How Organizational Complaint Handling Drives Customer Loyalty: An Analysis of the Mechanistic and the Organic Approach

Abstract

This article addresses how an organization's complaint management affects customer justice evaluations and, in turn, customer satisfaction and loyalty. In delineating an organization's complaint management, the authors draw a distinction between two fundamental approaches, the mechanistic approach (based on establishing guidelines) and the organic approach (based on creating a favorable internal environment). The empirical analysis is based on a dyadic data set that contains managerial assessments of companies’ complaint management and complaining customers’ assessments with respect to perceived justice, satisfaction, and loyalty. Findings indicate that though both the mechanistic and the organic approach significantly influence complaining customers’ assessments, the mechanistic approach has a stronger total impact. Moreover, the study provides evidence of a primarily complementary relationship between the two approaches. Another key facet of the study is related to the moderating influences of the type of business (business-to-business versus business-to-consumer) and type of industry (service versus manufacturing). The results show that the beneficial effects of the mechanistic approach are stronger in business-to-consumer settings than in business-to-business ones and for service firms than for manufacturing firms.