The Impact of Unionization on Consumer Perceptions of Service Quality: Evidence from Starbucks

42 Pages Posted: 13 Jan 2024

See all articles by Isamar Troncoso

Isamar Troncoso

Harvard Business School

Minkyung Kim

Carnegie Mellon University - David A. Tepper School of Business

Ishita Chakraborty

University of Wisconsin-Madison - Department of Marketing

SooHyun Kim

Marshall School of Business - University of Southern California

Date Written: December 7, 2023

Abstract

The US has seen a rise in union movements, but their effects on service industry marketing outcomes like customer satisfaction and perceptions of service quality remain understudied. In this paper, we empirically study the impact on customer satisfaction and perceptions of service as measured by online reviews using the recent Starbucks unionization wave as a case study. Using a difference-in-differences approach, we find that average review ratings decrease after unionization, suggesting that overall customer satisfaction decreases after unionization. By further leveraging deep learning textual analysis, we find that such a decline is mainly driven by more negative customer sentiment toward service, especially employee behavior. We suggest that a decrease in employee satisfaction, possibly influenced by Starbucks' management responses such as anti-union strategies and non-participation in negotiations, offers a plausible explanation for these findings.

Suggested Citation

Troncoso, Isamar and Kim, Minkyung and Chakraborty, Ishita and Kim, SooHyun, The Impact of Unionization on Consumer Perceptions of Service Quality: Evidence from Starbucks (December 7, 2023). Available at SSRN: https://ssrn.com/abstract=4657689 or http://dx.doi.org/10.2139/ssrn.4657689

Isamar Troncoso (Contact Author)

Harvard Business School ( email )

Minkyung Kim

Carnegie Mellon University - David A. Tepper School of Business ( email )

5000 Forbes Avenue
Pittsburgh, PA 15213-3890
United States

Ishita Chakraborty

University of Wisconsin-Madison - Department of Marketing ( email )

United States
53717 (Fax)

HOME PAGE: http://https://sites.google.com/view/ishitachakraborty/

SooHyun Kim

Marshall School of Business - University of Southern California ( email )

701 Exposition Blvd
Los Angeles, CA 90089
United States

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
558
Abstract Views
1,834
Rank
102,741
PlumX Metrics