Alleviating or exacerbating mistreatment? Leaders' cognitive and emotional reactions to witnessed customer mistreatment

Abstract Customer mistreatment is a prevalent phenomenon in service industries. However, limited studies have focused on leaders' reactions to witnessed customer mistreatment. Drawing upon literature on customer mistreatment, trait activation theory and empathy, we present a comprehensive theoretical framework to explore when and how service managers react to witnessed customer mistreatment. We propose that witnessed customer mistreatment is highly relevant to leaders' trait empathy and they jointly influence leaders' cognitive processes, specifically their interdependent self‐construal, and emotional responses, specifically distress. These reactions, in turn, shape leaders' positive and negative interpersonal behaviours. Across two experiments and a multi‐level, multi‐source and multi‐wave field study, we found that leaders with trait empathy were more likely to construe the self interdependently and experience distress after witnessing customer mistreatment. An interdependent self‐construal then led to more servant leadership behaviour and less incivility, whereas distress resulted in more incivility. In summary, our findings suggest that service managers with trait empathy may both alleviate and exacerbate the detrimental effects of customer mistreatment. Implications for mitigating customer mistreatment from the perspective of service managers are discussed.