After the horse has left the barn it's too late to close the door: a study of service firms’ conflict handling ability

Despite significant recent research attention to service failures and service recovery, few efforts investigate preemptive strategies as a means to avoid service failures. Drawing on equity theory, we introduce the concept of conflict handling, which refers to a service firm’s capability to anticipate and equitably resolve conflicts in service interactions. In a survey of two service contexts in Malaysia with more than 800 respondents, the authors find that conflict handling influences satisfaction and trust but not customer perceptions of customer orientation. Also, trust and customer perceptions of customer orientation mediate the relationship between conflict handling and customer loyalty and between customer satisfaction and customer loyalty. Page 1 of 8 ANZMAC 2009