Joint B2b Recovery Management: The Role of Locus of Failure

Abstract

The benefits of the co-creation of failure recovery are well recognized in the literature. So far, however, there has been little discussion about the collaborative process of joint recovery management and the role played by the locus of failure in this process in the Business-toBusiness context. Drawing on service-dominant logic and service logic, this paper attempts to explore the main sources/locus of failure and their roles in the level of supplier and customer collaboration during the failure recovery activities. Through the qualitative interviews with suppliers and customers firms based in Iran, the authors identify the main locus of failure and analyze the level of collaboration in recovery activities between the supplier and customer firms. The result reveals there are four main sources of failure (supplier-induced error, customerinduced error, an environmental factor, and unknown causation of failure) and two recovery management perspectives (reactive vs. proactive) in the B2B context. Our findings indicate that the level of joint recovery changes depending on the source of the failure in the business environment. Particularly, the level of joint recovery can be shown on a spectrum where the minimum level of collaboration is possible when the error is caused by the supplier and the maximum level of joint recovery happens when the root cause of failure is difficult to identify.

The Value Co-creation Through Joint Failure Recovery: B2B Settings

“…Another stream of marketing research indicates that service failure frequently occurs in the course of the business-to-business (B2B) context and restricts the process of value creation (Hübner et al, 2018). Failure in the business environment has dynamic and complex nature (Nik Bakhsh & Riivits-Arkonsuo, 2021). The prevention and resolution of failure need high interaction between a supplier and a customer, and the customers' participation in the recovery provided might afford the supplier and the customer with opportunities to facilitate the value co-creation process (Payne et al, 2008), through jointly shaping the recovery management activities.…”