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Journal of Services Marketing

Emerald Article: Crisis management and services marketing


Dominic Elliott, Kim Harris, Steve Baron

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To cite this document: Dominic Elliott, Kim Harris, Steve Baron, (2005),"Crisis management and services marketing", Journal of
Services Marketing, Vol. 19 Iss: 5 pp. 336 - 345
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Crisis management and services marketing


Dominic Elliott, Kim Harris and Steve Baron
Management School, University of Liverpool, Liverpool, UK
Abstract
Purpose Proposes exploring the opportunities for reciprocal learning between the fields of crisis management and services marketing, and
stimulating research on crises experienced by service organisations through the adoption of an interdisciplinary approach.
Design/methodology/approach Initially, an overview and summary are given of a crisis management approach by organisations, in order to
demonstrate the contrast between the research perspectives adopted in the fields of crisis management and services marketing. To demonstrate the
potential for reciprocal learning, a key construct from each field is identified and its potential contribution to learning in the other field is critically
evaluated.
Findings The comparison between the approaches of crisis management and services marketing highlights that a concentration, in services
marketing, on service failures and recoveries at individual service encounters draws attention away from the bigger picture and the multiple
stakeholder roles that may trigger a crisis and, while a crisis management approach acknowledges customers as key stakeholders in a crisis, it fails to
give enough attention to the roles adopted by customers in service organisations, especially through customer participation in service production.
Research limitations/implications The selection of one construct from each field is a limitation in itself, and the suggestions for further research
are not exhaustive. The paper should stimulate new direction in services research.
Practical implications The interdisciplinary approach has provided implications for both services marketers and crisis managers.
Originality/value The paper is breaking new ground by linking the disciplines of services marketing and crisis management as a means of furthering
an understanding of crises experienced by service organisations.
Keywords Disasters, Services marketing, Service failures, Consumer behaviour
Paper type Conceptual paper

services marketing, whereas service crises are researched


within the field of crisis management.
This exploratory paper examines the opportunities for
reciprocal learning and knowledge exchange between the
fields of crisis management and services marketing. Its
contribution is twofold. First, as this journals readership is
mainly services marketers, the paper seeks to introduce the
essence of a crisis management approach by (service)
organisations. Second, two opportunities are identified for
knowledge exchange; the application of the crisis management
construct of crisis incubation in future services marketing
research, and the application of the services marketing
construct of customer participation in service production in
future crisis management research.

An executive summary for managers and executive


readers can be found at the end of this issue.

Introduction
In July 2003, an unofficial strike by British Airways (BA)
check-in staff at Londons Heathrow airport resulted in BA
cancelling hundreds of flights during one of the busiest
weekends of the year. This stranded thousands of passengers
and took days to clear. Even when passengers were eventually
able to fly, their baggage was often missing and/or delayed.
From the perspectives of the passengers concerned, each and
every one of them experienced (sometimes several) failures
with BAs service provision. From the perspective of the
service organisation, it was a very costly crisis, during
which, in addition to receiving worldwide negative publicity,
BA shares dropped more than 5 per cent, and the company
had to pull a multi-million pound advertising campaign that
was planning to show flight delays and empty check-in desks
at rival airlines (USA Today, 2003). Service organisations, in
both the private and public sector, experience crises that
attract negative, often worldwide publicity. The cumulative
impact of service failures may result in crisis, however, in the
main, service failures are researched within the field of

A crisis management approach


Defining the term crisis has proved to be problematic, leading
some writers to conclude that overuse had stripped it of its
meaning (see for example, Eberwein, 1978, Morin, 1976,
Pauchant, 1993, Robinson, 1971; Pauchant and Douville,
1993). The label crisis is often applied to any organisational
problem, which may have negative consequences. The
popularity of the term provides difficulties for those who
seek to define it closely.

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Common features of organisational crises


Despite these difficulties there is some agreement that
organisational crises share a number of features. First, crises
involve a wide range of stakeholders (Shrivastava, 1987,
Smith, 1990, Elliott and McGuinness 2002). Second, there
are time pressures requiring an urgent response (Hermann,
1963, Quarantelli, 1988). Third, a crisis usually results from a
surprise to the organisation (Hermann, 1963). Fourth, there

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Journal of Services Marketing


19/5 (2005) 336 345
q Emerald Group Publishing Limited [ISSN 0887-6045]
[DOI 10.1108/08876040510609943]

336

Crisis management and services marketing

Journal of Services Marketing

Dominic Elliott, Kim Harris and Steve Baron

Volume 19 Number 5 2005 336 345

is a high degree of ambiguity, in which cause and effects are


unclear (Dutton, 1988, Quarantelli, 1988, Smith, 1990).
Fifth, a crisis creates a significant threat to an organisations
strategic goals (Shrivastava et al., 1988). Billings et al. (1980)
identified that these features often reside in the perceptual eye
of the beholder; what constitutes a crisis for one manager/
individual may not for another. A crisis may be a major
incident at another point in time for one organisation or in a
different cultural setting for another. Many service
organisations have experienced crises, which share the
characteristics above. The case that follows, and which is
used as an illustration throughout this paper, provides an
example.
When the Novo virus broke out on P&O cruise ship Aurora
in late 2003, an international problem was triggered (see, for
example, Vasagar and Tremlett, 2003; Searle et al., 2003). A
non-exhaustive list of stakeholders includes: the almost 600
passengers and crew who were confined to cabins; the
passengers and crew unaffected by the virus; P&O, the owners
of the cruise ship; the Greek and Spanish government
agencies; potential cruise customers; the lawyers who sought
to contact Aurora passengers with a view to encouraging
litigation; and the worlds media. Time pressures were evident
in that the cruise was intended to last for 17 days with
specified stops at ports located around the Mediterranean
Sea. The scale of the virus outbreak required the speedy
allocation of further medical personnel and resource (Dolan,
2003). The scale of the virus outbreak and the extended scope
triggered by the negative reactions of the Greek and Spanish
authorities took P&O by surprise. This extended scope
created high levels of ambiguity and uncertainty as P&O
sought to control the tangible health problems, but found the
scope of the political and media induced crises more difficult
to manage. Greek port authorities refused permission for
docking at Athens and the Spanish Government closed its
border with Gibraltar to Aurora passengers. The media crisis
was further exacerbated by the ease with which passengers
could use modern technology to communicate with family,
friends, lawyers and the media, creating another layer of
uncertainty. P&Os credibility came into question as some
passengers criticised the company for its slow and tardy
response. The media re-examined past virus outbreaks on
P&O cruise ships, thereby questioning the companys ability
to manage. Although ostensibly a crisis triggered by the
cumulative impact of many passengers and staff catching a
virus, the scale and scope of the crisis were greatly
exacerbated by other stakeholders and by the extensive
media scrutiny, fuelled in part, by the desire of some
customers for compensation (Hamilton, 2003).

thought, in fatalistic times all events were in the hands of the


gods, as Gloucester comments in Shakespeares King Lear:
As flies to wanton boys are we to the gods, they kill us for
their sport.
Second, investment in crisis preparations may be justified
by the significant costs to organisations in terms of financial
losses, fatalities and missed market opportunities. Such
justification, however, is constructed within a web of
cultural values and assumptions, the complexity of which is
highlighted by the difficulties of quantifying the costs of
experiencing a crisis. Pearson and Clair (1998), for example,
have argued that, from a financial perspective, Exxon incurred
fewer financial costs in responding to the spillage by the
Valdez (1989) than they would have incurred in terms of the
costs of preparing for such a crisis (e.g. investing in double
hulled vessels, providing extensive equipment for containment
of spills and continually assessing fitness evaluations for those
in command; see Nulty, 1990). However, as Pearson and
Clair (1998), also note, an alternative perspective might
criticise Exxons failure to heed warning signals, their ability
to manage the adverse publicity and the quality of
preparations from such a well-known company. The costs of
such failures, in terms of damaged reputation and the
resulting lost market share, are more difficult to quantify and
may be paid by less powerful stakeholder groups.
Disasters and crises
Crisis management as a field of investigation built on the
foundations of earlier studies of disaster. These studies were
primarily concerned with how organisations and social groups
responded to major events, usually natural disasters such as
earthquakes, fires, floods and hurricanes (Elliott and Smith,
2004). Implicit within this approach was the view that disaster
prevention was impossible as such events were almost literally
acts of God. Industrial accidents in North America, Asia
and Europe during the 1970s and 1980s challenged this
implicit view; as such events clearly resulted from industrial
processes and the decisions made by managers controlling
them. That is, there is now a view that organisational crises
are the product of socio-technical failures, possibly resulting
from the technological change that has fundamentally altered
the relationship between systems and their human elements.
Guiding framework
As a basic guiding framework, a crisis management approach
conceives of crisis as occurring in a minimum of three phases:
1 a pre-crisis of management;
2 the focal operational crisis; and
3 a post-crisis phase of recovery and a learning feedback
loop to the next crisis of management.

Rationale for a crisis management approach


The need for a crisis management approach by organisations
can be demonstrated as follows.
First, the number of disasters, accidents and mishaps that
trigger organisational crises has increased. The past 20 years
alone have witnessed many catastrophic events, which have
become embedded in the psyche of society. However, despite
the scale and impact of events such as Bhopal, Chernobyl, the
traumatic legacy of Challenger, the attacks on the New York
World Trade Center and the series of soccer stadia disasters in
the UK, organisations demonstrate a remarkable failure to
learn from such events. Although reflection on, and study of,
momentous and/or adverse events is probably as old as human

Within each phase, crisis management considers the options


available for managers to intervene within the crisis process
(see, for example, Smith, 1990).
Pre-crisis of management
This phase refers to a period in which managerial decisions or
indecisions incubate the potential for crisis. Turner (1976,
p. 378) identifies a range of factors, which contribute to this
latent failure:
Common causal features are rigidities in institutional beliefs, distracting
decoy phenomena, neglect of outside complaints, multiple information
handling difficulties, exacerbation of the hazards by strangers, failure to
comply with regulations and a tendency to minimise emergent danger.

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Volume 19 Number 5 2005 336 345

In a seminal study, Pauchant and Mitroff (1988, 1992) argued


that organisations could be placed on a continuum from crisisresistant to crisis-prone. Crisis-prone organisations were
managed by individuals suffering from serious pathologies
which inhibited effective crisis management efforts. Dealing
specifically with organisational accidents, and the potential
causation of crises, Reason (1997) used the metaphor of Swiss
cheese to illustrate how such failures might occur. The ideal
that the barriers to failure built by organisations remain intact
is rarely achieved; such defences are imperfect, which Reason
likens to slices of Swiss cheese in which the holes represent the
weaknesses. These slices are in constant motion, and at times
weaknesses in one are aligned with weaknesses in others. It is
the alignment of failures in human, organisation and
technological barriers, argues Reason, which leads to
accidents and thus the potential for a resulting crisis.
Olaniran and Williams (2001) have developed an anticipatory
model of crisis that incorporates expectations and actions,
organisational technologies and crisis potentials. Their aim is to
develop a model that enables managers to anticipate failures
and their consequences. Unsurprisingly for a paper among a
collection of public relations studies, the communication
aspects of crisis are emphasised, as is the external dimension of
crisis. What the paper seeks to do is to integrate, in a practical
way, the industrial studies of, for example, Weick (1988),
Mitroff and Kilmann (1984) with studies of crisis
communication such as Beniot (1997).
Crises, it follows, result from failures of management.
Smith (1990, p. 271) describes the process succinctly as:

and stress. The interests of this school have usually


concerned community-based disasters reflecting the
sociological origins of this approach. Quarantellis (1988)
summary of this schools research findings argues that the
greatest improvement to disaster crisis management will be
achieved from improving the behaviour of emergency
organisations. This focus upon the emergency service
distinguishes this literature from that of the management
science field, although both schools of thought share an
interest in the problems of information, communications and
decision making (see Smart and Vertinsky, 1977, for
example). Other researchers have examined the reactions of
victims and rescuers alike (see for example Elliott and Smith,
1993b; Hodgkinson and Stewart, 1993; James, 1988). The
aim of this strand of research has been focused on
understanding how groups, individuals and organisations
deal with the effects of the pressures generated by a crisis
situation.
Post-crisis phase of recovery and a learning feedback loop
Following the immediate crisis handling, a third phase occurs
in which organisations seek to limit the impact of a crisis
incident. This is frequently followed by a period of
consolidation and finally an offensive phase, which may
include scapegoating or an attempt to learn (Smith and Sipika
1993). Active learning (Toft and Reynolds, 1992) feeds back
and alters organisational behaviour in such a way that an
organisation becomes more resilient to crisis.
While organisations may seek to analyse an event after
managing the immediate response, the process of knowledge
acquisition represents only one stage in the learning process.
Active learning requires the translation of newly acquired
knowledge into new patterns of behaviour; such a transfer
may be flawed in many ways, from flaws in the methods of
knowledge acquisition and transfer through to resistance
(deliberate or otherwise) to change (see for example, Elliott
and McGuinness, 2002).

[. . .] the actions or inactions of management can promulgate the


development of an organizational climate and culture within which a
relatively minor triggering event can rapidly escalate up through the system
and result in catastrophic failure.

A crisis management approach makes a clear distinction


between a trigger event and the resulting crisis. For example, a
study of the effects of the bombing of the City of London on
resident banks found that:

Summarising a crisis management approach


In summary, a crisis management approach views crises as
occurring in a minimum of three phases. The approach draws
a distinction between a trigger event and the resulting
organisational crisis, and assumes that organisations
themselves may play a major role in incubating the
potential for failure. There is recognition that, if managed
properly, interruptions do not inevitably result in crises, and it
assumes that managers may build resilience to business
interruptions through processes and changes to operating
norms and practices. For our purposes, a crisis management
approach may also be defined as one that gives prominence to
the significance of the social and technical characteristics of
business interruptions. Finally, a crisis management approach
acknowledges the impact, potential or realised, of
interruptions on a wide range of stakeholders. Table I
summarises some key contributions to crisis management
theory.

The particular organizational crises triggered by the City of London


bombings were largely determined by internal factors the degree of
centralization, hardware and software backup routines and out-of-hours staff
communications. A gas explosion or earthquake might have had similar
effects. Following the Citys Bishopsgate bombing, the Nat Wests data
transfer routines were cited as a key factor in its ability to maintain
operations. Conversely, the routines of the Hong Kong and Shanghai Bank
Corporation did not facilitate a quick return to normality (Swartz et al.,
1995, p. 19).

Crises do not necessarily follow a trigger; effective business


continuity may enable an organisation to withstand a major
shock and continue functioning.
Focal operational crisis
At this phase, the potential for crisis is translated into a
system-wide incident. A key concern of management at this
stage is to contain the event and limit damage; the success of
such efforts will be influenced by management capabilities
and by the degree of tight coupling within the failing system.
Typical subject matter includes studies of crisis
communications and the examination of organisation
structure and crisis response (see for example Dynes, 1970;
Dynes and Aguirre 1979; Hage et al., 1971; Quarantelli,
1988; Elliott et al., 2002; Elliott and Smith, 1993a). For
Dynes (1970, p. 4), crisis situations provided a natural
laboratory for testing hypotheses about organisational and
group behaviour under realistic conditions of severe strain

Opportunities for knowledge exchange between


the fields of crisis management and services
marketing
Although it can be argued that many of the frameworks
underpinning a crisis management approach apply equally to
service- and manufacturing-based organisations, we believe
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Volume 19 Number 5 2005 336 345

Table I Key contributions to crisis management theory


Phase of crisis

Key issues

References

Pre-crisis of management

In this phase, the potential for crisis is incubated. Factors such as


faulty assumptions and cultural values combine with rigid structures
and imperfect communications to create a false view of the world in
which warning signs are ignored. This may occur over many years,
akin to many warm days drying the earth and creating a context in
which one misplaced spark may trigger a forest fire, at which point
we enter the focal incident.
Service failure may be characterised by the cumulative impact of
many adverse moments of truth, each providing a warning signal
to the organisation
At this phase, understanding and containing the crisis, which results
from the trigger, provides the focus for management efforts,
Effective preparations may prevent the trigger incident from causing
a full-blown crisis, as business continuity limits the impact and
permits the business to continue close to normal. If there are
insufficient preparations, the crisis may extend to threaten the
strategic goals of the organisation and those of stakeholders
This phase is concerned with the period following the immediate
response and is largely concerned with defence, consolidation and
finally, if apt, offence as the organisation seeks to reposition itself. It
is at this point that opportunities to learn arise which may break into
the vicious circle of crisis

Crisis incubation (Turner, 1976; Smith, 1990)


Crisis proneness (Pauchant and Mitroff, 1988)
Normal accident theory (Perrow, 1984)
Mapping crisis causation (Shrivastava et al.,
1987)
Business continuity management (Elliott et al.,
2002)
Triggers of crises (Reason, 1997)

Focal operational crisis

Post-crisis and learning

Crisis decision making (Smart and Vertinsky,


1977)
Crisis teams (Smith, 2000)
Crisis structures (Elliott et al., 2002)

Turnaround (Smith and Sipika, 1993)


Organisational learning from crisis (Elliott and
Smith, 2004; Toft and Reynolds, 1992)

crisis management approach above, that the perspective is


orgo-centric, in contrast to the customer-centric perspective
adopted by services marketers. To demonstrate the potential
for reciprocal learning, a key construct from each field has
been identified, which is then discussed in terms of its
potential contribution to research and learning in the other
field. From the field of crisis management, we have identified
the construct of crisis incubation in the pre-crisis of
management phase as being potentially valuable for future
services marketing research. From the field of services
marketing, we have identified the construct of customer
participation in service production as being potentially
valuable for future research into crisis management by service
organisations.

opportunities exist for reciprocal learning in relation to the


two critical themes of services: the management of the
service delivery process and the nature of interaction between
customers and suppliers and between customers themselves
(Laing et al., 2002, p. 480).
Figure 1 provides a visual guide of the structure of this
section. It should be apparent from the brief review of the
Figure 1 Service crisis and failure: knowledge transfer between fields

Crisis incubation in service delivery


Using crisis management terminology, with regard to crisis
incubation, the focus of attention within the services
marketing literature has traditionally been on the influence
of breakdowns in information flows between customers and
front line employees. The extensive and growing literature on
service recovery provides insights into the nature, impact and
organisational response to service failures in the context of the
service encounter (see for example Andreassen, 1999;
Boshoff, 1997; Hoffman et al., 2003; Mattila, 2001; Tax
et al., 1998; Zemke and Bell, 1990; Zhu and Sivakumar,
2001). The service encounter has been referred to as the
actualization of the service, reflecting the inseparability of
production and consumption in service industries (Laing et al.,
2002, p. 480). Carlzon (1987) graphically described the
encounter as the moment of truth, signifying its importance
as the point at which customers evaluate the service offering.
Under the umbrella of service recovery, research has
concentrated on identifying and classifying types of service
failures in different settings (Johnston, 1994; Kelley et al.,
339

Crisis management and services marketing

Journal of Services Marketing

Dominic Elliott, Kim Harris and Steve Baron

Volume 19 Number 5 2005 336 345

1993). Armistead et al. (1996) for example, identified three


types of service failure in an airline environment; service
provider error (lost luggage in transit), customer error, (e.g.
forgotten passport or ticket on the day of travel) and
associated organisation error (strike by baggage handlers).
More recently, Hoffman et al. (2003) investigated failures that
stemmed from servicescape problems as well as customer/
employee information breakdowns (e.g. mechanical
problems, cleanliness issues and design issues). Research has
also considered the appropriateness of specific recovery
strategies from the customer perspective (Hoffman and
Kelley, 2000; Webster and Sundaram, 1998). Mattila
(2001) for example, argues for consideration of the
customers assessment of the magnitude of the failure when
designing an appropriate response. Finally, research has
focused on the recovery evaluation process from the
individual customers perspective (Tax and Brown, 2000).
Swanson and Kelley (2001), for example, investigated how
customer attributions for service recovery (locus of causality,
stability and control), affected verbal behaviour related to
recovery. The impetus for much of the preceding research
stems from the realisation that, within services, recovery
strategies can be more influential than the initial service
encounter with respect to customers overall satisfaction and
future purchase intention (Spreng et al., 1995).
While there is clear recognition within this literature that an
organisation requires a coordinated effort to develop
procedures, policies and human competencies to deal with
service failures, the unit of analysis within the service recovery
literature remains predominantly at the level of the individual
encounter (see for example, Lewis and Spyrakopoulos, 2001).
Additionally, the emphasis is on service failures that occur at
the front-stage, to use the theatre metaphor. Less attention is
given to failures, through organisation errors, that occur at
the back-stage.
From a crisis management perspective, this highlights four
limitations.
First, what does service recovery research tell us about the
cumulative impact and significance of individual failure
incidents on an organisational crisis? Each service failure
may be, potentially, the trigger of an organisational crisis that
is almost literally the last straw! Each of these potential trigger
points is difficult to control because of the intangibility of
services and the tight-coupling associated with the ongoing
interaction between provider and customer. A crisis occurs, it
may be argued, when many customers experience a negative
moment of truth, resulting in either the removal of their
custom or in significant adverse publicity resulting in potential
customers spending elsewhere. It is thus the cumulative
impact of many negative experiences that combine to cause a
crisis. It may also be argued that, given the myriad of negative
encounters, service organisations receive many warning
signals and that crisis avoidance may be facilitated by more
effective reading of such signals. For example, in the case of
the Ford-Firestone crisis, concerns about the safety of
Firestone tyres and Ford vehicles were raised as early as
1992, some eight years before the public crisis and product
recall.
In the case of the cruise ship, Aurora, for example, critical
incident research, used extensively to investigate service
recovery (Bitner et al., 1990, 1994), might have identified
numerous sources of customer dissatisfaction in relation to
the service delivery process, e.g. poor quality food and/or

accommodation and employee actions. Customers might also


have complained about the behaviour of fellow passengers as
part of their response (Bitner et al., 1994). However, such
transaction-focused analysis, which takes place after the
event, fails to capture the significance of the complaint as a
potential trigger point for the organisational crisis that
occurred. In this case, poor passenger hygiene was
highlighted as a major contributory factor to the crisis but it
might only have been mentioned briefly in surveys of
customer dissatisfaction.
Second, it could be argued that a service recovery
approach also fails to anticipate the role other
stakeholders may play in escalating dissatisfaction into a
crisis. For example, the actions of the Greek and Spanish
authorities further exacerbated the potential for dissatisfaction
of customers by denying them access to parts of their
itinerary. Transaction analysis, it could be argued, fails to see
the bigger picture, as dissatisfaction escalates towards a fullblown crisis.
Third, what do current service recovery measures,
implemented within the context of the individual customer
encounter, reveal about core cultural assumptions that
influence crisis incubation? For example, are recovery
procedures simply a tick the box exercise to satisfy
internal quality audits, or are they aimed at resolving both
customer problems as perceived by customers and the
underlying systems, processes, practices and cultural
assumptions which underpin an organisations service
recovery approach? There are dangers that service
organisations tick the boxes of effective recovery without
making more fundamental changes to core assumptions.
While some efforts have been made within the services
literature to move away from the transaction specific focus of
service recovery research (see, for example, Brown et al.,
1996), opportunities remain for a more strategic reflection on
the issues that characterises a crisis management approach.
Fourth, the negative publicity associated with
organisational crises is often the result of back-stage service
failures by an organisation being brought to the attention of a
wider audience on the front-stage in the focal crisis incident.
For example, once evidence was made public of passenger
illnesses, and other passenger inconveniences, on earlier
Aurora cruises; people began to question P&Os capabilities.
It was no longer considered bad luck on P&Os part:
My wife and I took a cruise on the Aurora 18 months ago when it was new. It
had constant problems with the waste plumbing. Our toilet frequently
blocked, the whole corridor had no flush for two days. The staff mopped up
the overspill with bath towels I have no idea if these were re-circulated. A
number of areas smelt of sewerage (Paul Evans, England cited in bbc.co.uk,
2003a).

It is highly unlikely that all their employees were unaware of


back-stage service failures, and yet something prevented
action being taken, thus leading to the incubation of a crisis. A
services marketing emphasis on service failure and recovery
processes with external customers would be unlikely to
uncover the reasons for back-stage failures, nor why they were
not acted upon.
Customer participation in service production
The second opportunity for knowledge exchange stems from
the inseparability characteristic of services, and focuses
attention on customer involvement and participation,
particularly at the focal operational phase of a crisis. Due to
340

Crisis management and services marketing

Journal of Services Marketing

Dominic Elliott, Kim Harris and Steve Baron

Volume 19 Number 5 2005 336 345

the influence of on-site customer participation, the social


component of the socio-technical system plays a different,
arguably more significant, role in a crisis within a service
context than in one within a manufacturing context.
The nature, form and impact of all manifestations of
customer participation and response have been extensively
researched within services marketing (Bowen, 1986; Kelley
et al., 1990; Lengnick-Hall et al., 2000; Lovelock and Young,
1979; Mills and Moberg, 1982), and yet appear to have
received little attention within the crisis management literature.
Indeed it could be argued that a possible weakness of the crisis
management literature concerns its orgo-centrism; that is the
degree to which it focuses on the organisational response to
crisis, arguably to the detriment of other stakeholders, most
significantly customers. This reflects the roots of crisis
management as a sub-field that lie firmly within the area of
organisation studies. Although, as noted earlier, researchers
within crisis management have examined the reactions of
victims and rescuers alike, the focus has been almost
exclusively upon coping strategies, one aspect of customer
response evident within the post-crisis phase. In short, it can be
argued that reacting to crises in an orgo-centric way fails
properly to acknowledge customer perceptions associated with
the organisational responses to the crisis, and undervalues the
potential information to be obtained through monitoring
customer participation (as emphasised by the servuction
system (Langeard et al., 1981)) through all phases of the
service delivery during the crisis.
P&Os response to the Aurora crisis, seen through the
accounts of passengers, demonstrates characteristics of orgocentricism, with little regard for the customers reactions/
perceptions of the crisis response actions:

reference to recent research in the services marketing field,


placed in the context of service crisis scenarios.
Customer roles in services
In services research, numerous forms of customer
participation have been identified. Lovelock and Young
(1979), for example, urged providers to view customers as
partial employees capable of contributing both information
and effort through physical activities and oral exchanges at
various stages of the service delivery process. As Bowen
(1986, p. 377) noted, on-site customers are not just attentive
spectators in the game between persons: they are active
players as well, supplying labor and knowledge to the service
creation process. According to Mills et al. (1983), there are
many occasions when customers have the resources (e.g.
information, ability and motivation) to perform more
effectively than full-time employees. The ability of
customers to perform the role of partial employee has been
termed their relational competence (Bendapudi and Berry,
1997), which is driven by individual variables (customer
characteristics), situational variables (characteristics of the
service situation) and their interaction. Just as employees need
to be trained to operate effectively within a service setting,
organisations need to make sure that customers have a clear
understanding of the role they are expected to perform, have
the ability to perform it and receive valued rewards for
effective performance (Bowen, 1986).
The benefits to an organisation from effective customer
participation have been identified as increased productivity,
the provision of value-added services, and enhanced customer
retention and loyalty. For customers, benefits of customer
participation include convenience, social support, risk
reduction and enhanced satisfaction. However, as Harris
and Reynolds (2004) observe, the positive, benefit-based
conclusions may have arisen from a concentration by service
marketing researchers on the functional customer to the
detriment of the dysfunctional customer. In crisis situations,
customers may have the opportunity or inclination to act in a
dysfunctional way, i.e. play the role of jaycustomer a
customer who deliberately acts in a thoughtless or abusive
manner, causing problems for the organisation, employees or
other customers (Lovelock, 1994). Deliberate thoughtlessness
(to take one aspect of jaycustomer behaviour) is noticed by
other customers and can take on an increasingly significant
meaning in the focal operational and post-crisis phases. In the
Aurora case, customer comments at the height of the crisis
provide illustrations:

Ms Seaborn, 35, from Heywood in Greater Manchester, said she came down
with the bug on Monday after staff took her passport to stop her leaving the
ship and flying home from Gibraltar. It was an absolute nightmare. We were
held hostage. We got a clean bill of health from the doctor, but they wouldnt
let us off or give us our passports. A P&O executive said they would only give
them to us after we set sail from Gibraltar. I am suing them for kidnap they
didnt need to keep us on the ship did they? (bbc.co.uk, 2003c).
Sometimes you would hardly know there is anybody about you dont see a
soul which is most unusual. The atmosphere is a combination of gloom and
worry (passenger Sheila Elton cited in bbc.co.uk, 2003a).
They are sterilising cabins, people with masks are cleaning everywhere the
crew are doing everything they can (passenger Sheila Haigh cited in
bbc.co.uk, 2003a).

It is clear, from the comments of these customers, that actions,


taken by the company in the focal operational phase of the
crisis, led to negative customer perceptions associated with
capture and isolation in a sterile environment. Customers
attain these perceptions through their participant status in
the service production. A better understanding of the
perceptions at an early stage, and a commitment to manage
and monitor customer participation, would lead to an
improvement in crisis management decision making.
What additional insights for crisis management can be
gained from viewing customer participation in services through
a services marketing lens? Given the likely dissatisfaction of
customers involved in crisis situations, we have concentrated
on two features within the wide-ranging literature on customer
participation in service production; the roles that customers
play in service settings (especially those deemed to be
dysfunctional), and the effects on service dissatisfaction when
customers interact with each other (customer-to-customer
interaction). We address these particular features with

This year I have been on Oceana, Oriana and just recently Aurora. I can only
put the blame down to some passengers where they dont wash their hands
after going to the bathroom, then proceed back into the restaurant or other
food areas (Ray Prichard, UK, cited in bbc.co.uk, 2003b).
Not on Aurora, but came off Oceana 24/10/2003. The ship tried their very
best to look after us including issuing disinfected hand wipes as we went into
to buffet. However, there were passengers who felt this was beneath them
and waved them aside. With this sort of arrogance how can ships protect
their passengers? People should think of others and not show off (Lyndsay
Piper, England, cited in bbc.co.uk, 2003a).

Research into jaycustomers, and their different roles and


associated behaviours, can prove to be of great value to crisis
managers. Harris and Reynolds (2004) have identified eight
forms and motives of jaycustomer behaviour that appear to vary
according to financial motivation for, and level of overtness/
covertness of, the behaviour. They are compensation letter
writers, undesirable customers, property abuser, service
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Volume 19 Number 5 2005 336 345

workers, vindictive customers, oral abusers, physical


abusers and sexual predators. Their research complements
earlier studies by Huefner and Hunt (2000) on customer
retaliation and Fullerton and Punj (1993) on the antecedents to
jaycustomer behaviour. Some of the jaycustomer roles identified
by Harris and Reynolds (2004), for example undesirable
customers, property abusers, oral abusers, physical abusers and
sexual predators, are especially prevalent in hospitality services,
often fuelled by alcohol consumption, which was the service
sector in which their empirical work was undertaken. However
jaycustomers adopting behaviours in the remaining three roles
can inflame the situation at each phase in a crisis, whatever the
service context.
Compensation letter writers are those customers who
complain illegitimately, with little or no justification for their
complaint. Such customers are likely to be even more
aggressive with their claims for compensation once they
perceive that the organisation is reacting to negative publicity.
Service workers are customers who work in the service
sector concerned, but behave in a dysfunctional way when
playing the role of a customer in that same sector. Their
knowledge of inherent weaknesses in the service systems, and
of the means for attaining financial rewards from the service
organisation, is used to deliberately plan to cause disruption
to service encounters. Vindictive customers are those who,
according to Harris and Reynolds (2004), either deliberately
and maliciously verbally spread negative word of mouth
concerning an organisation or engage in physical acts of
perceived retaliation or revenge toward either the organisation
or front-line members of staff or attempt to evade
responsibility for their own behaviours through blaming
organisational personnel.

of their service experiences, through the reduction of


customer anxiety, the enactment of the partial employee
role (especially in the absence of rail employees), and the
supply of social interaction (often involving the sharing of
mutual moans about the service). In turn, this helped de-fuse
customer dissatisfaction levels through raising customer
tolerance of service inadequacies and increasing their
capacity to cope with them. The dissatisfaction was largely
due to unreliability and overcrowding of trains, and the lack of
information given by the rail operators. Although the
ethnography provided some examples of customers
complaining about other customers, this was relatively
infrequent, and fellow customers were rarely blamed for
service failures. It seems reasonable to assume that, if
customers start attributing blame for service failures to the
behaviours or attitudes of fellow customers, then the
stabilising effect of customer-to-customer interactions will
weaken, and triggers for crises are more likely to occur.
Customers are clearly vital stakeholders in the all stages of
crisis. There is often a financial incentive, in terms of
compensation payouts in many crisis situations, which
encourages customers to exacerbate any failure, encouraging
the kinds of jaycustomer behaviour outlined above. In a
service setting, where customers participate in service
production, they act as a rogue element, contributing in
ways that are both difficult to predict and to control. While
there is evidence that customer-to-customer interactions can
act as a de-fuser of dissatisfaction with a service organisation,
the stabilising effect can become a de-stabilising effect if
customers begin regularly to attribute blame to other
customers and/or communicate their perceptions of the
organisations crisis response actions by word of mouth to the
detriment of the companys image. It is argued, therefore, that
service business continuity processes would benefit from the
inclusion of an effective process for monitoring complaining
behaviour between customers.

Customer-to-customer interactions
In many service settings, a feature of customer participation,
highlighted by the servuction system, is the opportunity for
customers to interact with each other during service
encounters. Customers are often in a position to talk on-site
with other customers and to help, advise or abuse them.
Customer roles have been identified in customer-to-customer
interactions that reflect generally altruistic motives for the
interactions, and that result in mutual help. McGrath and
Otnes (1995) identified customers adopting the roles of
proactive helper, reactive helper and helpseeker in their
interactions with other shoppers in a US retail store
environment. Empirical research undertaken in the UK
provided additional evidence of these roles being played in
retail (Harris et al., 1999), leisure (Parker and Ward, 2000)
and transport (Harris and Baron, 2004) services. These
studies sought to draw attention to the fact that customers
can, and frequently do act positively to other customers, and
their ability and willingness to share knowledge and offer
advice to other customers can represent an effective,
additional human resource to a service organisation.
The study by Harris and Baron (2004) an ethnography of
a UK rail passenger service examined customer-tocustomer conversations in a service industry characterised
by high levels of customer dissatisfaction. Customers
responded to high levels of customer dissatisfaction in a
were all in it together, so lets make the best of it manner,
rather than with jaycustomer behaviours. Indeed, the
customer-to-customer conversations were having a
stabilising impact on customer expectations and perceptions

Managerial implications
There are extremely serious consequences for service
organisations that have a crisis. For many, it means going
out of business completely. The implications outlined in this
section represent an initial attempt to bring issues, raised
through an interdisciplinary approach to service business
crisis management, to management attention.
Implications for services marketers
If service organisations wish to reduce the chances of crisis
incubation, the earlier discussion suggests a number of
directions to consider.
The collection of critical incident data on service failures,
from both customers and employees, has been found to yield
valuable information, and supports monitoring procedures.
However, rather than simply classifying incidents, there is
scope to examine incidents through a crisis management lens.
This would permit taking a historical/developmental
perspective on failures, thereby aiding our understanding of
the impact and significance of the cumulative effects of the
failures in relation to crisis incubation.
A key finding from crisis management research concerns
the notion of the crisis prone versus the crisis resilient
organisation (see Pauchant and Mitroff, 1988, 1992). Inward
looking, narcissistic organisations are more prone to crises,
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Volume 19 Number 5 2005 336 345

in part because they fail to see the impact on other


stakeholders and thus fail to manage a crisis in its entirety.
For example, when Shell sought to dispose of the Brent Spar
oilrig in the North Atlantic, having identified it as an
environmentally friendly option, they were surprised by
Greenpeace, the environmental campaign group. Through
the clever use of media images and an emotional argument,
Shell were forced to step down after a protracted battle which
saw its image tarnished (see Elliott et al., 2002). As the Aurora
case also illustrates, crisis events involve many stakeholders;
indeed the crisis event may be seen to result from the complex
interplay between these groups with different needs and
objectives. Crises are multifaceted events and have complex
causes. Effective crisis management requires a sound
understanding of the power, urgency and legitimacy (real or
perceived) of the different stakeholders if an incident is to be
effectively managed. For P&O the involvement of the Greek
and Spanish authorities, the media scrutiny and resulting
adverse publicity escalated what might have otherwise have
been simply another case of cruise ship food poisoning. Shell
now employs environmental activists to advise its board of
directors to ensure that they remain in touch with alternative
perspectives. Service organisations might benefit by seeking to
identify and understand possible events from different
stakeholder perspectives.
For service marketers, the predominant approach towards
implementing service recovery strategies is focused on
resolution at the level of individual transaction. Such a
focus is unlikely to bring about changes in core cultural
assumptions by the service organisation, and may fail to
eradicate the underlying causes of service failures, such as
rigidities in institutional beliefs, and a tendency to minimise
emergent danger (as identified by Turner (1976) above).
Service organisations can apply the methods that are used to
manage external complaints to their internal staff complaints/
concerns, in order to monitor back-stage service failures, and
subsequently identify the organisational assumptions that may
be incubating them.

comprehensive, interdisciplinary framework for research into


service crisis management would be a very valuable and
important first stage. The three phases of the crisis
management approach could provide the foundations for
such a framework. This development would respond to recent
calls for a widening of service research and the employment of
multidisciplinary methods to research service organisations
(Grove, 2003; Rust, 2004). Particularly the contribution of
Olaniran and Williams (2001) anticipatory framework of
technological crisis might be well applied to the services
context. The examination of customer-to-customer
interactions during and after a crisis in a service would also
make a valuable contribution to an understanding of how
crises may escalate. Conversely, an area ripe for study
concerns the point at which service recovery evolves into
service crisis, particularly where multiple failures occur, but
where spatial and temporal issues hamper communications.
It has been argued that service failure and recovery research
should move beyond a concentration on the individual
encounter. This could involve the development of models for
determining the cumulative effects of service failures, or for
tracking the movement of back-stage failures to the frontstage. In the latter case, this could be seen as an extension to
the range of applications of service blueprinting.
For crisis management research, there is scope for, and
benefits to be gained from, a study of customer roles in the
specific context of a crisis. What customer behaviors result in
stabilising or de-stabilising effects for the organisation in the
three crisis phases?
While the earlier discussion highlighted the potential effects
of on-site customer-to-customer interactions during service
crises, time pressures on an organisation during a crisis are
often increased through customers (past and present)
communicating with each other online, spreading negative
word of mouth (Hennig-Thurau et al., 2004; MacLaren and
Catterall, 2002). Studies of on-line communities, drawing on
research into consumerism and consumer activism, should
provide insights into these behaviours.
These research ideas are by no means exhaustive. Overall, it
is hoped that the ideas presented in the paper provide a
stimulus for new research directions to flourish.

Implications for crisis managers


Crisis management should afford greater recognition to the
nature, form and impact of customer participation in service
organisations. There are benefits to be gained from
monitoring all forms of customer participation, but of
particular interest are jaycustomer behaviours, which could
inflame a crisis, and the stabilising impact of customer-tocustomer interactions on customer dissatisfaction levels.
These particular effects of customer participation, at the
three phases of a crisis, are probably too subtle to be detected
by the self-completion customer satisfaction surveys that are
commonplace in the service industries, most of which, in any
case, do not seek feedback on behaviours of fellow customers.
There is scope for more imaginative procedures for
monitoring customer perceptions (including those of the
behaviours other customers) as a means of anticipating and
preventing potential de-stabilising behaviours of the customer
stakeholders.

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Further reading
Rodie, R.A. (2002), Customer participation in services
production and delivery, in Swartz, T.A. and Iacobucci, D.
(Eds), Handbook of Services Marketing and Management,
Sage Publications, Thousand Oaks, CA, pp. 111-25.

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