Many firms in the service industry have empowered their customer-facing employees to handle service complaints on the spot rather than having the customer contact a corporate customer service center. For example, some airline and hotel companies authorize flight attendants and desk clerks to issue frequent-flyer miles or hotel loyalty points for minor service failures.

Required

a. What nonfinancial benefits might these companies expect from this form of employee empowerment?

b. What are some issues that may arise that create other negative impacts on the firm?

c. In addition to any indirect financial benefits that may result from the program through increased customer and employee satisfaction, can you think of any financial benefits of this initiative for these companies?