Today we identify service articles published in Marketing, Management, Operations, Productions, Information Systems & Practioner-oriented Journals in the last month.
For more information about the alert system methodology go here
For all previous alerts go here
Burton, S. (2018): The Case for Plain-Language Contracts, Harvard Business Review, 96(1), pp.134-139
What do you call a dense, overly lengthy contract that’s loaded with legal jargon and virtually impossible for a non-lawyer to understand? The status quo, says Shawn Burton, the general counsel for GE Aviation’s Business & General Aviation. When Burton was leading the legal team for that division’s new digital-services unit, he and his colleagues noticed that customer contract negotiations were dragging on for months, hampering growth. So they set out to replace the unit’s seven excruciatingly complicated Contracts with one that even a high schooler could understand. In this article, Burton describes how the team went about achieving that goal and the lessons learned along the way. He also shares the results: Customers were delighted with the new contract, and some even signed it without making a single change. The time it took to negotiate contracts dropped by a whopping 60%. And now plain-language contracts are starting to spread inside GE.
Downes, L. and P. Nunes (2018): FINDING YOUR COMPANY’S SECOND ACT, Harvard Business Review, 96(1), pp.98-107
Accelerating technological improvements have changed the speed with which new innovations penetrate markets. Graphed over time, the market adoption of innovations now resembles a dramatic shark fin-a dangerously deformed version of the classic bell-curve model of diffusion. Two forces have compressed the bell curve: near-instant market saturation by new products and the rapid obsolescence of digital components. As a result, many companies struggle to find new sources of revenue after a big-bang success. The authors describe seven mistakes that make enterprises-incumbent businesses as well as startups- highly vulnerable to such flameouts: (1) The company is too lean. (2) Its capital structure is built to fail. (3) It has lost its founder. (4) It’s overserving investors. (5) It “won the lottery” by getting lucky with a big-bang disrupter. (6) It’s held captive by regulators. (7) It anticipates customers who don’t exist. They offer some tactics for ensuring that your business is a second-act survivor: Abandon the successful product before it runs out of steam. Build a platform, not a product. Turn your initial product into a service. Invest in or acquire nascent disrupters.
Hamori, M. (2018): CAN MOOCs SOLVE YOUR TRAINING PROBLEM?, Harvard Business Review, 96(1), pp.70-77
Companies say they want their employees to learn and grow, but in practice, they skimp on training. In a recent study of 1,481 employed learners, more than one-third of them said they had received no training from their companies in the previous 12 months. Instead, many acquire work-related skills through MOOCs (massive open online courses)-usually without their employers’ knowledge or support. This represents a missed opportunity for companies to harness their employees’ efforts in the service of organizational goals. Managers can help team members put their learning into context by providing study time and informal guidance before and during the courses. Having employees pilot courses for one another helps ensure relevance and quality. And tracking completion reinforces the value of learning while increasing the odds that people will stick with their coursework.
Kaplan, R. S., G. Serafeim and E. Tugendhat (2018): INCLUSIVE GROWTH: PROFITABLE STRATEGIES FOR TACKLING POVERTY AND INEQUALITY, Harvard Business Review, 96(1), pp.126-133
More than a billion people in the developing world remain in extreme poverty and outside the formal economy. Traditional CSR programs have done little to alleviate the situation and rarely produce transformative change. Instead of trying to fix local problems, the authors argue, corporations need to reimagine the regional ecosystems in which they participate. They should search for systemic, multisector opportunities; mobilize complementary partners; and obtain seed and scale-up financing from organizations with a mission to alleviate poverty. They should also align the various stakeholders around the new strategy, using proven tools such as a co-created strategy map. These principles are informed by the authors’ experience with several successful inclusive-growth projects. An initiative in Uganda is bringing small maize farmers into the mainstream regional economy, while a training program in El Salvador is giving unemployed youths the skills to work in the country’s growing service sector.
Ashok, M., M. Day and R. Narula (2018): Buyer (dis)satisfaction and process innovation: The case of information technology services provision, Industrial Marketing Management, 68(), pp.132-144
Studying buyer satisfaction within business services is important because if buyer expectations are not addressed, it can endanger the relationship. Dissatisfied buyers can remain silent or switch supplier without notice, damaging the supplier-buyer relationship. Therefore, suppliers often invest substantial effort in collecting feedback with an expectation that it will foster improvements and innovation in processes. However, using a mixed method sequential research design, we find that there is no direct association between the level of dissatisfaction and process innovation: this poses questions about redundancy of feedback collection. We find that there is a time lag between dissatisfaction identification and problem resolution. We also find that there is a cognitive gap between a supplier’s interpretation of the buyer’s expectations and the buyer’s actual expectations. Further, existing processes that are improved repetitively using discontent feedback suffer from diminishing returns. Suppliers need to proactively seek solutions rather than reactively dealing with buyer problems.
Hoang, H. T., S. Rao Hill, S. Freeman, V. N. Lu and B. C. Imrie (2017): Developing service climate in local vs. foreign firms in smaller Asian emerging markets: a resource-based and social exchange perspective, The International Journal of Human Resource Management, 28(4), pp.627-656
AbstractWhile research on drivers of service climate has focused on organisational resources and human resource practices such as training, employee autonomy and inter-departmental support, how these resources interrelate and influence service climate has not been examined, especially in the context of smaller Asian emerging market. Drawing on the resource-based view and its extension on dynamic capability, and social exchange theory, this qualitative study investigates how local and foreign firms in smaller Asian emerging markets create a favourable service climate. Our findings suggest three inter-related groups of factors that influence service climate, namely firm-based, market-based and culture-based drivers. Notably, foreign service firms perform better than their local counterparts in several firm-based drivers (e.g. service-oriented human resource management practices, work facilitation resources). Our study proposes a conceptual framework that integrates inter-relationships of organisational resource-based factors and explains how internal and external factors drive service climate in firms in smaller Asian emerging markets.
Zhu, Q., H. Krikke and M. C. J. Cani√´ls (2018): Supply chain integration: value creation through managing inter-organizational learning, International Journal of Operations & Production Management, 38(1), pp.211-229
Purpose The purpose of this paper is to demonstrate how inter-organizational learning (including supply chain learning and imitation prevention) mediates the relationships between supply chain integration (SCI) and two dimensions of focal firm performance (i.e. customer service performance and innovation performance).Design/methodology/approach A cross-sectional approach was adopted with primary data collected through a survey in China. Data were analyzed using structural equation modeling with partial least-squares estimations.Findings The findings verify that inter-organizational learning mediates the relationship between SCI and focal firm performance. The results of sub-group model analysis illustrate that both powerful and weak focal firms benefit from inter-organizational learning, but in different ways.Research limitations/implications The responses were all from young executives who had four years’ work experience on average. Top-level executives may provide more comprehensive and accurate input for similar future research.Practical implications The results suggest that successfully integrating the supply chain to create customer value requires both supply chain learning and imitation prevention.Originality/value This paper responds to calls for an inter-disciplinary research between supply chain management and inter-organizational learning by taking into account supply chain learning and imitation prevention as links between SCI and both customer service performance for current success and innovation performance for future prosperity.
Halbheer, D., D. L. G√§rtner, E. Gerstner and O. Koenigsberg (2018): Optimizing service failure and damage control, International Journal of Research in Marketing, 35(1), pp.100-115
Should a provider deliver a reliable service or should it allow for occasional service failures? This paper derives conditions under which randomizing service quality can benefit the provider and society. In addition to cost considerations, heterogeneity in customer damages from service failures allows the provider to generate profit from selling damage prevention services or offering compensation to high-damage customers. This strategy is viable even when reputation counts and markets are competitive.
Menon, K. and C. Ranaweera (2018): Beyond close vs. distant ties: Understanding post-service sharing of information with close, exchange, and hybrid ties, International Journal of Research in Marketing, 35(1), pp.154-169
Customers’ post-service sharing of information (PSSI) occurs with a range of social ties typically conceptualized in terms of closeness/tie strength. We extend this research by orthogonally crossing the dimension of closeness with exchange to define close, exchange, and hybrid ties. Study 1, a survey of actual PSSI behavior, supports our conceptualization regarding the dimensions of closeness and exchange defining audiences for PSSI. Study 2, a survey of PSSI intentions, further supports the significance of this extended conceptualization by showing that a model with close, exchange, and hybrid ties has a significantly better fit than a model with only close ties. We provide further evidence of the significance of these three ties by showing that service outcome and process have distinct effects on PSSI to each social tie. Satisfaction has a non-linear effect on PSSI to close ties, and positive and negative linear effects on exchange and hybrid ties respectively. Further, satisfaction is the sole predictor of PSSI to close ties, whereas satisfaction, provider status and customer power interactively drive PSSI to exchange and hybrid ties. Thus, considering close, exchange, and hybrid ties enables a more comprehensive understanding of PSSI.
Bhardwaj, P., P. Chatterjee, K. D. Demir and O. Turut (2018): When and how is corporate social responsibility profitable?, Journal of Business Research, 84(), pp.206-219
Firms in various markets such as health care, financial services, software, consumer goods, etc. spend a significant amount of money on corporate social responsibility (CSR) activities. The literature suggests that consumers take into consideration firms’ CSR activities when making purchase decisions, noting that and doing so either increases their purchase intention or makes them willing to pay higher prices for the firms’ products and services. Unfortunately, notwithstanding its strategic benefits, the empirical findings regarding the impact of CSR on firms’ financials are mixed. In this paper we explore when and why investing in CSR can have positive or negative impact on a firm’s profitability. In doing so, we model two types of CSR (i.e., company ability relevant CSR (CSR-CA) and company ability irrelevant CSR (CSR-NCA)). We allow firms to choose which one to pursue if they decide to invest in CSR, and we incorporate the indirect effect of CSR through expectancy disconfirmation on consumers’ utility, which has been ignored by the extant literature. Our analysis reveals the conditions under which it is optimal to invest in CSR and of what type. Then, we extend our analysis by investigating how the increase in consumers’ appreciation of CSR and increase in consumers’ sensitivity to evaluative context affect firms’ optimal CSR strategies.
Collier, J. E., D. C. Barnes, A. K. Abney and M. J. Pelletier (2018): Idiosyncratic service experiences: When customers desire the extraordinary in a service encounter, Journal of Business Research, 84(), pp.150-161
For many customers “good” service is not enough to create an experience that warrants telling others. Customers want an extraordinary service experience, but what does that really mean? Through an initial qualitative study, the authors tackle this question and conceptualize a term called Idiosyncratic Service Experience (ISE) to represent the interpersonal aspects that create these unique or special service experiences. ISE is a higher order construct made up of a) perceived employee effort, b) surprise, and c) perceived employee empathy. Further, the authors examine the antecedents and consequences of ISEs in a structural model. The results of our study found that ISEs promoted feelings of delight which lead to a higher tolerance to future failures, decreased price consciousness, and stimulated self-enhancing word-of-mouth. We also explore how exception making or the willingness of an employee to break a service norm influences ISEs and evaluations of delight.
Huang, Y.-S., W.-J. Huang and C.-C. Fang (2018): Coordination for distribution of motion pictures in the context of piracy, Journal of Business Research, 85(), pp.209-225
In addition to the traditional DVD rental channel, with the pervasive use of Internet, consumers can also watch motion pictures by purchasing videos on demand (VOD) from an on-line digital channel. However, both traditional and online channels suffer from piracy, which may decrease the overall real demand for such products. This study proposes a revenue-sharing mechanism in which the relationships among the film distributor, traditional DVD rental store, and Internet VOD service provider are investigated to avoid channel conflicts and achieve effective supply chain coordination. We assume that the services provided by the two channels are substitutable for consumers, and consider that both the diffusion effect and piracy rate are essential in order to forecast the demand for motion pictures. A game theoretic model is constructed to obtain the optimal revenue sharing ratio and the equilibrium retail prices for the two channels, with the aim of enhancing overall supply chain performance and profitability. The results show that when piracy is considered in the market, the market potentials of the two channels would decrease, and the price elasticity would increase, so the members of the supply chain in the film industry have to pay more attention to the impacts of cross elasticity, and be more prudent when determining their pricing strategies.
Kuester, S., E. Konya-Baumbach and M. C. Schuhmacher (2018): Get the show on the road: Go-to-market strategies for e-innovations of start-ups, Journal of Business Research, 83(), pp.65-81
Internet-enabled service innovations (e-innovations) are the latest trend in digital entrepreneurship. E-innovation adoption is associated with high levels of uncertainty for potential customers, particularly when e-innovations are launched by start-ups. Go-to-market strategies contain information suitable to convey valuable signals for adoption decisions. Based on a systematic literature review, a historical method analysis, and expert interviews, this study explores how start-ups should design go-to-market strategies to facilitate the adoption of e-innovations. Start-ups launching e-innovations apply the service marketing mix specifically adapted to the digital context. In line with signaling theory, the findings demonstrate that the design of e-innovation go-to-market strategies should primarily signal trustworthiness and usability. For start-ups, this study proposes that trust mediates the relationship between e-innovation trustworthiness signals and adoption and that usability signals moderate the uncertainty associated with e-innovation adoption. These findings offer important managerial implications for start-ups launching e-innovations.
Manes, E. and A. Tchetchik (2018): The role of electronic word of mouth in reducing information asymmetry: An empirical investigation of online hotel booking, Journal of Business Research, 85(), pp.185-196
The hotel industry is plagued with asymmetric information, which may distort prices and reduce incentives to provide quality service. However, both branding and hotel star ratings play an important role in reducing information asymmetry. The question addressed here is whether electronic word-of-mouth (eWOM) – an increasingly popular form of online feedback -contributes to any further reduction in information asymmetry; and, if so, in what manner. Using a dataset of listed prices and guests’ ratings extracted from Booking.com , including several covariates, we show that the price-reputation gradient is much steeper in lower star-rated hotels than in higher star-rated hotels. The gradient is also steeper in unbranded hotels than in branded hotels. As lower star-rated and unbranded hotels are laden with greater quality uncertainty, this finding lends support to the hypothesis that the greater the information asymmetry, the greater the role of eWOM in reducing that uncertainty. Managerial implications are discussed.
Manral, L. and K. R. Harrigan (2018): The logic of demand-side diversification: Evidence from the US telecommunications sector, 1990-1996, Journal of Business Research, 85(), pp.127-141
The logic of demand-side diversification articulated herein explains that a firm’s demand-side strategic assets motivate its choice to diversify into an industry whose production function warrant possession of different supply-side strategic assets. The concept of demand-side relatedness, which underpins the logic of demand-side diversification, clarifies the conditions under which a firm’s demand-side strategic assets provide it with the motivation to explore opportunities for realizing consumer synergies. We invoke this logic to explain the observed variation in the decision of monopoly local telephone service providers to diversify into the competitive long distance telephone services markets in the U.S. during 1990-1996. We find that the likelihood of a monopoly local telephone company to diversify into the long-distance services market within its area of franchise increases in the (a) quality of its customer-base for local telephony, and (b) competitive intensity of the market for long-distance services.
McLean, G., K. Al-Nabhani and A. Wilson (2018): Developing a Mobile Applications Customer Experience Model (MACE)- Implications for Retailers, Journal of Business Research, 85(), pp.325-336
This paper examines the customer experience in relation to retailers’ m-commerce mobile applications. The research aims to understand the variables capable of influencing the customer experience during use of retailers’ m-commerce mobile applications, resulting in the development of a Mobile Application Customer Experience Model (MACE). Through the use of structural equation modelling on a sample of 1024 consumers, the findings of the research highlight the importance of utilitarian factors in driving an effective customer experience. In contrast to the e-commerce environment with regard to flow theory, this research highlights that customers are conscious of the length of time spent completing an activity on an m-commerce mobile application, thus should customers perceive to spend longer than necessary using the application, it will result in a negative customer experience. Additionally, the findings illustrate that gender and smartphone screen-size play a moderating role on the customer experience. The findings provide key managerial implications for retailers on how to provide an excellent customer experience through mobile applications as a service delivery channel.
P√∂ppel, J., J. Finsterwalder and R. A. Laycock (2018): Developing a film-based service experience blueprinting technique, Journal of Business Research, 85(), pp.459-466
The arts are labelled an important driver of value co-creation. Research suggests that businesses can translate the arts into action using the potency of art forms. Film is one of these art forms available to businesses that are willing to draw value from employing arts-based initiatives and approaches. Film as an art form, as well as its technological evolution, is opening up new perspectives for the service industry, also for designing and managing services. The technique of service blueprinting, developed in the 1980s, has since been applied and improved. Nevertheless, the conventional service blueprinting technique does not properly capture and visualise the customer’s service experience. To date, the art form and medium of film has not been suitably conceptualised and integrated into the method of blueprinting of service experiences. This conceptual paper addresses this gap and showcases how digital film can be used for the development of a film-based service experience blueprinting technique to make service issues more comprehensible and service redesign more customer focused.
R√∂tzmeier-Keuper, J., J. Hendricks, N. V. W√ºnderlich and G. Schmitz (2018): Triadic relationships in the context of services for animal companions, Journal of Business Research, 85(), pp.295-303
Triadic service relationships comprise complex relationships in which not only the customer and provider are involved as partners but also other individuals with caregiving relationships with the customer. A triadic constellation may arise in the context of services for animal companions, for example, when veterinarians provide counsel and treatment to the animal companion and its owner. Through interviews with both owners of animal companions and providers of services for animal companions, this study explores typical constellations and characteristics of the three relationships in this service triad. In line with balance theory, the results show that four distinct types of triadic relationships exist in services for animal companions: the harmonious , the dysfunctional , the challenging , and the doubtful triad . The study highlights the potential conflicts and dynamics in the triads to advise providers on how to address customers depending on the types of triads to which they belong.
Suhartanto, D., D. Dean, R. Nansuri and N. N. Triyuni (2018): The link between tourism involvement and service performance: Evidence from frontline retail employees, Journal of Business Research, 83(), pp.130-137
Despite the increasing attention on employee performance, empirical research to explain the consequences of employee involvement in tourism on their service performance has been overlooked. This study proposes new insights into theoretical concepts and evaluates the empirical evidence on the direct relationship between tourism involvement and employee service performance and its indirect relationship through work engagement and job satisfaction in the context of retail. To test the proposed model, this study applies variance-based structural equation modeling partial least squares (PLS) with a sample of 408 frontline store employees in Bandung, Indonesia. The results reveal that tourism involvement directly affects service performance. Further, this study confirms that the linkage between tourism involvement and service performance is partially mediated by work engagement and job satisfaction. The theoretical and managerial practices consequences of these findings are discussed.
Xun, H., H. Zhongqiang and R. S. Wyer Jr (2018): The Influence of Social Crowding on Brand Attachment, Journal of Consumer Research, 44(5), pp.1068-1084
Feeling crowded in a shopping environment can decrease consumer’s evaluations of a product or service and lower customer satisfaction. However, the present research suggests that a crowded environment can sometimes have a positive impact on consumer behavior. Although feeling crowded motivates consumers to avoid interacting with others, it leads them to become more attached to brands as an alternative way of maintaining their basic need for belongingness. The effect does not occur (a) when the crowding environment is composed of familiar people (and therefore, is not considered aversive); (b) when individuals have an interdependent self-construal (and consequently, high tolerance for crowdedness); (c) when people are accompanied by friends in the crowded environment; (d) when the social function of the brands is made salient; (e) when people have never used the brand before; or (f) when the brand is referred to as a general product rather than a specific brand.
Brymer, R. A. and D. G. Sirmon (2018): Pre-Exit Bundling, Turnover of Professionals, and Firm Performance, Journal of Management Studies, 55(1), pp.146-173
Context-emergent turnover theory (CETT) focuses on the contextual factors that influence the turnover-firm performance relationship, yet to date, has not investigated how particular firms weather the detrimental effects of loss more effectively than others. We build on the CETT literature by theorizing that different human resource bundling strategies are central contextual factors that impact the effects of human resource exit. Specifically, we argue that bundling human resources prior to exit in greater concentrations deflects some harmful effects of turnover. Pre-exit bundling ensures that remaining professionals post-exit retain both the capacity necessary to meet job demands and the critical tacit knowledge of firm routines that maintain effectiveness. Our study examines the loss of professionals in a panel of the largest U.S.-based law firms. We find general support for our theory. Results show that losing professionals when the pre-exit bundling had produced greater service-, hiring-, and geographic-concentration lessens the negative effects of loss.
Caldieraro, F., J. Z. Zhang, M. Cunha, Jr. and J. D. Shulman (2018): Strategic Information Transmission in Peer-to-Peer Lending Markets, Journal of Marketing, 82(2), pp.42-63
Peer-to-peer (P2P) marketplaces, such as Uber, Airbnb, and Lending Club, have experienced massive growth in recent years. They now constitute a significant portion of the world’s economy and provide opportunities for people to transact directly with one another. However, such growth also challenges participants to cope with information asymmetry about the quality of the offerings in the marketplace. By conducting an analysis of a P2P lending market, the authors propose and test a theory in which countersignaling provides a mechanism to attenuate information asymmetry about financial products (loans) offered on the platform. Data from a P2P lending website reveal significant, nonmonotonic relationships among the transmission of nonverifiable information, loan funding, and ex post loan quality, consistent with the proposed theory. The results provide insights for platform owners who seek to manage the level of information asymmetry in their P2P environments to create more balanced marketplaces, as well as for P2P participants interested in improving their ability to process information about the goods and services they seek to transact online.
Hartmann, N. N., H. Wieland and S. L. Vargo (2018): Converging on a New Theoretical Foundation for Selling, Journal of Marketing, 82(2), pp.1-18
This article demonstrates that the sales literature is converging on a systemic and institutional perspective that recognizes that selling and value creation unfold over time and are embedded in broader social systems. This convergence illustrates that selling needs a more robust theoretical foundation. To contribute to this foundation, the authors draw on institutional theory and service-dominant logic to advance a service ecosystems perspective. This perspective leads themto redefine selling in terms of the interaction between actors aimed at creating and maintaining thin crossing points-the locations at which service can be efficiently exchanged for service-through the ongoing alignment of institutional arrangements and the optimization of relationships. This definition underscores how broad sets of human actors engage in selling processes, regardless of the roles that characterize them (e.g., firm, customer, stakeholder). A service ecosystems perspective reveals (1) that selling continues to be an essential activity, (2) how broader sets of actors participate in selling processes, and (3) how this participation may be changing. It leads to novel insights and questions regarding gaining and maintaining business, managing intrafirm and broad external selling actors, and sales performance.
Naseer Butt, M., K. D. Antia, B. R. Murtha and V. Kashyap (2018): Clustering, Knowledge Sharing, and Intrabrand Competition: A Multiyear Analysis of an Evolving Franchise System, Journal of Marketing, 82(1), pp.74-92
As franchise systems expand, the clustering and resulting proximity of same-brand outlets often become contentious issues. The increased interactions among outlets may facilitate knowledge sharing, even while inducing intrabrand competition. Prior research has considered each possibility-knowledge sharing or intrabrand competition-in isolation, resulting in conflicting recommendations to the central question of whether multiple same-brand outlets should be close to or distant from one another. In this study, the authors take the perspective of the focal outlet and show that the opportunity to share knowledge afforded by clustering-based proximity may or may not be realized, depending on the motivation and ability of the proximal outlets to share knowledge, the focal outlet’s ability to absorb knowledge, and the governance context. An analysis of more than 8,000 observations on the 988 outlets of a U.S.-based automotive service franchise system from 1977 to 2012, and corresponding outlet-level sales information from 2004 to 2012, provides support for the authors’ hypotheses.
Kihyun Hannah, K. I. M. and V. Kumar (2018): The Relative Influence of Economic and Relational Direct Marketing Communications on Buying Behavior in Business-to-Business Markets, Journal of Marketing Research (JMR), 55(1), pp.48-68
Business-to-business firms spend significant resources in direct marketing to manage close relationships with their customers. Nevertheless, there is limited understanding of how the effectiveness of direct marketing communications varies by value propositions. Typically, direct marketing efforts are geared toward explicitly featuring economic or relational values. To implement an effective communication strategy catering to customers’ preferences, firms should understand how customers consistently evaluate these organizational marketing communications, which ultimately affect their buying behaviors. Therefore, the authors analyze marketing messages and employ content analysis to capture the two distinct types of direct marketing communications. Using data from a Fortune 500 business-to-business service firm and a robust econometric model, they find that the (1) effects of economic and relational marketing communication on customer purchase behaviors interplay and vary over time, (2) latent stock of direct marketing communication affects customer purchase behaviors, and (3) evolution of customers’ perceived importance can be recovered using transaction data. Overall, the authors provide a marketing resource reallocation strategy that enables marketers to customize marketing communications and improve a firm’s financial performance.
De Massis, A., D. Audretsch, L. Uhlaner and N. Kammerlander (2018): Innovation with Limited Resources: Management Lessons from the German Mittelstand, Journal of Product Innovation Management, 35(1), pp.125-146
German Mittelstand firms are globally recognized for their innovation, especially regarding product, process, and service innovation. So what can scholars and managers across the globe learn from the success story of German Mittelstand innovation? Drawing on information collected on innovative Mittelstand firms and extant knowledge on innovation, the resource-based view, and family firm research, the authors investigate how these highly innovative firms flourish and achieve high innovation performance despite the severe financial and human capital resource constraints they face as compared with larger corporations. The authors then present a model identifying and integrating six salient traits of such firms that allow them to efficiently orchestrate their resources to innovate and outcompete their competitors in the global market, enabling those firms to overcome their resource-related weaknesses and turn them into strengths. Specifically, these traits are: niche focus and customer collaboration, globalization strategy, preference for self-financing, long-run mindset, superior employee relations, and community embeddedness. The power of this Mittelstand approach takes full effect only when all six traits operate in an integrated fashion, and the proposed resource-based model serves as a starting point for a more holistic and comprehensive understanding of firm ability to innovate and successfully compete within a specific context. The article outlines the implications of the model of German Mittelstand innovation for research conducted in different fields including innovation, entrepreneurship, strategy, dynamic capabilities, ecosystems, and family business. Finally, the article proposes a future research agenda aimed at improving current understanding of the German Mittelstand ‘innovation strategy’ and its transferability to other contexts, and outlines practical implications for owners and managers worldwide wanting to emulate the German Mittelstand innovation model.
Hofstetter, R., S. Aryobsei and A. Herrmann (2018): Should You Really Produce What Consumers Like Online? Empirical Evidence for Reciprocal Voting in Open Innovation Contests, Journal of Product Innovation Management, 35(2), pp.209-229
In open innovation, firms increasingly rely on online consumer votes to evaluate ideas for new products and services. Votes can represent cost‚Äêeffective external information about idea quality that can inform and facilitate a firm’s task of evaluating and screening of ideas at the early stages of the innovation process. Challenging this perception, we proposed that consumer votes provided in open innovation contests can be socially biased by reciprocal voting. On the basis of theories related to cooperation and social influence, we argued that both gregarious consumers (those who solicit social ties) and consumers who initiate direct reciprocity (those who vote for others) signal a willingness to cooperate that stimulates reciprocal voting from peers. We empirically investigated consumer voting behavior using a unique dataset with information obtained from actual open innovation contests in which consumers could submit their own ideas and see and vote for the ideas of others. We found that both gregariousness and the initiation of direct reciprocity positively influence votes received. Such cooperation pays off for consumers because firms indeed use votes to inform internal idea evaluations. We also found, however, that the votes an idea receives during an innovation contest cannot significantly explain its later revealed quality. Reciprocity may be an effective form of cooperation among consumers, but it has potentially negative implications for firms’ evaluations. Our results also indicated that beyond reciprocity, consumers and firms value different types of ideas, which further differentiates their evaluations. Thus, firms should not only be aware of social biases in votes but also account for the diverging idea preferences of customers.
Jaakkola, E. and A. Hallin (2018): Organizational Structures for New Service Development, Journal of Product Innovation Management, 35(2), pp.280-297
Although previous research has demonstrated that many critical success factors for new service development (NSD) relate to how the NSD function is organized, few attempts have been made to examine the organizational arrangements for NSD in more detail. This study explores what kind of organization structures firms use for NSD, and what implications such structures have for NSD. To expand the previous research heavily focused on standardized services, a qualitative, in‚Äêdepth study of NSD in knowledge‚Äêintensive business service firms was conducted. The study uses a multiple case comparative research strategy where empirical data was collected in nine companies. The study empirically identifies four key organizational arrangements for NSD: NSD in customer relationships, NSD in temporary project teams, NSD in business development units, and NSD in separate R&D units. These arrangements are conceptualized as organization structures characterized by their level and nature of specialization, standardization, formalization, and centralization. The study shows that these key NSD structures can coexist in organizations despite their different and even contradictory characteristics, and highlights the unique opportunities and challenges that each structure brings for NSD. Challenging extant research that has focused on examining particular structural characteristics as success factors for NSD, this study demonstrates that NSD performance may be driven by a configuration of several, simultaneously operating NSD structures rather than by one superior structure. Accordingly, firms should establish organizational approaches that support close connections between different NSD structures.
Beitelspacher, L. S., T. L. Baker, A. Rapp and D. Grewal (2018): Understanding the long-term implications of retailer returns in business-to-business relationships, Journal of the Academy of Marketing Science, 46(2), pp.252-272
Providing end consumers with the ability to return products is an important part of a retailer’s service offering. While research in reverse logistics has explored the movement of returned merchandise upstream, little research examines the relational implications of returned merchandise in the business-to-business (B2B) context. This research explores the relational implications, as well as the impact on the supplier salesperson’s behaviors, of retailer returns. Using a comprehensive dataset which includes longitudinal archival returns data, as well as two waves of retailer surveys reporting on salesperson behaviors, our research investigates how retail returns impact salesperson responses in the following time period, retailer perceptions of the relationship in the following time period, and returns in the following time period. Consistent with a reciprocal exchange perspective, results suggest that when salespeople respond to returns by engaging in relationship building behaviors, these behaviors are noted by the retailer, which in turn results in fewer returns in a future time period.
Lee, N. Y., S. M. Noble and D. Biswas (2018): Hey big spender! A golden (color) atmospheric effect on tipping behavior, Journal of the Academy of Marketing Science, 46(2), pp.317-337
This research examines how gold-related color in atmospherics might influence customer tipping behavior at restaurants. A series of five studies shows that the color gold (as opposed to other colors) in a service atmosphere positively influences consumer tipping. First, a field experiment (Study 1) demonstrates that customers presented with a gold-colored (vs. black-colored) service prop (i.e., bill folder) leave larger tips. Study 2 further confirms this effect of the color gold by validating the findings of Study 1 with a different service prop (i.e., tablecloth). Process evidence demonstrates the underlying mechanism of this effect, whereby a gold-colored service prop increases tipping by influencing status perceptions about the restaurant and the self (Study 3). Additional studies further confirm this by ruling out novelty of the color in this mechanism (Study 4) and by highlighting the effect of status on tipping through status priming (Study 5). The findings of this research have implications for strategic use of color in servicescape design and atmospherics in general.
Wang, C., J. Hoegg and D. W. Dahl (2018): The impact of a sales team’s perceived entitativity on customer satisfaction, Journal of the Academy of Marketing Science, 46(2), pp.190-211
This research investigates the impact of a sales team’s entitativity-the extent to which a group of individuals is perceived as a unified single entity-on customer satisfaction. Four studies demonstrate that a sales team entitativity cue, either based on appearance (e.g., wearing the same outfit) or based on behavior (e.g., explicit coordination in service), leads to heightened perceptions of service quality, which subsequently enhances customer satisfaction. Further, these two entitativity cues are shown to have interactive effects. Specifically, when both cues indicate high entitativity, customer satisfaction with the sales team exceeds the average evaluation of individual team members. However, if at least one cue suggests low entitativity (e.g., different outfits or no explicit coordination), the positive influence of the entitativity cue is undermined and customer satisfaction with the team’s service is mitigated. Product category is identified as an important moderator of the main effect.
Babich, V. and P. Kouvelis (2018): Introduction to the Special Issue on Research at the Interface of Finance, Operations, and Risk Management (iFORM): Recent Contributions and Future Directions, Manufacturing & Service Operations Management, 20(1), pp.1-18
Interface of finance, operations, and risk management (iFORM) is a relatively new research area dealing with timely, complex, and boundary-spanning issues in a variety of settings from start-ups to global enterprises. iFORM research addresses ways to better integrate physical, financial, and informational flows by combining the operational choices of the firm with its financial decisions, and merging information flows between the firm and its customers and suppliers with informational flows between the firm and its investors. We report on the main research themes of the recent iFORM research, based on, and going beyond, papers that appeared in the Manufacturing and Service Operations Management iFORM special issue. We highlight the main emerging contributions in the area. Among the most frequently addressed issues in current research include the following: supply chain finance, such as trade credit and buyer-intermediated finance and their effects on supply chain performance; agency problems, such as risk shifting and managerial short-termism and their influence on operational decisions; contracting between the firmand its investors and how it alters contracting with supply chain partners; and supply risk management in the form of dealing with commodity price fluctuations and supplier performance issues. We suggest four promising directions of future iFORM research: supply chain finance, integrated risk management, start-up and entrepreneurial financing, and asset pricing with supply chains.
Fang, X. and P. Jen-Hwa Hu (2018): TOP PERSUADER PREDICTION FOR SOCIAL NETWORKS, MIS Quarterly, 42(1), pp.63-A14
Top persuaders in a social network are social entities whose adoption of a product or service will result in the largest numbers of other entities in the network adopting the same product or service. Predicting top persuaders is critical to an expanding array of important social network-centric applications, such as viral marketing, customer retention, and political message promotion. This study formulates the top persuader prediction problem and develops a novel method to predict top persuaders. Our method development is rooted in eminent social network theories that reveal several forces central to social persuasion, including social influence, entity similarity, and structural equivalence. Our method innovatively integrates these forces to predict top persuaders in a social network, in contrast to existing methods that primarily focus on social influence. Specifically, we introduce persuasion probability that denotes the likelihood of persuasion conditioned on these forces. We then propose how to estimate persuasion probabilities, develop an algorithm to predict top persuaders using the estimated persuasion probabilities, and analyze the theoretical property of the algorithm. We conduct an extensive evaluation with real-world social network data and show that our method substantially outperforms prevalent methods from representative previous research and salient industry practices.
Feng, H., Z. Jiang and D. Liu (2018): QUALITY, PRICING, AND RELEASE TIME: OPTIMAL MARKET ENTRY STRATEGY FOR SOFTWARE-AS-A-SERVICE VENDORS, MIS Quarterly, 42(1), pp.333-A314
As a new software licensing model, software-as-a-service (SaaS) is gaining tremendous popularity across the globe. In this study, we investigate the competition between a new entrant and an incumbent in an SaaS market, and derive the optimal market entry strategy for the new entrant. One interesting finding is that, when its product quality is significantly lower than that of the incumbent, the new entrant should adopt an instant-release strategy (i.e., releasing its product at the start of the planning horizon). If the initial quality gap of the two products is small, the new entrant is better off adopting a late-release strategy (i.e., deferring the release of the new product until its quality surpasses that of the existing product). We also find that instant-release and late-release are essentially low-quality/low-price and high-quality/high-price strategies, respectively. In addition, we explore the scenario where the two competing products are partially compatible, and characterize the impact of asymmetric incompatibility on the two vendors’ market strategies at equilibrium. We find that the new entrant’s zero-profit region expands as the level of incompatibility between the two competing products increases. Moreover, if the new entrant adopts the instant-release strategy, its profit decreases with the level of incompatibility. When the level of incompatibility is sufficiently high, the instant-release strategy may not be viable for the new entrant. On the other hand, if the new entrant adopts the late-release strategy, its profit increases with the level of incompatibility from its product to the incumbent’s, but decreases with the level of incompatibility in the other direction.
Gopal, R. D., H. Hidaji, R. A. Patterson, E. Rolland and D. Zhdanov (2018): HOW MUCH TO SHARE WITH THIRD PARTIES? USER PRIVACY CONCERNS AND WEBSITE DILEMMAS, MIS Quarterly, 42(1), pp.143-A125
Publishers websites are increasingly presenting content and services that are not created and managed by the website administrators themselves, but are provided by other third parties. While third party content and services provide value and utility to website users, this comes at the cost of user information being shared with the third party. Privacy concerns surrounding information leakage have been growing rapidly. With increasing concerns regarding online privacy and information disclosure, it is important to understand the factors that affect the level of sharing between publisher websites and third parties. In this study, we propose a two-sided economic model that captures the interaction between the users, publisher websites, and third parties. Specifically, we focus on the effect of privacy concerns on the sharing behavior of the publisher website and the impact of users’ privacy concerns on third party market concentration. We then analyze welfare aspects to provide insights on the impacts of industry regulations and policy on users, publisher websites, and third parties. We partially validate the model using an exploratory empirical analysis of publisher website third party sharing behavior and the structure of the industry. To the best of our knowledge, this study is among the first to analyze publisher website decision making in sharing user information with third parties.
Guo, Z. and D. Ma (2018): A MODEL OF COMPETITION BETWEEN PERPETUAL SOFTWARE AND SOFTWARE AS A SERVICE, MIS Quarterly, 42(1), pp.101-A126
Software as a service (SaaS) has grown to be a significant segment of many software product markets. SaaS vendors, which charge customers based on use and continuously improve the quality of their products, have put competitive pressure on traditional perpetual software vendors, which charge a licensing fee and periodically upgrade the quality of their software. We develop an analytical model to study the competitive pricing strategies of an incumbent perpetual software vendor in the presence of a SaaS competitor. We find that,depending on both the SaaS quality improvement rate and the network effect, the perpetual software vendor adopts one of three different strategies: (1) an entry deterrence strategy, (2) a market segmentation strategy,or (3) a sequential dominance strategy. Surprisingly, we find that vendor competition does not always result in higher consumer surplus, and it might lead to a socially inefficient outcome under certain conditions. We further show insights into how the incumbent perpetual software vendor can defend its market position by providing incremental quality improvement through patching and/or by releasing consecutive versions with major quality upgrades. Finally, we extend our model to include the vendor’s quality improvement cost and users’ switching cost. These additional analyses help to identify the effect of different quality and cost factors on the market competitive equilibrium.
Oshri, I., O. Henfridsson and J. Kotlarsky (2018): RE-REPRESENTATION AS WORK DESIGN IN OUTSOURCING: A SEMIOTIC VIEW, MIS Quarterly, 42(1), pp.1-A6
Outsourcing work relies on the supplier’s interpretation of the work delegated by the client. Existing streams of outsourcing literature tend to assume that the supplier should use the same convention as the client to make sense of the work package. In this research, we use a semiotic lens to challenge this assumption by viewing such sense making as a process of decoding symbolic representations. This complementary view involves innovative use of digital technology for re-representing the outsourced work through new conventions. We studied a Chinese business process outsourcing supplier in-depth to learn how such re-representation is achieved through the creation of special-purpose languages. Our research contributes to the Information Systems (IS)outsourcing literature by providing a semiotic view on the design of outsourcing work supported by digital technologies. Three re-representation practices (i.e., dissociating the signifiers, signifying through new conventions, and embedding new conventions in the digital infrastructure) constitute the core of this view. The results are highly significant for outsourcing theory and practice, not least since they suggest that the use of semiotics and visuals for re-representation may enable suppliers to reformulate outsourcing work and the expertise needed to deliver services.
Romanow, D., A. Rai and M. Keil (2018): CPOE-ENABLED COORDINATION: APPROPRIATION FOR DEEP STRUCTURE USE AND IMPACTS ON PATIENT OUTCOMES, MIS Quarterly, 42(1), pp.189-A111
In the United States, the Centers for Medicare & Medicaid Services (CMS) has begun instituting pay-for-performance incentives that reward hospitals based on patient-centric outcomes such as patient satisfaction. Further, to promote the “meaningful use” of health information technology (HIT), CMS has been prompting hospitals to adopt and use HITs. Computerized provider order entry (CPOE) is one such HIT and is designed to improve coordination in patient care teams and consequently patient outcomes. We explore the impact of CPOE-enabled coordination on patient satisfaction with the care team. In a departure from prior research that has tended to treat the team as all clinicians within a hospital unit/clinic, we conceptualize (and operationalize) patient care teams as ad hoc and patient-specific and thus comprised of those clinicians having direct contact with the patient. In a further departure from prior research that has employed lean measures of IS use (e.g., use intentions, duration, or frequency of use), we respond to the call for rich measures of IS use by conceptualizing deep structure use (DSU) of CPOE as patient care team-level usage of CPOE features. We draw upon adaptive structuration theory (AST) to identify faithfulness of appropriation (FOA) and consensus on appropriation (COA) as two related, but distinct, aspects of CPOE appropriation by patient care teams that affect DSU. We also draw on relational coordination theory to conceptualize communicative coordination (CC) as team communication for coordination purposes and theorize that DSU affects patient satis-faction through CC and informating the patient differentially across high/low patient mortality risk conditions. Based on data from 224 patient care teams caring for both low and high patient mortality risk conditions, our results indicate that FOA and COA are salient predictors of DSU, and that the effect of COA on DSU is mediated by FOA. We also observed a significant indirect effect of DSU on patient satisfaction (as mediated by communicative coordination and patient informating), but only for high patient mortality risk conditions. Our findings are important because they show that by using CPOE in a comprehensive manner, patient care team members are better able to coordinate patient care and are able to better inform the patient about their care,ultimately leading to improved patient satisfaction. Additional implications for HIT research and practice are discussed.
Ye, H. and A. Kankanhalli (2018): USER SERVICE INNOVATION ON MOBILE PHONE PLATFORMS: INVESTIGATING IMPACTS OF LEAD USERNESS, TOOLKIT SUPPORT, AND DESIGN AUTONOMY, MIS Quarterly, 42(1), pp.165-A169
User participation is increasingly being seen as a way to mitigate the challenges that firms face in innovation,such as high costs and uncertainty of customer acceptance of their innovations. Thus, firms are establishing online platforms to support users in innovating services, such as iOS and Android platforms for mobile data service (MDS) innovation. Mobile phone platforms are characterized by technology (toolkits) and policy (rules) components that could influence user’s innovation. Additionally, attributes of user innovators (lead userness) are expected to drive their innovation behavior. Yet it is unclear how these characteristics jointly impact users’ service innovation outcomes. To address this knowledge gap, we propose a model that builds on user innovation theory and the work design literature to explain the influences of lead userness, design autonomy, toolkit support, and their interactions on user’s innovation outcomes (innovation quantity) on these platforms. We conceptualize toolkit support in terms of two constructs (i.e., ease of effort and exploration), and design autonomy in terms of three constructs (i.e., decision-making autonomy, scheduling autonomy, and work-method autonomy). The model was tested using survey and archival data from two dominant mobile phone platforms (i.e., iOS and Android). As hypothesized, lead userness, exploration through toolkits, and ease of effort through toolkits positively affect users’ innovation quantity. Additionally, decision-making autonomy and work-method autonomy influence innovation quantity, but scheduling autonomy does not. Further, the proposed three-way interactions between lead userness, toolkit support, and design autonomy constructs on users’ quantity of MDS innovation are largely supported. The findings enhance our understanding of user innovation on mobile phone platforms.
Han, X., N. Yaraghi and R. Gopal (2018): Winning at All Costs: Analysis of Inflation in Nursing Homes’ Rating System, Production & Operations Management, 27(2), pp.215-233
The Nursing Home Compare system administrated by the Centers for Medicare & Medicaid Services (CMS) is widely used by patients, medical providers and payers. We argue that the rating system is prone to inflation in self‚Äêreported measures, which leads to biased and misleading ratings. We use the CMS rating data over 2009-2013 and the corresponding financial data reported by Office of Statewide Health Planning and Development and patients’ complaints data reported by California Department of Public Health for 1219 nursing homes in California to empirically examine the key factors affecting the star rating of a nursing home. We find a significant association between the changes in a nursing home’s star rating and its profits, which points to a financial incentive for nursing homes to improve the ratings. We then demonstrate that this association does not always lead to legitimate efforts to improve service quality, but instead can induce inflation in self‚Äêreporting in the rating procedure. A prediction model is then developed to evaluate the extensiveness of inflation among the suspect population based on which 6% to 8.5% of the nursing homes are identified as likely inflators. We also summarize the key characteristics of likely inflators, which can be useful for future audit.
Lee, S. J., G. R. Heim, C. Sriskandarajah and Y. Zhu (2018): Outpatient Appointment Block Scheduling Under Patient Heterogeneity and Patient No‚ÄêShows, Production & Operations Management, 27(1), pp.28-48
We study outpatient appointment block scheduling policies for single providers under conditions of patient heterogeneity in service times and patient no‚Äêshows. The objective is to find daily appointment schedules that minimize a weighted sum of patients’ waiting time, the physician’s idle time, and the physician’s overtime. We contribute by suggesting new effective sequential block scheduling procedures motivated by actual outpatient clinic practices across the globe and grounded in the successful Toyota Production System load smoothing approach. Our block scheduling policy first assigns a sequence of different patient types within a time block. The policy then allocates repetitive blocks across a planning horizon. We start our analysis by studying the case with zero probability of no‚Äêshows. Under the setting that the physician’s idle time is zero, we propose a polynomial time optimal scheduling approach for two patient types, before demonstrating that the problem with at least three patient types is NP‚ÄêHard. Various extensions to incorporate practical outpatient clinic environment dimensions are considered. We then extend our scheduling approach to incorporate reasonable patient no‚Äêshow probabilities. Finally, our block scheduling approach is adapted for scenarios where outpatient clinics use an open‚Äêaccess scheduling environment, where patients make same‚Äêday appointments. We compare our block scheduling policies against extant scheduling policy, finding our block scheduling policies surpass the benchmark method.
Krishen, A. S. and H. F. Hu (2018): Will they pitch or will they switch? Comparing Chinese and American consumers, Psychology & Marketing, 35(3), pp.210-219
Abstract: This study compares the conditions for consumer satisfaction and word of mouth (WOM) between Chinese and American consumers. The authors utilize a between‚Äêsubjects factorial design experiment to investigate the effect of service experience (positive or negative) and consumption context (hedonic vs. utilitarian) across these two cultures. Results indicate that consumers perceive higher levels of satisfaction and switching costs, and provide higher WOM intention for positive than for negative service experiences. The relationship between service experience and perceived switching costs is further moderated by consumption context and culture. Of importance is the critical mediating role of consumer satisfaction in driving perceived switching costs and WOM intention. The comparison of Chinese and American consumers also reveals the distinct switching behaviors between the two groups of consumers, which can be explained from a cultural perspective. The study findings provide insights into provider‚Äêswitching and WOM‚Äêspreading behaviors by Chinese and American consumers, under hedonic versus utilitarian consumption contexts.
McKechnie, S., P. Nath and J. Xun (2018): New insights into emotion valence and loyalty intentions in relational exchanges, Psychology & Marketing, 35(2), pp.160-169
Abstract: This research examines how emotion valence and future intentions arising from relational exchanges with a service firm depend on a consumer’s level of goal attainment and locus of causality (firm vs. self) of relational outcomes. Drawing on the theories of goal‚Äêdirected behavior and agency of causation, this study hypothesizes that levels of goal attainment and locus of causality influence the generation of positive emotions (gratitude), negative emotions (grudge and guilt), relational mediators (trust and commitment), and subsequent future intentions to remain loyal to the firm. Based on a controlled experiment with 284 subjects in a consumer‚Äêdetermined relationship setting, the research finds that emotion valence and future loyalty intentions are contingent upon the fulfillment of relational objectives of individual consumers and the agency of causation for the outcome of the relational exchanges. In doing so, this study delineates the conditioning mechanism that directs how emotion valence influences behavioral intentions. The study contributes to the consumer behavior and services marketing literatures on consumption‚Äêbased emotions and has significant practice implications for relational behaviors.
Mishra, M. (2018): For Indian online shoppers, have saying and doing parted ways?, Psychology & Marketing, 35(1), pp.5-19
Grounded in the theory of planned behavior (TPB) and based on both perceptual as well as behavioral data, the study explores e-service quality (e-SQ) dimensions’ influence on merchandise value perception (MVP) and how these value perceptions, in turn, impact shopper loyalty intention, finally leading to word-of-mouth (WOM) and store patronization behavior. The model was tested for measurement and structural validity, mediation by MVP, and moderation by gender. Findings suggest that: (1) e-SQ dimensions of efficiency and fulfillment have direct effect on MVP; (2) MVP is a key mediating variable facilitating ‘indirect-only’ mediation between e-SQ dimensions and online shoppers’ loyalty intentions; (3) mediation by MVP is not moderated by gender; (4) strong association between shoppers’ loyalty intention and intention to spread positive WOM; and (5) ‘saying’ and ‘doing’ are incompatible because online shoppers’ loyalty intentions or WOM do not translate into store patronization behavior.