Today we identify service articles published in Marketing, Management, Operations, Productions, Information Systems & Practioner-oriented Journals in the last months.
For more information about the alert system methodology go here
For all previous alerts go here
Cennamo, C., P. Oliveira and L. Zejnilovic (2022): Unlocking Innovation in Healthcare: The Case of the Patient Innovation Platform, California Management Review, 64(2992), pp.47-77
Multisided platforms are new organizing forms that can boost innovation in the healthcare sector by empowering patients as innovators and facilitating the commercialization of innovations by and for patients. However, applying the playbook script for the platform model from other sectors may prove challenging given the distinctive nature of the healthcare services. Drawing on the case of a leading healthcare innovation platform in Europe, this article examines the platform’s role in identifying and enabling the development and diffusion of patient innovations. This involves three main roles (community organizer, market matchmaker, and innovation manager) and corresponding orchestration activities.
Link: http://dx.doi.org/10.1177/00081256221101657 [Google]
Ozalp, H., P. Ozcan, D. Dinckol, M. Zachariadis and A. Gawer (2022): “Digital Colonization” of Highly Regulated Industries: An Analysis of Big Tech Platforms’ Entry into Health Care and Education, California Management Review, 64(2993), pp.78-107
Digital platforms have disrupted many sectors but have not yet visibly transformed highly regulated industries. This study of Big Tech entry in healthcare and education explores how platforms have begun to enter highly regulated industries systematically and effectively. It presents a four-stage process model of platform entry, which we term as “digital colonization.” This involves provision of data infrastructure services to regulated incumbents; data capture in the highly regulated industry; provision of data-driven insights; and design and commercialization of new products and services. The article clarifies platforms’ sources of competitive advantage in highly regulated industries and concludes with managerial and policy recommendations.
Link: http://dx.doi.org/10.1177/00081256221094307 [Google]
Tang, Q., K. Zhang and X. Huang (2022): Indulgent Consumption Signals Interpersonal Warmth, Journal of Marketing Research (JMR), (2994), pp.1
People who engage in indulgent consumption often are viewed as having poor self-control. In this research, however, eight studies provide converging support that indulgent consumption can have a positive effect: signaling interpersonal warmth. Specifically, consumers who post indulgent (vs. healthy) consumption content on social media are perceived as warmer (Study 1). The effect occurs because consumers believe that indulgent consumption is what people genuinely prefer, so indulgent (vs. healthy) consumption seems more authentic, and authenticity mediates the effect of indulgent consumption on perceived warmth (Studies 2a and 2b). Providing additional support for the authenticity mechanism, the authors show that the positive effect of indulgent (vs. healthy) consumption on perceived warmth is attenuated when the indulgent content is sponsored, which casts doubt on its authenticity (Study 3). Further, sharing sharing indulgent consumption can increase the appeal of a service provider among consumers who are seeking a warm service provider, but this occurs only when the content is not sponsored (Studies 4a and 4b). Finally, the effect of sharing indulgent (vs. healthy) consumption has downstream consequences for audience engagement on Instagram (Studies 5a and 5b). This research sheds light on how to cultivate interpersonal warmth in marketing communication and personal branding.
Link: http://dx.doi.org/10.1177/00222437221097089 [Google]
Keeling, D. I., K. Ruyter and A. Laing (2022): Consumer (dis)engagement coping profiles using online services in managing health‐related stressors, Psychology & Marketing, (2995), pp.1
Online health services are a rapidly growing coping resource for consumers to draw on in managing health‐related stressors. We apply a (dis)engagement coping lens to understand consumer coping, identify the distinct purposes of consumer coping captured in six coping scales, and develop an inventory (via multiple studies), to measure consumer positioning on these scales. In a final survey (
Link: http://dx.doi.org/10.1002/mar.21717 [Google]
Walsh, G., E. Shiu, M. Schaarschmidt and L. M. Hassan (2022): Digital presence in service recovery: The interactive effect of customer salutations and employee photographs in email signatures, Psychology & Marketing, (2996), pp.1
Service firms can manage failure apology emails depending on how much digital presence or lack thereof they wish to maintain toward aggrieved customers. While nascent research indicates positive effects of higher levels of digital presence, the efficacy of this strategy in service recovery settings remains unclear. Drawing on the concept of digital presence and the unified theory of social relations, the authors investigate the potential detrimental effects of combining certain salutation forms with digital presence in the form of employee photographs in these emails. The data were gathered using one survey among service employees (Prestudy, N = 202), and two scenario‐based experiments (Study 1,
Link: http://dx.doi.org/10.1002/mar.21724 [Google]
Berger, J., G. Packard, R. Boghrati, M. Hsu, A. Humphreys, A. Luangrath, S. Moore, G. Nave, C. Olivola and M. Rocklage (2022): Marketing insights from text analysis, Marketing Letters, 33(2997), pp.365-377
Language is an integral part of marketing. Consumers share word of mouth, salespeople pitch services, and advertisements try to persuade. Further, small differences in wording can have a big impact. But while it is clear that language is both frequent and important, how can we extract insight from this new form of data? This paper provides an introduction to the main approaches to automated textual analysis and how researchers can use them to extract marketing insight. We provide a brief summary of dictionaries, topic modeling, and embeddings, some examples of how each approach can be used, and some advantages and limitations inherent to each method. Further, we outline how these approaches can be used both in empirical analysis of field data as well as experiments. Finally, an appendix provides links to relevant tools and readings to help interested readers learn more. By introducing more researchers to these valuable and accessible tools, we hope to encourage their adoption in a wide variety of areas of research.
Link: http://dx.doi.org/10.1007/s11002-022-09635-6 [Google]
Ladas, K., S. Kavadias and C. Loch (2022): Product Selling vs. Pay-Per-Use Service: A Strategic Analysis of Competing Business Models, Management Science, 68(2998), pp.4964-4982
We present a model that suggests possible explanations for the observed proliferation of “pay-per-use” (PPU) business models over the last two decades. Delivering “fractions” of a product as a service offers a cost advantage to customers with lower usage but requires extra delivery costs. Previous research focused on information goods (with negligible production costs) and predicted that PPU, when arising as a differentiation to selling in equilibrium, would fundamentally achieve lower profits than selling. We extend the theory by covering goods with any production cost in duopolistic competition. We show that PPU business models can be more profitable than selling (especially at midrange production costs), as long as their delivery costs are not too high, a requirement that is more easily fulfilled as new technologies reduce these costs. Moreover, if firms are imperfectly informed about their customers’ usage profiles, PPU’s effective pricing of customers’ varying usage offers an additional advantage over selling. This requires companies to employ accounting methods that do not inappropriately allocate production costs over stochastic usage levels. If PPU service provision suffers from queueing inefficiencies, this does not fundamentally change the relative profitability of the PPU and selling models, provided that PPU providers can attract sufficiently high demand to benefit from pooling economies. This paper was accepted by Charles Corbett, operations management.
Link: http://dx.doi.org/10.1287/mnsc.2021.4125 [Google]
Yu, Q., Y. Zhang and Y.-P. Zhou (2022): Delay Information in Virtual Queues: A Large-Scale Field Experiment on a Major Ride-Sharing Platform, Management Science, 68(2999), pp.5745-5757
The growing adoption of virtual queues in the service and retail industries has been greatly accelerated in recent times. In collaboration with a major ride-sharing platform, we study how the wait time information (WTI), both its initial magnitude and its subsequent progress over time, impacts customers’ abandonment behavior in virtual queues. The study was conducted through a randomized field experiment that included 1,425,745 rides: one-third of the rides received a neutral WTI, one-third received an optimistic WTI shorter than the neutral WTI (hence less frequent updates), and one-third received a pessimistic WTI (hence more frequent updates). The underlying wait time did not vary across the three groups. We find that both the magnitude of the initial WTI and the update frequency of the WTI have a significant impact on customer abandonment. Specifically, when adjusting the initial WTI by one minute, it did not impact customer abandonment. This is because the magnitude effect of the initial WTI is cancelled out by the opposite update-frequency effect. However, when adjusting the WTI by more than one minute, the magnitude effect dominates: when comparing the pessimistic WTI of four minutes with the neutral initial WTI of two minutes, five minutes with three minutes, and eight minutes with five minutes, customers’ likelihood to abandon increases by 6.2%, 14.1%, and 19.6%, respectively. Similar but opposite effects are found when comparing the optimistic WTI with the neutral WTI. We discuss how firms can use our findings and insights to design and operate better virtual queues. This paper was accepted by Vishal Gaur, operations management.
Link: http://dx.doi.org/10.1287/mnsc.2022.4448 [Google]
Chen, M., M. Hu and J. Wang (2022): Food Delivery Service and Restaurant: Friend or Foe?, Management Science, 68(3000), pp.6539-6551
With food delivery services, customers can hire delivery workers to pick up food on their behalf. To investigate the long-term impact of food delivery services on the restaurant industry, we model a restaurant serving food to customers as a stylized single-server queue with two streams of customers. One stream consists of tech-savvy customers who have access to a food delivery service platform. The other stream consists of traditional customers who are not able to use a food delivery service and only walk in by themselves. We study a Stackelberg game, in which the restaurant first sets the food price; the food delivery platform then sets the delivery fee; and, last, rational customers decide whether to walk in, balk, or use a food delivery service if they have access to one. If the restaurant has a sufficiently large established base of traditional customers, we show that the food delivery platform does not necessarily increase demand but may just change the composition of customers, as the segment of tech-savvy customers grows. Hence, paying the platform for bringing in customers may hurt the restaurant’s profitability. We demonstrate that either a one-way revenue-sharing contract with a price ceiling or a two-way revenue-sharing contract can coordinate the system and create a win-win situation. Furthermore, under conditions of no coordination between the restaurant and the platform, we show, somewhat surprisingly, that more customers having access to a food delivery service may hurt the platform itself and the society, when the food delivery service is sufficiently convenient, and the delivery-worker pool is large enough. This is because the restaurant can become a delivery-only kitchen and raise its food price by focusing on food-delivery customers only, leaving little surplus for the platform. This implies that limiting the number of delivery workers can provide a simple yet effective means for the platform to improve its own profitability while benefiting social welfare. This paper was accepted by Charles Corbett, operations management.
Link: http://dx.doi.org/10.1287/mnsc.2021.4245 [Google]
Feldman, P. and E. Segev (2022): The Important Role of Time Limits When Consumers Choose Their Time in Service, Management Science, 68(3001), pp.6666-6686
A main challenge that service providers face when managing service systems is how to generate value and regulate congestion at the same time. To this end, classical queueing models suggest managers charge per-use fees and invest in capacity to speed up the service. However, in discretionary services, in which consumers value time in service and choose how long to stay, per-use fees result in suboptimal performance and speeding up does not apply. We study a queueing model of a service provider and rational consumers who are heterogenous in their requirements for service duration. Consumers incur disutility from waiting and choose whether to join and how long to spend in service. We consider time limits as a novel mechanism that may help in controlling congestion. Time limits put a cap on the maximum time that customers can spend in service. We analyze their effectiveness when combined with two price schemes: per-use fees and price rates. Time limits are effective because they reduce time in service and impact waiting times and joining behavior. Revenue maximizing firms and social planners who maximize social welfare benefit from implementing time limits in addition to price rates. Social planners who seek to maximize consumer welfare, however, focus on regulating congestion and should, therefore, offer the service for free but implement time limits if congestion levels are high. The attractiveness of time limits goes further. We show that time limits are not only a useful lever that works well when combined with simple price mechanisms, but they are in fact optimal when congestion is high. Service providers can achieve the first-best outcome and extract all customer surplus by coupling a time limit with an optimal price mechanism. The attractiveness of time limits stems from their ability to reduce not only the average time spent in service, but also its variance. This is highly effective in settings in which customers’ service times impose externalities on others’ waiting times. Thus, we conclude that providers of discretionary services should set time limits when congestion is an issue. This paper was accepted by Vishal Gaur, operations management.
Link: http://dx.doi.org/10.1287/mnsc.2021.4236 [Google]
Ashkanani, A. M., B. B. Dunford and K. J. Mumford (2022): Impact of Motivation and Workload on Service Time Components: An Empirical Analysis of Call Center Operations, Management Science, 68(3002), pp.6697-6715
We study the joint effects of motivation and workload on human servers’ service time. Using operational and survey data from a call center with a pooled queue structure and limited financial incentives, we examine how individual differences between servers’ trait intrinsic motivation (IM) and extrinsic motivation (EM) impact their average offline, online, and total service times in response to changing workloads. We find significant differences in the patterns of workload and service time relationships across different stages of the service request between servers possessing different combinations of trait motivation. For example, servers with a combination of high IM and low EM were approximately 15% (161%) faster in processing the offline portion of service requests than their peers with the opposite combination (low and high) when workload levels were low (high), respectively. In contrast, servers with high IM-low EM were approximately 35% (5%) slower in processing the online portion of service requests than their low IM-high EM counterparts when workload levels were low (high), respectively. Our findings suggest important nuances in how servers with different trait motivation types respond to changing workload across different stages of the service request. The behavioral pattern shown by high IM-low EM servers is consistent with the preferences of productivity-seeking call center managers who favor speedup and slowdown at certain stages of the service request, conditional to workload. These findings underscore the importance of accounting for trait-based individual differences for a more complete understanding of the complex relationship between workload and service time. This paper was accepted by Charles Corbett, operations management.
Link: http://dx.doi.org/10.1287/mnsc.2022.4491 [Google]
Raddats, C., P. Naik and A. Ziaee Bigdeli (2022): Creating value in servitization through digital service innovations, Industrial Marketing Management, 104(3003), pp.1-13
Servitization increasingly requires the use of digital technologies such as the Internet of Things (IoT), cloud computing, and predictive analytics. This paper investigates digital service innovations (DSIs) that use these technologies. Using a service innovation lens, it is distinguished from most prior servitization research through specifying DSIs from incremental to radical modes, rather than measuring service innovation on self-reported scales. Data were collected using expert interviews and secondary sources from 20 manufacturers from four sectors. Using changes from baseline service offerings, the study identified nine DSIs with varying degrees of innovativeness. The paper develops a framework within which each DSI can be placed, with two axes representing innovation mode (incremental, intermediate, radical) and impact of innovation (customer, manufacturer, hybrid). This latter dimension addresses concerns about the lack of focus on customer value in prior service innovation research. The study also develops a new typology of DSI groupings (Business enabler, Service enhancement, Digital service offering) demonstrating that DSIs have mainly enabling or service enhancing roles for manufacturers rather than one that is predominantly designed to create digital service offerings. The exceptions are ‘predictive maintenance’ and ‘process improvement’, which are radical/intermediate DSIs respectively and provide strong value for both manufacturers and customers. • Servitization investigated using digital service innovations (DSIs). • Experts in 20 manufacturers interviewed to provide a comprehensive study. • Nine DSIs identified from incremental to radical modes. • A new service innovation framework developed based on innovation mode and impact. • DSIs mainly have business enabling or service enablement manufacturer roles.
Link: http://dx.doi.org/10.1016/j.indmarman.2022.04.002 [Google]
Korkeamäki, L., D. Sjödin, M. Kohtamäki and V. Parida (2022): Coping with the relational paradoxes of outcome-based services, Industrial Marketing Management, 104(3004), pp.14-27
By entering outcome-based service (OBS) relationships, industrial service providers and their customers realign their business interests to achieve mutually beneficial outcomes. The move towards OBS represents a shift from transactional to relational interaction between the providers and their customers. Thus, the changed relationship is bound to envelop paradoxes – circumstances that involve competing demands where making tradeoffs can often be impossible. The purpose of this study is to explore such relational paradoxes in OBS relationships and how providers cope with them. An explorative case study approach reveals that the relational paradoxes are related to control, knowledge, dependency, and complexity. Subsequently, we developed a COPE framework consisting of four provider coping strategies: commitment, openness, partnerships, and extrication. Building on the logic of knotted paradoxes, we introduce a quatrefoil knot in which the found relational paradoxes are enmeshed. Finally, we show how different paradoxical tensions become salient at different phases of the OBS relationship while being reinforced by the latent paradoxes at the time. For managers, we disclose relational tensions and their temporal interplay and suggest strategies to cope with them. • OBS relationship spurs paradoxical tensions between the provider and customer. • Found relational paradoxes: control, knowledge, dependency and complexity. • Paradoxes are interconnected through a quatrefoil knot which cannot be disentangled. • Different paradoxes become salient at different phases of the OBS relationship. • COPE framework is identified: commitment, openness, partnerships, and extrication
Link: http://dx.doi.org/10.1016/j.indmarman.2022.04.005 [Google]
Hahn, T. and J. Pinkse (2022): A paradox approach to sustainable product-service systems, Industrial Marketing Management, 105(3005), pp.182-189
A move towards the business model of product-service systems (PSS) holds the promise of changing customer behaviour in a more sustainable direction. While this promise of PSS to play a key role in business sustainability has long been recognised, so far, the realised sustainability benefits remain limited. This article sheds light on the reasons why PSS seem to struggle with delivering on their potential. It develops the argument that sustainable PSS are fraught with paradoxical tensions between their marketability and their potential to achieve substantive sustainability benefits. Applying a paradox lens, the article identifies six paradoxes inherent to sustainable PSS and argues that unlocking their full potential to achieve sustainability benefits requires a proactive approach to respond to these paradoxes. • This article offers a paradox perspective on sustainable product-service systems (PSS). • We show why PSS have struggled to live up to their promise to deliver substantive sustainability benefits. • Sustainable PSS are fraught with paradoxes between marketability and the potential for substantive sustainability benefits. • The article identifies six paradoxes that are inherent to sustainable PSS. • PSS’ full potential to achieve sustainability benefits requires a proactive approach to respond to these paradoxes.
Link: http://dx.doi.org/10.1016/j.indmarman.2022.06.004 [Google]
Kohtamäki, M., R. Rabetino, V. Parida, D. Sjödin and S. Henneberg (2022): Managing digital servitization toward smart solutions: Framing the connections between technologies, business models, and ecosystems, Industrial Marketing Management, 105(3006), pp.253-267
The present study extends the discussion on product manufacturers’ digital servitization toward smart solutions by outlining and reviewing the existing literature on digital servitization and smart solutions. We focus on potential configurations based on technologies, business models, and ecosystems to understand how this transition can be managed through the process of reconfiguration. We define smart solutions as an advanced state of product-service-software systems, and we use moving vehicles as a case in point. We base our discussion on a configurational research approach, examining the role of advanced technologies (e.g., artificial intelligence), novel business models, and modern ecosystems (e.g., platforms and innovation ecosystems) in shaping digital servitization toward smart and autonomous solutions. We identify gaps in the literature, offer an analytical framework, suggest avenues for future research, and contribute by laying the theoretical foundations and proposing managerial directions for a digital servitization journey toward smart solutions. By so doing, we present the papers accepted to the current IMM special issue on “Moving toward autonomous solutions: The role of Product-Service-Software Systems”, which this review article introduces.
Link: http://dx.doi.org/10.1016/j.indmarman.2022.06.010 [Google]
Li, A. Q., B. Claes, M. Kumar and P. Found (2022): Exploring the governance mechanisms for value co-creation in PSS business ecosystems, Industrial Marketing Management, 104(3007), pp.289-303
This paper explores the governance mechanisms for value co-creation when product–service systems (PSS) providers move into PSS business ecosystems. The PSS providers in our study applied both internal and external governance mechanisms to regulate value co-creation. Internally, they relied on formal organisational setups and informal coordination between product, service and digital divisions. Externally, they had strong relational governance mechanisms supported by appropriate contractual governance mechanisms. As frontline (field) interactions became an important factor for realising value co-creation, PSS providers also attempted to develop individual-based psychological governance to complement group-based relational governance. Our findings reveal five challenges in managing the governance mechanisms: (1) orchestrating all digital resources and capabilities, especially managing the incompatibility and isolation of different digital tools in product and service divisions; (2) managing all relations in one platform that can embrace customer relationship management (CRM), supplier relationship management (SRM) and form relations with emerging actors such as authorities; (3) designing appropriate contractual governance to measure co-created value from economic, societal and environmental perspectives, and govern data ownership and security; (4) managing the interplay between contractual and relational governance mechanisms during PSS agreement implementation; and (5) developing psychological governance for frontline staff. We direct PSS providers towards essential aspects that require attention when developing governance mechanisms by identifying these challenges. Moreover, identifying such challenges will allow policymakers, practitioners, and scholars to jointly develop standards, policies and guidelines in these increasingly prevalent ecosystem business arrangements. • Both internal and external governance mechanisms regulated value co-creation in PSS business ecosystems. • PSS providers had strong relational governance mechanisms that were subsequently supported by appropriate contractual governance mechanisms and they co-evolved. • Relational governance went beyond traditional B2B setup and involved more B2A (business to authorities). • Psychological governance emerged to guide individual-based frontline interactions and complemented the group-based relational governance. • The identification of five challenges will allow policymakers, practitioners, and scholars to jointly develop standards, policies and guidelines.
Link: http://dx.doi.org/10.1016/j.indmarman.2022.05.005 [Google]
Kanani-Moghadam, V. and S. A. Zarghami (2022): The impact of customer characteristics on exploitation and exploration capabilities: An empirical study of outsourcing service companies, Industrial Marketing Management, 104(3008), pp.340-351
There is a long history of examining exploitation and exploration capabilities as the key drivers of organizational learning, but the research that pursues the synergistic impact of various customer characteristics on these two capabilities of firms is yet to emerge. This article utilizes fuzzy set theory to develop a method that accounts for the combined effect of the three key characteristics of customers, namely customer involvement, customer sophistication, and customer geographical location on the exploration and exploitation capabilities of firms. Applying the proposed method to a sample of 86 Outsourcing Service Companies (OSCs) around the world, our findings highlight the disproportionate impact of customers’ influence on the learning capabilities of four different types of OSCs: technology-based, engineering, knowledge-based, and business service firms. This empirical study makes a key contribution by way of developing a quantitative picture of the interplay between customer characteristics and the exploration and exploitation capabilities of OSCs, which in turn provides a measure of the extent to which interactions with customers enhance these two capabilities of firms. • An empirical study of the impact of customers on learning capabilities of firms • A diverse set of service firms around the world is studied • Fuzzy logic is employed to evaluate the combined effect of customers characteristics • The new method prioritizes customers based on their influence on learning capabilities
Link: http://dx.doi.org/10.1016/j.indmarman.2022.05.007 [Google]
Raja, J. Z., I. F. Neufang and T. Frandsen (2022): Investigating tensional knots in servitizing firms through communicative processes, Industrial Marketing Management, 105(3009), pp.359-379
Tensions and paradoxes have gained considerable traction in the broader general management literature in recent years. Within the servitization domain, however, they are only starting to receive attention. This paper explores the tensions that industrial firms encounter when attempting to integrate services and solutions into their offerings. Following an exploratory multiple case study approach, we identify several tensions experienced at the intra- and interorganizational levels by three industrial firms. By drawing on the four flows model—activity coordination, organizational self-structuring, institutional positioning, and membership negotiation—we identify tensions at the intersection of the flows. The findings elucidate how many of the identified tensions become knotted and movement across organizational levels is created through communicative processes. We make contributions to the literature by drawing on communicative processes to explain how paradoxical tensions emerge within a servitization context and become entangled. As servitizing firms move toward offering advanced services, they are likely to face an increasing number of tensions spanning intra- and interorganizational levels. Our study raises important implications as inextricable entanglements between tensions creates complexity, which requires managers to focus more clearly on the challenge of coping with these on an ongoing basis. • Paradoxical tensions encountered by industrial servitizing firms are explored. • The communicative constitution of organization (CCO) approach is utilized. • Multiple case studies of Danish engineering firms were undertaken. • Identified (paradoxical) tensions become knotted and span across intra- and interorganizational levels. • Entanglements between (paradoxical) tensions have amplifying effects and are not easily attenuated.
Link: http://dx.doi.org/10.1016/j.indmarman.2022.06.007 [Google]
Nageswaran, L. and A. Scheller-Wolf (2022): Queues with Redundancy: Is Waiting in Multiple Lines Fair?, Manufacturing & Service Operations Management, 24(3010), pp.1959-1976
Problem definition: We study service systems where some (so-called “redundant”) customers join multiple queues simultaneously, enabling them to receive service in any one of the queues, while other customers join a single queue. Academic/practical relevance: The improvement in overall system performance due to redundant customers has been established in prior work. We address the question of fairness—whether the benefit experienced by redundant customers adversely affects others who can only join a single line. This question is particularly relevant to organ transplantation, as critics have contended that multiple listing provides unfair access to organs for patients based on wealth. Methodology: We analyze two queues serving two classes of customers; the redundant class joins both queues, whereas the nonredundant class joins a single queue randomly. We compare this system against a benchmark wherein the redundant class resorts to joining the shortest queue (JSQ) if multiple queue joining were not allowed, capturing the most likely case if multilisting was prohibited: Affluent patients could still afford to list in the region with the shorter wait list. Results: We prove that when the arrival rate of nonredundant customers is balanced across both queues, they actually benefit under redundancy of the other class—that is, redundancy is fair. We also establish that redundancy may be unfair under some circumstances: Nonredundant customers are worse off if their arrival rate is strongly skewed toward one of the queues. We illustrate how these findings apply in the organ-transplantation setting through a numerical study using publicly available data. Managerial implications: Our analysis helps identify when, and by how much, multiple listing may be unfair and, as such, could be a useful tool for policy makers who may be concerned with trying to ensure equitable access to resources, such as organs, across patients with differing wealth levels.
Link: http://dx.doi.org/10.1287/msom.2021.1052 [Google]
Wang, Y., L. X. Lu and P. Shi (2022): Does Customer Email Engagement Improve Profitability? Evidence from a Field Experiment in Subscription Service Retailing, Manufacturing & Service Operations Management, 24(3011), pp.2703-2721
Problem definition: This paper empirically investigates how customer email engagement affects the profitability of subscription service providers and retailers. They have been using email engagement to increase customer retention. However, it is unclear whether email engagement improves their profitability. The existing literature focuses on email engagement’s benefit of customer retention but ignores its associated operating cost to serve retained customers. Methodology/results: We analyze the outcome of a field experiment conducted by a large U.S. car wash chain that offers tiered subscription services to consumers and employs an radiofrequency identification-based technology to track subscriber service events. We apply survival analysis and difference-in-differences methods to estimate the effects of email engagement on subscribers’ retention and service consumption. We find that a one-month engagement with two emails separated by a half-month interval increased the likelihood of subscriber retention by 7.4% five months after the experiment started and decreased the subscriber churn odds by 26.3% for the entire five-month duration. Meanwhile, we find that the same engagement increased a subscriber’s per-period service consumption by 7.0%. We provide suggestive evidence for two behavioral mechanisms that explain the effect of email engagement on subscribers’ service consumption. First, the engagement effect decays over time and exhibits fatigue after the second email, suggesting that emails act as reminders to subscribers. Second, the engagement effect persists after engagement ends but weakens over time, suggesting the habit formation of subscribers. By computing subscriber lifetime value and the operating cost of service, we find that email engagement increases profit when deployed on mid-level infrequent-use subscribers and top-level subscribers but decreases profit when deployed on mid-level frequent-use subscribers and basic-level subscribers. Therefore, we recommend that the company use a selective strategy by sending engagement emails to only profitable subscribers. Managerial implications: Our study highlights that email engagement is a double-edged sword; it increases both customer retention and service consumption, and it may decrease profitability when the increased operating cost to serve retained customers outweighs the benefit of customer retention. We recommend that subscription service providers and retailers adopt a data-driven approach to optimize their email engagement strategies.
Link: http://dx.doi.org/10.1287/msom.2022.1122 [Google]
Hu, M., R. Momot and J. Wang (2022): Privacy Management in Service Systems, Manufacturing & Service Operations Management, 24(3012), pp.2761-2779
Problem definition: We study customer-centric privacy management in service systems. Academic/practical relevance: We explore the consequences of extended control over personal information by customers in such systems. Methodology: We adopt a stylized queueing model to capture a service environment that features a service provider and customers who are strategic in deciding whether to disclose personal information to the service provider—that is, customers’ privacy or information disclosure strategy. A customer’s service request can be one of two types, which affects service time but is unknown when customers commit to a privacy strategy. The service provider can discriminate among customers based on their disclosed information by offering different priorities. Results: Our analysis reveals that, when given control over their personal data, strategic customers do not always choose to withhold them. We find that control over information gives customers a tool they can use to hedge against the service provider’s will, which might not be aligned with the interests of customers. More importantly, we find that under certain conditions, giving customers full control over information (e.g., by introducing a privacy regulation) may not only distort already efficiently operating service system but might also backfire by leading to inferior system performance (i.e., longer average wait time), and it can hurt customers themselves. We demonstrate how a regulator can correct information disclosure inefficiencies through monetary incentives to customers and show that providing such incentives makes economic sense in some scenarios. Finally, the service provider itself can benefit from customers being in control of their personal information by enticing more customers joining the service. Managerial implications: Our findings yield insights into how customers’ individually rational actions concerning information disclosure (e.g., granted by a privacy regulation) can lead to market inefficiencies in the form of longer wait times for services. We provide actionable prescriptions, for both service providers and regulators, that can guide their choices of a privacy and information management approach based on giving customers the option of controlling their personal information.
Link: http://dx.doi.org/10.1287/msom.2022.1130 [Google]
Xue, M., X. Cao, X. Feng, B. Gu and Y. Zhang (2022): Is College Education Less Necessary with AI? Evidence from Firm-Level Labor Structure Changes, Journal of Management Information Systems, 39(3013), pp.865-905
As a general-purpose technology, artificial intelligence (AI) is expected to transform almost all industries and aspects of our society. Thus, it is important to understand the potential changes within the firms related to how AI applications change their labor force. Using a panel dataset with over 1,300 publicly-traded companies in China from 2007 to 2018, we examine the relationship between AI applications and firm labor structure with workers with or without formal college education. The study indicates that AI applications were positively associated with the overall employment as well as the employment of nonacademically- trained workers with no college degrees at the firm level. These associations were more significant in the service sector than in the manufacturing sector. Further causal analysis shows increasing AI applications have a positive effect on a firm’s employment of nonacademically-trained workers and its overall employment but a negative effect on academically-trained workers. We attribute the findings to the technology deskilling effect of AI. The findings suggest that, in response to the potential labor force transformation with increasing AI applications, information-systems research needs to focus on structural changes of labor forces and the implications for preparing human employees to work with AI side by side.
Link: http://dx.doi.org/10.1080/07421222.2022.2096542 [Google]
Ye, Y., X. Peng, R. L. Fan and A. Narayanan (2022): An empirical investigation of governance mechanism choices in service outsourcing, International Journal of Operations & Production Management, 42(3014), pp.1467-1496
Purpose: Drawing on transaction cost economics (TCE) theory and organizational information processing theory (OIPT), this study investigates how the alignments between the characteristics of service (i.e. task complexity and measurement ambiguity) and governance mechanisms (i.e. contract specificity and monitoring) can affect service performance. Design/methodology/approach: The paper uses a rigorously designed survey to collect data from professionals who manage service outsourcing contracts in various industries. The respondent pool consists of randomly selected members of the Institute of Supply Management (ISM). The authors’ research question is analyzed using 261 completed and useable responses. Structural equation modeling is adopted to examine the data and test the proposed hypotheses. Findings: The authors find that both contract specificity and monitoring have a positive impact on supplier performance. Further, for high task complexity services, contract specificity is more effective than monitoring, and for high measurement ambiguity services, the opposite is true. Moreover, the effect of contract specificity is mediated by monitoring. Practical implications: Service outsourcers should use both contract specificity and monitoring in governing outsourced services and know that the former depends on the latter during execution. Facing resource constraints, they can prioritize crafting detailed contract provisions over implementing monitoring for highly complex services but consider monitoring as the primary governance tool in services whose outcomes are difficult to measure. Originality/value: This study is the first to couple TCE with OPIT and consider the nature of outsourced services in the choice of governance mechanisms and empirically test the simultaneous effects of contract specificity and monitoring in the context of service outsourcing.
Link: http://dx.doi.org/10.1108/IJOPM-01-2022-0025 [Google]
Matsuoka, K. (2022): Effects of revenue management on perceived value, customer satisfaction, and customer loyalty, Journal of Business Research, 148(3015), pp.131-148
Revenue management aims to maximize financial performance by setting different prices for the same offerings. However, such practices may deteriorate the nonfinancial performance of customer relationship management such as perceived value, customer satisfaction, and customer loyalty. Furthermore, revenue management tends to set higher prices during periods of peak demand or congestion. Congestion may negatively affect service quality and result in lower perceived value, customer satisfaction, and customer loyalty. Thus, revenue management may have dual negative effects on customer relationship: objective price and occupancy rate simultaneously and negatively affect the nonfinancial performance of customer relationship. Using the panel data of 18 hotels from a Japanese hotel chain company within 16 months, this study reveals the dual negative effects, which, to the best of my knowledge, have never been shown by literature. Hotel companies, when employing revenue management, should consider the tradeoff between short-term profitability and long-term customer relationship.
Link: http://dx.doi.org/10.1016/j.jbusres.2022.04.052 [Google]
Kaur, P., S. Talwar, N. Islam, J. Salo and A. Dhir (2022): The effect of the valence of forgiveness to service recovery strategies and service outcomes in food delivery apps, Journal of Business Research, 147(3016), pp.142-157
The literature offers valuable insights into various aspects of service recovery and service outcomes. However, the available findings are limited relative to the size of the ever-expanding service economy. In particular, past studies have left more granular nuances of the association between service recovery strategies and service outcomes, such as the mediating role of forgiveness or the valence of forgiveness, under-explored. Recognising that an improved understanding of recovery from failures is crucial for sustaining positive customer–brand relationships in the service economy, the present study investigates the mediating effect of the valence of forgiveness (both exoneration and resentment) on the association between various service recovery strategies (apology, compensation and voice) and service outcomes (brand trust and negative word of mouth [NWOM]) in the context of food delivery apps (FDAs). We tested the proposed model by analysing data from 294 FDA users who had experienced FDA service failures and recovery efforts in the recent past. The findings suggest that recovery strategies are associated with exoneration, resentment and brand trust but not with NWOM. While exoneration mediates the association of these strategies with both brand trust and NWOM, resentment mediates only the association of these strategies with NWOM. Finally, the severity of previously experienced service failures and the speed of the service provider’s response moderates the association of the valence of forgiveness with brand trust and NWOM. By uncovering the key role of the valence of forgiveness in service recovery, our study offers significant theoretical and practical implications for stakeholders.
Link: http://dx.doi.org/10.1016/j.jbusres.2022.04.020 [Google]
Kühl, C., M. Bourlakis, E. Aktas and H. Skipworth (2022): Product-service systems and circular supply chain practices in UK SMEs: The moderating effect of internal environmental orientation, Journal of Business Research, 146(3017), pp.155-165
• Measurement items are developed for circular supply chain (CSC) practices. • Product service systems (PSSs) positively affect CSC practice implementation. • Use-oriented PSSs do not affect the slowing of resource loops. • Result-oriented PSSs do not affect the closing of resource loops. • Internal environmental orientation does not moderate the PSS – CSC relationship. Many studies uphold product-service systems (PSSs) as key factors for the implementation of circular supply chain (CSC) practices. This paper explores this assumption by testing the links between product-, use- and result-oriented PSSs and slowing, closing, and narrowing CSC practices. It develops and validates survey items that can be used to benchmark CSC practice implementation. In addition, it tests a model that recognises the positive moderating role of internal environmental orientation. A survey is conducted with 114 manufacturing small and medium-sized enterprises (SMEs) in the United Kingdom (UK). Partial least squares structural equation modelling is conducted to evaluate two models. The results show that product-oriented PSSs positively affect the slowing, use-oriented positively affects the closing, and result-oriented positively affects the slowing and the narrowing of resource loops. Internal environmental orientation does not moderate the PSS – CSC relationship, suggesting that less internally environmentally oriented firms are not at a disadvantage.
Link: http://dx.doi.org/10.1016/j.jbusres.2022.03.078 [Google]
Taishoff, M., H. Mühlbacher and H. Kauppinen-Räisänen (2022): Building and sustaining resilient luxury service ecosystems, Journal of Business Research, 146(3018), pp.201-215
• The establishment of a resilient LSE requires the initiative of a private actor in close collaboration with a high-level public authority that acts as an institutional entrepreneur. • Resilient LSEs possess stable macro-level institutional arrangements that serve as guiding frameworks for adaptations and transformation of institutions concerning the social servicescape and service encounters. • Resilient LSEs assemble collaborative actors who join their super-modular complementary resources in a collective effort to reach a strong and shared vision, which is continuously spread by the driving actors and shared by the service providers. • Resilient LSEs dynamically adapt their value proposition, servicescape, and service encounters to the socio-historical context of the time while keeping their guiding macro-level institutions unchanged. • Resilient LSEs consist of service providers who are ready to make shared sense of transformational changes to be accomplished in servicescape and service encounters and of complementary resources and capabilities needed to realize the transformational processes. Research on luxury service ecosystems (LSEs) is in its infancy. LSEs consist of a continuous multiplicity of formally independent yet interdependent actors who align unique and super-modular complementary resources to co-create value with other participants in the system. The purpose of this research is to understand how complex LSEs can be established and made sufficiently resilient to successfully persist in changing or even disruptive contexts over time. A longitudinal analysis of secondary sources and interviews with currently leading actors concerning the development of the LSE of Monaco over a period of nearly 160 years reveals the high importance of joint leadership of a private and a public actor, a strong enduring vision that engages stakeholders, and stable macro-level institutional arrangements that provide a framework for collaborative adaptations and transformation of the ecosystem’s servicescape and service encounters in reaction to ongoing and disruptive changes in the socio-historical context.
Link: http://dx.doi.org/10.1016/j.jbusres.2022.03.033 [Google]
Peng, P., S. Jacobs and B. Cambré (2022): How to create more customer value in independent shops: A set-theoretic approach to value creation, Journal of Business Research, 146(3019), pp.241-250
• There are different pathways to episode and relationship value in independent coffee shops. • To achieve high episode value in an independent coffee shop, organizational citizenship behavior towards customers is a key factor. • To achieve high relationship value in an independent coffee shop, both customer citizenship behavior and organizational citizenship behavior towards customers are essential. • Baristas should provide extra service to the customer in independent coffee shops to differentiate themselves from the standardized service in big chain stores. The purpose of this essay is to study different pathways to high customer episode/relationship values using qualitative comparative analysis (QCA) based on 93 cases of customers who visited independent coffee shops in South China. The results demonstrate that a high level of episode/relationship value can be produced through multiple configurations of a customer’s personal characteristics, value co-creation behaviours, and employee citizenship behaviours toward the customer. The key conclusions indicate that, to achieve a high episode value, employee citizenship behaviours toward customers (OCB-C) are key factors, and customers’ citizenship behaviours (CCB) and/or OCB-C are essential to producing high relationship values. In addition, high agreeableness, high openness, and low conscientiousness play important roles in achieving a high level of episode/relationship value. This study contributes to the advancement of the value co-creation theory by providing configurational insights.
Link: http://dx.doi.org/10.1016/j.jbusres.2022.03.066 [Google]
Krause-Söhner, E., A. Roth and C. Schaller (2022): Multifaceted and even contradictory? Impulses to push efficiency and innovativeness and the dynamic role of ambiguity in context of a German university, Journal of Business Research, 147(3020), pp.258-277
[Display omitted] • Longitudinal in-depth case study of a German multi-campus university. • Study adds a novel and innovative understanding to the ambidexterity literature. • The adopted view builds upon a processual constructivist perspective. • Organizational dynamics are investigated at multiple levels and sites. • Implications for managers seeking to manage the dynamics of ambidexterity change. • Findings suggest a model of ambidexterity change dynamics and reveal the role of OA ambiguity. Organizations have to find ideal combinations of efficient and innovative practices to manage the dynamic in changing contexts. However, we know less so far about managing the occurring dynamics of exploration–exploitation change and how they can be influenced. This study develops a novel dynamic and multi-level view on organizational ambidexterity (OA; i.e. the capacity to explore and exploit simultaneously). This view builds upon a processual constructivist perspective and the context of strategic change in a German Multi-campus university. In a longitudinal in-depth case study, organizational dynamics are investigated at multiple levels and sites. The results show that diverse—and somehow contradictory—impulses are operating on multiple levels and these are interpreted in different ways, leading to several organizational responses. The findings reveal the role of ambiguity, expressed along the categories of “identity conflicts”, “role confusion” and “sensegiving void”, in processing these impulses on multiple levels. This research contributes to the emerging discourse on dynamic ambidexterity by providing implications for managers seeking to manage the dynamics of ambidexterity change in public service sector.
Link: http://dx.doi.org/10.1016/j.jbusres.2022.02.058 [Google]
Yang, C., Y. Sun and X.-L. Shen (2022): Beyond anger: A neutralization perspective of customer revenge, Journal of Business Research, 146(3021), pp.363-374
• Drawing upon neutralization theory to illuminate how customers rationalize their revenge behaviors. • Distinguishing the effects of emotional and rational mechanisms on direct and indirect revenge behaviors. • Confirming dissatisfaction as an antecedent of neutralization techniques. • The emotional and rational mechanisms work differently for process and outcome service failures. Although previous studies have elucidated emotional and cognitive routes toward customer revenge, they have mainly paid attention to customers’ perceptions about service failures and vendors. Nevertheless, the mechanism underlying how customers justify their revenge behaviors has not been theorized or examined. To advance this line of research, our research draws on neutralization theory to interpret how customers rationalize their revenge behaviors. Furthermore, we distinguish the influences of emotional and rational paths on direct and indirect revenge behaviors across different failure contexts. Two studies were conducted to test our proposed hypotheses. The results demonstrate that dissatisfactory services facilitate customers’ revenge behaviors through the use of neutralization techniques. In addition, compared to neutralization techniques, anger has a more salient effect on direct revenge behaviors, while neutralization techniques dominate anger toward indirect revenge behaviors. Moreover, such differential impacts become more salient in process vs. outcome failures. Implications and directions for future research are discussed.
Link: http://dx.doi.org/10.1016/j.jbusres.2022.03.076 [Google]
Lindsey Hall, K. K., J. Qi, R. G. Richey and R. K. Patil (2022): Collaboration, feedback, and performance: Supply chain insights from service-dominant logic, Journal of Business Research, 146(3022), pp.385-397
• Integrates supply chain logistics management and service-dominant logic research. • Develops and validates 2-stage service-dominant logic-based collaboration model. • Examines positive effect of operant and operand resources on logistics performance. • Identifies inter-firm collaboration as critical mediating mechanism. • Commitment to learning strengthens positive effect on logistic performance. This research demonstrates how collaborative feedback and resource investments in supply chain management and logistics-based partnerships influence the establishment of inter-firm collaboration, and ultimately, focal firm logistics service performance. We employ a two-stage collaboration model grounded in Service-Dominant logic and supported by empirical findings from supply chain managers. This answers calls for research addressing how information and collaboration co-create value in service ecosystems. The study further explores the conditional effects of commitment to learning, an operant resource aiding in collaboration capitalization. Accordingly, this study contributes to Service-Dominant logic, supply chain management and logistics, and service strategy literatures by successfully demonstrating that various partnership investments in and dialogical exchanges with partners enhance collaborative, value co-creation processes resulting in mutually-beneficial strategic advantages. The findings are particularly relevant given recent global supply disruptions that mandate more resilient supply chains.
Link: http://dx.doi.org/10.1016/j.jbusres.2022.03.055 [Google]
Song, C. S. and Y.-K. Kim (2022): The role of the human-robot interaction in consumers’ acceptance of humanoid retail service robots, Journal of Business Research, 146(3023), pp.489-503
• The humanoid Retail Service Robots’ usefulness, social capability, and appearance positively influenced consumers’ attitudes toward Human-Robot Interaction. • Consumers’ favorable attitudes toward Human-Robot Interaction predicted anticipation of greater service quality, which positively influenced their acceptance of humanoid Retail Service Robots. • Consumers’ pre-existing anxiety toward robots moderated the relations between the interaction facilitators of the humanoid robots’ social capability and appearance and attitudes toward Human-Robot Interaction. The Retail Service Robot (RSR) is a humanoid robot that uses AI service automation to provide customized shopping assistance. Based upon Computers-Are-Social-Actors theory, this study investigates: (1) The way RSRs’ usefulness, social capability, and appearance facilitate Human-Robot Interaction (HRI); (2) whether anxiety toward robots inhibits the relations between RSRs’ facilitators and HRI, and (3) whether HRI affects anticipated service quality and ultimately the acceptance of RSRs. The study incorporates interviews, video clip stimuli, and empirical data collection (n = 1362) in fashion, technology, and food-service. The results reveal that RSRs’ facilitators such as usefulness, social capability, and appearance influence attitudes toward HRI positively, which in turn, predict anticipation of better service quality and greater acceptance of RSRs, and demonstrate the moderating role of anxiety toward robots between RSRs’ facilitators and attitudes toward HRI. The findings provide theoretical and practical implications for the adoption of RSRs and development of effective HRI.
Link: http://dx.doi.org/10.1016/j.jbusres.2022.03.087 [Google]
Lähteenmäki, I., S. Nätti and S. Saraniemi (2022): Digitalization-enabled evolution of customer value creation: An executive view in financial services, Journal of Business Research, 146(3024), pp.504-517
Digitalization and related transformation in services is disrupting existing businesses and changing the positions and roles of incumbent and new players in the industry, as well as customers. This study aims to create an understanding of how digitalization has driven change in customer value creation, and how companies can enhance customers’ digital value creation in the present situation. For this purpose, we conduct a qualitative inquiry and use inductive logic with rich data from the represented industry – the financial sector – which enables us to detect the evolution of value creation during the last thirty years from an executive perspective. Our contribution is based on defining change processes involved in the evolution of customer value creation due to digitalization and revealing its microfoundations.
Link: http://dx.doi.org/10.1016/j.jbusres.2022.04.002 [Google]
Finsterwalder, J., V. G. Kuppelwieser and R. P. Fisk (2022): Dynamics of individual actors’ self, social, and task pre-dispositions in multi-actor service ecosystems, Journal of Business Research, 147(3025), pp.518-531
Actors increasingly engage in service ecosystems where multiple other actors can be present and influence value co-creation. Comprehending such contexts has gained importance in research but remains an emerging field of study due to the complexity of such multi-actor encounters. To unpack this complexity, we establish novel actor engagement foundations to explicate value co-creation in multi-actor service ecosystems. Our research informs on value co-creation at a meta-theoretical level utilizing the explanatory power of mid-range theory. We suggest that actor pre-disposition (propensity to engage) differs from actor disposition (readiness to engage) outlined in engagement literature. Applying a longitudinal study design and using an established measurement from organizational psychology, we uncover a novel dynamic perspective on these pre-dispositions prior to and during resource investment throughout multi-actor engagement activities. Self-, social, and task pre-dispositions change over time when actors engage with one another to collaborate making this relatively stable construct of attitude “flexi-stable”.
Link: http://dx.doi.org/10.1016/j.jbusres.2022.04.023 [Google]
Lee, K., M. A. Bellamy and N. R. Joglekar (2022): Distributed service with proximal capacity and pricing on a two‐sided sharing economy platform, Journal of Operations Management, (3026), pp.1
In this article, we characterize the relationship between spatial pricing and capacity based on distributed service design (DSD) decisions in a two‐sided sharing economy platform. We leverage theoretical tenets on two‐sided markets and on spatial pricing and capacity management in the sharing economy to inform a set of empirical and simulation models. Empirically, we use data on 156,520 observations of dynamic pricing and capacity distribution within Uber’s San Francisco region. Estimation of a spatial econometric model reveals that the number of active drivers in neighboring zones negatively impacts the price in focal zones. Simultaneously, we find that spatial proximity is a significant factor in determining the distribution of prices when service demand levels are sufficiently high. We leverage this simultaneity finding to advance the literature on the sharing economy by incorporating operational considerations such as distributed capacity into service design. We link these econometric results with profit and welfare using a simulation that tests a variety of DSD pricing strategies under varying elasticity and revenue‐sharing conditions. Our findings offer guidance to firms managing two‐sided sharing economy platforms on tracking demand‐ and supply side price elasticity levels as well as revenue sharing spread when seeking to maximize profit, welfare, or both.
Link: http://dx.doi.org/10.1002/joom.1222 [Google]
Castillo, V. E., D. A. Mollenkopf, J. E. Bell and T. L. Esper (2022): Designing technology for on-demand delivery: The effect of customer tipping on crowdsourced driver behavior and last mile performance, Journal of Operations Management, 68(3027), pp.424-453
Crowdsourcing technology platforms specializing in on-demand last mile delivery face a novel problem–heightened agent independence increases uncertainty in last mile delivery and has the potential to undermine operational performance. Uncertainty emanates from drivers’ competing interests, or opportunity costs. Rather than increase remuneration, some platforms have designed the technology to allow customers to tip, but the subsequent effects on driver behavior and last mile performance have not yet been studied. We explore this feature of on-demand delivery technology design–customer tipping–and its implications for crowdsourced delivery performance. Using netnography and secondary data sources, we empirically ground an adaptive, multi-agent hybrid simulation to propose how customer tipping impacts service performance through contextcontingent driver behavior. Our results generally indicate that tipping as a technology design feature mitigates uncertainty in the crowdsourced delivery fleet and reduces fulfillment times and unit delivery costs. We also find evidence suggesting that the impact of tipping on driver behavior is geography-contingent, with tipping having unexpectedly detrimental effects in high population density areas relative to low-density areas. We conclude by making a series of theoretical propositions and managerial implications about designing technology to facilitate crowdsourced delivery.
Link: http://dx.doi.org/10.1002/joom.1187 [Google]
Noyan, I. and S. Guangzhi (2022): The impact of waiting on customer-instigated service time: Field evidence from a live-chat contact center, Journal of Operations Management, 68(3028), pp.487-514
It is well known that the waiting time a customer experiences in a service system is determined by the service processing time of preceding customers, among other factors. We argue that a directionally opposite effect, which diffuses from waiting time to her own service time, also exists in co-productive service contexts where a significant fraction of the service time is contributed by the customer. Multiple underlying customer behavioral mechanisms lead us to hypothesize that waiting’s impact is dependent on the service stage and magnifies as the service process approaches completion. Our empirical analysis uses a unique operational data set that combines server log information with instant-messaging transcripts collected from a live-chat contact center. We show that pre-service waiting accelerates customer engagement–one dimension of customer instigated service time–only at the beginning of the conversation and then exhibits a slowdown effect as the conversation proceeds. In contrast, in-service waiting consistently slows down customer responses–another dimension of customer instigated service time, the magnitude of which is higher in later episodes of the agentcustomer message exchanges. We discuss the practical implications of our findings on operational policies employed in contact centers.
Link: http://dx.doi.org/10.1002/joom.1199 [Google]
Spring, M., J. Faulconbridge and A. Sarwar (2022): How information technology automates and augments processes: Insights from Artificial‐Intelligence‐based systems in professional service operations, Journal of Operations Management, 68(3029), pp.592-618
This study contributes to the technology management literature on the effects of IT on operations processes by examining the use of systems based on Artificial Intelligence (AI) in professional services. The paper builds on key concepts on AI, information systems, professional work, and professional services operations management. A model is developed to explain how AI‐based systems combine with humans to do work, both automating and augmenting the work of the professional, leading to process improvement and extension of the service offering. The study uses case‐based research in two law firms and two accountancy firms using AI‐based systems. It shows that AI‐based systems are used selectively, mainly on high‐volume, back‐office tasks, across the sequence of stages in the professional service process—diagnosis, inference, and treatment. Automation using AI relieves professionals from repetitive tasks, while AI achieves augmentation by buffering professionals from low‐value activity, making their expertise scalable and providing new analytical insights. System use can improve performance in delivering core professional services and enable service extension into additional, high‐value advisory work. The model and research approach have potential implications for other emerging areas of technology management in OM.
Link: http://dx.doi.org/10.1002/joom.1215 [Google]
Chen, W., S. Gao, W. Chen and J. Du (2022): Optimizing resource allocation in service systems via simulation: A Bayesian formulation, Production & Operations Management, (3030), pp.1
The service sector has become increasingly important in today’s economy. To meet the rising expectation of high‐quality services, efficiently allocating resources is vital for service systems to balance service qualities with costs. In particular, this paper focuses on a class of resource allocation problems where the service‐level objective and constraints are in the form of probabilistic measures. Further, process complexity and system dynamics in service systems often render their performance evaluation and optimization challenging and relying on simulation models. To this end, we propose a generalized resource allocation model with probabilistic measures, and subsequently, develop an optimal computing budget allocation (OCBA) formulation to select the optimal solution subject to random noises in simulation. The OCBA formulation minimizes the expected opportunity cost that penalizes based on the quality of the selected solution. Further, the formulation takes a Bayesian approach to consider the prior knowledge and potential performance correlations on candidate solutions. Then, the asymptotic optimality conditions of the formulation are derived, and an iterative algorithm is developed accordingly. Numerical experiments and a case study inspired by a real‐world problem in a hospital emergency department demonstrate the effectiveness of the proposed algorithm for solving the resource allocation problem via simulation.
Link: http://dx.doi.org/10.1111/poms.13825 [Google]
Gangwar, M. and H. K. Bhargava (2022): Pricing on‐demand services: Alternative ways of combining usage and access fees, Production & Operations Management, (3031), pp.1
Many firms are adopting an “everything or anything” as a service—“XaaS”—model to sell goods and value‐added services. Buyers for such goods are heterogeneous both in the number of units they desire and the valuations for each unit. Suppliers designing such revenue models can offer either a usage‐based per‐unit fee or an access‐based per‐period fee, often combining them both as a nonlinear two‐part tariff plan that imposes both types of fees on all buyers or let buyers self‐select from a menu of per‐unit and per‐period plans. We develop a theoretical model to analyze the economic implications of alternative designs for mixing per‐unit and per‐period fees. Our analysis produces the following practical insights on these plans’ profitability and market coverage. First, the menu is generally a better way of combining access and usage fees for a firm selling digital goods with zero variable costs. Second, the preferred design switches to a two‐part tariff if the firm’s production environment resells or runs on top of a back‐end infrastructure or data service provider that imposes nonnegligible variable costs. Third, we show that the revenue advantage of these two designs (which employ both fees) over a simple plan that employs only one fee (best of per unit and per period) is most significant when the rate of change in marginal valuation is relatively similar across buyers.
Link: http://dx.doi.org/10.1111/poms.13835 [Google]
Hezarkhani, B., M. Nagarajan and C. Tong (2022): Toward servitization: Optimal design of uptime‐guarantee maintenance contracts, Production & Operations Management, (3032), pp.1
This paper analyzes the contracting of maintenance services provided by an original equipment manufacturer (OEM) to an operator for a device. The service provider can exert different levels of maintenance effort during the course of the contract and the device’s reliability (uptime) is influenced by these levels. However, the service provider’s effort level is noncontractible. Our research seeks to find the optimal structures, as well as parameters, of performance‐based maintenance contracts. We single out a unique uptime‐guarantee contract structure that contains profit‐maximizing contracts in many situations. Complete servitization is the essence of such optimal contract structures. With this contract structure, the service provider simply guarantees 100% uptime and compensates the operator’s for any occurred downtime at a higher unit rate than it charges for maintenance services. Our findings show that some of the well‐known performance‐based contract structures used in practice (e.g., pay‐for‐performance contracts) can be suboptimal for the OEMs. We incorporate the customer’s ability to affect the uptime and show that the optimal contract structures can also coordinate the customer’s effort. We demonstrate the advantages and limitations of offering menus of contracts to increase the service provider’s expected profits. Finally, through simulations using a sample data set, we find that a contract designed using the key ideas in our paper shows very promising results for practitioners.
Link: http://dx.doi.org/10.1111/poms.13789 [Google]
Li, D., Z. Pang and L. Qian (2022): Bid price controls for car rental network revenue management, Production & Operations Management, (3033), pp.1
We consider a car rental network revenue management (RM) problem, accounting for the key operational characteristics of car rental services such as the varying length of rentals and mobility of inventories, which imply the intertemporal and spatial correlations of rental demands for inventories across different locations and days. The problem is formulated as an infinite‐horizon cyclic stochastic dynamic program to account for the time‐varying and cyclic nature of car rental businesses. To tackle the
Link: http://dx.doi.org/10.1111/poms.13836 [Google]
Wang, J., L. Ma, W. Xue and Y. H. Kuo (2022): Impact of self‐service technology in designing a service delivery system, Production & Operations Management, (3034), pp.1
Self‐service technologies (SSTs) have been widely adopted in industries that require the delivery of physical products by services, in which consumers evaluate a product for both the product value and the service value. A typical service delivery system usually involves sales agents and/or self‐service technologies, for example, online services and kiosks, to serve consumers by a coproduction process. In other words, both the sales agent (or self‐service machine) and the consumer should exert effort, with corresponding service costs. By modeling the coproduction output with a Cobb–Douglas production function, we establish a principal–agent model to study the value of self‐service technologies in designing a service delivery system wherein the sales agent’s service cost is private information. We first characterize the main trade‐off between the sales agent and the self‐service machine when the firm provides only one service channel. Then, we analyze the value of the self‐service machine when the firm can provide both service channels. We find that, interestingly, the firm may possibly provide both service channels, that is, services offered by the sales agent and the self‐service machine, when the level of information uncertainty is high, and the self‐service machine’s service cost is intermediate. Moreover, when both service channels are offered, only the efficient sales agent will be contracted, and the inefficient sales agents are screened out of the market by the self‐service machine; that is, the self‐service machine can help the firm eliminate the information rent. We also investigate how the firm’s service weight in the coproduction process and information uncertainty influence the consumer surplus, firm’s choices, contract parameters, and resulting profits. Our results are shown to be robust when our model is extended to consider a single‐contract strategy, contracting on effort, a continuous sales agent type, and a general coproduction function.
Link: http://dx.doi.org/10.1111/poms.13797 [Google]
Li, B. and S. Kumar (2022): Managing Software‐as‐a‐Service: Pricing and operations, Production & Operations Management, 31(3035), pp.2588-2608
Software‐as‐a‐service (SaaS) applications have experienced a decade of explosive growth, eliminating barriers in reaching users and enabling real‐time interchanges and intelligence. Using business analytics, SaaS applications are increasingly embedded in the day‐to‐day activities of businesses and consumers with competition and innovative pricing. Due to the evolution in cloud business models, new issues are surfacing to challenge practitioners and scholars. A number of issues encountered in the practice have not been properly addressed or even recognized. In this paper, we attempt to fill this important gap. We propose a framework of recent business research on SaaS in light of wide adoption of the SaaS business model. This framework broadly classifies SaaS research into two basic themes. For each theme, we review past work that has been instrumental in setting the direction of this line of research and discuss how emerging research opportunities can be addressed. For each research opportunity, we also propose an initial model and the applicable methodology. Further, in order to aid researchers, we identify the data sources wherever applicable, and even present some of the initial results. We conclude by describing promising directions on a roadmap for future research and explain why an integrative perspective of operations, marketing, and information systems is critical to SaaS. In this paper, we bridge the gap between research and practice by identifying the relevant industry problems that would help researchers who are interested in working in this area both to get a starting point and to address important theoretical and practical challenges.
Link: http://dx.doi.org/10.1111/poms.13729 [Google]
Wang, L., R. Gopal, R. Shankar and J. Pancras (2022): Forecasting venue popularity on location‐based services using interpretable machine learning, Production & Operations Management, 31(3036), pp.2773-2788
Customers are increasingly utilizing location‐based services via mobile devices to engage with retail establishments. The focus of this paper is to identify factors that help to drive venue popularity revealed by location‐based services, which then better facilitate companies’ operational decisions, such as procurement and staff scheduling. Using data collected from Foursquare and Yelp, we build, evaluate, and compare a wide variety of machine learning methods including deep learning models with varying characteristics and degrees of sophistication. First, we find that support vector regression is the best performing model compared to other complex predictive algorithms. Second, we apply SHAP (Shapley Additive exPlanations) to quantify the contribution from each business feature at both the global and local levels. The global interpretability results show that customer loyalty, the agglomeration effect, and the word‐of‐mouth effect are the top three drivers of venue popularity. Furthermore, the local interpretability analysis reveals that the contributions of business features vary, both quantitatively and directionally. Our findings are robust with respect to different popularity measures, training and testing periods, and prediction horizons. These findings extend our knowledge of location‐based services by demonstrating their potential to play a prominent role in attracting consumer engagement and boosting venue popularity. Managers can make better operational decisions such as procurement and staff scheduling based on these more accurate venue popularity prediction methods. Furthermore, this study also highlights the importance of model interpretability which enhances the ability of managers to more effectively utilize machine learning models for effective decision‐making.
Link: http://dx.doi.org/10.1111/poms.13727 [Google]
