Service Recovery Policy, Empowerment or both? : A study of the interrelation between service recovery policy and empowerment within service organizations

Abstract: Today’s economy is getting more service oriented and we live in a service society. The service sector has experienced a great development, which has implied and implies greater competition. The customers have a wider range of services to choose among and as a service provider, it is all about providing a superior service. However, being a service provider can sometimes imply a hard undertaking. Sometimes the service provider does not accomplish to provide the service perfectly. These situations are more known as service failures. Service recoveries are often used to recover service failures, which can e.g. imply an apology or offering the customer something extra at no cost. To be able to act correctly in a service recovery situation, a com-pany can e.g. have a service recovery policy for how to act in service failure situations. A company can also choose to empower the front-line employees who interact frequently with the customers. The purpose of the thesis is to determine the interrelation between service recovery policy and empowerment. The research method chosen in this thesis is qualitative and the in-formation is collected by using semi-formal in-depth interviews as well as verbal protocols. One middle manager and one front-line employee representing three different service companies is partici-pating in the thesis. The three companies operate in three different industries within the service sector. There is somewhat an interrelation between service recovery policy and the degree of empowerment. A non-specific service recovery policy seems to demand a high degree of empowerment while a specific policy does not seem to require a high degree of empowerment. According to the findings of this thesis, a company can also have a semi-formal policy and a medium degree of empowerment. This means that the more formal and specific service recovery policy, the less empowered staff is required.