Today we identify service articles published in Marketing, Management, Operations, Productions, Information Systems & Practioner-oriented Journals in the last month.
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Mirvis, P. and B. Googins (2018): Engaging Employees as Social Innovators, California Management Review, 60(4), pp.25-50
This article explores a variety of ways employees are being engaged as social innovators in their companies or as co-creators in partnerships with other businesses, NGOs, and/or government agencies. They are engaged as intrapreneurs in company innovations contests, in partnerships with external social entrepreneurs, and in pro bono global service programs, and as members of innovation teams in organization-wide innovations. The study compares and contrasts four employee engagement platforms and assesses their impact on participating employees, companies, and communities from these efforts.
Link: http://dx.doi.org/10.1177/0008125618779062 [Google]
Manning, S., S. Massini, C. Peeters and A. Y. Lewin (2018): The changing rationale for governance choices: Early vs. late adopters of global services sourcing, Strategic Management Journal, 39(8), pp.2303-2334
Research Summary: This article studies how the logic of firm governance choices varies as a function of the time of adoption of particular sourcing practices. Using data on the diffusion of global business services sourcing as a management practice from early experiments in the 1980s through 2011, we show that the extent to which governance choices are affected by process commoditization, availability of external service capabilities, and past governance choices depends on whether firms are early or late adopters. Findings inform research on governance choice dynamics specifically in highly diverse and evolving firm populations. Managerial Summary: This article considers how firms have chosen delivery models in global services sourcing decisions over time. Based on comprehensive data, we make two major observations. First, we find that firms that began with global services sourcing early, invested mainly in their internal sourcing capacity, while outsourcing only simple tasks to external providers, whereas firms that started later invested more in their capability to outsource various services to increasingly sophisticated suppliers. Second, we find that initial investments in internal or external sourcing capabilities have a strong effect on future choices of delivery models. This explains why, even today, firms vary greatly in how they implement global sourcing decisions, and it suggests that newcomers should learn from their own peer group rather than from highly experienced firms.
Link: http://dx.doi.org/10.1002/smj.2795 [Google]
(2018): CUSTOMER COMPATIBILITY DRIVES SATISFACTION AND PROFITS, Harvard Business Review, 96(4), pp.22-22
The article discusses the role that the customer relations concept referred to as customer compatibility plays in corporate profits and customer satisfaction, referencing the working paper “The Customer May Not Always Be Right: Customer Compatibility and Service Performance,” by Ryan W. Buell, Dennis Campbell and Frances X. Frei.
Link: http://dx.doi.org/ [Google]
Wilson, H. J. and P. R. Daugherty (2018): COLLABORATIVE INTELLIGENCE: Humans and AI Are Joining Forces, Harvard Business Review, 96(4), pp.114-123
Artificial intelligence is transforming all sectors of the economy, but there’s no reason to fear that robots will replace all human employees. In fact, companies that automate their operations mainly to cut their workforces will see only short-term productivity gains, say the authors. Their research, involving 1,500 firms in a range of industries, shows that the biggest performance improvements come when humans and smart machines work together, enhancing each other’s strengths. People need to train AI agents, explain their outputs, and make sure they are used responsibly. AI agents, in turn, can assist people with information gathering, data crunching, routine customer service, and physical labor, thereby freeing them for higher-level tasks that require leadership, creative thinking, judgment, and other human skills. To get the most out of AI, companies need to redesign their business processes. After deciding what needs improvement—their operational flexibility, speed, or scalability; their decision making; or their ability to personalize products and services—they can devise appropriate solutions. That will mean not only implementing AI technology but also developing employees who can work effectively at the human-machine interface. The authors describe how a number of firms are already taking these steps and optimizing collaborative intelligence. But many more should follow their example. INSETS: THE VALUE OF COLLABORATION.;ENHANCING PERFORMANCE.;REVEALING INVISIBLE PROBLEMS..
Link: http://dx.doi.org/ [Google]
Kingshott, R. P. J., P. Sharma and H. F. L. Chung (2018): The impact of relational versus technological resources on e-loyalty: A comparative study between local, national and foreign branded banks, Industrial Marketing Management, 72(), pp.48-58
The emergence of online and mobile technologies has necessitated the need to re-examine the viability of relationship marketing in nurturing business-to-business service relationships. By drawing upon the resource-based view (RBV), social exchange (SE) theory and socio-technical systems (STS) theory, this research explores the differences in the process by which local, national and foreign branded banks are able to integrate their online platforms into their relational efforts. Data from a sample of 336 small and medium-sized business customers in the New Zealand banking industry shows that both offline and online service quality affect satisfaction with their e-banking services, which in turn affect the trust and commitment towards the bank and loyalty towards e-banking. In addition, the effect of trust and commitment on loyalty towards e-banking is significantly stronger for the local and national branded banks compared to foreign branded banks. Our findings extend current research on B2B relationship marketing and offer useful managerial insights for professional B2B services providers.
Link: http://dx.doi.org/10.1016/j.indmarman.2018.02.011 [Google]
Best, B., S. Moffett, C. Hannibal and R. McAdam (2018): Examining networked NGO services: reconceptualising value co-creation, International Journal of Operations & Production Management, 38(7), pp.1540-1561
Purpose The purpose of this paper is to explain how value is co-created in a many-to-many (MTM) context. The authors use a case study of a non-governmental service delivery consortium engaging multiple actors to examine how value is co-created beyond the buyer-supplier dyad.Design/methodology/approach An explanatory case study of a consortium of seven UK non-governmental organisations (NGOs) delivering public service contracts is presented. Multiple data collection methods are combined; semi-structured interviews (n=30) and focus groups with internal stakeholders (n=5), participant observations (n=4) and document analysis.Findings The authors use three illustrative empirical examples to show how different sources, types, enablers and mechanisms of VCC are evident during service provision activities. The findings show how different service provision activities utilise different dimensions, leading the authors to suggest that dimensions of VCC may be context dependent.Research limitations/implications As consortia differ in their context and function, the findings may not be generalisable. Nevertheless, they provide specific examples of sources, types, enablers and mechanisms of value co-creation (VCC) that may be applicable to private, public and NGOs.Practical implications Understanding how value is co-created with multiple stakeholders can offer competitive advantages likely to lead to improved sustainability, impact and performance.Originality/value The empirical study offers a reconceptualisation of VCC in a MTM context. The paper combines disparate perspectives of VCC to offer a more holistic perspective.
Link: http://dx.doi.org/10.1108/IJOPM-10-2015-0644 [Google]
Steinbach, T., C. M. Wallenburg and K. Selviaridis (2018): Me, myself and I, International Journal of Operations & Production Management, 38(7), pp.1519-1539
Purpose This research focuses on the role of customer behavior in service outsourcing relationships that are governed by outcome-oriented contracts. The purpose of this paper is to explain how non-collaborative customer behavior impedes the effectiveness of outcome-oriented contracts to align the goals and incentives of the customer and service provider, and leads to service provider opportunism.Design/methodology/approach Nine hypotheses are developed regarding customer behavior and the reaction of the service provider to this. These are tested using structural equation modeling with data from 213 service outsourcing relationships.Findings Outcome-orientated contracts in service outsourcing may have unintended consequences because they create value attribution ambiguity. This ambiguity induces non-collaborative customer behavior, which, in turn, results in service provider opportunism. This reveals a paradox, where customer behavior aimed at curbing service provider opportunism instead induces such opportunism. This chain of effects can be counteracted by increased outcome attributability, which reduces the ambiguity and, thus, the motivation for non-collaborative customer behavior.Originality/value This research extends the existing literature by stressing that non-collaborative customer behavior is a key reason why outcome-oriented contracts fail in effectively governing outsourcing relationships, and that this can be counteracted by increased outcome attributability.
Link: http://dx.doi.org/10.1108/IJOPM-05-2017-0297 [Google]
Bachnik, K., R. Nowacki and T. S. Szopiński (2018): Determinants of assessing the quality of advertising services – The perspective of enterprises active and inactive in advertising, Journal of Business Research, 88(), pp.474-480
This paper provides a comparative analysis of the perception of advertising services, addressing the intensity of advertising services and the evaluation of advertising quality. Using multidimensional scaling techniques for 505 enterprises in Poland, the authors demonstrate that managers employ different criteria to assess the quality of advertising services. The selection of these criteria is influenced by the company’s size and its experience cooperating with advertising agencies. A statistically significant relationship occurred between the size of the company and the choice to use or not to use the services of advertising agencies, the companies’ choice to use or not to use the services of advertising agencies and the perception of the importance of factors that determine advertising agencies’ quality by the managers of these companies.
Link: http://dx.doi.org/10.1016/j.jbusres.2017.12.017 [Google]
Bouncken, R. B., M. Ratzmann, R. Pesch and S. M. Laudien (2018): Alliances of service firms and manufacturers: Relations and configurations of entrepreneurial orientation and hybrid innovation, Journal of Business Research, 89(), pp.190-197
Alliances between service firms and manufacturers in pursuit of joint hybrid innovations face both advantages and challenges. This study analyzes the ambivalence in service firm-manufacturer alliances via complementarities versus divergences. The mixed method approach consists of a multiple case study of 12 firms, regression analysis, and a fuzzy-set qualitative comparative analysis (fsQCA) of a sample of 190 firms. The three methods deliver consistent and robust results that complement each other. Findings are that a service firm’s entrepreneurial orientation enhances joint hybrid innovation and alliances with manufacturers. Divergences between firms have ambivalent influences on joint hybrid innovation, depending on the service firm’s entrepreneurial orientation and the equity arrangement of the alliance.
Link: http://dx.doi.org/10.1016/j.jbusres.2018.01.039 [Google]
Climent-Serrano, S., E. Bustos-Contell, G. Labatut-Serer and A. Rey-Martí (2018): Low-cost trends in audit fees and their impact on service quality, Journal of Business Research, 89(), pp.345-350
The 2008 financial crisis has transformed the business environment. The number of audited firms has fallen considerably since the crisis, leading to a reduction in the cost of auditing services as a result of fierce competition among auditors. This drop in audit fees is of great concern for audited firms because it may be correlated with a fall in audit service quality. Such a fall in quality ultimately harms the prestige of audited firms and therefore negatively affects their profits. Based on an application of fuzzy-set qualitative comparative analysis (fsQCA), this paper analyzes the quality of audit services following a drop in the fees charged by auditors. The factors analyzed in the empirical study were audit fees, other fees charged by the auditor, and the inclusion of explanatory paragraphs, qualified opinions, and emphasis of matter in audit reports. The EBITDA of the audited firms was chosen as an indicator of the quality of the service. The results of the analysis reveal that the quality of the auditing service has remained steady despite the fall in audit fees, as confirmed by the fact that the EBITDA has evolved positively without being affected by the fall in fees.
Link: http://dx.doi.org/10.1016/j.jbusres.2017.11.020 [Google]
Leischnig, A., K. Kasper-Brauer and S. C. Thornton (2018): Spotlight on customization: An analysis of necessity and sufficiency in services, Journal of Business Research, 89(), pp.385-390
This study aims to advance the service management literature by further illuminating the relationships between service employees’ adaptive behaviors and customer satisfaction. Using data from a survey of 349 customers of an insurance company, this study employs fuzzy-set Qualitative Comparative Analysis to examine how distinct levels of service-offering adaptive behavior and interpersonal adaptive behavior relate to customer satisfaction. The results show that interpersonal adaptive behavior is a necessary condition or, in other words, a prerequisite for high customer satisfaction. In addition, the results show that a high level of service-offering adaptive behavior is a sufficient condition or, in other words, a guarantee for high customer satisfaction. These findings improve the understanding of the explicit connections between customization approaches and satisfaction in services and help guide service managers in developing effective and efficient service designs.
Link: http://dx.doi.org/10.1016/j.jbusres.2017.12.038 [Google]
Lenka, S., V. Parida, D. R. Sjödin and J. Wincent (2018): Exploring the microfoundations of servitization: How individual actions overcome organizational resistance, Journal of Business Research, 88(), pp.328-336
Servitization research has principally focused on the transition of organizational-level strategy, systems, capabilities, and processes for firms to be able to offer advanced services to their customers. Less is known of the underlying microfoundational dynamics of such transitions at the individual-level. Based on a multiple case study of six large multinational industrial firms engaged in servitization efforts, this paper identifies the tactics (i.e., evangelizing, bootlegging, leveraging, and collaborating) that individuals adopt to overcome organizational resistance to servitization. This study also presents the conditions that are necessary for individual employees to adopt these tactics. The present study provides theoretical and practical implications of the microfoundations of servitization, focusing attention on individual-level actions that affect the outcomes at the organizational-level to drive servitization efforts.
Link: http://dx.doi.org/10.1016/j.jbusres.2017.11.021 [Google]
Liu, S. Q., V. Bogicevic and A. S. Mattila (2018): Circular vs. angular servicescape: “Shaping” customer response to a fast service encounter pace, Journal of Business Research, 89(), pp.47-56
Although a fast service encounter pace might increase revenues for the service provider, its consequences on customer satisfaction and repatronage can be detrimental. To address this gap, the present study proposes a novel sensory marketing strategy (i.e., using shape cues) to soften customers’ negative reactions to a fast-paced service encounter. Specifically, we examine the interplay of physical servicescape cues (shape: circular vs. angular) and social servicescape cues (busyness: non-busy vs. busy) on customer satisfaction. The findings suggest that in busy settings, angular shape cues increase customer satisfaction through perceived competence of the service provider. Conversely, in non-busy settings, circular shape cues enhance customer satisfaction via warmth perceptions. These findings highlight an innovative sensory approach in managing customer evaluations of experiential consumption as well as communicating brand personalities through the servicescape.
Link: http://dx.doi.org/10.1016/j.jbusres.2018.04.007 [Google]
Lutz, C. and G. Newlands (2018): Consumer segmentation within the sharing economy: The case of Airbnb, Journal of Business Research, 88(), pp.187-196
The sharing economy is a global phenomenon with rapid growth potential. While research has begun to explore segmentation between users and non-users, only limited research has looked at consumer segmentation within sharing economy services. In this paper, we build on this research gap by investigating consumer segmentation within a single sharing economy platform: Airbnb. Utilizing a mixed methods approach, with both a quantitative survey and a qualitative content analysis of Airbnb listings, we compare two different types of accommodation offered on Airbnb: shared room and entire home. Our findings indicate that within a single platform, the variety between offerings can create distinct consumer segments based on both demographics and behavioral criteria. We also find that Airbnb hosts use marketing logic to target their listings towards specific consumer segments. However, there is not, in all cases, strong alignment between consumer segmentation and host targeting, leading to potentially reduced matching efficiency.
Link: http://dx.doi.org/10.1016/j.jbusres.2018.03.019 [Google]
Martin, S. L., R. G. Javalgi and L. Ciravegna (2018): Service advantage built on service capabilities: An empirical inquiry of international new ventures, Journal of Business Research, 88(), pp.371-381
The literature on high-tech international new ventures (INVs) has failed to consider the precursors of service advantage within the strategy interplay for approaching new markets overseas. Services account for an increasingly crucial component, especially in high-tech manufacturing sector. Attaining competitive advantage in international markets is contingent upon the level of service the firm offers to its customers. Building on the resource-based view, this study advances the literature by analyzing an integrative model of service advantage based on INVs’ service capabilities. The findings show that service capabilities, leveraged from entrepreneurial orientation and informational resources, are central to attaining superior performance when developing a service advantage. Due to the high-velocity environment in which high-tech INVs compete, new strategies are needed for attaining service advantage. This study’s findings have influential implications for research on new-venture decision making and international marketing.
Link: http://dx.doi.org/10.1016/j.jbusres.2018.01.024 [Google]
Miranda, S., P. Tavares and R. Queiró (2018): Perceived service quality and customer satisfaction: A fuzzy set QCA approach in the railway sector, Journal of Business Research, 89(), pp.371-377
This study investigates whether different combinations of service quality dimensions affect customer satisfaction. The study uses an extension of SERVQUAL with dimensions specific to the railway industry: comfort, connection, and convenience. We use a fsQCA to examine the responses from an online survey of 352 railway customers. The results show that three different combinations of the service quality dimensions lead to overall customer satisfaction. These combinations contain at least two of the three dimensions specific to the railway industry: comfort, connection, and convenience. Furthermore, the combination of comfort and connection alone captures higher customer satisfaction.
Link: http://dx.doi.org/10.1016/j.jbusres.2017.12.040 [Google]
Temerak, M. S., H. Winklhofer and S. A. Hibbert (2018): Facilitating customer adherence to complex services through multi-interface interactions: The case of a weight loss service, Journal of Business Research, 88(), pp.265-276
Today’s communication landscape affords multiple service interfaces to promote customer engagement (i.e. adherence) with complex and prolonged services, but an understanding of how customers use them is limited. This study compares personal and non-personal interfaces that provide educational and/or emotional support for customers to develop the operant resources (i.e. competence and motivation) necessary for adherence. A survey of 270 subscribers to a weight-loss programme demonstrates that booklets and a website (non-personal interfaces) provide educational support that enhances role clarity and ability to adhere, respectively. For novices, it is customer forums (personal interface) that afford the educational support needed to develop ability. Group meetings (personal interface) provide emotional support that boosts customer motivation to adhere and, in turn, encourages them to help other customers. Our study distinguishes types of support for adherence, accessed via multiple service interfaces, has implications for management and highlights needs for future research into complex and prolonged services.
Link: http://dx.doi.org/10.1016/j.jbusres.2018.03.029 [Google]
To, C. K.-m., R. W. Y. Yee, P. Y. Mok, K. P. Chau, M. C. Wong and N. M. Cheung (2018): Collaboration reasoning or social heuristics? Value proposition validity in omnium-gatherum business models, Journal of Business Research, 88(), pp.550-559
Central to the value co-creation business model is mutualistic interaction, through which business value producers propose offers and affirm the final meaning of offering values with customer experience. The model treats each upstream offering of value production merely as a part of value proposition (Grönroos, 2011; Vargo, 2008). Thus, the interaction becomes a locus, key source of value co-creation. Contemporary literature on interactive marketing and service research contain a myriad of theories clarifying the relevance and prominence of the interaction. However, there are still limited discussions regarding how business actors may propose a new potential value, and how the actors can judge the validity of the value co-creation in multi-actor business environments. This study provides a literature review on two main judgment paradigms used as a means to validate new value proposition and co-creation. The two paradigms are as follows: (1) collaborative rationality that evaluates rationales behind business actors’ interactions for value co-creation; (2) social heuristics that concerns group-based satisficing decisions and judgments on a specific value proposition. Social heuristics use social information that does not necessarily stem from a formal, accurate analysis. To corroborate the theoretical implications of the two paradigms, the study analyzes a set of field case value validation processes for a novel product life cycle management information platform. The case study findings illustrate implications for collaborative business modeling and verification on new service-dominant value creation. Finally, the case study presents a prescriptive framework for smarter multi-actor value propositions and co-creation procedures.
Link: http://dx.doi.org/10.1016/j.jbusres.2018.01.062 [Google]
Vakulenko, Y., D. Hellström and K. Hjort (2018): What’s in the parcel locker? Exploring customer value in e-commerce last mile delivery, Journal of Business Research, 88(), pp.421-427
This study explores customer value in relation to parcel lockers, a self-service tool that reshapes the delivery and returns experience in the context of e-commerce last mile delivery. Parcel lockers offer a response to retail and last mile delivery challenges provoked by the rapid growth of e-commerce worldwide. Retailers, logistics service providers, communities, and other stakeholders now face issues due to increased volumes of goods sold online. The introduction of parcel lockers to service algorithms is intended to address these issues by involving consumers in the service process. However, the existing research fails to provide knowledge about the customer’s view on this new technological solution. This study followed a focus group design and built on grounded theory to provide insights into customer value in relation to parcel lockers. These insights can contribute to both research and practice.
Link: http://dx.doi.org/10.1016/j.jbusres.2017.11.033 [Google]
Kuksov, D. and C. Liao (2018): When Showrooming Increases Retailer Profit, Journal of Marketing Research (JMR), 55(4), pp.459-473
Showrooming, the phenomenon of consumers visiting a brick-and-mortar (B&M) store to learn about products but then buying online to obtain lower prices, is attracting increased attention both in business practice and in academic literature. It is considered a major threat to the B&M retailers, and determining “how to fight it” seems to be the only consideration. However, the manufacturer’s need for retail informational services has always been one of the essential reasons for retailers to exist and is a means for retailers to achieve profitability. The popular arguments about the threat of showrooming ignore the strategic role of the manufacturer in the distribution channel. This article analytically shows that when the manufacturer’s decisions are considered (i.e., when the manufacturer–retailer contract is endogenous), consumers’ ability to engage in showrooming may lead to increased, rather than decreased, profitability for B&M retailer(s). Thus, retail efforts to restrict showrooming behavior may be misguided. This result holds even if the manufacturer is restricted to wholesale-only contracts and is not allowed to price discriminate between channels.
Link: http://dx.doi.org/10.1509/jmr.17.0059 [Google]
Packard, G., S. G. Moore and B. McFerran (2018): (I’m) Happy to Help (You): The Impact of Personal Pronoun Use in Customer–Firm Interactions, Journal of Marketing Research (JMR), 55(4), pp.541-555
In responding to customer questions or complaints, should marketing agents linguistically “put the customer first” by using certain personal pronouns? Customer orientation theory, managerial literature, and surveys of managers, customer service representatives, and consumers suggest that firm agents should emphasize how “we” (the firm) serve “you” (the customer), while de-emphasizing “I” (the agent) in these customer–firm interactions. The authors find evidence of this language pattern in use at over 40 firms. However, they theorize and demonstrate that these personal pronoun emphases are often suboptimal. Five studies using lab experiments and field data reveal that firm agents who refer to themselves using “I” rather than “we” pronouns increase customers’ perceptions that the agent feels and acts on their behalf. In turn, these positive perceptions of empathy and agency lead to increased customer satisfaction, purchase intentions, and purchase behavior. Furthermore, the authors find that customer-referencing “you” pronouns have little impact on these outcomes and can sometimes have negative consequences. These findings enhance understanding of how, when, and why language use affects social perception and behavior and provide valuable insights for marketers.
Link: http://dx.doi.org/10.1509/jmr.16.0118 [Google]
Serkan Akturk, M., M. Ketzenberg and G. R. Heim (2018): Assessing impacts of introducing ship-to-store service on sales and returns in omnichannel retailing: A data analytics study, Journal of Operations Management, 61(), pp.15-45
Omnichannel retailing features, such as ship-to-store (STS) service, are designed to deliver a seamless shopping experience for customers. For a retailer, introducing omnichannel capabilities requires major investments to integrate physical stores and online marketplaces, yet holds a promise of potentially enhancing revenue streams from both brick-and-mortar (BM) stores and online store channels. We assess the promise of ship-to-store capabilities by analyzing transactional data from a national jewelry retailer to study impacts of introducing ship-to-store on a retailer’s operating performance, in terms of sales and customer returns. Contrary to expectations, the findings show that online sales decreased after ship-to-store was introduced, although BM store sales increased. Detailed analysis of the transactional data suggests that, after STS implementation, some customers switched from the online channel to the brick-and-mortar channel. This switch occurred mainly for high-value purchases. The customers who actually remained with and fully completed a sale using the ship-to-store service typically were those that bought low-value items. Our findings also suggest that introducing ship-to-store increased cross-channel customer returns of online purchases to physical stores. Concurrently, these new ship-to-store returns generated additional BM store sales. The paper contributes by showing how introducing ship-to-store service can have different impacts in terms of sales and returns across a retailer’s channels.
Link: http://dx.doi.org/10.1016/j.jom.2018.06.004 [Google]
Venkataraman, S., L. D. Fredendall, K. M. Taaffe, N. Huynh and G. Ritchie (2018): An empirical examination of surgeon experience, surgeon rating, and costs in perioperative services, Journal of Operations Management, 61(), pp.68-81
We examine how physicians affect the flow of patients through Perioperative Services (POS) on the day of surgery by studying the effects of surgeon experience and surgeon quality (measured by Healthgrades rating) on patients’ flow. We control for the work environment created by the POS manager’s resource allocation decision, which determines the utilization levels of the three POS departments: Pre-operative (PreOp), Operating Room (OR), and Post Anesthesia Care Unit (PACU). Using patient level data from a large teaching hospital, we find that POS managers in all three departments view overtime costs as more important than idle time costs, which implies that they keep capacity slack available for patient care in each department. Further, our findings suggest that highly experienced surgeons take ownership of their patients’ experience in the POS and that their patients spend less time in PreOp and the OR. We argue that not only do more experienced surgeons perform surgical procedures more efficiently, but they also coordinate better with PreOp to reduce patient waiting time there. We find that a surgeon’s rating has no direct effect on a patient’s actual surgery time in the OR, but that the effect of surgeon experience on actual surgery time is higher, in magnitude, for a lower-rated surgeon than for a higher-rated surgeon. Finally, we conduct a counterfactual analysis and find that highly experienced surgeons reduce the total length of a patient’s stay in the POS.
Link: http://dx.doi.org/10.1016/j.jom.2018.04.002 [Google]
Gao, F. and X. Su (2018): Omnichannel Service Operations with Online and Offline Self-Order Technologies, Management Science, 64(8), pp.3595-3608
Many restaurants have recently implemented self-order technologies across both online and offline channels. Online technology, through websites and mobile apps, allows customers to order and pay before coming to the store; offline technology, such as self-service kiosks, allows store customers to place orders without interacting with a human employee. In this paper, we develop a stylized theoretical model to study the impact of self-order technologies on customer demand, employment levels, and restaurant profits. Our main results follow. First, customers using self-order technologies experience reduced waiting cost and increased demand, and moreover, these benefits may even carry over to customers who do not use these technologies. Second, although public opinion suggests that self-order technologies facilitate job cuts, we find instead that some firms should increase employment levels, and, paradoxically, this recommendation holds for firms with high labor costs. Finally, we find that firms should implement online (offline) self-order technology when customers have high (low) wait sensitivity. The supplementary appendix is available at https://doi.org/10.1287/mnsc.2017.2787. This paper was accepted by Serguei Netessine, operations management.
Link: http://dx.doi.org/10.1287/mnsc.2017.2787 [Google]
Goes, P. B., I. Noyan, L. Mingfeng and J. L. Zhaod (2018): When More Is Less: Field Evidence on Unintended Consequences of Multitasking, Management Science, 64(7), pp.3033-3054
Online customer service chats provide new opportunities for firms to interact with their customers and have become increasingly popular in recent years for firms of all sizes. One reason for their popularity is the ability for customer service agents to multitask (i.e., interact with multiple customers at a time) thereby increasing the system “throughput” and agent productivity. Yet little is known about how multitasking impacts customer satisfaction–the ultimate goal of customer engagements. We address this question using a proprietary data set from an S&P 500 service firm that documents agent multitasking activities (unobservable to customers) in the form of server logs, customer service chat transcripts, and postservice customer surveys. We find that agent multitasking leads to longer in-service delays for customers and lower problem resolution rates. Both lead to lower customer satisfaction, although the impact varies for different customers. Our study is among the first to document the link between multitasking and customer satisfaction, and it has implications for the design of agent time allocation in contact centers and more broadly for howfirms can best manage customer relations in newservice channels enabled by information technology.
Link: http://dx.doi.org/10.1287/mnsc.2017.2763 [Google]
Jingqi, W. and Z. Yong-Pin (2018): Impact of Queue Configuration on Service Time: Evidence from a Supermarket, Management Science, 64(7), pp.3055-3075
We study how queue configuration affects human servers’ service time by comparing dedicated queues with shared queues using field data from a natural experiment in a supermarket. We hypothesize that queue configuration may affect servers’ service rate through several mechanisms: pooling may affect service rate directly as a result of social loafing effect and competition effect and indirectly via its impact on queue length. To investigate these impacts, we take advantage of the supermarket’s checkout layout and use a data set containing both checkout transaction details and queue information collected from video recordings in the supermarket. After we control for the queue length, we find that servers in dedicated queues are about 10.7% faster than those in shared queues, mainly because of the social loafing effect. We also demonstrate that pooling has an indirect negative effect on service time through its impact on queue length. In addition, the queue configuration’s direct effect and its indirect queue length effect function independently of each other. In aggregation, the social loafing effect dominates, and servers slow down (a 6.86% increase in service time) in shared queues.
Link: http://dx.doi.org/10.1287/mnsc.2017.2781 [Google]
Guajardo, J. A. and M. A. Cohen (2018): Service Differentiation and Operating Segments: A Framework and an Application to After-Sales Services, Manufacturing & Service Operations Management, 20(3), pp.440-454
The decisions of whether and how to adopt service differentiation are at the core of a firm’s service operations strategy. This paper proposes a framework for service differentiation that highlights the identification and use of operating segments as a central component in the delivery of differentiated services. The notion of operating segments and the general empirical methodology to identify them proposed in this paper integrally considers the consumer’s preferences and operational capabilities required to fulfill the differentiated service offering. An application in the context of after-sales services for product-service bundles using data from a major manufacturer in the consumer electronics industry is presented, which illustrates how operational decisions need to be adjusted when multiple operating segments are defined to support a service differentiation strategy.
Link: http://dx.doi.org/10.1287/msom.2017.0645 [Google]
Yao, C., I. Duenyas and O. Sahin (2018): Unbundling of Ancillary Service: How Does Price Discrimination of Main Service Matter?, Manufacturing & Service Operations Management, 20(3), pp.455-466
We consider a setting where the firm sells a main service (e.g., air travel) and an ancillary service (e.g., in-flight meal) to two types of consumers: high type (e.g., business travelers) and low type (e.g., leisure travelers). The firm decides whether to unbundle the ancillary service from the main service and charge separate prices for different service components. We study the interaction between the optimal ancillary unbundling strategy and the firm’s use of main service price discrimination by analyzing two types of firms: firms that use uniform pricing of main service and firms that use discriminatory pricing of main service. We find that a uniform-pricing (respectively, discriminatory-pricing) firm should unbundle the ancillary service if the fraction of high-type consumers who value the ancillary service is large (respectively, small) enough. The difference hinges on the rationale that under uniformpricing, unbundling allows the firmto extract more ancillary surplus from high-type consumers; by contrast, under discriminatory pricing, bundling allows the firm to extract more ancillary surplus from consumers. Moreover, we find that unbundling the ancillary service and using main service price discrimination are strategic complements (respectively, strategic substitutes) if the correlation between consumers’ main service valuations and ancillary service valuations is low (respectively, high).
Link: http://dx.doi.org/10.1287/msom.2017.0646 [Google]
Moon, J. and S. M. Shugan (2018): Explaining Bundle-Framing Effects with Signaling Theory, Marketing Science, 37(4), pp.668-681
Many sellers bundle add-ons (e.g., in-flight entertainment, hotel amenities) with core services (e.g., transportation, lodging). One surprising empirical finding is that consumers often believe bundle frames provide greater value than equivalent unbundle frames ($10 > $9 + $1) despite equal all-inclusive prices. Although these context or framing effects appear irrational in isolation, the bundle-framing effect might reflect market relationships caused by underlying seller motives. We show that bundling can signal information about product appeal, that is, popularity. Specifically, only sellers of wide-appeal (popular) add-ons (e.g., well-liked entertainment, sought-after hotel amenities, standard side salads, popular excursions) have an incentive to bundle their add-ons with their core products (e.g., flights, hotel rooms, restaurant entrées, cruise trips). By contrast, sellers of narrow-appeal (niche) add-ons (e.g., unorthodox entertainment, unpopular amenities, exotic side salads, unusual excursions) find that bundling is undesirable because they lose core revenue. Consequently, bundling can convey information about horizontally differentiated markets even when the total all-inclusive price equals that of unbundling. Perhaps some presumed consumer biases can reveal market relationships. Frames provide information about the framer. The online appendix is available at https://doi.org/10.1287/mksc.2018.1097.
Link: http://dx.doi.org/10.1287/mksc.2018.1097 [Google]
Andritsos, D. A. and C. S. Tang (2018): Incentive Programs for Reducing Readmissions when Patient Care is Co‐Produced, Production & Operations Management, 27(6), pp.999-1020
To reduce preventable readmissions, many healthcare systems are transitioning from fee‐for‐service (FFS) to other reimbursement schemes such as pay‐for‐performance (P4P) or bundled payment (BP) so that the funder of a healthcare system can transfer to the hospital some of the financial risks associated with patient rehospitalizations. To examine the effectiveness of different schemes (FFS, P4P, and BP), we develop a “health co‐production” model in which the patient’s readmissions can be “jointly controlled” by the efforts exerted by both the hospital and the patient. Our analysis of the equilibrium outcomes reveals that FFS cannot entice the hospital and the patient to exert readmission‐reduction efforts. Relative to BP, we find that P4P is more effective in reducing readmissions over a wider range of scenarios. However, BP tends to be more effective in keeping lower combined patient costs and funder payments to the hospital. Finally, we find that some patient cost‐sharing can be optimal for the funder under both P4P and BP.
Link: http://dx.doi.org/10.1111/poms.12847 [Google]
Avgerinos, E. and B. Gokpinar (2018): Task Variety in Professional Service Work: When It Helps and When It Hurts, Production & Operations Management, 27(7), pp.1368-1389
In a wide range of professional service firms, individuals perform a variety of tasks which are highly cognitive and knowledge intensive yet repetitive in nature, providing significant opportunities for learning. In addition, individuals in such environments tend to enjoy considerable discretion in managing when and how they perform their tasks. In light of these observations, we investigate task allocation and timing strategies that may enhance or inhibit learning and productivity for professional service workers. Specifically, we focus on the role of task variety. We use a detailed dataset of 3273 coronary artery bypass surgeries in a private European hospital over 7 years to examine the effect of concurrent and non-concurrent exposure to task variety on learning and productivity on a focal task. We find that while concurrent exposure to variety has a positive impact on focal productivity, non-concurrent exposure to variety has a negative impact on it. Our results also suggest that short-term exposure to variety amplifies these relationships.
Link: http://dx.doi.org/10.1111/poms.12874 [Google]
Boqian, S. and M. Z. F. Li (2018): Dynamic Pricing with Service Unbundling, Production & Operations Management, 27(7), pp.1334-1354
In this study, we investigate unbundling when a firm dynamically prices a basic service, while separating the sale of a fixed-price add-on. We characterize the optimal dynamic unbundling pricing policy and investigate its structural properties. We find that the value function with unbundling increases in the degree of dependence between consumers’ reservation prices for basic service and add-on. However, there are no similar monotonicity properties for the optimal price of the basic service. For several families of commonly used joint distributions, we show that the influence of the dependence parameter on the optimal price of the basic service depends on a threshold, which is a function of the dependence parameter. Moreover, the price of the bundled service is higher under unbundling when the add-on price is high, and vice versa. Our model is then compared with the bundling model through a numerical experiment. Among most cases where unbundling outperforms, the degree of dependence is non-negative. It is further revealed that given the non-negativity of dependence, unbundling is worth practicing under the following situations: (i) the variance of the reservation price for the basic service (add-on) is low (high); (ii) the mean of the reservation price for the basic service (add-on) is high (low); (iii) the demand intensity is low; (iv) the capacity of the basic service is high; and (v) the incremental cost of the basic service (add-on) is low (high). Finally, unbundling can improve the firm’s expected profit and the consumers’ surplus at the same time.
Link: http://dx.doi.org/10.1111/poms.12871 [Google]
Park, J. H. and T. B. H. Tran (2018): Internal marketing, employee customer‐oriented behaviors, and customer behavioral responses, Psychology & Marketing, 35(6), pp.412-426
Abstract: This study seeks to investigate the effect of internal marketing—treating employees as internal customers—on salesperson’s engagement in customer‐oriented behaviors and resultant customers’ responses. The data were collected from dyadic interactions between salespeople and customers in banking firms in Vietnam. The results showed that internal marketing is significantly associated with salesperson’s performance of adaptive selling behavior, customer‐oriented selling behavior, and relational selling behavior, which result in customer relationship continuity, purchase intention, and positive word‐of‐mouth. In addition, salesperson’s customer‐oriented behaviors play partial mediating roles between internal marketing and external customer responses. The study extends the extant literature of internal marketing and offers useful managerial implications for service firms, particularly banking firms in Vietnam. The study concludes with suggestions of potential research directions for future studies.
Link: http://dx.doi.org/10.1002/mar.21095 [Google]
