Effect of Service Recovery Strategies on Service Quality in Commercial Banks in Kenya

Abstract

All service providers endeavour to provide world class service. World class being a measure of the quality of services provided with reference to the market leader as seen from the customer’s viewpoint. Customers are satisfied when their expectations are met and delighted when their expectations exceeded. However, this is not always possible and non-standard services are experienced by customers. These are collectively called service failures and have negative impact on the firm. This endeavoured to establish the service recovery strategies commercial banks in Kenya use to deal with service failures. The study covered 32 out of 44 commercial banks in Kenya and the effect those strategies have on service quality by using one respondent per bank. The study found out those service recovery strategies: comprehensive formal strategy, accessibility and influence strategy, central authority strategy and intensity strategy are all adopted in almost equal proportions by commercial banks in Kenya. This is explained by the compensating effect the different strategies have on each other. The study also found out that different service recovery strategies had varying effect on different service quality attributes and should thus be implemented in proportions that achieve optimal service quality. The study also found out that comprehensive formal strategy and Central authority strategy are the most adopted by commercial banks in Kenya. The study found out that comprehensive formal strategy and central authority strategy have positive effect on service quality while accessibility and influence strategy and intensity strategy have negative influence on service quality. The study also established that only central authority has positive significant effect on service quality. It is thereby recommended that the study be repeated using more respondents per bank and use of factors as independent variables since comprehensive formal strategy, accessibility and influence strategy and intensity strategy have insignificant influence on service quality.