The interplay of management response and individual power in digital service environments from a bystander's perspective

Purpose: This study aims to investigate bystanders' perceptions and reactions to management responses to consumer complaints through digital service channels. Specific purposes are to examine how management response (i.e. warmth, competence) and individual differences (i.e. bystander power) work together to influence bystanders' information processing of service recovery. Design/methodology/approach: This research consists of two main studies which employed web-based experiments. Both studies used a 2 (management response: warmth vs competence) × 2 (individual power: low vs high) between-subjects design. A total of 240 participants were recruited from Amazon's Mechanical Turk platform in Study 1, and 233 participants were recruited from a market research company in Study 2. Findings: Study 1 suggested that for the high-power group, warmth-related responses increased service perceptions (perceived diagnosticity and perceived fairness), and for low-power group, competence-related responses enhanced service perceptions. Study 2 confirmed the results of Study 1 and further demonstrated bystanders' service perceptions as the underlying mechanisms to connect the interactive effect of management response and individual power on satisfaction with complaint handling and WOM intentions. Practical implications: The current research demonstrates how companies can effectively manage customers' experiences (i.e. bystanders' experiences) with service recovery management on digital platforms by demonstrating effective management responses to consumer complaints through digital service channels. Originality/value: To the best of our knowledge, this is the first study that explores bystanders' individual characteristics related to the information processing of service recovery through digital service channels.