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Study Reveals Impact of Unionization on Customer Satisfaction

By Leiah Fundell

March 25, 2024

(MADISON, WI) A new study led by Ishita Chakraborty, assistant professor at the Wisconsin School of Business, unveils crucial insights into the effects of unionization on customer satisfaction in the service industry. Amid a surge in union labor movements across various sectors, including tech giants and popular service chains like Starbucks and Chipotle, Chakraborty’s research fills a critical gap by examining the downstream implications of unionization on customer experiences.

The study, published in the prestigious Journal of Marketing Research, focuses on the recent Starbucks unionization wave as a case study. The research analyzed over 370,000 online reviews from 4,071 Starbucks stores and found a statistically significant decrease in average review ratings following unionization. This decline in customer satisfaction was primarily attributed to negative sentiment towards service quality, particularly employee behavior. Notably, the findings suggest that management responses, such as anti-union tactics and non-participation in negotiations, may contribute to decreased employee satisfaction, subsequently impacting customer perceptions of service quality.

“Unionization in the service industry has far-reaching implications, affecting not only employees but also customer experiences,” said Ishita Chakraborty. “Our study underscores the need for businesses and policymakers to consider the holistic impact of labor relations on all stakeholders. By shedding light on the complexities of this dynamic, we aim to inform strategies that promote both employee welfare and customer satisfaction.”

For interviews or further inquiries, please contact:
Leiah Fundell
Public Relations Manager, Wisconsin School of Business | UW-Madison