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Exit, Voice and Loyalty Published: Sunday, December 13, 1998 By: Dr. Manuel Angel Morales

The 90`s have been years of great concerned with the responsiveness of organizations to the interests of their clients and the larger public. The message is that all organizations must provide benefits to external publics (customers, clients, citizens), as a necessary condition for their continued existence. The contributions and value-added to these publics vary according to the nature of the organization and may involve direct payments for product or services received, indirect support in the form of taxes, and normative support in the form of goodwill and legitimacy. A concern with organizational responsiveness to the demands of the external publics is increasingly raised in connection with all types of organizations.

Sometime ago the distinguished professor Albert O. Hirschman wrote an important and influential book, Exit, Voice and Loyalty where he distinguished between two general options open to disgruntled publics wishing to express dissatisfaction with the type and quality of services received. The first, Exit, involves the withdrawal of patronage. Dissatisfied customers simply withdraw from a relation with one organization and seek another that is expected to serve their interests more adequately. Exit is the typical economic response; it is typified in the relations between organizations and their attentive customers and presumes the existence of viable alternatives. The second option, Voice, is broadly defined as any attempt at all to change (rather than to escape from) an objectable state of affairs. Voice is the typical political option expressed through petitions, complaints and protest, and it is more likely to be exercised in situations in which a kind of monopoly exists. Voice is a more costly option than exit, demanding at a minimum the investment of time and energy. In extreme cases, its exercise can entail personal and institutional risk and sacrifice.

Organizations can greatly benefit from publics that take the trouble to exercise the option of voice rather than exit. The quality of services provided by organizations can deteriorate when alternative suppliers are available to some, since the more discerning customers withdraw their business, leaving those who are less quality-conscious (or who have no alternatives) to endure substandard service. Such problems are especially characteristic of lazy monopolies. Incentives need to be provided to encourage quality-driven customers to exercise Voice before resorting to Exit, and this is one of the mayor functions of Loyalty.

The economy of the market (Exit) must be supplemented with the sociology of service (Voice) in order to achieve the psychology of social commitment (Loyalty). After all, there is no such a thing as a perfect organization. An organization that is excellent in one context or under one set of criterion may be weak under another…

Copyright 1998 QBS, Inc.
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