DYNAMICS OF COMPLAINT MANAGEMENT IN THE SERVICE ORGANIZATION

Most literature on consumer services recognizes the importance of input from customers in producing the service (cf., Solomon et al. 1985; Zeithaml, Berry, and Parasuraman 1988); few discuss how input from customers and customer contact personnel is communicated from customer contact personnel at the organizational boundaries to managers who can make decisions regarding policies and procedures. The importance of communication in the delivery of services has been noted by Zeithaml, Berry, and Parasuraman (1988) who examined the gap between consumer expectations and management perceptions of consumer expectations and identified upward communication within the organization as a factor which tends to close this gap. An important potential input from customer contact personnel to management is consumer complaints. Many researchers and consumer affairs personnel would agree that consumer complaints provide organizations with the opportunity to satisfy unhappy customers and prevent brand switching and unfavorable word-of-mouth communications. While effective handling of customer complaints is obviously in the consumer interest, consumer complaints can also offer benefits far beyond the individual complainant. If the organization disseminates information about complaints to decision makers who can take steps to eliminate or reduce the cause of the dissatisfaction, consumer interests will also be served. Dissemination of information for the purpose of finding and correcting the causes of consumer dissatisfaction can be characterized as "complaint management" (Fornell and Westbrook 1979), as opposed to the traditional complaint handling involved in placating unhappy customers. An important component of complaint management is understanding how information from customers flows through the organization to relevant decision makers. This understanding becomes particularly important in some service organizations in which, due to intangibility and simultaneous production and consumption of the service (Bateson 1979), the customer may have repeated contacts with many different employees. Thus, marketers in service organizations have the opportunity to supplement information obtained from marketing research with marketing intelligence provided by customer contact personnel. In the case of consumer complaints, customer contact personnel may be particularly averse to passing important information up the organizational hierarchy. Fornell and Westbrook (1984) cited research from organizational behavior which "suggests that there may be significant impediments to the intrafirm communication of unfavorable or negatively valued messages" (69). The authors noted that consumer complaints may imply inadequacies of previous marketing policies and may be taken as criticism of policy-makers, thus inhibiting communication. Andreasen (1988) also discussed the aversion managers have to consumer complaints because they do not want to hear about weaknesses. To understand the dynamics of complaint management, a number of issues must be addressed. Organizational members who facilitate the successful passing of consumer information to those who can take action on complaints must be identified. Second, barriers and facilitators to communication about consumer dissatisfaction need to be determined. Third, it is important to determine who is likely to engage in complaint handling and complaint management. Finally, the type of complaint may have effects on how it is managed in the organization. As a first step in understanding these issues, a study of complaint management in a hospital was undertaken. Complaints were traced through this service organization from complaint to resolution and beyond, to recommendations for policy or procedural changes that could be enacted to minimize future consumer dissatisfaction. HANDLING AND MANAGING CONSUMER COMPLAINTS The focus of the vast majority of research on consumer complaints has been the dissatisfied consumer. …