the customers have experienced impartiality in human interactions from the service provider (in this case: employees, managers) during the recovery process. For example, in the research, it has been shown that courtesy and empathy (Tax and Brown,1998) and politeness, concern and neutrality (Sparks and McColl-Kennedy,2001) can positive affect customers’ overall assessments of justice.

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Blodgett et al. (1997) claimed the importance of interactional justice in the research of service recovery and failure. In their experimental study, Tax, Brown, and Chandrashekaran (1998) emphasized that interactional justice is a strong predictor of customer satisfaction and trust. A study of Namkung and Jang (2009) on restaurants in the US stated that interactional justice can enhance customer retention by increased the satisfaction.

In the context of interactional justice, it is shown that customers should be treated with the proper respect, courtesy and sincerity (Maxham & Netemeyer, 2002). Regarding to previous literature, social interactions are crucial in the sharing economy business models. In terms of service management, interactional justice is one of the principal factors in predicting customer satisfaction and loyalty (Grönroos, 1994).

Thus, this argument leads to the following hypothesis:

H3: Interactional justice will have a positive influence on customer satisfaction