Companies'recovery efforts following service failure are known to be a critical determinant of customer satisfaction and future purchase-related decisions. Using a large corporate database in the meetings and conventions industry, this study re-examined basic assumptions imposed on the effects of service failure and recovery on customer satisfaction and repurchase intentions. Results indicate, in general, that the impacts of service failure and recovery were less critical than traditionally emphasized and that some methodological artifacts could have inflated interpretation of the impacts in previous studies. Such problems are discussed and illustrated in this study. Using a hierarchical regression modeling technique, this study also attempted to determine the boundaries of service failure and recovery impacts under realistic scenarios.
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