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 elds 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 elds of crisis management and services marketing. To demonstrate the potential for reciprocal learning, a key construct from each eld is identied and its potential contribution to learning in the other eld 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 eld 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

An executive summary for managers and executive readers can be found at the end of this issue.

Introduction
In July 2003, an unofcial strike by British Airways (BA) check-in staff at Londons Heathrow airport resulted in BA cancelling hundreds of ights 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 y, 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 ight 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 eld of
The Emerald Research Register for this journal is available at www.emeraldinsight.com/researchregister The current issue and full text archive of this journal is available at www.emeraldinsight.com/0887-6045.htm

services marketing, whereas service crises are researched within the eld of crisis management. This exploratory paper examines the opportunities for reciprocal learning and knowledge exchange between the elds 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 identied 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.

A crisis management approach

Dening 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 difculties for those who seek to dene it closely. Common features of organisational crises Despite these difculties 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 336

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

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Journal of Services Marketing 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 signicant threat to an organisations strategic goals (Shrivastava et al., 1988). Billings et al. (1980) identied 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 conned 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 specied 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 difcult 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). 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 reection on, and study of, momentous and/or adverse events is probably as old as human 337

thought, in fatalistic times all events were in the hands of the gods, as Gloucester comments in Shakespeares King Lear: As ies to wanton boys are we to the gods, they kill us for their sport. Second, investment in crisis preparations may be justied by the signicant costs to organisations in terms of nancial losses, fatalities and missed market opportunities. Such justication, however, is constructed within a web of cultural values and assumptions, the complexity of which is highlighted by the difculties of quantifying the costs of experiencing a crisis. Pearson and Clair (1998), for example, have argued that, from a nancial perspective, Exxon incurred fewer nancial 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 tness 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 difcult to quantify and may be paid by less powerful stakeholder groups. Disasters and crises Crisis management as a eld 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, res, oods 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. 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) identies 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 difculties, exacerbation of the hazards by strangers, failure to comply with regulations and a tendency to minimise emergent danger.

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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 specically 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:
[. . .] 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.

and stress. The interests of this school have usually concerned community-based disasters reecting the sociological origins of this approach. Quarantellis (1988) summary of this schools research ndings 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 eld, 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 nally 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 awed in many ways, from aws in the methods of knowledge acquisition and transfer through to resistance (deliberate or otherwise) to change (see for example, Elliott and McGuinness, 2002). 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 dened as one that gives prominence to the signicance 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.

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:
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 inuenced 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 338

Opportunities for knowledge exchange between the elds 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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Table I Key contributions to crisis management theory

Phase of crisis Pre-crisis of management Key issues 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 re, 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 insufcient 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 nally, 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 References 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

Crisis decision making (Smart and Vertinsky, 1977) Crisis teams (Smith, 2000) Crisis structures (Elliott et al., 2002)

Post-crisis and learning

Turnaround (Smith and Sipika, 1993) Organisational learning from crisis (Elliott and Smith, 2004; Toft and Reynolds, 1992)

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 elds

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 eld has been identied, which is then discussed in terms of its potential contribution to research and learning in the other eld. From the eld of crisis management, we have identied the construct of crisis incubation in the pre-crisis of management phase as being potentially valuable for future services marketing research. From the eld of services marketing, we have identied the construct of customer participation in service production as being potentially valuable for future research into crisis management by service organisations. 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 inuence of breakdowns in information ows 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, reecting 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

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1993). Armistead et al. (1996) for example, identied 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 specic 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 inuential 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 signicance 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 difcult 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 signicant 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 identied numerous sources of customer dissatisfaction in relation to the service delivery process, e.g. poor quality food and/or 340

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 signicance 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 briey 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 inuence 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 specic focus of service recovery research (see, for example, Brown et al., 1996), opportunities remain for a more strategic reection 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 ush 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

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the inuence of on-site customer participation, the social component of the socio-technical system plays a different, arguably more signicant, 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 signicantly customers. This reects the roots of crisis management as a sub-eld that lie rmly 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:
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 ying 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).

reference to recent research in the services marketing eld, placed in the context of service crisis scenarios. Customer roles in services In services research, numerous forms of customer participation have been identied. 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 benets to an organisation from effective customer participation have been identied as increased productivity, the provision of value-added services, and enhanced customer retention and loyalty. For customers, benets of customer participation include convenience, social support, risk reduction and enhanced satisfaction. However, as Harris and Reynolds (2004) observe, the positive, benet-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 signicant meaning in the focal operational and post-crisis phases. In the Aurora case, customer comments at the height of the crisis provide illustrations:
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).

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 341

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 identied eight forms and motives of jaycustomer behaviour that appear to vary according to nancial motivation for, and level of overtness/ covertness of, the behaviour. They are compensation letter writers, undesirable customers, property abuser, service

Crisis management and services marketing Dominic Elliott, Kim Harris and Steve Baron

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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 identied 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 iname 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 justication 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 nancial 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. 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 identied in customer-to-customer interactions that reect generally altruistic motives for the interactions, and that result in mutual help. McGrath and Otnes (1995) identied 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 342

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 nancial 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 difcult 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 benet from the inclusion of an effective process for monitoring complaining behaviour between customers.

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 signicance of the cumulative effects of the failures in relation to crisis incubation. A key nding 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,

Crisis management and services marketing Dominic Elliott, Kim Harris and Steve Baron

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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 identied 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 benet 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 identied 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. Implications for crisis managers Crisis management should afford greater recognition to the nature, form and impact of customer participation in service organisations. There are benets to be gained from monitoring all forms of customer participation, but of particular interest are jaycustomer behaviours, which could iname 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.

comprehensive, interdisciplinary framework for research into service crisis management would be a very valuable and important rst 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 benets to be gained from, a study of customer roles in the specic 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 ourish.

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Suggestions for further research

The whole area of crises in service organisations is relatively under-researched, especially in the services marketing literature. Given this situation, the development of a

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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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