Service failure and recovery
strategies in the restaurant sector
An Indo-US comparative study
Kirti Dutta and Umashankar Venkatesh
Institute for International Management & Technology, Haryana, India, and
Department of Consumer Sciences, The Ohio State University,
Columbus, Ohio, USA
Purpose – The purpose of this research is to explore the reasons for service failure in restaurants.
The paper aims to give insights into customers’ perceptions and response regarding service failure and
recovery and to try to draw a parallel between consumers in a developing economy like India and the
same in a developed society, such as USA.
Design/methodology/approach – The paper is empirical and involves data from 200 respondents
from India and the USA. The sampling unit is individual restaurant customers and the data collection
instrument is a structured, non-disguised questionnaire. The questionnaires have been administered
through personal interviews.
Findings – The study found conclusive results on the reasons for service failure in the restaurant
business in the context of developed and developing economies. It also sheds light on the behavioral
aspects of customers’ perception towards these failures and their responses to the same. The paper
further looked into the recovery strategy employed by restaurants and the customers’ perception
towards the recovery strategies.
Practical implications – The study has important managerial implications as it facilitates the
understanding of where and how the failure-points occur and how customers perceive and react to
them. The paper is also helpful in designing policies and procedures to proactively weed-out such
failure-points and, in case of their occurrence, design responses to the same.
Originality/value – The paper is valuable as very little has been done in the Indian context. It also
creates a comparative perspective as to service failure in the restaurant sector between a developed
and a developing country.
Keywords Restaurants, Customer service management, Customer satisfaction, Consumer behaviour,
India, United States of America
Paper type Research paper
Service quality is one of the heavily researched topics in management research with
various studies having been conducted to study different factors that constitute service
quality and its effect on customer perceptions (Parasuraman et al., 1988; Zeithaml,
1988; Sureshchandar et al., 2003; O’Neill and Palmer, 2004). It has been of prime
importance both to academicians and practitioners to zero-in on the factors that
constitute service quality that results in customer satisfaction leading to creating loyal
customers. The importance of customers is further highlighted by the fact that it costs
a lot more to attract a new customer than to retain an old customer (Oliver, 1999).
However, it is estimated that businesses typically lose 50 percent of their customers
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Vol. 19 No. 5, 2007
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