Today we identify service articles published in Marketing, Management, Operations, Productions, Information Systems & Practioner-oriented Journals in the last month.
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Apte, U. M. and M. M. Davis (2019): Sharing Economy Services: BUSINESS MODEL GENERATION, California Management Review, 61(2), pp.104-131
The emerging growth of the sharing economy demonstrates the need to understand the factors driving this growth and the business models and practices of sharing economy service (SES) companies. Using case vignettes as the research method, this article analyzes the operations of a large number of these companies and presents a set of building blocks that are useful for generating the business models of SES companies. An examination of the successes and failures in the practices of SES companies provides a number of managerial recommendations.
Link: http://dx.doi.org/10.1177/0008125619826025 [Google]
Hochstein, B., W. Bolander, R. Goldsmith and C. R. Plouffe (2019): Adapting influence approaches to informed consumers in high-involvement purchases: are salespeople really doomed?, Journal of the Academy of Marketing Science, 47(1), pp.118-137
The availability of information and variety of online purchase options are increasing for consumers shopping for complex products (e.g., cars, real estate). This situation, and consumers’ resulting sense of informedness, has led many to suggest that the need for business-to-consumer (B2C) salespeople is diminishing. Yet, despite these claims, many purchases—especially those associated with high prices and, therefore, high consumer involvement—still require consumers to interact with salespeople. This interaction, between consumers (at varying levels of informedness) and B2C salespeople, is the focus of the current study. Merging theories of consumer informedness and adaptive interpersonal influence, we suggest that the interaction between salesperson influence attempts and consumer informedness plays an important role in purchase decisions. To study this notion, Study 1 matches automobile shoppers’ survey responses with objective purchase data from 480 sales interactions. Study 2 is a scenario-based experiment that investigates informedness and influence in a financial services setting. The findings of both studies suggest that understanding a consumer’s informedness, and adapting the proper influence approach to it, is critical if salespeople are to influence modern consumers’ purchase decisions and, thus, avoid irrelevancy.
Link: http://dx.doi.org/10.1007/s11747-018-0609-2 [Google]
Li, X., K. W. Chan and S. Kim (2019): Service with Emoticons: How Customers Interpret Employee Use of Emoticons in Online Service Encounters, Journal of Consumer Research, 45(5), pp.973-987
Virtually no research has examined the role of emoticons in commercial relationships, and research outside the marketing domain reports mixed findings. This article aims to resolve these mixed findings by considering that emoticon senders are often simultaneously evaluated on two fundamental dimensions, warmth and competence, and the accessibility of one dimension over the other is critically contingent on salient relationship norms (communal vs. exchange norms) in customers’ minds due to individual and situational factors. Through laboratory and field experiments, the current research shows that customers perceive service employees who use emoticons as higher in warmth but lower in competence compared to those who do not (study 1). We further demonstrate that when a service employee uses emoticons, communal-oriented (exchange-oriented) customers are more likely to infer higher warmth (lower competence) and thus to be more (less) satisfied with the service (study 2). We also examine two practically important service situations that can make a certain type of relationship norm more salient: unsatisfactory services (study 3) and employees’ extra-role services (study 4). We speculate on possible mechanisms underlying these effects and discuss theoretical and practical implications along with opportunities for future research.
Link: http://dx.doi.org/10.1093/jcr/ucy016 [Google]
Arlotto, A., A. E. Frazelle and Y. Wei (2019): Strategic Open Routing in Service Networks, Management Science, 65(2), pp.735-750
We study the behavior of strategic customers in an open-routing service network with multiple stations. When a customer enters the network, she is free to choose the sequence of stations that she visits, with the objective of minimizing her expected total system time. We propose a two-station game with all customers present at the start of service and deterministic service times, and we find that strategic customers “herd,” that is, in equilibrium all customers choose the same route. For unobservable systems, we prove that the game is supermodular, and we then identify a broad class of learning rules—which includes both fictitious play and Cournot best response—that converges to herding in finite time. By combining different theoretical and numerical analyses, we find that the herding behavior is prevalent in many other congested open-routing service networks, including those with arrivals over time, those with stochastic service times, and those with more than two stations. We also find that the system under herding performs very close to the first-best outcome in terms of cumulative system time. The online appendices are available at https://doi.org/10.1287/mnsc.2017.2971. This paper was accepted by Gad Allon, operations management.
Link: http://dx.doi.org/10.1287/mnsc.2017.2971 [Google]
Chan, C. W., L. V. Green, S. Lekwijit, L. Lu and G. Escobar (2019): Assessing the Impact of Service Level When Customer Needs Are Uncertain: An Empirical Investigation of Hospital Step-Down Units, Management Science, 65(2), pp.751-775
Many service systems have servers with different capabilities and customers with varying needs. One common way this occurs is when servers are hierarchical in their skills or in the level of service they can provide. Much of the literature studying such systems relies on an understanding of the relative costs and benefits associated with serving different customer types by the different levels of service. In this work, we focus on estimating these costs and benefits in a complex healthcare setting where the major differentiation among server types is the intensity of service provided. Step-down units (SDUs) were initially introduced in hospitals to provide an intermediate level of care for semicritically ill patients who are not sick enough to require intensive care but not stable enough to be treated in the general medical/surgical ward. One complicating factor is that the needs of customers is sometimes uncertain—specifically, it is difficult to know a priori which level of care a particular patient needs. Using data from 10 hospitals from a single hospital network, we take a data-driven approach to classify patients based on severity and empirically estimate the clinical and operational outcomes associated with routing these patients to the SDU. Our findings suggest that an SDU may be a cost-effective way to treat patients when used for patients who are post-ICU (intensive care unit). However, the impact of SDU care is more nuanced for patients admitted from the emergency department and may result in increased mortality risk and hospital length of stay for patients who should be treated in the ICU. Our results imply that more study is needed when using SDU care this way. This paper was accepted by Serguei Netessine, operations management.
Link: http://dx.doi.org/10.1287/mnsc.2017.2974 [Google]
Hagiu, A. and J. Wright (2019): Controlling vs. Enabling, Management Science, 65(2), pp.577-595
How does a firm decide whether to employ professionals and control how they deliver services to clients, or to operate as a platform enabling independent professionals to provide services directly to clients? Similarly, how does a manufacturer decide whether to allow sales agents to choose certain costly actions (e.g., kickbacks to clients) or to take control of these actions itself? We answer this question using a principal–agent framework in which both the principal and the agent must be incentivized to carry out investments (or effort) that increase the revenue they jointly create. Our theory explains when the principal should take control over a particular decision (“control”) or should instead allow the agent to make the decision (“enable”). It does so both for the case when there are multiple such transferable decisions for a single agent, and for the case when there are many agents and one transferable decision for each. We also consider the possibility of cost asymmetries between the principal and the agent, spillovers across agents, and the misclassification of the principal as an employer even though agents are allocated the relevant control rights. Finally, we explain how the “control versus enable” choice and its associated trade-offs differ from the classic “make versus buy” choice. The online appendix is available at https://doi.org/10.1287/mnsc.2017.2956. This paper was accepted by Joshua Gans, business strategy.
Link: http://dx.doi.org/10.1287/mnsc.2017.2956 [Google]
Levi, R., T. Magnanti and Y. Shaposhnik (2019): Scheduling with Testing, Management Science, 65(2), pp.776-793
We study a new class of scheduling problems that capture common settings in service environments, in which one has to serve a collection of jobs that have a priori uncertain attributes (e.g., processing times and priorities) and the service provider has to decide how to dynamically allocate resources (e.g., people, equipment, and time) between testing (diagnosing) jobs to learn more about their respective uncertain attributes and processing jobs. The former could inform future decisions, but could delay the service time for other jobs, while the latter directly advances the processing of the jobs but requires making decisions under uncertainty. Through novel analysis we obtain surprising structural results of optimal policies that provide operational managerial insights, efficient optimal and near-optimal algorithms, and quantification of the value of testing. We believe that our approach will lead to further research to explore this important practical trade-off. The online appendix is available at https://doi.org/10.1287/mnsc.2017.2973. This paper was accepted by Yinyu Ye, optimization.
Link: http://dx.doi.org/10.1287/mnsc.2017.2973 [Google]
Rosenzweig, E., C. Queenan and K. Kelley (2019): Virtuous cycles of service quality: an empirical test, International Journal of Operations & Production Management, 39(2), pp.357-380
Purpose Research on the service–profit chain (SPC) provides important insights regarding how organizations attain service excellence. However, this research stream does not shed light on the mechanisms by which service organizations sustain such excellence, despite the struggles of many organizations to do so. Thus, the purpose of this paper is to develop the SPC as a more dynamic system characterized by feedback loops, accumulation processes, and time delays based on the service operations, human resources, and marketing literatures.Design/methodology/approach The authors posit the feedback loops operate as virtuous cycles, such that increases in customer perceptions of service quality and in profit margins lead to subsequent increases in the quality of the internal working environment, which ultimately reimpacts performance in a positive way, and so on. The authors test the hypotheses using five years of archival data on 417 full-service US hotels. The unique data set combines longitudinal data from multiple functions, including employee assessments regarding their tools, practices, and abilities to serve customers, customer perceptions of service quality, and objective measures of financial performance.Findings The authors find support for the idea that some organizations provide customers with high-quality service over time by reinvesting in the inputs responsible for generating the initial success, i.e., in various aspects of the internal working environment.Research limitations/implications The analysis of 417 hotels from a single firm may influence the extent to which the findings can be generalized.Originality/value By expanding the boundaries of previous conceptual and empirical models investigating SPCs, the authors offer a deeper understanding of the cross-functional character of modern operational systems and the complex dynamics that these systems generate.
Link: http://dx.doi.org/10.1108/IJOPM-11-2017-0678 [Google]
Trischler, J. and M. Charles (2018): The Application of a Service Ecosystems Lens to Public Policy Analysis and Design: Exploring the Frontiers, Journal of Public Policy & Marketing, 38(1), pp.19-35
The relevance of marketing for public policy has been questioned because its focus on dyadic exchanges does not consider the dynamism and complexity of public problems. Public service-dominant logic, as a new lens for public policy and management, does not address this limitation, because its focus remains on delivering services to the end user. Integrating recent developments in service-dominant logic and related research, this article proposes applying a service ecosystems lens to public policy. Five propositions guide the application of this lens to public policy analysis and design. Public policy is conceptualized as a means to enable service by coordinating multiple actors? value cocreation activities to address public problems. Inherent in this conceptualization is the multilevel nature of policy analysis, which includes the users? value creation process (micro level), the context (meso level), and the broader value constellation (macro level). Policy design, in turn, includes the identification and support of emergent solutions driven by different actors. Policy makers therefore need to consider problem?conditions?solution combinations across the value constellation and the effect of public interventions on these constellations. The article concludes by presenting policy makers with marketing and design practices that can assist in the analysis of service ecosystems and engage relevant stakeholders in change initiatives.
Link: http://dx.doi.org/10.1177/0743915618818566 [Google]
