The effects of knowledge sharing and knowledge application on service recovery performance

Abstract

This study set out to discover the effects of knowledge sharing (KS) and knowledge application (KA) on service recovery performance (SRP) through survey-based research. The population of the study consisted of front-line employees of hotels in Accra. The study found significant and positive effects of both KS and KA on SRP. Data were analysed using linear and multiple regression.

Keywords

Hospitality sector knowledge application knowledge management knowledge sharing service recovery performance

Introduction

Customer satisfaction is a key concern for hospitality companies. However, hotels face challenges in delivering quality service to their customers (Dutta et al., 2007; Zainol, 2012). Customers regularly experience service failure so service delivery often does not meet their expectations (Susskind, 2002). Most service failures are normally caused by front-line personnel who are often the less well-paid employees and, as Weatherly and Tansik (1993) suggest, are often emotionally exhausted. Managing and resolving complaints are critical to hotels if ‘dissatisfied customers are to be converted into satisfied and loyal customers’ (Johnston and Mehra, 2002). Customers who experience service failure and then have their issues resolved to their full satisfaction are more likely to make future purchases than customers who have had no problems at all. This phenomenon is only true for a first service failure, recovered to a customer’s full satisfaction, and may not be so for repeated service failures. (Maxham and Netemeyer, 2002 argue that if a second service failure occurs, the paradox disappears.). Ironically, in most cases, the same front-line employees who cause the issues are expected to resolve them (Boshoff and Allen, 2000). The service recovery performance (SRP) of front-line personnel cannot be detached from service failure. If hotels want to retain their customers, managerial support, knowledge, motivation and an attitude of competitiveness will be needed to resolve problems successfully (Boshoff and Allen, 2000).

Babakus et al. (2003: 27) defined SRP as the ‘front-line service employee’s perceptions of their own abilities and actions to resolve a service failure to the satisfaction of the customer’. Boshoff and Allen (2000) investigated the factors that affect employee SRP and found that a firm’s goals and organizational commitment are key to ensuring SRP. In a related study, Bouncken (2002) asserts that hotels can enhance their service quality by augmenting employees’ knowledge about customer’s preferences. Bouncken also noted that hotels must collect and share customer knowledge across the whole organization if they are to deliver superior services to their patrons. Ashill et al. (2005) found that perceptions of managerial attitudes and the work environment are predictors of SRP in hospitals. They recommended that future studies should investigate other precursors and outcomes of SRP in other hospitals and other industries. Karatepe (2006), on the other hand, found competitiveness, intrinsic motivation and role ambiguity as the antecedents of front-line employees’ SRP. However, some scholars (e.g. Lin, 2010), believe that a more authoritative leadership and a strong corporate culture will have a negative impact on employees’ SRP. In the Ghanaian context, Narteh et al. (2013) examined the relationship between relationship marketing and customer loyalty in the hotel sector and found that relationship marketing has a significant effect on customer loyalty.

Many different concepts have been used to predict SRP and to date no ironclad constructs exist. This study argues that there is a need for knowledge sharing (KS) and knowledge application (KA) among front-line staff if they are to successfully recover failed services and satisfy customers. Previous studies investigating the relationship between knowledge management (KM) and SRP are limited; additionally, KM and SRP studies in the hotel sector are still at the embryonic stage (Hallin and Marnburg, 2008). The objective of this study was therefore to explore the impact of KS and KA on the SRP of front-line staff in the hotel sector. This study contributes to the body of evidence on the topic, providing empirical evidence for the relationship between KM and SRP. This article introduces the context of the research, reviews relevant literature, discusses the methodology employed, presents the results and makes recommendations.

The hospitality industry in Ghana

The contribution of the hospitality industry to Ghana’s economy cannot be underestimated. The growth of the hospitality industry is contributing substantially to the overall economic growth of the country (www.modernghana.com). Different cultural heritage, colourful festivals, hotels, beaches, colonial slave castles, wildlife and vegetation and the hospitable culture of Ghanaians contribute to the richness of the sector (Mensah and Blankson, 2014). The hotel industry has been booming in the last few years; its potential for growth is significant with increasing demand for hotel services from both international and domestic travellers since 2007 when oil was found in commercial quantities (Boahen et al., 2013). Despite this, the industry faces some challenges. For example, Hiamey (2012) notes that managers and employees of some hotels in the country lack product knowledge. This is attributed to the poor quality of staff from outsourced companies. Many hotel employees, especially front-line staff, are employed through temporary work agencies. Additionally, the study found lack of commitment on the part of employees as a key factor stifling the growth of some hotels in Ghana.

KM in the hotel industry

Paquette (2005) defines KM as the methodologies and systems employed in the acquisition, capturing and distribution of valuable customer-derived information. His study noted that KM goes beyond capturing simple transactional information and extends to the formation of strategic partnerships and the development of new products. It involves the processes and the tools for capturing, managing, distributing and utilizing knowledge concerning the provision of customer services or products throughout an enterprise. Bouncken (2002) also defines KM as the processes of knowledge identification, acquisition and development of knowledge, knowledge accumulation, retrieval and distribution and knowledge control. From these definitions, it can be argued that the KM process involves knowledge capturing, knowledge acquisition, KS and KA.

Effective and successful KM in the hotel sector is essential to the success of hotels (Rudež, 2010). However, the hotel sector is far behind when it comes to existing KM practices (Hallin and Marnburg, 2008). In the hotel industry, Bouncken (2002) claims that only a small number of hotels have implemented KM systems, although they are likely to gain benefits from KM in delivering an overall quality standard for their geographically dispersed hotels. Existing efforts in KM practices are particularly observed within hotel chains (Hallin and Marnburg, 2008). A study by Bouncken and Pyo (2002) shows that hotel management teams consider KM and information resources to be relevant concepts but are confronted with too many unclear KM strategies, activities and implementation techniques. This finding is confirmed by Yun (2004) who argues that the hospitality industry adapts slowly to KM strategies due to the complexity of the concept, which requires certain skills in data mining, statistics and substantial knowledge of tourism and hospitality management (Hallin and Marnburg, 2008). Rudež (2010) stresses that a unique way to manage knowledge in the sector does not exist. The policies of hotels should contain several mechanisms connected with KM: mechanisms to measure knowledge development, mechanisms to measure knowledge gaps between planned and achieved knowledge, mechanisms to eliminate knowledge gaps, mechanisms to eliminate barriers to knowledge development and mechanisms to transform knowledge in people’s heads into company-owned knowledge.

Knowledge sharing

Noble and Mokwa (1999) note that hotels that disseminate customer knowledge among their different departments are more likely to implement successful marketing activities. Email systems and emails are important for KS and for the transfer of tacit knowledge. Yang (2004) and Yang and Wan (2004) acknowledge several obstacles to KS in hotel companies. One of the difficulties normally mentioned by employees is the difficulty in imitating tacit knowledge based on working experience. They found that past experience is not workable and does not fit today’s environment because of the increase in diversity of people and the different conditions of the business environment. Nonetheless, KS has been found to have an impact on employee performance (Kang et al., 2008; Muhammad et al., 2011).

Knowledge application

KA has been described by many scholars to imply the importance given by a company or its employees to exploit existing knowledge (Boateng and Narteh, 2013; Kuah et al., 2012). This process enables an organization to utilize and leverage internal knowledge to improve its operation, generate knowledge assets and invent new products. Knowledge has been well recognized as an intangible yet important asset for gaining continuous competitive advantage (Boateng and Narteh, 2013). According to Kuah et al. (2012), knowledge utilization and application measures the capability of the workers in using existing knowledge to solve problems, develop new products and inventions and generate intellectual capital or knowledge assets. Swan et al. (1996) have posited that KA can help address the challenges that firms face in extending individuals’ reach beyond their formal communication lines. It is safe therefore to conclude that KA improves SRP.

Service failure and recovery in the hotel sector

Since service production and service consumption often occur simultaneously, service delivery performance depends on various factors, such as the attitudes of front-line employees, the capacity of the service system, the behaviour of the customer concerned as well as that of other customers. Susskind (2002) observes that service failures are inevitable due to the high ‘people component’ of services in the hospitality business. Errors are an inevitable feature of all human endeavour and thus also of service delivery. However, hotels cannot afford to ignore the significant costs of losing customers who can potentially become public relation makers through positive word-of-mouth recommendations for the hotel’s products and services (Liao, 2007). From a customer’s perspective, a service failure is ‘a mistake or error that occurs during the service delivery, causing dissatisfaction’ (Abou and Abou, 2013), and often arises when the service is not delivered as originally planned or expected (Lewis and McCann, 2004). It is important to note that service failures are determined by the customer, not by the service organization (Ennew and Schoefer, 2003), and guests want explanations for service failure (Weiner, 2000). The service marketing literature recognizes two types of service encounter failures: outcome and process failures (Bitner et al., 1990). The outcome dimension reflects what customers actually receive from the service (e.g. a clean hotel room), whereas the process dimension involves how they receive the service, that is, the manner in which it is delivered (Parasuraman et al., 1985).

Abou and Abou (2013) identified examples of service failures commonly experienced by hotel guests, ranging from serious failures (e.g. product or service defect such as slow service or employee behaviour) to less serious failures (e.g. seating problems and lost orders). When service failures occur, service recovery is the primary way to retain customers and minimize the costs associated with customer defection and negative word of mouth (Kristie et al., 2008). Mattila (2001) asserts that if customers are satisfied with the handling of their complaints, dissatisfaction can be reduced and the probability of repurchase can be increased. Furthermore, effective complaint handling can have dramatic impacts on customer retention rate, achieve secondary satisfaction and achieve customer loyalty (Tax and Brown, 2001).

Lewis and McCann (2004) indicated that firms must attempt to resolve problems at the point of service encounter before customers complain or before they leave dissatisfied. However, Smith et al. (1999) argue that service recovery is not limited to responding to customers who voice their dissatisfaction. The purpose of service recovery is to ‘seek out and deal with’ service failures (Johnston, 1995). The ‘seeking out’ part distinguishes recovery from complaint handling; a vast majority of dissatisfied customers do not bother to complain.

Levesque and McDougall (2000) posit that service recovery strategies and tactics should be matched to the specific incident. When evaluating service recovery, three types of resolution justice must be considered (Tax et al., 1998): distributive justice, procedural justice and interactional justice. The first refers to what the offending firm specifically did to offer the customer recovery from the failure and the extent to which this outcome/output offset the cost (input). The second refers to the fairness of the resolution procedures in terms of delay, accessibility, flexibility, and so on. The third refers to the manner in which people are treated during the service recovery process (Hammami and Triki, 2011).

The concept of SRP

Employee SRP can be defined as the behaviours exhibited by customer service employees directly handling customer complaints. Front-line employees, placed at the customer interface and directly responsible for the production and delivery of service, act as boundary spanners for the service company (Bettencourt and Brown, 2003). A burgeoning stream of ‘linkage research’ in customer service (Wiley, 1996) has demonstrated that the attributes, attitudes and behaviours of customer service employees play a pivotal role in translating the internal functioning of a service organization into desirable external customer outcomes (e.g. Liao and Chuang, 2004). In service recovery, although employees who handle customer complaints may not be directly responsible for the service failures and mistakes, many of the recovery activities fall into the domain of these employees (Sparks and McColl-Kennedy, 2001). Therefore, customers will view them as the agents or representatives of the service company and tend to base their recovery evaluations largely on the performance of these employees.

Similarly, SRP refers to particular types of employee behaviours. This conceptualization of SRP is consistent with the general approach of defining performance as employee behaviours relevant to organizational goals (Motowidlo, 2003) and with the view of customer service performance as ‘an employee performing specific behaviours in particular ways to increase customer perceptions of service’ (Ryan and Ployhart, 2003: 380). Motowidlo (2003) also asserts that SRP has two conceptual and practical advantages. First, results may be influenced by factors that are beyond the employee’s control; thus, equating performance to behaviours is less contaminated by situational constraints and opportunities. Second, employee behaviours are more amenable to intervention than is their outcome, thus allowing researchers to apply fruitful psychological principles to managing SRP behaviours.

Some scholars (e.g. Sparks and McColl-Kennedy, 2001) have examined different types of recovery efforts following service failures, including reimbursement/refund, replacement, repair, extra compensation, correction, apology, assuming responsibility, timing–speed, explanation of the causes, politeness, empathy and effort. An apology shows an organization recognizes that the customer has been inconvenienced, that it takes the complaint seriously, and that it will do its best to resolve the complaint (Boshoff, 1999). Johnston and Mehra (2002), on the other hand, believe that a speedy response is one of the keys to successful resolution of customer complaints. A slow response to complaints is unacceptable to complainers (Lewis and Spyrakopoulos, 2001), and complainers take note of how quickly the complaint is handled by the service company (Magnini and Ford, 2004). Providing quick service recoveries results in high levels of positive word-of-mouth communication (Swanson and Kelly, 2001).

According to Lewis and Spyrakopoulos (2001), providing detailed explanations about a problem is one of the most effective organizational responses a service firm can make. Complainers may switch service providers if the causes of problems are not explained (Keaveney, 1995). However, Karatepe and Ekiz (2004) assert that the interactions between complainers and the organization’s front-line employees are most essential in service recovery (Karatepe and Ekiz, 2004). Employees must show respect and politeness (Davidow, 2000) and empathy and willingness to listen (Plymire, 1991). When complainers receive courteous and empathetic responses to their complaints, they are more likely to be satisfied (Goodwin and Ross, 1992).

Methodology

This study employed survey research using convenience sampling. This helped the researchers establish and explain statistically the relationship between KM and SRP. The study population consisted of front-line employees of hotels in Greater Accra region in Ghana; most of the hotels in Ghana are located in this cosmopolitan region (Narteh et al., 2013).

A total of 450 questionnaires were distributed to accessible employees and 324 responses were used in the final analysis. Some front-line employees were not willing to partake in the study. More female respondents (69.5 per cent) than males (30.6 per cent) replied; 53.7 per cent had worked for less than 3 years in the sector, whilst 28.1 per cent had worked for 3–7 years; 11.4 per cent had worked for 8–11 years and 6.8 per cent for more than 11 years.

The questions to measure the constructs KS, KA and SRP were adapted from Paquette (2005) and Ashill et al. (2005). The topics comprising each construct are given in Appendix Table 1. A reliability test was performed to ascertain the reliability of the questionnaire before the final analysis. The constructs were measured on a five-point scale; 1 = strongly agree, 2 = agree, 3 = neutral, 4 = disagree and 5 = strongly disagree. Data were analysed using descriptive statistics and multiple regression. KS and KA were used as the independent variables, whilst SRP was used as the dependent variable. The results showed that the responses are free of common method bias, that is, discriminant validity has been achieved (Bagozzi and Yi, 2012) and that most of the respondents agreed with the statements used to measure the constructs (see Appendix – Reliability, mean and standard deviation values section and Appendix Table 1).

Results and their analysis

Also shown in Appendix Table 1 are the mean scores of all the variables used to measure the various constructs. On a scale of 1 (strongly agree) to 5(strongly disagree), the means range from 1.52 to 2.48. This means that most of the respondents agreed with the statements used to measure the constructs.

The effect of KS and KA on SRP

The results from multiple regression analysis indicate that customer KS and customer KA significantly affect SRP (p < 0.05; see Appendix Tables 2 and 3). KS and KA explained 31.4 per cent of the variations in SRP. This means that KS and KA are essential for employees’ SRP.

Additionally, from the regression analysis output (see Appendix Table 4), customer KA has the greatest influence on SRP. This is not surprising because front-line employees must apply the knowledge acquired from customers regarding their preferences and expectations and must utilize knowledge received from other employees to resolve customers’ complaints or service failures. The results also reveal that customer KS significantly influences SRP. This means that customer KS explains 4.5 per cent of the variance in employees’ SRP.

Discussions, conclusions and recommendation

The study sought to examine the effect of KS and KA on SRP. This study has proven that KS and KA are critical for employees’ SRP. This confirms Kang et al.’s (2008) and Muhammad et al.’s (2011) findings that KM contributes to individual and firm’s performance. In resolving customers’ complaints, front-line employees rely on knowledge from other colleagues, probably those who have dealt with the problem or the customer before. The hotels make knowledge available to their employees at various contact points in the hotel. As asserted by Bouncken (2002), they must make a conscious effort to distribute knowledge across the whole organization to enable employees to deliver superior services to customers and recover from service failure. It is only when customers’ expectations are met and service failures recovered successfully that customers will be loyal.

Although KS is critical to SRP, the full potential or capabilities of the shared knowledge may not be realized unless it is utilized in resolving customers’ complaints or applied in decision making. Liyanage et al. (2009) indicated that KA is the critical part of the KM process. It is at this stage that the value of knowledge is manifested (Rudež, 2010). As this study shows, front-line employees’ SRP is significantly and greatly influenced by KA. Employees are able to learn from past mistakes, solve new problems, make decisions and resolve problems promptly. This confirms Swan et al.’s (1996) findings that KA improves problem solving and decision making.

This study focused on two aspects of the KM process: KS and KA; future studies may include other KM processes and test their relationship with SRP. Additionally, future studies may include customers as part of the respondents to confirm their satisfaction with the service failure response provided by the front-line employees. This study did not ascertain whether the hotels formally engage in KM. Therefore, future studies should investigate formal KM practices in hotels. Furthermore, since limited empirical data exist on the relationship between KM and service recovery performance, more studies must be conducted in other sectors and industries to confirm the relationship. Again, the convenience sampling technique employed impedes generalization from the findings; therefore, future studies should employ a probability sampling technique to make this possible.

Footnotes

Appendix

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