Today we identify service articles published in Marketing, Management, Operations, Productions, Information Systems & Practioner-oriented Journals in the last months.
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Herhausen, D., L. Grewal, K. H. Cummings, A. L. Roggeveen, F. Villarroel Ordenes and D. Grewal (2023): Complaint De-Escalation Strategies on Social Media, Journal of Marketing, 87(3264), pp.210-231
To date, the literature offers multiple suggestions for how to recover from service failures, albeit without explicitly addressing customers’ negative, high-arousal states evoked by the failure. The few studies that do address ways to improve negative emotions after failures focus on face-to-face interactions only. Because many customers today prefer to complain on social media, firms must learn how to effectively de-escalate negative, high-arousal emotions through text-based exchanges to achieve successful service recoveries. With three field studies using natural language processing tools and three preregistered controlled experiments, the current research identifies ways to mitigate negative arousal in text-based social media complaining, specifically, active listening and empathy. In detail, increasing active listening and empathy in the firm response evokes gratitude among customers in high-arousal states, even if the actual failure is not (yet) recovered. These findings provide a new theoretical perspective on the role of customer arousal in service failures and recoveries as well as managerially relevant implications for dealing with public social media complaints.
Link: http://dx.doi.org/10.1177/00222429221119977 [Google]
Cao, J., P. Chintagunta and S. Li (2023): From Free to Paid: Monetizing a Non-Advertising-Based App, Journal of Marketing Research (JMR), (3265), pp.1
Non-advertising-based mobile apps face several critical challenges when trying to monetize their free services—among them, the choice of pricing strategies (hard landing vs. soft landing; i.e., a “pay or churn” paywall vs. continuing to offer limited free services to existing users after monetization) and aspects of product design (whether to provide exclusive secondary offerings to paying users). The authors implemented a large-scale randomized field experiment with an app firm to test the causal effects of such pricing and product design strategies. Results show that both soft landing and exclusive secondary offerings decrease existing app users’ willingness to subscribe, but there is a positive interaction between these two strategies on subscriptions. The authors propose a theoretical framework, discuss potential mechanisms that might be at play, and conduct robustness checks to rule out several alternative explanations. A customer survey by the firm and an experiment on Prolific provide further support for the theoretical mechanism. To assess generalizability, the authors conducted a second field experiment and obtained consistent results. They also report the results from the actual implementation of the best-performing strategy by the firm. This research provides guidance on possible theoretical underpinnings of users’ responses and important managerial implications for app monetization.
Link: http://dx.doi.org/10.1177/00222437221131562 [Google]
Lee, S., J.-H. Lee and Y. Jeong (2023): The Effects of Digital Textbooks on Students’ Academic Performance, Academic Interest, and Learning Skills, Journal of Marketing Research (JMR), (3266), pp.1
The advances in information and communications technology and the digitization of services offer new ways to reach, engage with, and provide services to consumers. Recent advances in technology have fueled the rapid growth of digitization in education, and the education industry has witnessed radical changes in the provision and delivery of its products and services. Digital textbooks, which are equipped with various learning resources including multimedia aids, assessment questions, and hyperlinks to external resources, can be an important channel for harnessing technologies in classrooms. Korea’s digital textbook experiment provides a unique empirical setting to examine the effects of digital textbooks on students’ academic outcomes. The authors employ a panel regression model with teacher fixed effects, propensity score weighting, and an instrumental variable strategy to find that greater usage of digital textbooks in class improves students’ academic performance, academic interest, and learning skills. The authors explore the heterogeneity in the utilization effect across student levels and find greater improvements in academic performance for low-achieving students. The findings have important managerial and policy implications for major stakeholders in the education sector, including teachers, school administrators, students, and policy makers.
Link: http://dx.doi.org/10.1177/00222437221130712 [Google]
Dwertmann, D. J. G., B. Go_tautait_, R. Kazlauskait_ and I. Bu_i_nien_ (2023): Receiving Service from a Person with a Disability: Stereotypes, Perceptions of Corporate Social Responsibility, and the Opportunity for Increased Corporate Reputation, Academy of Management Journal, 66(3267), pp.133-163
Whereas advocates point to benefits of employing people with disabilities for organizations, employers’ concern over negative customer reactions is still a barrier to the employment of people with disabilities in service occupations. We contribute to this discussion and the management literature on disability by examining the effects of receiving service from employees with a hearing disability and employees who use a wheelchair on corporate reputation. Based on signaling theory, stereotypes, and valuation-by-association logic, we argue and find in a multistudy, multimethod approach that employing people with disabilities can be perceived as corporate social responsibility and leads to better corporate reputation. A field study with 317 customers of a large international supermarket chain in Lithuania demonstrates higher ratings of corporate reputation for customers receiving service from an employee with a hearing disability than for customers receiving service from an employee without disabilities. In an online experiment using a Solomon four-group design, we utilize video vignettes to test our model with corporate social responsibility perceptions as a mediator. Together, our findings show that managers’ concerns about how biased customers might respond to service employees with disabilities are likely unfounded and highlight—in addition to an ethical case for inclusion—the potential for organizations to benefit from employing of people with disabilities, as it leads to favorable reputation effects for organizations.
Link: http://dx.doi.org/10.5465/amj.2020.0084 [Google]
Friedland, J. and D. B. Balkin (2023): When gig workers become essential: Leveraging customer moral self-awareness beyond COVID-19, Business Horizons, 66(3268), pp.181-190
The COVID-19 pandemic intensified economic reliance on gig workers that perform essential tasks such as health care, personal transport, food and package delivery, and ad-hoc tasking services within the developed and developing world. As a result, workers who provide such services are no longer perceived as low-skilled laborers but as essential workers who fulfill a crucial role in society. These workers’ newly elevated moral and economic status increases consumer demand for corporate social responsibility toward this stakeholder group, specifically for practices that increase worker freedom and rewards. We provide algorithmic tools for online labor platforms to meet this demand, bolstering their social purpose and ethical branding while better protecting themselves against potential reputational crises. To do this, we propose a managerial strategy rooted in moral self-awareness theory that leverages customers’ self-perceived virtuosity to increase gig-worker freedom.
Link: http://dx.doi.org/10.1016/j.bushor.2022.05.003 [Google]
Koukova, N. T., R. J.-H. Wang and M. S. Isaac (2023): “If you loved our product”: Do conditional review requests harm retailer loyalty?, Journal of Retailing, 99(3269), pp.85-101
• Retailers may send customers conditional review requests following a purchase. • Conditional requests ask customers to write a review only if it will be favorable. • Customers who receive conditional requests are less loyal to the retailer afterwards. • Retailers making conditional requests are viewed as manipulative and untrustworthy. • Modified conditional requests that restore customer trust mitigate harm to loyalty. Online retailers frequently solicit reviews from customers who have recently purchased their products or services. This research examines how consumers react to conditional requests—wherein a retailer explicitly asks them to consider their experience but to only leave a review if this experience was favorable—versus more neutral unconditional requests. The provision of conditional requests is widespread, presumably because retailers believe that such requests will yield more positive reviews. Irrespective of whether these potential benefits materialize, the present research demonstrates that the consequences of conditional requests on customer loyalty (i.e., retailer engagement and repeat purchase behavior) are uniformly negative and surprisingly expansive. Six experiments with over 3,000 participants reveal that customers who receive conditional (vs. unconditional) requests are subsequently less loyal to the retailer, whom they perceive as manipulative and untrustworthy. This research also shows that easily implementable message modifications can attenuate (although not necessarily eliminate) the adverse effects of conditional requests on customer loyalty. Substantively, this work highlights how the messaging used in a review request affects customers’ inferences as well as their later judgments and behaviors. Managerially, the findings should exhort online retailers to exercise caution before sending conditional review requests given the risk of reputational harm. [Display omitted]
Link: http://dx.doi.org/10.1016/j.jretai.2022.09.002 [Google]
Garbas, J., S. Schubach, M. Mende, M. L. Scott and J. H. Schumann (2023): You want to sell this to me twice!? How perceptions of betrayal may undermine internal product upgrades, Journal of the Academy of Marketing Science, 51(3270), pp.286-309
Physical products (e.g., cars, smartphones) increasingly evolve into dynamic service platforms that allow for customization through fee-based activation of restricted add-on features throughout their lifecycle. The authors refer to this emerging phenomenon as “internal product upgrades”. Drawing on normative expectations literature, this research examines pitfalls of internal product upgrades that marketers need to understand. Six experimental studies in two different contexts (consumer-electronics, automotive) reveal that consumers respond less favorably to internal (vs. external) product upgrades. The analyses show that customer-perceived betrayal, which results from increased feature ownership perceptions, drives the effects. Moreover, this research identifies three boundary conditions: it shows that the negative effects are attenuated when (1) the company (vs. consumer) executes the upgrading, and (2) consumers upgrade an intangible (vs. tangible) feature. Finally, consumers react less negatively when (3) the base product is less relevant to their self-identity.
Link: http://dx.doi.org/10.1007/s11747-022-00881-8 [Google]
Homburg, C. and M. Tischer (2023): Customer journey management capability in business-to-business markets: Its bright and dark sides and overall impact on firm performance, Journal of the Academy of Marketing Science, (3271), pp.1-29
Abstract: Business-to-business (B2B) practitioners are increasingly interested in capabilities to holistically manage touchpoints along B2B customer journeys (CJs) to remain competitive. Research in the B2B context, however, has investigated neither
Link: http://dx.doi.org/10.1007/s11747-023-00923-9 [Google]
Baron, O., X. Chen and Y. Li (2023): Omnichannel Services: The False Premise and Operational Remedies, Management Science, 69(3272), pp.865-884
The notion of omnichannel, an integration of brick-and-mortar stores with online channels, has been thriving in recent years and is reforming the traditional service industry. Many service chains, such as Starbucks and McDonald’s, established omnichannel capability by allowing customers to order online in advance before visiting stores for pickup. The premise of omnichannel services is that when customers take advantage of the low-cost-of-waiting online channel, both their utility and the provider’s revenue will increase. Although simply adding an online-ordering option to the conventional walk-in model stimulates revenue, it also inflicts interference on the walk-in channel. We show that online ordering inadvertently reduces customers’ individual utility and social welfare when both channels are used in equilibrium. Moreover, the less it costs to order and wait online, the more the social welfare is reduced. We then evaluate two industry state-of-the-art operational remedies: regulating the use of the online channel and establishing channel-dedicated capacities. Although both remedies may improve the throughput over the walk-in-only service or even the first-come-first-served omnichannel service, they are unlikely to achieve this without jeopardizing the social welfare. We thus propose prioritizing walk-in customers and show that such prioritization can deliver this premise—that is, simultaneously benefiting the service provider and customers in comparison with the conventional walk-in-only service when both channels are used in equilibrium. Our results highlight that creating an efficient marketplace requires synergy between innovative technology and effective operational strategies. This paper was accepted by Victor Martinez de Albéniz, operations management. Funding: Y. Li was supported in part by the Hong Kong Research Grants Council General Research Fund [Project 14505820]. Supplemental Material: The technical supplement and online appendix are available at https://doi.org/10.1287/mnsc.2022.4416.
Link: http://dx.doi.org/10.1287/mnsc.2022.4416 [Google]
Ichihashi, S. and B.-C. Kim (2023): Addictive Platforms, Management Science, 69(3273), pp.1127-1145
We study competition for consumer attention in which platforms can sacrifice service quality for attention. A platform can choose the “addictiveness” of its service. A more addictive platform yields consumers a lower utility of participation but a higher marginal utility of allocating attention. We provide conditions under which increased competition can harm consumers by encouraging platforms to offer low-quality services. In particular, if attention is scarce, increased competition reduces the quality of services because business-stealing incentives induce platforms to increase addictiveness. Restricting consumers’ platform usage may decrease addictiveness and improve consumer welfare. A platform’s ability to charge for its service can also decrease addictiveness. This paper was accepted by Joshua Gans, business strategy.
Link: http://dx.doi.org/10.1287/mnsc.2022.4392 [Google]
Kamble, V., N. Shah, D. Marn, A. Parekh and K. Ramchandran (2023): The Square Root Agreement Rule for Incentivizing Truthful Feedback on Online Platforms, Management Science, 69(3274), pp.377-403
A major challenge in obtaining evaluations of products or services on e-commerce platforms is eliciting informative responses in the absence of verifiability. This paper proposes the square root agreement rule (SRA): a simple reward mechanism that incentivizes truthful responses to objective evaluations on such platforms. In this mechanism, an agent gets a reward for an evaluation only if the answer matches that of a peer agent, where this reward is inversely proportional to a popularity index of the answer. This index is defined to be the square root of the empirical frequency at which any two agents performing the same evaluation agree on the particular answer across evaluations of similar entities operating on the platform. Rarely agreed-on answers thus earn a higher reward than answers for which agreements are relatively more common. We show that in the many tasks regime, the truthful equilibrium under SRA is strictly payoff-dominant across large classes of natural equilibria that could arise in these settings, thus increasing the likelihood of its adoption. Although there exist other mechanisms achieving such guarantees, they either impose additional assumptions on the response distribution that are not generally satisfied for objective evaluations or they incentivize truthful behavior only if each agent performs a prohibitively large number of evaluations and commits to using the same strategy for each evaluation. SRA is the first known incentive mechanism satisfying such guarantees without imposing any such requirements. Moreover, our empirical findings demonstrate the robustness of the incentive properties of SRA in the presence of mild subjectivity or observational biases in the responses. These properties make SRA uniquely attractive for administering reward-based incentive schemes (e.g., rebates, discounts, reputation scores, etc.) on online platforms. This paper was accepted by Kartik Hosanagar, information systems. Supplemental Material: The data files and online appendix are available at https://doi.org/10.1287/mnsc.2022.4375.
Link: http://dx.doi.org/10.1287/mnsc.2022.4375 [Google]
Lin, C.-A., K. Shang and P. Sun (2023): Wait Time–Based Pricing for Queues with Customer-Chosen Service Times, Management Science, 69(3275), pp.2127-2146
This paper studies a pricing problem for a single-server queue where customers arrive according to a Poisson process. For each arriving customer, the service provider announces a price rate and system wait time. In response, the customer decides whether to join the queue, and, if so, the duration of the service time. The objective is to maximize either the long-run average revenue or social welfare. We formulate this problem as a continuous-time control model whose optimality conditions involve solving a set of delay differential equations. We develop an innovative method to obtain the optimal control policy, whose structure reveals interesting insights. The optimal dynamic price rate policy is not monotone in the wait time. That is, in addition to the congestion effect (the optimal price rate increases in the wait time), we find a compensation effect, meaning that the service provider should lower the price rate when the wait time is longer than a threshold. Compared with the prevalent static pricing policy, our optimal dynamic pricing policy improves the objective value through admission control, which, in turn, increases the utilization of the server. In a numerical study, we find that our revenue-maximizing pricing policy outperforms the best static pricing policy, especially when the arrival rate is low, and customers are impatient. Interestingly, the revenue-maximizing policy also improves social welfare over the static pricing policy in most of the tested cases. We extend our model to consider nonlinear pricing and heterogeneous customers. Nonlinear pricing may improve the revenue significantly, although linear pricing is easier to implement. For the hetergeneous customer case, we obtain similar policy insights as our base model. This paper was accepted by Baris Ata, stochastic models and simulation. Supplemental Material: The online appendix is available at https://doi.org/10.1287/mnsc.2022.4474.
Link: http://dx.doi.org/10.1287/mnsc.2022.4474 [Google]
Mai, Y., B. Hu and S. Peke_ (2023): Courteous or Crude? Managing User Conduct to Improve On-Demand Service Platform Performance, Management Science, 69(3276), pp.996-1016
In this paper, we study how an on-demand service platform could improve its performance through managing user conduct. In such a platform, service providers may reject certain platform-proposed service requests, and their responses, in turn, incentivize users to adjust their conduct. We develop an evolutionary game theory model of user conduct and provider responses that shows that the platform could improve user conduct through either setting a low wage for service providers or implementing priority matching. Building upon these results, we further model providers and users joining and leaving the platform by once again utilizing the evolutionary game theory approach. We find that wage setting alone is a blunt instrument to improve platform performance via managing user conduct, whereas supplementing the wage decision with priority matching could overcome its limitations and serve as an effective strategy to further improve platform performance in terms of growth and profitability. This finding suggests that matching prioritization could be an important strategy for managing platforms with user and provider heterogeneities. In addition, our analysis and results also demonstrate the potential of the evolutionary game theory approach for analyzing the impact of pricing and matching decisions on the performance of large markets. This paper was accepted by Gabriel Weintraub, revenue management and market analytics. Supplemental Material: The online appendix is available at https://doi.org/10.1287/mnsc.2022.4391.
Link: http://dx.doi.org/10.1287/mnsc.2022.4391 [Google]
Shi, P. (2023): Optimal Matchmaking Strategy in Two-Sided Marketplaces, Management Science, 69(3277), pp.1323-1340
Online platforms that match customers with suitable service providers utilize a wide variety of matchmaking strategies; some create a searchable directory of one side of the market (i.e., Airbnb, Google Local Finder), some allow both sides of the market to search and initiate contact (i.e., Care.com, Upwork), and others implement centralized matching (i.e., Amazon Home Services, TaskRabbit). This paper compares these strategies in terms of their efficiency of matchmaking as proxied by the amount of communication needed to facilitate a good market outcome. The paper finds that the relative performance of these matchmaking strategies is driven by whether the preferences of agents on each side of the market are easy to describe. Here, “easy to describe” means that the preferences can be inferred with sufficient accuracy based on responses to standardized questionnaires. For markets with suitable characteristics, each of these matchmaking strategies can provide near-optimal performance guarantees according to an analysis based on information theory. The analysis provides prescriptive insights for online platforms. This paper was accepted by Omar Besbes, revenue management and market analytics. Supplemental Material: The online appendix is available at https://doi.org/10.1287/mnsc.2022.4444.
Link: http://dx.doi.org/10.1287/mnsc.2022.4444 [Google]
Zhang, Z., K. Yang, J. Z. Zhang and R. W. Palmatier (2023): Uncovering Synergy and Dysergy in Consumer Reviews: A Machine Learning Approach, Management Science, 69(3278), pp.2339-2360
Massive online text reviews can be a powerful market research tool for understanding consumer experiences and helping firms improve and innovate. This research exploits the rich semantic properties of text reviews and proposes a novel machine learning modeling framework that can reliably and efficiently extract consumer opinions and uncover potential interaction effects across these opinions, thereby identifying hidden and nuanced areas for product and service improvement beyond existing modeling approaches in this domain. In particular, we develop an opinion extraction and effect estimation framework that allows for uncovering customer opinions’ average effects and their interaction effects. Interactions among opinions can be synergistic when the co-occurrence of two opinions yields an effect greater than the sum of two parts, or as what we call dysergistic, when the co-occurrence of two opinions results in dampened effect. We apply the model in the context of large-scale customer ratings and text reviews for hotels and demonstrate our framework’s ability to screen synergy and dysergy effects among opinions. Our model also flexibly and efficiently accommodates a large number of opinions, which provides insights into rare yet potentially important opinions. The model can guide managers to prioritize joint areas of product and service improvement and innovation by uncovering the most prominent synergistic pairs. Model comparison with extant machine learning approaches demonstrates our improved predictive ability and managerial insights. This paper was accepted by Gui Liberali, marketing. Funding: The authors acknowledge the support of research funding from the National Natural Science Foundation of China [Grant 72072173]. Supplemental Material: The data files and online appendix are available at https://doi.org/10.1287/mnsc.2022.4443.
Link: http://dx.doi.org/10.1287/mnsc.2022.4443 [Google]
Zhou, W., W. Huang, V. N. Hsu and P. Guo (2023): On the Benefit of Privatization in a Mixed Duopoly Service System, Management Science, 69(3279), pp.1486-1499
We consider a mixed duopoly service system with two service providers (SPs): one private and the other public. The public SP’s objective is welfare maximization, whereas the private SP is profit driven. Customers are heterogeneous in terms of their quality tastes and choose from three options, namely, joining the private queue, joining the public queue, and balking (or taking an outside option). We first consider the scenario where the private SP provides a premium service and the public SP provides a regular service. Paradoxically, we find that although the public SP’s objective is welfare maximization, welfare in the system can be less than that obtained with only profit-seeking private SPs. We further demonstrate that the maximum social welfare is achieved by partially privatizing the public SP, that is, by including both welfare and profit maximization as arguments in its objective function. In extreme cases in which the public SP’s capacity is very small, fully privatizing the public SP can be socially desirable. We then consider the alternate setting where the public SP provides a premium service and the private SP provides a regular service and obtain similar conclusions. These findings, however, rely on the assumption that an outside option exists for balking customers, and one should be cautious in generalizing to no-balking situations. This paper was accepted by Jayashankar Swaminathan, operations management. Funding: W. Zhou was supported by the National Natural Science Foundation of China [Grants 71925002 and 71731006]. W. Huang acknowledges the financial support from the National Natural Science Foundation of China [Grants 71801096 and 72101090] and the Guangdong Basic and Applied Basic Research Foundation [Grant 2022A1515011983]. V. N. Hsu was supported by the General Research Fund of the Hong Kong Research Grants Council [Grant CUHK14526216]. P. Guo received financial support from the Hong Kong Research Grants Council [Grant 15502820]. Supplemental Material: The e-companion and data are available at https://doi.org/10.1287/mnsc.2022.4424.
Link: http://dx.doi.org/10.1287/mnsc.2022.4424 [Google]
Runge, J., D. Wentzel, J. Y. Huh and A. Chaney (2023): “Dark patterns” in online services: a motivating study and agenda for future research, Marketing Letters, 34(3280), pp.155-160
Some companies offering online services employ tactics that make it hard for customers to quit their accounts. These tactics are commonly referred to as “dark patterns” and may include hiding the cancelation procedure, asking customers to go through an excessive number of steps to complete the cancelation, or simply not letting customers quit their accounts straight away. Arguably, dark patterns are the result of misaligned incentives between companies and customers as companies can still benefit from their customers’ data even if they no longer use the companies’ services. Against this background, the authors conduct an observational survey of the state of current market practice and call for future research that enhances our understanding of dark patterns, their organizational antecedents, customers’ psychological responses to these tactics, and the wider consequences of dark patterns for firms and markets.
Link: http://dx.doi.org/10.1007/s11002-022-09629-4 [Google]
Berry, L. L., S. Letchuman, J. Khaldun and M. K. Hole (2023): How Hospitals Improve Health Equity Through Community-Centered Innovation, NEJM Catalyst Innovations in Care Delivery, 4(3281), pp.CAT-22
Hospitals that invest in community health equity — reducing and ultimately eliminating disparities in health and the determinants that adversely affect excluded or marginalized groups — can strengthen their financial performance, organizational culture, and reputation. By emphasizing health, not just health care, leaders of these hospitals help achieve a broader good for the community at large. By working with community stakeholders, these hospitals reduce barriers to good health (e.g., poverty, discrimination, inadequate housing, deficient education); welcome the community’s input into hospital operations and programs; and extend the hospital’s expertise, credibility, and financial resources into the community. The authors feature examples from hospital-based health systems that have successfully mitigated health inequities with primarily self-funded community initiatives while serving diverse geographic locations and populations. They conducted 30- to 60-minute semi-structured virtual interviews with 11 leaders at 5 hospitals between January and March 2022 and collected additional information through email. Interview questions centered on whether the hospital’s community health equity investments make financial sense, how population health outcomes are measured for community interventions, how specific community programs were initiated, and the lessons other health systems can learn when investing in the community. From these interviews, as well as published reports and data, the authors show the positive impact that community-centered innovation can have for all stakeholders. They then offer specific leadership lessons for other institutions that aim to replicate these successes.
Link: http://dx.doi.org/ [Google]
Dwivedi, Y. K., L. Hughes, Y. Wang, A. A. Alalwan, S. J. Ahn, J. Balakrishnan, S. Barta, R. Belk, D. Buhalis, V. Dutot, R. Felix, R. Filieri, C. Flavián, A. Gustafsson, C. Hinsch, S. Hollensen, V. Jain, J. Kim, A. S. Krishen and J. O. Lartey (2023): Metaverse marketing: How the metaverse will shape the future of consumer research and practice, Psychology & Marketing, 40(3282), pp.750-776
The initial hype and fanfare from the Meta Platforms view of how the metaverse could be brought to life has evolved into an ongoing discussion of not only the metaverse’s impact on users and organizations but also the societal and cultural implications of widespread usage. The potential of consumer interaction with brands within the metaverse has engendered significant debate within the marketing_focused discourse on the key challenges and transformative opportunities for marketers. Drawing on insights from expert contributors, this study examines the marketing implications of the hypothetical widespread adoption of the metaverse. We identify new research directions and propose a new framework offering valuable contributions for academia, practice, and policy makers. Our future research agenda culminates in a checklist for researchers which clarifies how the metaverse can be beneficial to digital marketing and advertising, branding, services, value creation, and consumer wellbeing.
Link: http://dx.doi.org/10.1002/mar.21767 [Google]
Iveson, A., M. Hultman, V. Davvetas and P. Oghazi (2023): Less speed more haste: The effect of crisis response speed and information strategy on the consumer_brand relationship, Psychology & Marketing, 40(3283), pp.391-407
This paper investigates the relationship between firm crisis behavior and the resulting consumer–brand relationship (CBR) response. Drawing from theoretical traditions in brand transgressions, service failure, and crisis communications, we use longitudinal survey data combined with archival social media data to empirically test the effect of crisis response speed and crisis information strategy on the short_term consumer crisis response evaluations (1 month after crisis response), and the long_term CBR (1 year after crisis response). Results show that, contrary to intuitive expectations, a faster firm response is not always better, as a slower response was found to result in higher crisis response evaluations. We also show that this effect depends on the consistency of the communication strategy with the first active response. Specifically, when a firm prioritizes safety information (instructing strategy), a faster response is better. Whereas, when the firm prioritizes well_being information (adjusting strategy), a slower response is better. We argue the counterintuitive finding that a slower response is better implies that reacting too quickly may signal rashness and unpreparedness to the customer, leading to more negative evaluations. We term this distinction the difference between being responsive (fast but considered) and reactive (faster but rash).
Link: http://dx.doi.org/10.1002/mar.21726 [Google]
Moisio, R. and M. Beruchashvili (2023): Heeding emotions or seeking challenges? Family support processes cultivate consumers’ emotion_ and problem_focused support_seeking, Psychology & Marketing, 40(3284), pp.707-722
This research explores how families shape consumers’ support_seeking from businesses’ employees and other customers. Findings from a qualitative study of Weight Watchers uncover that some families trigger support_seeking focused on attenuating emotions arising from the source of stress (emotion_focused support_seeking), while other families foster support_seeking related to attenuating the cause(s) of stress itself (problem_focused support_seeking). Consumers’ support_seeking reflects whether they experience their families’ support as caring and responsive to their needs. As such, this research informs the substantive understanding of how consumers cope with consumption_induced stress. Theoretically, this research contributes to coping literature in marketing with its conceptualization of emotion_ and problem_focused support_seeking. This work also contributes to marketing literature on social support, expanding and revising the literature’s explanation about when and how support from primary sources (e.g., family) is related to consumers’ support_seeking from businesses’ employees and customers. Managerially, this work is relevant to businesses in consumer health domain. The key implication is that to enhance customer satisfaction and retention, businesses ought to improve the alignment between their services and consumers’ support_seeking tendencies.
Link: http://dx.doi.org/10.1002/mar.21776 [Google]
Park, J. and Y. Yi (2023): The influence of frontline employee self_disclosure about products in a retail store on customer trust in the retailer in the context of service encounters, Psychology & Marketing, (3285), pp.1
The current research investigates how customers respond to self_disclosure by frontline employees in the service encounter context of retailing. Three scenario_based experiments demonstrate that self_disclosure by frontline employees related to the promoted products in a retail store has a beneficial impact on the trust which customers feel in the store. This effect is mediated by both perceived employee effort and intimacy toward employees. However, this self_disclosure effect is mitigated when customers perceive strong persuasive intent via persuasive attempts by employees. From a practical viewpoint, our investigations offer applicable tactics for producing desired outcomes regarding relational benefits (i.e., trust) during service encounters.
Link: http://dx.doi.org/10.1002/mar.21817 [Google]
Pizzi, G., V. Vannucci, V. Mazzoli and R. Donvito (2023): I, chatbot! the impact of anthropomorphism and gaze direction on willingness to disclose personal information and behavioral intentions, Psychology & Marketing, (3286), pp.1
The present research focuses on the interplay between two common features of the customer service chatbot experience: gaze direction and anthropomorphism. Although the dominant approach in marketing theory and practice is to make chatbots as human_like as possible, the current study, built on the humanness_value_loyalty model, addresses the chain of effects through which chatbots’ nonverbal behaviors affect customers’ willingness to disclose personal information and purchase intentions. By means of two experiments that adopt a real chatbot in a simulated shopping environment (i.e., car rental and travel insurance), the present work allows us to understand how to reduce individuals’ tendency to see conversational agents as less knowledgeable and empathetic compared with humans. The results show that warmth perceptions are affected by gaze direction, whereas competence perceptions are affected by anthropomorphism. Warmth and competence perceptions are found to be key drivers of consumers’ skepticism toward the chatbot, which, in turn, affects consumers’ trust toward the service provider hosting the chatbot, ultimately leading consumers to be more willing to disclose their personal information and to repatronize the e_tailer in the future. Building on the Theory of Mind, our results show that perceiving competence from a chatbot makes individuals less skeptical as long as they feel they are good at detecting others’ ultimate intentions.
Link: http://dx.doi.org/10.1002/mar.21813 [Google]
Shen, M., S. Gao and H. Wang (2023): The effect of social crowding on self_perceived health risks in healthcare services, Psychology & Marketing, 40(3287), pp.845-862
Overcrowding in healthcare environments (e.g., hospitals) has become a widely identified problem in today’s healthcare. This research documents whether and how social crowding affects consumers’ self_perceived health risks in healthcare environments and its downstream effect. One pilot study (secondary data analysis), seven laboratory experiments, and a field survey (Study 6) demonstrated that social crowding increased individuals’ self_perceived health risks through a lack of control (Studies 1–6), thereby leading to overspending on the healthcare products (Study 5). Furthermore, the mediating process was moderated by choice and disease symptom severity (Studies 3 and 4). The findings of this research theoretically enrich our understanding of how social crowding interacts with individual disease symptoms and the services provided in the healthcare environment, and practically provide important implications for healthcare practitioners in managing consumers’ health risks and consumption behavior.
Link: http://dx.doi.org/10.1002/mar.21771 [Google]
Shin, M., R. H. Lee, J. E. Min and T. S. Legendre (2023): Connecting nature with luxury service, Psychology & Marketing, 40(3288), pp.300-316
Many service and retail facilities, such as hotels, restaurants, hospitals, and airports, are incorporating nature elements into their building design. Individuals’ affinity for nature is called biophilia. The literature on biophilic design heavily focuses on the restorative effects of biophilic design on the facility users, leaving many other effects under_investigated. In particular, biophilic design implementation requires significant financial investment, thus, whether biophilic design can bring financial returns from consumers would be of interest to practitioners. This study investigates whether biophilic design attributes are linked to consumers’ willingness to pay a price premium (WTPP). Two pretests show that when biophilic attributes are moderately implemented, they can elevate aesthetic and attractiveness perceptions, but this effect tapers off if the implementation is excessive. Through three between_subjects main experiments, this study confirms that WTPP is enhanced via increased aesthetic value and luxury perceptions when biophilic attributes are present (vs. absent—Studies 1 and 2), but this serial mediation is moderated by biophilic scarcity (low vs. high—Study 3). An adequate level of nature elements, when implemented in biophilic_scarce areas, can improve customers’ perceptions of aesthetic value and luxury. This, in turn, improves customers’ WTPP for the service.
Link: http://dx.doi.org/10.1002/mar.21762 [Google]
Abou-Foul, M., J. L. Ruiz-Alba and P. J. López-Tenorio (2023): The impact of artificial intelligence capabilities on servitization: The moderating role of absorptive capacity-A dynamic capabilities perspective, Journal of Business Research, 157(3289), pp.N.PAG-N.PAG
The advent of artificial intelligence (AI)-based technologies has opened new opportunities for manufacturers to maintain their technological edge and address pressing societal challenges. This research investigates the nature of the relationships between AI capabilities, servitization, and the role of absorptive capacity. Building on dynamic capabilities literature, we developed and empirically tested a model using structural equation modeling (SEM) and further applied a fuzzy-set qualitative comparative analysis (fsQCA). Through the construct of AI capabilities and its four sub-dimensions, we find supportive evidence from our model estimates employing data from 185 manufacturing firms in the US and EU. The study findings highlight the positive impact of AI capabilities on servitization; this relationship is positively moderated by absorptive capacity. Furthermore, the road to servitization is through advancing AI capabilities related to internal process and resource optimization coupled with AI for social innovation services. The study’s theoretical and pragmatic implications are discussed.
Link: http://dx.doi.org/10.1016/j.jbusres.2022.113609 [Google]
Chakrabarti, R. and S. C. Henneberg (2023): Base of the Pyramid entrepreneurship through silent design and effectuation, Journal of Business Research, 158(3290), pp.N.PAG-N.PAG
This study aims at understanding how entrepreneurs at the Base of the Pyramid (BoP) are ‘silent designers’ when fostering their service ventures. We couch our interpretation of their activities in the concepts of effectuation and silent design. We eschew a top-down notion of entrepreneurship and service design, which tries to understand what should be developed for the BoP, and instead focus on service design ‘by the BoP’ and ‘with the BoP’, and proffer a new concept of ‘BoP entrepreneurship by silent design of service’. Two longitudinal case studies showcase a boat service innovation through an individual entrepreneur and an NGO-led vehicles program in the same BoP setting. A key finding is the necessity to embed silent design and entrepreneurship concepts in the context of BoP, that is by employing silent design characteristics, and by complementing design concepts with effectuation logic. From a practical perspective, the findings indicate that active and passive interventions in BoP entrepreneurship must be based on understanding such embedded service design concepts, as exemplified in BoP entrepreneurship by silent design of service.
Link: http://dx.doi.org/10.1016/j.jbusres.2022.113633 [Google]
Chirumalla, K., L. Leoni and P. Oghazi (2023): Moving from servitization to digital servitization: Identifying the required dynamic capabilities and related microfoundations to facilitate the transition, Journal of Business Research, 158(3291), pp.N.PAG-N.PAG
• Industry 4.0 enable firms to transition from servitization to digital servitization. • Firms need to build different dynamic capabilities (DCs) for the transition. • The study identifies and maps the DCs and microfoundations to guide the transition. • The study identifies the key challenges and enablers for the transition. • The study proposes an integrated framework with DCs, key challenges, and enablers. Many manufacturing companies are adopting servitization as a competitive business strategy to offer product-service combinations. The ongoing shift to digitalization and Industry 4.0 provides novel opportunities and benefits to industrial firms in this regard, and researchers termed the adoption of digital technologies to servitization as “digital servitization”. In order to successfully transition towards digital servitization, fundamental reconfiguration of resources, organizational structures, work practices, infrastructure, culture, etc. are required. Hence, this paper performs a systematic literature review on prior studies covering dynamic capabilities for servitization and digital servitization. The purpose is to identify and compare the dynamic capabilities needed to facilitate a transition from “traditional” servitization to digital servitization. In doing so, this paper presents an integrated framework of dynamic capabilities to enable digital servitization, providing 22 micro-foundations for servitization and digital servitization, as well as the key challenges and enablers related to the transition from one to the other.
Link: http://dx.doi.org/10.1016/j.jbusres.2023.113668 [Google]
Fan, H., W. Gao and B. Han (2023): Are AI chatbots a cure-all? The relative effectiveness of chatbot ambidexterity in crafting hedonic and cognitive smart experiences, Journal of Business Research, 156(3292), pp.N.PAG-N.PAG
Whether AI chatbots improve smart experiences and generate revenue is an under-researched topic. This study fills this research gap by investigating and comparing the effects of the full range of chatbot ambidexterity on smart experiences. Using empirical data from 1,026 customers, the results indicate that chatbot ambidexterity is not a cure-all. Only efficiency-flexibility ambidexterity benefits smart experiences and customer patronage, while service-sales ambidexterity is detrimental to the creation of smart experiences. Furthermore, high service-low sales (vs low service-high sales) ambidexterity has a stronger impact on hedonic smart experiences but a weaker influence on cognitive smart experiences. Low efficiency-high flexibility and low existing-high new product selling ambidexterity outperform high efficiency-low flexibility and high existing-low new product selling ambidexterity, respectively, in crafting either hedonic or cognitive smart experiences. The results also reveal that hedonic smart experiences have a stronger impact on customer patronage than cognitive smart experiences. This study contributes to the literature on smart experiences and chatbot ambidexterity and provides fruitful and meaningful guidance for service providers regarding the deployment of AI chatbots in the frontline interface.
Link: http://dx.doi.org/10.1016/j.jbusres.2022.113526 [Google]
Gazzoli, G., S. M. Shabazz, T. J. Arnold and P. B. Kim (2023): Why do frontline employees speak up on behalf of customers? The influence of supervisors versus coworkers and the role of intrapersonal factors, Journal of Business Research, 156(3293), pp.N.PAG-N.PAG
Customer-Focused Voice (CFV) – an employees’ discretionary expression of constructive ideas that challenge the status quo with the aim to benefit the customer – has been shown to improve service effectiveness. While the importance of supervisors in promoting employee voice is widely acknowledged in the literature, the relative impact of coworkers on voice behaviors is still unclear. To address this knowledge gap, we propose that supervisor support, coworker relationship quality, and intrapersonal employee factors combine to influence the extent to which frontline employees engage in CFV and the role that CFV plays on performance outcomes. The results reveal that supervisors and coworkers influence CFV through their effect on psychological safety, and these indirect effects are significant at higher levels of perspective taking self-efficacy. Perspective taking self-efficacy acts, as well, as a critical moderator to determine the extent to which psychological safety impacts in-role and customer-oriented performance.
Link: http://dx.doi.org/10.1016/j.jbusres.2022.113514 [Google]
Leone, D., M. Cristina Pietronudo, H. Gabteni and M. Rosaria Carli (2023): Reward-based crowdfunding for building a valuable circular business model, Journal of Business Research, 157(3294), pp.N.PAG-N.PAG
Reward-based crowdfunding is a source of funds for innovative start-ups. However, prior literature paid little attention to how this phenomenon occurs when such micro-firms market products and services within the context of the so-called circular economy (CE) and for more sustainable innovation. We aim to explore the potential of reward-based crowdfunding in designing and orchestrating a circular business model for micro-firms. Drawing on this evidence, the present study performs a multiple case study analysis of selected best practices by sustainable projects funded on the Kickstarter platform. Results show that reward-based crowdfunding shapes circular business models (CBM) in informational mechanisms, collaborative innovation networks, and marketing aspects. Furthermore, reward-based crowdfunding reduces risks connected to the CBM, such as uncertainty and the long-range perspective for campaign creators and customers.
Link: http://dx.doi.org/10.1016/j.jbusres.2022.113562 [Google]
Lin, C.-S., M. Jin, P.-C. Huang and R. Xiao (2023): Does it take two to tango? The joint role of high-performance work systems and ethical leadership, Journal of Business Research, 156(3295), pp.N.PAG-N.PAG
Employees’ organizational citizenship behavior (OCB), influenced both by human resource management (HRM) and leadership, is vital for meeting non-standard and unpredictable customer demands in the service industry. Drawing on social exchange theory, substitute-for-leadership theory and information-processing perspective, this study addresses the question of how employees’ perceptions of high-performance work systems (HPWS) and ethical leadership interact to impact employees’ affective commitment and service-oriented OCB. We tested the theoretical model using a sample of 275 supervisor–subordinate dyads from chain store enterprises in the service sector in Taiwan. The proposed models were tested with hierarchical linear modeling and Monte Carlo simulation. We found that the presence of high ethical leadership weakens the positive effect of employees’ perceptions of HPWS. Furthermore, affective commitment mediates the interactive effect of employees’ perceptions of HPWS and ethical leadership on employee service-oriented OCB. In particular, the indirect effect is positive and significant when ethical leadership is low.
Link: http://dx.doi.org/10.1016/j.jbusres.2022.113536 [Google]
Mele, C., T. Tuominen, B. Edvardsson and J. Reynoso (2023): Smart sensing technology and self-adjustment in service systems through value co-creation routine dynamics, Journal of Business Research, 159(3296), pp.113737
Self-adjustment processes are crucial for ensuring service system viability in the light of emerging adoption of digital technologies that shape value co-creation. This article offers a novel conceptualization of self-adjustment to explain the process that a service system performs to adapt to changing conditions to remain viable or improve the system’s viability. In doing this, we draw on service-dominant logic and routine dynamics theory and zoom in on how self-adjustment emerges in value co-creation routines. We show the usefulness of our conceptualization in a case of an elderly care home that introduced smart sensing technology, which triggered self-adjustments in that service system through value co-creation routines. The case study explicates the deployment of self-adjustment when sensing solutions become integrated with other resources and applied by engaged actors as resources-in-use, creating novel value co-creation outcomes. It is argued that routine dynamics contribute to self-adjustment by initiating processes whereby the involved actors’ schemas, resources, and value co-creation performances become integrated and aligned after the technological change.
Link: http://dx.doi.org/10.1016/j.jbusres.2023.113737 [Google]
Nourallah, M. (2023): One size does not fit all: Young retail investors’ initial trust in financial robo-advisors, Journal of Business Research, 156(3297), pp.N.PAG-N.PAG
Financial robo-advisors (FRAs) are a cutting-edge financial technology offering automated services that relies on artificial intelligence. However, few studies have investigated how young retail investors (YRIs) build trust in FRAs. Another neglected area is whether FRAs’ universal (“one-size-fit-all”) model will succeed or should take account of cultural dimensions. Based on the initial trust perspective and the unified theory of acceptance and use of technology, this study develops a conceptual model of YRIs’ initial trust in FRAs, testing it in two countries from different parts of the world, i.e., Malaysia and Sweden. The results indicate that trust propensity, performance expectancy, and hedonic motivation address initial trust in FRAs, which in turn drives behavioural intention to use this technology. Although most results are similar in the two countries, there are indications of cultural differences regarding what influences YRIs’ initial trust in FRAs.
Link: http://dx.doi.org/10.1016/j.jbusres.2022.113470 [Google]
Razmdoost, K., L. Alinaghian, J. D. Chandler and C. Mele (2023): Service ecosystem boundary and boundary work, Journal of Business Research, 156(3298), pp.N.PAG-N.PAG
We aim to explain service ecosystem change at the intersection of focal service ecosystems through the concepts of boundary and boundary work. We define a service ecosystem boundary as a set of symbolic or social boundaries that enable the functioning of an ecosystem by identifying and authorizing actors and recognizing, legitimizing, and protecting resources. We further introduce boundary work and conceptualize the three types through which it manifests in service ecosystems: competitive, collaborative, and configurational. We further illustrate this typology by applying these types of boundary work in an analysis of the evolution of the music service ecosystem. Our paper has implications for the definition of actors and resources in service ecosystems in addition to the processes that include or exclude these actors and resources. Furthermore, our conceptualization contributes to the literature by providing a lens for investigating boundary changes in service ecosystems and explaining their fluidity or stability.
Link: http://dx.doi.org/10.1016/j.jbusres.2022.113489 [Google]
Turienzo, J., P. Cabanelas and J. F. Lampón (2023): Business models in times of disruption: The connected and autonomous vehicles (uncertain) domino effect, Journal of Business Research, 156(3299), pp.N.PAG-N.PAG
• The connectivity of CAV will increase personalization of services through digitalization. • Mobility-related business will move from B2C to B2B due to the higher servitization. • Service areas, car parks and maintenance workshops can create synergies joint synergies. • Logistics, e-commerce will be key elements in the service offered by platforms or service areas. • Servitization will optimize routes and delivery of goods through data management. The ongoing digitalization of the economy is challenging the value creation process in traditional business. In the mobility-related industry, the disruptive potential of Connected and Autonomous Vehicles (CAV) has the capacity to transform business models. However, great uncertainty exists regarding the technological evolution and social trends that will condition businesses in the near future. This paper intends to use contingency theory to shed light on this topic and better understand the enhancers and barriers that managers should deal with to create, deliver, and capture value associated to CAV. With this aim, the paper adopts a qualitative approach based on in-depth interviews with high-level managers from different industries. The findings suggest the importance of data management to better understand the needs of the customer and vehicle requirements so that differential value can be provided. Two potential solutions that have emerged are, first, the establishment of alliances between companies competing in different areas and, second, digital platforms in order to enhance customer experience and the evolution from B2C to B2B markets associated with growing servitization.
Link: http://dx.doi.org/10.1016/j.jbusres.2022.113481 [Google]
Treiblmaier, H. and E. Petrozhitskaya (2023): Is it time for marketing to reappraise B2C relationship management? The emergence of a new loyalty paradigm through blockchain technology, Journal of Business Research, 159(3300), pp.N.PAG-N.PAG
[Display omitted] • Blockchain-based loyalty programs transform business-to-consumer (B2C) relations. • Five features are examined: usage, accrual, relevance, expiration, transferability. • Expectancy theory is used to assess perceptions of blockchain-based loyalty. • Twitter tweets show more positive feedback for the blockchain-based loyalty program. • A survey confirms blockchain’s advantages for designing loyalty programs. Blockchain technology is predicted to become a powerful driver of marketing transformation. At present, most envisioned use cases are in an early stage with an uncertain industrial impact and an immature theoretical integration in academic research. To help close this research gap, we investigate how blockchain-based loyalty programs transform B2C relations through innovative customer services that bear important properties of a sharing economy. Specifically, we identify-five potential advantages of blockchain-based programs over traditional loyalty programs pertaining to usage, accrual, relevance, expiration, and transferability. We then apply expectancy theory to assess consumers’ perceptions in two empirical studies, both of which reveal an overall preference for blockchain-based loyalty programs over traditional models: an analysis of 5,059 Twitter tweets detects more positive feedback for the blockchain-based program, and a survey of 206 consumers reveals a significantly more positive attitude toward the blockchain-based loyalty program with respect to accrual, relevance, expiration, and transferability.
Link: http://dx.doi.org/10.1016/j.jbusres.2023.113725 [Google]
Viglia, G., R. Pera, S. Dyussembayeva, M. Mifsud and L. D. Hollebeek (2023): Engagement and value cocreation within a multi-stakeholder service ecosystem, Journal of Business Research, 157(3301), pp.N.PAG-N.PAG
While consumer engagement and value cocreation research proliferate, it is important to explore these concepts from an ecosystem-based multi-stakeholder perspective as, therefore, undertaken in this article. Specifically, this study marks a pioneering attempt in conceptualizing stakeholder engagement (SE) as a core foundation of stakeholder value cocreation within multi-stakeholder service ecosystems. SE’s behavioral, cognitive, and emotional dimensions are proposed to activate distinct outcomes, thus disentangling stakeholder value cocreation from the closely related constructs of cooperation and collaboration. The study adopts a qualitative multi-method approach integrating in-depth managerial interviews with observation, and secondary data analysis. The findings show that (1) when behavioral SE prevails, the activated process is cooperation, (2) when cognitive SE is also present, the activated process is collaboration, (3) when emotional SE integrates the behavioral and cognitive SE, the activated process is cocreation.
Link: http://dx.doi.org/10.1016/j.jbusres.2022.113584 [Google]
Benjaafar, S., D. Chen, R. Wang and Z. Yan (2023): Appointment Scheduling Under a Service-Level Constraint, Manufacturing & Service Operations Management, 25(3302), pp.70-87
Problem definition: This paper studies an appointment system where a finite number of customers are scheduled to arrive in such a way that (1) the expected waiting time of each individual customer cannot exceed a given threshold; and (2) the appointment times are set as early as possible (without breaking the waiting time constraint). Methodology/results: First, we show that, under the service-level constraint, a prospective schedule can be obtained from a sequential scheduling approach. In particular, we can schedule the appointment time of the next customer based on the scheduled appointment times of the previous customers. Then, we use a transient queueing-analysis approach and apply the theory of majorization to analytically characterize the structure of the optimal appointment schedule. We prove that, to keep the expected waiting time of each customer below a certain threshold, the minimum inter-appointment time required increases with the arrival sequence. We further identify additional properties of the optimal schedule. For example, a later arrival has a higher chance of finding an empty system and is more likely to wait less than the duration of his expected service time. We show the convergence of the service-level-constrained system to the D/M/1 queueing system as the number of arrivals approaches infinity and propose a simple, yet practical, heuristic schedule that is asymptotically optimal. We also develop algorithms that can help system managers determine the number of customers that can be scheduled in a fixed time window. We compare the service-level-constrained appointment system with other widely studied systems (including the equal-space and cost-minimization systems). We show that the service-level-constrained system leads to a lower upper bound on each customer’s waiting time; ensures a fair waiting experience among customers; and performs quite well in terms of system overtime. Finally, we investigate various extended settings of our analysis, including customer no-shows; mixed Erlang service times; multiple servers; and probability-based service-level constraints. Managerial implications: Our results provide guidelines on how to design appointment schedules with individual service-level constraints. Such a design ensures fairness and incorporates the threshold-type waiting perception of customers. It is also free from cost estimation and can be easily applied in practice. In addition, under the service-level-constrained appointment system, customers with later appointment times can have better waiting experiences, in contrast to the situation under other commonly studied systems. Funding: Z. Yan was partly supported by a Nanyang Technological University startup grant; the Ministry of Education Academic Research Fund Tier 1 [Grant RG17/21] and Tier 2 [Grant MOE2019-T2-1-045]; and Neptune Orient Lines [Fellowship Grant NOL21RP04]. Supplemental Material: The online supplement is available at https://doi.org/10.1287/msom.2022.1159.
Link: http://dx.doi.org/10.1287/msom.2022.1159 [Google]
Guo, P., M. Haviv, Z. Luo and Y. Wang (2023): Signaling Service Quality Through Queue Disclosure, Manufacturing & Service Operations Management, 25(3303), pp.543-562
Problem definition: We consider a single-server queueing system where service quality is either high or low. The server, who knows its exact quality level, can signal this quality information to customers by revealing or concealing its queue length. Based on this queue disclosure action and the observed queue length in the case of a revealed queue, customers decide whether to join the system. Academic/practical relevance: The queue disclosure action is regarded as a signal indicating the service quality. Methodology: We develop a signaling game and adopt the sequential equilibrium concept to solve it. We further apply the perfect sequential equilibrium as an equilibrium-refinement criterion. Results: In our baseline model, where all of the customers are uninformed of service quality, the pure-strategy perfect sequential equilibrium is always a pooling one, except at several discrete values of market size (measured by the potential arrival rate). When the market size is below a certain threshold, both high- and low-quality servers adopt queue concealment; otherwise, both types of servers adopt queue revelation. We also consider a general scenario in which the market is composed of both quality informed and uninformed customers. Under this setting, when the server conceals the queue, we can fully characterize customers’ equilibrium queueing strategies and the corresponding effective arrival rates. The unique sequential equilibrium outcome is still a pooling one when the market size is either below a lower threshold or above an upper threshold. A separating equilibrium can occur only when the market size falls between two thresholds; under that circumstance, the uninformed customers can infer the server’s quality from its queue disclosure behavior. Managerial implications: Under separating sequential equilibria, uninformed customers can fully infer the quality information and thus behave in an informed way. Unlike studies where queue disclosure is not regarded as a quality signal, our study reveals that the signaling effect of queue disclosure increases (decreases) the effective arrival rate of the high-quality (low-quality) server and also increases the customers’ total utility when the server is of low quality. Funding: P. Guo acknowledges the financial support from the Research Grants Council of Hong Kong [Grant 15502820]. The research of M. Haviv was funded by Israel Science Foundation [Grant 1512/19]. Z. Luo acknowledges the financial support from the Internal Start-up Fund of the Hong Kong Polytechnic University [Grant P0039035] and the National Natural Science Foundation of China [Grant 71971184]. Y. Wang’s work was supported by the Research Grants Council of Hong Kong [Grant 15505019]. Supplemental Material: The e-companion is available at https://doi.org/10.1287/msom.2022.1170.
Link: http://dx.doi.org/10.1287/msom.2022.1170 [Google]
He, E. J., S. Savin, J. Goh and C.-P. Teo (2023): Off-Platform Threats in On-Demand Services, Manufacturing & Service Operations Management, 25(3304), pp.775-791
Problem definition: Online platforms that provide on-demand services are often threatened by the phenomenon of leakage, where customer-provider pairs may decide to transact “off-platform” to avoid paying commissions to the platform. This paper investigates properties of services that make them vulnerable or resistant to leakage. Academic/practical relevance: In practice, much attention has been given to platform leakage, with platforms experimenting with multiple approaches to alleviate leakage and maintain their customer and provider bases. Yet, there is a current dearth of studies in the operations literature that systematically analyze the key factors behind platform leakage. Our work fills this gap and answers practical questions regarding the sustainability of platform. Methodology: We develop two game-theoretical models that capture service providers’ and customers’ decisions whether to conduct transactions on or off the platform. In the first (“perfect information”) model, we assume that customers are equipped with information to select their desired providers on the platform, whereas in the second (“imperfect information”) model, we assume customers are randomly matched with available providers by the platform. Results: For profit maximizing platforms, we show that leakage occurs if and only if the value of the counterparty risk from off-platform transactions exceeds a threshold. Across both models, platforms tend to be more immunized against leakage as provider pool sizes increase, customer valuations for service increase, their waiting costs decrease, or variability in service times are reduced. Finally, by comparing the degree of leakage between both settings, we find that neither model dominates the other across all parameter combinations. Managerial implications: Our results provide guidance to existing platform managers or entrepreneurs who are considering “platforming” their services. Namely, based on a few key features of the operating environment, managers can assess the severity of the threat of platform leakage for their specific business context. Our results also suggest how redesigning the waiting process, reducing service time variability, upskilling providers can reduce the threat of leakage. They also suggest the conditions under which revealing provider quality information to customers can help to curb leakage. Funding: J. Goh’s work was supported by a National University of Singapore Start-Up [Grant R-314-000-110-133] and a 2021 Humanities and Social Sciences Fellowship from the National University of Singapore. Supplemental Material: The online appendices are available at https://doi.org/10.1287/msom.2022.1179.
Link: http://dx.doi.org/10.1287/msom.2022.1179 [Google]
Li, L., X. Fang and Y. F. Lim (2023): Asymmetric Information of Product Authenticity on C2C E-Commerce Platforms: How Can Inspection Services Help?, Manufacturing & Service Operations Management, 25(3305), pp.631-647
Problem definition: We consider a customer-to-customer (C2C) platform that provides an inspection service. Uncertain about product authenticity, a seller sells a product through the platform. Before purchasing, a buyer obtains a signal of the product authenticity from the product’s price set by the seller. The platform’s inspection service can detect a counterfeit with a probability. If the product passes the inspection, the platform sends it to the buyer and charges the seller a commission fee. Otherwise, the platform returns it to the seller and charges the seller a penalty fee. Methodology/results: We develop a two-stage game-theoretical model. In the first stage, the platform designs a contract specifying the commission and penalty fees. In the second stage, the seller signals the product authenticity by setting a price and the buyer decides whether to purchase it. This results in a contract design problem that governs a signaling game. We find that the effect of inspection is beyond merely detecting counterfeits. The inspection, even an imperfect one, changes the signaling game’s structure and incentivizes the seller whose product is likely authentic to sell through the platform. This can only be achieved by carefully choosing the commission and penalty fees. Moreover, a larger platform’s expected profit does not imply a larger commission fee or price in equilibrium. Under some mild conditions, the optimal commission increases but the optimal penalty decreases as the platform’s inspection capability improves. Managerial implications: The inspection service is not widely available among leading C2C platforms as it is considered imperfect and costly. Our study suggests that its benefit may be underestimated in practice. Moreover, the inspection can eliminate the seller’s information rent and generate more revenue for the platform. This paper provides guidance on how to set commission and penalty fees when the inspection service is provided. Funding: L. Li is supported by the National Natural Science Foundation of China [Grant 72071198] and the Hong Kong Polytechnic University Distinguished Postdoctoral Fellowship Scheme [Grant 1-YWC7]. X. Fang and Y. F. Lim are grateful for the support from the Lee Kong Chian School of Business, Singapore Management University [Maritime and Port Authority Research Fellowship and Retail Centre of Excellence Research Grant]. Y. F. Lim is supported by the Association of South-East Asian Nations Business Research Initiative Grant [Grant G17C20421], the Research Grants Council of Hong Kong [Grants 15501920 and 15501221], and the Key Program of National Natural Science Foundation of China [Grant 71931009]. Supplemental Material: The online appendices are available at https://doi.org/10.1287/msom.2023.1186.
Link: http://dx.doi.org/10.1287/msom.2023.1186 [Google]
Wang, Z., S. Cui and L. Fang (2023): Distance-Based Service Priority: An Innovative Mechanism to Increase System Throughput and Social Welfare, Manufacturing & Service Operations Management, 25(3306), pp.353-369
Problem definition: The main goal of many nonprofit or nongovernmental organizations is to increase the number of customers who receive service (i.e., service coverage) and social welfare. However, the limited number of employees, volunteers, and service locations results in long service wait. In addition, getting customers living in remote areas to receive services by traveling long distances is difficult. We propose an innovative distance-based service priority policy that would reduce the service waiting time for customers who must travel farther for the service by giving them higher service priority, thereby providing them with a new incentive to seek service. Methodology/results: Using a game-theoretic queueing model, we show that the proposed policy can significantly attract more customers to a service. The increase can be up to 50% compared with the ordinary first-come-first-served service discipline. The policy can also achieve higher social welfare, however, that may come at the cost of reduced customer welfare. We therefore propose a possible remedy for a social planner to coordinate welfare under such circumstance. It ensures all stakeholders, including the service provider, customers, and society, can benefit from the policy at the same time. Finally, we compare our distance-based service priority policy with two existing strategies from the literature—namely, the price discrimination strategy and the probabilistic priority strategy. Managerial implications: Our proposed policy can play a pivotal role in a nonprofit service provider’s mission to increase service coverage and social welfare, especially when customers’ travel costs to obtain service are significant. Furthermore, our policy may create fewer implementation and fairness concerns compared with related strategies. Funding: Z. Wang acknowledges financial support from the National Natural Science Foundation of China [Grants 72001118 and 72132007], and L. Fang acknowledges financial support from the National Natural Science Foundation of China [Grant 72271129]. Supplemental Material: The online appendices are available at https://doi.org/10.1287/msom.2022.1157.
Link: http://dx.doi.org/10.1287/msom.2022.1157 [Google]
Behera, R. K. and P. K. Bala (2023): Unethical use of information access and analytics in B2B service organisations: The dark side of behavioural loyalty, Industrial Marketing Management, 109(3307), pp.14-31
In business-to-business (B2B) service organisations, unethical practices frequently lead to an adverse impact on business. Therefore, B2B must adopt the ethical use of information access and analytics to deliver the best service quality as it positively influences behavioural loyalty. This study explores the unethical use of information access and analytics on B2B relationships to observe the dark side of service quality and behavioural loyalty. A novel conceptual model based on information access, analytics, service quality, customer perceived value and behavioural loyalty is proposed. A quantitative methodology is applied to raw data gathered from 307 respondents of B2B service firms. This study concludes that unethical use of access to privacy and secured information, and unethical use of analytics in sensitive inferences, risk assessment, model drift and eDiscovery results in unfavourable service quality. The unfavourable service quality leads to unfavourable behavioural loyalty. Therefore, acting ethically is essential for long-lasting relationships. • Examines the dark side of behavioural loyalty and service quality. • Propose a conceptual model based on unethical use of information access and analytics. • Studies how unfavourable service quality influence unfavourable behavioural loyalty. • Discuss the dark side of B2B relationships. • Propose a declining service quality curve and declining behavioural loyalty curve.
Link: http://dx.doi.org/10.1016/j.indmarman.2022.12.006 [Google]
Clarke, A. H., B. Mortensen and P. V. Freytag (2023): Knowledge intensive business service (KIBS) firms’ use of visualization for customer participation and knowledge sharing during the service process, Industrial Marketing Management, 109(3308), pp.32-43
Customer participation is central to the service production and delivery processes of knowledge intensive business service firms. The customer can provide knowledge, effort, and decisions on problems and solutions, but the often intangible and abstract service offerings and discussions can be challenging. Recent research suggests that visualization can help customers understand service offerings and support productization, but the critical link between customer participation and visualization has yet to be researched. This paper explores this link through a qualitative study based on in-depth interviews with twenty-five service representatives from nine Danish advertising agencies. We develop a framework that describes four customer participation activities focused on visualization. In two activities, probing (the problem) and selecting (the solution), the visualization acts as a cue for the service providers’ and customers’ knowledge sharing. In mapping (the problem) and exploring (the solution), the visualization acts as a manifestation of the KIBS firm and customer knowledge sharing. The research shows that the application of the activities varies across projects depending on the contextual factors of tasks and customer relations. KIBS firms benefit from applying more visualization activities throughout the service process when dealing with complicated tasks and new customers, compared to simple tasks and existing customers. • We develop a framework for customer participation activities in the KIBS service process. • The framework describes four customer participation activities focused on visualization. • In two activities the visualization acts as a cue for knowledge sharing. • In two activities the visualization acts as a manifestation of knowledge sharing. • Activities varies depending on the complexity of the tasks and the relation to the customer.
Link: http://dx.doi.org/10.1016/j.indmarman.2022.12.004 [Google]
Iriarte, I., M. Hoveskog, H. Nguyen Ngoc, I. Legarda, M. Uranga, M. Nazabal and A. Atxa (2023): Service design for digital servitization: Facilitating manufacturers’ advanced services value proposition design in the context of Industry 4.0, Industrial Marketing Management, 110(3309), pp.96-116
Industry 4.0 provides increasing opportunities for manufacturing companies in servitization, which has led to the emergence of digital servitization. Several single case studies have suggested service design as a means to advanced services value proposition design in digital servitization. However, these case studies are context-constrained, while multicase studies investigating the impact of service design on digital servitization remain sparse. In the present study, we examined, over two and a half years, the application of service design for advanced services value proposition design in a multicase study of 10 manufacturers engaged in digital servitization. By applying a research through design method, we studied the impact of service design on the digital servitization process and identified the types of events that shape the advanced services value proposition design. As a result, this research provides further insights into the impact of service design on digital servitization in the manufacturing context and offers new avenues for further research in the field. • Service design facilitates advanced services value proposition design. • Service design empowers capabilities to guide the digital servitization process. • Service design nurtures internal and external collaboration for digital servitization legitimacy.
Link: http://dx.doi.org/10.1016/j.indmarman.2023.02.015 [Google]
Li, A. Q., A. Lahy, P. Found, M. Kumar and B. Claes (2023): Developing PSS business ecosystems in the digital era, Industrial Marketing Management, 109(3310), pp.121-134
This paper presents two approaches to developing PSS (product-service systems) business ecosystems for manufacturing and service organisations by leveraging digital development. Our research is based on two in-depth, comparative case studies of large multinational corporations: one manufacturing company that takes the servitisation approach and the other a logistics services company taking a productisation approach. The research addresses two principal gaps in extant PSS research. First, most extant PSS research focuses predominantly on servitisation development and overlooks the productisation perspective. We address this gap by considering PSS from both a productisation and servitisation perspective. Second, extant research investigates PSS integration mainly from the ‘technical’ and ‘commercial’ perspectives. In contrast, this research adds a ‘social’ perspective by considering the business-to-authority (B2A) and business-to-public (B2P) relations. The findings also provide business practitioners with preliminary yet meaningful insights into holistic consideration of PSS ecosystem integration from ‘technical’, ‘commercial’ and ‘social’ perspectives. Moreover, we seek to push the boundaries of PSS ecosystem research and promote interdisciplinary research across fields, including business strategy, industrial marketing, social marketing, public policy and supply chain management. • The PSS ecosystems can be realised by manufacturing and service organisations through servitisation and productisation. • PSS ecosystem integration requires holistic consideration from ‘technical’, ‘commercial’, and ‘social’ perspectives. • Business to authority (B2A) and business to public (B2P) relations emerge in PSS ecosystems. • The research promotes interdisciplinary collaboration among business strategy, industrial marketing, social marketing, public policy and SCM.
Link: http://dx.doi.org/10.1016/j.indmarman.2022.12.017 [Google]
Stegehuis, X., A. von Raesfeld and L. Nieuwenhuis (2023): Inter-organizational tensions in servitization: A dialectic process model, Industrial Marketing Management, 109(3311), pp.204-220
This study investigates inter-organizational tensions in servitization and develops a dialectic process model to better understand the emergent nature of servitization. Inter-organizational tensions have gained increasing attention in servitization literature recently, but their role in the emergent nature of servitization requires further research. By combining dialectic theory and the ARA framework from the Industrial Marketing and Purchasing (IMP) tradition, we develop a dialectic process model that identifies inter-organizational tensions as generative forces in servitization. We present a single case study about the implementation of a circular service proposition in the construction industry called “Façade-as-a-Service. Our results reveal multiple tensions in a servitization context and how they emerged as a result of contradictory relationship structures in the existing and envisioned situations. We found that the tensions may be either anticipated as a result from direct clash between the status quo and an envisioned situation or unanticipated because they are indirectly as a result of interdepend ARA dimension. Our findings contribute to the existing literature by (i) extending knowledge on servitization tensions to a circular economy context, (ii) portraying servitization as a dialectic process that requires integration of competing interests, and (iii) opening the black box of inter-organizational tensions by adopting the ARA framework. • This paper develops and presents a dialectic process model to better understand the emergent nature of servitization. • Dialectic theory explains change through thesis, antithesis, and synthesis. • Servitizing firms contradict existing relationship configurations resulting in tensions, negotiation, and synthesis. • Activity links, resource ties, and actor bonds can be considered micro-foundations of the dialectic process in servitization. • Business relationship structures can result in direct first-order contradictions and indirect-second order contradictions.
Link: http://dx.doi.org/10.1016/j.indmarman.2023.01.004 [Google]
Li, H., J. Peng, X. Li and J. Stallaert (2023): When More Can Be Less: The Effect of Add-On Insurance on the Consumption of Professional Services, Information Systems Research, 34(3312), pp.363-382
The emergence of online platforms for professional services (e.g., cosmetic procedures) represents a natural progression of e-commerce from search and experience goods to credence goods. Because of the deeply consequential nature of professional services and the large information asymmetries between customers and service providers, designing effective risk-reduction strategies is crucial for facilitating digital transactions of professional services. This paper studies whether and how the introduction of a novel risk-reduction strategy, the add-on insurance covering the potential cost of negative consequences (e.g., complications and unsatisfactory outcomes), affects the demand for professional services in online platforms. We leverage a policy change in an online platform for cosmetic procedures, which started to offer the add-on insurance for a subset of procedures in 2016. Our empirical analysis shows that the introduction of insurance increases the sales of low-risk procedures, but not those of high-risk ones. More importantly, the insurance has a negative spillover effect on uninsured competitors, regardless of their risk levels. The negative spillover effect on high-risk procedures is noteworthy because it hurts the sales of their uninsured competitors without increasing their own sales, reducing the overall demand. Our findings have important implications for platforms to design, deploy, and evaluate their risk-reduction strategies. The emergence of online platforms for professional services (e.g., cosmetic procedures) represents a natural progression of e-commerce from search and experience goods to credence goods. Because of the deeply consequential nature of professional services and the large information asymmetries between customers and service providers, designing effective risk-reduction strategies is crucial for facilitating digital transactions of professional services. In this paper, we study whether and how the introduction of a novel risk-reduction strategy, the add-on insurance covering the potential cost of negative consequences (e.g., complications and unsatisfactory outcomes), affects the demand for professional services in online platforms. We leverage a policy change in an online platform for cosmetic procedures, which started to offer the add-on insurance for a subset of cosmetic procedures in 2016. Our empirical analysis shows that this risk-reduction strategy has asymmetric effects on low- and high-risk procedures. Specifically, the introduction of insurance increases the sales of low-risk procedures, but not those of high-risk ones. More importantly, the insurance has a negative spillover effect on uninsured competitors of insured procedures, regardless of their risk levels. The negative spillover effect of insurance on high-risk procedures is noteworthy because it hurts the sales of their uninsured competitors without increasing their own sales, suggesting that the negative spillover effect goes beyond the typical demand cannibalization explanation and can decrease the overall demand for high-risk procedures. We further corroborate our findings and investigate the mechanisms behind the asymmetric treatment effects and the negative spillover effect using an online controlled experiment. Our findings have important implications for platforms to design, deploy, and evaluate their risk-reduction strategies. History: Eric Zheng, Senior Editor; Pallab Sanyal, Associate Editor. Supplemental Material: The online appendix is available at https://doi.org/10.1287/isre.2022.1129.
Link: http://dx.doi.org/10.1287/isre.2022.1129 [Google]
Ravichandran, T. and C. Deng (2023): Effects of Managerial Response to Negative Reviews on Future Review Valence and Complaints, Information Systems Research, 34(3313), pp.319-341
Online reviews are very instrumental in driving customer behaviors. This coupled with the fact that negative reviews seem to have a stronger effect on customer behaviors raises the stakes for managers to effectively respond to such reviews in order to protect their brand. However, given the exponential growth in the volume of reviews, a strategic approach that enables managers to focus their efforts in responding to negative reviews is needed. This paper develops a framework to classify negative reviews and managerial responses and examines how the fit between the nature of review and the nature of managerial response impacts the customers’ complaining behavior in the future. We focus on the mix of rational and emotional cues in exploring the appropriateness of managerial responses to negative reviews. Using text analysis (e.g., natural language processing and deep learning) and using large sale review and response data from TripAdvisor, we extract and code the variables in our model. The findings provide specific and actionable guidelines for responding to negative reviews in online forums. First, managers should respond to negative reviews in order to safeguard the brand and improve firm reputation. Second, managers should be aware that they can respond both rationally and emotionally to negative reviews. Whereas emotional responses have been the preferred mode in most firms, our theorizing and findings clearly indicate response with rational cues is also particularly important in dealing with complaints. When complaints pertain to primarily the procedures in the service delivery process such as speed and flexibility, managers should respond with rational cues that explain the reasons for the service failure and the steps taken to address such failures and reinforce the value of the service provided by the firm. When customers complain only about the nature of their interactions with the hotel or also file grievances about the services not aligning with their needs, managers should respond with more emotional cues such as apologizing or appreciating the customer for patronage and being attentive to the empathy and emotional gratification needs of customers. When customers complain that they were discriminated against, they were not getting what they deserve, or the service did not meet their requirements, managers should respond with both rational cues that explain the discrepancy between actions and expected outcomes and providing some compensation and emotional cues that satisfy the customers’ need for emotional gratification. Such customized and calibrated responses that are appropriate for the nature of the complaint would be critical in shaping the views of other customers in the online review forum. Firms, in their efforts to deal with the growing volume of reviews, have increasingly automated the response process using template responses. Our findings suggest that a more deliberate approach of carefully tailoring the responses to negative reviews is likely to be beneficial in online review forums. Firms could use a data-driven approach of extracting and classifying the nature of complaints according to our proposed framework. Recent advances in machine learning algorithms allow for such classification with greater precision. Instead of drafting each response from scratch, managers can use machine-written skeletons in their responses to target some specific reviews. Firms could then generate responses that are tailored to the nature of the complaints. Such approaches to generate tailored responses could allow firms to deal with the large review volumes in a more effective manner. There is limited systematic research on managerial response strategies to online customer complaints and negative reviews. In this paper, we synthesize justice theory and service recovery literature to develop a model that explores the mechanisms through which appropriate managerial responses to customer complaints influence aggregate future review valence and complaints. We test our model using data from TripAdvisor.com, a leading travel review platform. Using text analysis (e.g., natural language processing and deep learning), we extract and code the variables in our model from the reviews and the managerial responses to these reviews. Key findings indicate that responding to customer reviews—in particular, negative reviews—will have a positive influence on future review valence. Moreover, responses with more rational cues than emotional cues to customer complaints about procedural unfairness will have a positive influence on future review valence. However, responses with more rational cues than emotional cues to customer complaints about interactional unfairness will have a negative influence on future review valence. Moreover, we find that when reviews have both distributive and interactional unfairness, responses with more rational cues matter. In addition, we find that both rational cues and emotional cues in responses to distributive unfairness and rational cues in responses to procedural unfairness are effective to decrease the future occurrence of similar complaints. We interpret and discuss the implication of these findings for theory and practice. History: Yulin Fang, Senior Editor; Zhengrui Jiang, Associate Editor. Supplemental Material: The online appendix is available at https://doi.org/10.1287/isre.2022.1122.
Link: http://dx.doi.org/10.1287/isre.2022.1122 [Google]
Kühl, C., H. D. Skipworth, M. Bourlakis and E. Aktas (2023): The circularity of product-service systems: the role of macro-, meso- and micro-level contextual factors, International Journal of Operations & Production Management, 43(3314), pp.619-650
Purpose: This paper aims to examine the relationships between macro-, meso- and micro-level contextual factors that enable or inhibit the contribution of product service systems (PSS) to circularity. It is informed by the natural resource-based view (NRBV) and the multi-level perspective as theoretical lenses. Design/methodology/approach: A theory elaboration approach is used through three in-depth case studies of UK and German manufacturers. Case studies provide use- and result-oriented PSS for personal computers, power tools and wind turbines. Multiple sources of evidence, including 20 semi-structured interviews, company documents and quantitative data, are triangulated to improve the validity of the results. Findings: Empirical evidence for relationships between macro-, meso- and micro-level contextual factors show significant barriers to the extending and cycling of resource loops, primarily through maintenance, repairs and refurbishment. A firm’s environmental awareness has a determining role in the contribution of PSS to circularity. The evidence from two use-oriented PSS reveals different circularity maturity levels. Originality/value: This research makes three key contributions. Firstly, it elaborates on NRBV by showing that a firm’s environmental awareness determines product stewardship. The type of product stewardship practices depends on the enabling and inhibiting effects of macro- and meso-level factors. Secondly, it shows that use-oriented PSS have different circularity profiles and proposes three circularity maturity levels. Finally, it provides an empirically validated framework of macro-, meso- and micro-level enablers and barriers and how they interact to enable or inhibit circularity in PSS.
Link: http://dx.doi.org/10.1108/IJOPM-01-2022-0055 [Google]
van Oorschot, K. E., H. A. Akkermans, L. N. Van Wassenhove and Y. Wang (2023): Organizing for permanent beta: performance measurement before vs performance monitoring after release of digital services, International Journal of Operations & Production Management, 43(3315), pp.520-542
Purpose: Due to the complexity of digital services, companies are increasingly forced to offer their services “in permanent beta”, requiring continuous fine-tuning and updating. Complexity makes it extremely difficult to predict when and where the next service disruption will occur. The authors examine what this means for performance measurement in digital service supply chains. Design/methodology/approach: The authors use a mixed-method research design that combines a longitudinal case study of a European digital TV service provider and a system dynamics simulation analysis of that service provider’s digital service supply chain. Findings: With increased levels of complexity, traditional performance measurement methods, focused on detection of software bugs before release, become fragile or futile. The authors find that monitoring the performance of the service after release, with fast mitigation when service incidents are discovered, appears to be superior. This involves organizational change when traditional methods, like quality assurance, become less important. Research limitations/implications: The performance of digital services needs to be monitored by combining automated data collection about the status of the service with data interpretation using human expertise. Investing in human expertise is equally important as investing in automated processes. Originality/value: The authors draw on unique empirical data collected from a digital service provider’s struggle with performance measurement of its service over a period of nine years. The authors use simulations to show the impact of complexity on staff allocation.
Link: http://dx.doi.org/10.1108/IJOPM-03-2021-0211 [Google]
Wang, W., S. Chen, J. Shao, J. Chu and Z. Yuan (2023): The impact of servitization on trade credit in manufacturing firms: a signaling theory perspective, International Journal of Operations & Production Management, 43(3316), pp.373-398
Purpose: The aim of this study is to empirically test the link between servitization and trade credit in manufacturing firms as well as the boundary conditions of this link. Design/methodology/approach: Using a unique dataset of 4,974 observations covering 838 manufacturing firms publicly listed in the United States during 1990–2020, this study examines the impact of servitization on trade credit and the moderating impacts of financial slack and service relatedness based on fixed-effect regression models. Findings: The authors find that servitization shows a U-shaped relationship with trade credit. Besides, financial slack negatively moderates this U-shaped relationship whereas service relatedness has no significant impact on this relationship. Originality/value: This paper is the first to empirically verify the influence of servitization on trade credit in manufacturing firms based on longitudinal secondary data and signaling theory. The research findings can provide several important theoretical and managerial implications for scholars and practitioners in operations management.
Link: http://dx.doi.org/10.1108/IJOPM-02-2022-0100 [Google]
Duhaylongsod, J. B., F. Papier and A. Onculer (2023): Reference_dependent preferences in flat penalty service_level contracts, Journal of Operations Management, (3317), pp.1
This paper investigates a supply chain governed by a flat penalty service_level contract in which missing the target fill rate can lead to costly operational disruption. We focus on near_miss bias: (1) the preference for near_miss events, that is, risky production quantities that reach the target but narrowly avoid disruption; and (2) riskier decision_making due to such preferences. We propose a reference_dependent behavioral model that explains the near_miss bias. The findings of a laboratory experiment show that production quantities are evaluated based on realized profits and are below the optimal model prediction. Contracts associated with lower perceived severity, that is, the ratio of flat penalty to wholesale price, result in lower production quantities than those with higher perceived severity, even though the standard model does not predict any effect. A structural estimation analysis indicates that the behavioral model performs better than the standard model in terms of predictive accuracy and goodness of fit. Our analysis provides insights for managers who design supply chain contracts in settings with considerable risk of disruption due to a shortage of critical parts.
Link: http://dx.doi.org/10.1002/joom.1251 [Google]
Kumar, P., A. Nowinska and H. J. Schramm (2023): The signaling effect of supplier’s customer network instability on service price: Insights from the container shipping charter market, Journal of Operations Management, (3318), pp.1
In a service exchange setting, the supply management literature generally assumes, with notable exceptions, the availability of complete information regarding supplier reliability. Highlighting the information asymmetry in supplier evaluation and using signaling theory, we argue that for a focal buyer, a supplier’s downstream ego_network instability, that is, other buyers’ turnover in a supplier’s network from one period to the next, acts as a signal of supplier unreliability, thereby reducing the price that the buyer pays to the supplier in a service exchange. Furthermore, we suggest that focal buyer–supplier relationship strength and structural equivalence weaken the negative effect of instability because the buyer has a more direct and positive experience with the supplier. Using a dataset of 3263 unique dyads formed by 260 buyers (shipoperators) and 493 suppliers (shipowners) during the 2000–2018 period in the container shipping charter market, we find support for our hypotheses, except for the contingent effect of structural equivalence. Our study contributes to signaling literature and network research by developing a supplier’s downstream ego_network instability as a salient heuristic for a focal buyer’s pricing decisions. These findings equip buyer managers who may not accurately foresee supplier service quality in the charter market with a new supplier evaluation tool: a supplier’s downstream ego_network instability.
Link: http://dx.doi.org/10.1002/joom.1254 [Google]
Huang, Y., Y. Shen, F. Lai and X. Luo (2023): The categorical paradoxes in the sharing economy: Empirical evidence from Airbnb, Production & Operations Management, (3319), pp.1
Challenging conventional epistemological stances, we unravel two paradoxes of communication strategies in the emerging context of sharing economy. Specifically, the conformity–distinctiveness paradox asserts that differing from hotels improves hosts’ economic performance, but such economic benefit diminishes when deviating from the norms in hospitality settings. The economic–social paradox propounds that positioning away from hotels improves social performance but may not result in optimal economic gains. Drawing on the theoretical underpinnings of strategic categorization and optimal distinctiveness, we collect and analyze data from a sample of Airbnb listings. Utilizing multiple estimation models and identification strategies, we find that hosts can improve their economic performance by differing from hotels, but such economic gains diminish beyond a certain point. Furthermore, deviating from hotels also increases hosts’ social performance, especially when direct host–guest interactions occur in shared apartments. Our empirical findings provide compelling evidence for the two paradoxes in the context of sharing economy, extend the discourse on strategic categorization, and elucidate the effects of listing narratives conveyed through social technologies. This study also sheds new light on how operations management and service providers can exploit the communicative and linguistic perspectives of user_generated content.
Link: http://dx.doi.org/10.1111/poms.13974 [Google]
Wu, C., C. Jin and S. Veeraraghavan (2023): Designing professional services: Pricing and prioritization, Production & Operations Management, (3320), pp.1
We study the optimal design of a professional service in a mixed market of customers with heterogeneous skills and capabilities of using such service.
Link: http://dx.doi.org/10.1111/poms.13996 [Google]
