Moderating Effect of the Power-Distance Belief on the Relationship between Employees' Service Failures and Customers'...

This study was designed to examine the moderating effects of the power-distance belief (PDB) on the relationship between employees' service failures and customers' transactional and non-transactional outcomes in a fitness center context. To test the relationships among these variables, we employed two pretests and a main experiment. In Pretest 1, a critical incident technique (CIT) was used to identify the employees' service failure situations in fitness centers. Then, in Pretest 2, we developed two written scenarios that described employees' service failures according to low and high severity and confirmed the differences between these two scenarios with a manipulation check. In the main experiment, we employed scenarios to examine the relationships among service failures' severity, PDB, and customers' non-transactional and transactional outcomes. We used Hayes' PROCESS macro to test the PDB's single moderating effect on the relationship between the service failures' severity and the customers' responses. According to the results, the moderating effect on the relationship between the service failures' severity and fitness center customers' non-transactional and transactional behaviors was confirmed. We extended the understanding of fitness center customers' reactions, depending upon individual PDB to service failures, by comparing low- and high-service failure situations. Our findings also suggest that segmenting fitness center customers may help managers recognize that their customers' varying responses depend on PDB.