An integrated service recovery system (ISRS) : Influence on knowledge‐intensive business services performance

Purpose – Appropriate management of service failures involves a complex organizational response that allows an effective internal and external recovery, learn from mistakes and introduce future service innovations. Empirical evidence on the organizational recovery practices more suitable to achieve these objectives, leading to superior performance, is limited. The present work seeks to extend the existing literature by identifying the potential dimensions that constitute an integrated service recovery system (ISRS), introducing a strategic, proactive and relational approach to service failure and recovery management, and by proposing a causal model linking the ISRS with performance. Design/methodology/approach – The ISRS dimensions and their attributes are derived from an extensive literature review and suggestions from academics and business experts. Structural equations modeling is used to test a model linking the ISRS (conceptualized as a second order construct), with client, employee and business performance indicators, using data from a Spanish sample of 151 Knowledge‐Intensive Business Services (KIBS). Findings – Results confirm that the firms' ability to approach service recovery from a strategic, proactive and relational perspective allows improving performance among clients and employees, that is, the external and internal recovery to occur, which leads to a superior competitive performance. Practical implications – The ISRS scale can provide managers with a diagnostic tool to analyze their recovery practices and to further improve their competitiveness in the long term. Originality/value – The need to assess the integrative nature of effective service recovery systems has been claimed theoretically. An empirical study showing the link between comprehensive service recovery practices and performance was lacking.