This study is designed to examine the extent to which home countries affect the nature of the ownership advantages of firms and subsequently their competitive position in the international market. The empirical test is based on a comparison of the ownership advantages of US, UK and French advertising agencies and examination of their possible origin in specific characteristics of the home countries. The findings suggest that the impact of home countries is critical, but it provides only partial explanation for the nature of the ownership advantages which advertising agencies develop. Some of these advantages are related to the attributes of individual advertising agencies and they vary in line with their unique characteristics rather than as a response to the characteristics of their home countries.
During the last 20 years, R&D and innovation activities in the service sector have clearly increased. Especially business services are believed to be one of the main drivers of technical changes and economic progress. Looking at the labour indices calculated over the period from 1982 to 1996 one notices a remarkable increase of over 70 percent for the business services. About 8 percent of total employment in West Germany is in business services. In particular, by taking advantage of information and communication technologies, knowledge-intensive business service firms increasingly play the role of "converters" of technological information within the economy. They are providers, purchasers or partners in the context of innovation. A sound innovation capacity, especially knowledge, creativity, market and management skills let them become bridges for innovation.
The study estimates a variable cost model of the UK water industry. From this variable cost function, estimates of economies of scale and economies of capital utilisation and capacity utilisation are made. The data used cover 20 English and Welsh water companies. The results suggest that only slight, albeit, significant dis-economies of scale and substantial diseconomies of capital utilisation exist in the industry. These estimates indicate that if output increases, with or without holding capital constant, variable costs would increase at a level above the proportional increase in output. If the water industry is not in long-term equilibrium, in terms of capital, neither merger nor acquisition amongst water companies are justified in terms of cost efficiency. A low level of capital utilisation is also indicated for the water industry. It is shown that the level of capital utilisation does increase over the sample period to approximately 30 per cent in 1996, indicating dis-equilibrium, in terms of capital, is present in this sector.
Local care services are making a comeback in the headlines (with the Borloo plan, CAE report). The development of this market (or markets) and the policies linked with them nonetheless give rise to problems.This article seeks to identify the levers on which current policy can rely to become effective and emphasises the shortcomings that need to be resolved to ensure impetus. It attempts to specify certain macrosociological and macroeconomic conditions, and analyse the conditions specific to demand and the constraints in building efficient supply that may explain the failures of the policies implemented so far.
Tourism destinations have a necessity to innovate to remain competitive in an increasingly global environment. A pre-requisite for innovation is the understanding of how destinations source, share and use knowledge. This conceptual paper examines the nature of networks and how their analysis can shed light upon the processes of knowledge sharing in destinations as they strive to innovate. The paper conceptualizes destinations as networks of connected organizations, both public and private, each of which can be considered as a destination stakeholder. In network theory they represent the nodes within the system. The paper shows how epidemic diffusion models can act as an analogy for knowledge communication and transfer within a destination network. These models can be combined with other approaches to network analysis to shed light on how destination networks operate, and how they can be optimized with policy intervention to deliver innovative and competitive destinations. The paper closes with a practical tourism example taken from the Italian destination of Elba. Using numerical simulations the case demonstrates how the Elba network can be optimized. Overall this paper demonstrates the considerable utility of network analysis for tourism in delivering destination competitiveness. Comment: 15 pages, 2 figures, 2 tables. Forthcoming in: The Service Industries Journal, vol. 30, n. 8, 2010. Special Issue on: Advances in service network analysis v2: addeded and corrected references
[eng] Recent discussions on the possible overestimation of inflation have focused in particular on the extent of substitution bias in the calculation of price indices. This bias is due to not taking enough account, with a Laspeyres index, of consumers' purchasing switches between products and points of sale prompted by different price changes. . The substitution bias could be important at detailed product level. Ideally, a constant-utility index (CUI) should be calculated to measure the variation in expenditure that maintains the level of utility at the lowest cost when faced with price changes. Calculating a CUI is a tricky business. A utility function has to be found that rationalises the data. This problem is solved formally using the revealed preferences theory. In practice, highly detailed price and quantity information is required, which is now provided by scanner data. . This study presents the results obtained with this type of data for fast-moving consumer goods: consumers' choices are on the whole rational. There is not one, but an entire range of CUis whose extreme values occasionally coincide with the Laspeyres and Paasche indices. This range virtually always encompasses the Fisher index. [ger] Die j�ngsten Diskussionen �ber eine etwaige �berbewertung der Inflation betrafen insbesondere das Ausma� der Substitutionsverzerrung bei der Errechnung der Preisindizes. Diese Verzerrung ist darauf zur�ckzuf�hren, da� mit einem Laspeyres-Index die Kauftransfers der Konsumenten zwischen Produkten oder Verkaufsstellen entsprechend der differenzierten Preisentwicklung nur unzureichend ber�cksichtigt werden. . Die Substitutionsverzerrung kann auf der untersten Gliederungsebene der Produkte erheblich sein. Im Idealfall m��te ein Index mit konstantem Nutzwert errechnet werden, der die Schwankung der Ausgabe mi�t, bei der zu den geringsten Kosten das Niveau des Nutzwerts im Hinblick auf die Preisschwankung aufrechterhalten werden kann. Die Errechnung eines sol
Recent marketing literature pays particular attention to customer value because of the potential impact on customer behavior and, ultimately, firm performance. Whereas some studies conceptualize customer value in a unidimensional manner, more recent approaches take a multidimensional approach, generally conceptualizing value as composed of various benefits and sacrifices. However, nearly all of these studies consider value components in a reflective manner, which is not only problematic but in many cases conceptually incorrect. In addition, recent customer value research includes service components to define and operationalize the construct. This study suggests that customer value in service contexts, or service value, represents a higher-order, formative construct with benefit and sacrifice components. Specifically, the authors propose a formative model of service value with four components: service quality, service equity, confidence benefits, and perceived sacrifice. A multiple-industry study substantiates the contention that this higher-order, formative approach best models value. The results theoretically and empirically support the conceptualization of service value with formative components, and the measure is robust and works well across multiple service contexts.
The rise of the service economy has been the predominant pattern of structural change in the twentieth century. This article investigates the driving forces behind the recent stages of this development. Focusing on international input—output data from the early 1970s to the 1990s, a decomposition analysis separates the quantitative impacts of demand, technology and trade-driven determinants of output growth. Our findings confirm the rise of knowledge-based services as the most dynamic component, thus strengthening the case for ‘quaternarisation’ as a process which is distinctly characterised by the substantial contribution of technological and organisational change to structural development.
This experiment investigates how slow downloads of shopping web sites are perceived by online consumers, and how download delays relate to web site abandoning and stage of delay. Results show a complex, nonlinear relationship between actual and perceived download waiting, where perceptions level off after a threshold is reached. Furthermore, perceptions of download waiting are found to be more reliable than actual waits in predicting web site abandoning. Finally, delays near the start of the download are perceived as longer than later in the process, and time pressure worsens the effect of download waiting at earlier stages of delay.
This study used the profile accumulation technique (PAT) of Johns and Lee-Ross to produce an importance-performance analysis for a professional association. Ninety PAT forms obtained from a random sample of association members were used to draw up a 22 item closed questionnaire, which was administered to a different, randomly selected sample. Means from the items on 388 returned questionnaires were used as the 'performance' data for the analysis. PAT scores obtained from the previous survey were employed as the 'importance' values, so that the resulting matrix used comparable data from two different sources, reducing methodological bias. The technique made it possible to investigate importance-performance relationships both overall among the 22 items and for different membership segments, within an item which showed significant differentiation between segments. The article also discusses the reliability and validity of the questionnaire and of the resulting data and implications of the study for further research.
In this study, we adopt a stochastic cost frontier method to investigate the influence of off-balance sheet (OBS) activities on the cost efficiency of Taiwan's banks. We estimate and compare cost inefficiency with or without OBS outputs of 46 Taiwanese commercial banks during the period, 1998 through 2001. The conclusions of this empirical study are as follows. First, omitting off-balance sheet outputs in estimating the cost frontier function of banks results in an underestimation of bank efficiency by approximately 5 per cent. Second, large banks are associated with a higher cost efficiency and have an increased ability to develop OBS activities. This is consistent with Taiwan's regulatory policies, which focus on promoting efficiency in the banking industry of emerging markets. Banks with higher employee productivity are also more cost efficient. Finally, we observe evidence of economies of scale in both models with or without OBS specification in Taiwan's bank industry. Economies of scope between loans and OBS outputs are also observed.
Database Marketing has emerged as the technological means of achieving competitive advantage through the development and retention of customer relationships, but not all companies in the services sector have been successful in moving beyond operational benefits to strategic use. This article presents key empirical findings on the relationship between the degree of both marketing and information orientation within an organisation and the use and sophistication of Database Marketing. The use of a cross industry sample of four UK industries namely; the financial services industry, the retail industry, the travel industry and the performing arts industry provides generalisable insights into how firms can make the most out of their Database Marketing investments. Our findings suggest that a marketing orientation is important to the adoption and sophistication of Database Marketing applications, but only in so far as it is not already developed in the industry. It is information orientation that is critical, particularly in developing sophistication. Once using Database Marketing, those service organisations with the greatest level of information orientation will be best placed to develop fully the strategic aspects of Database Marketing.
This study applies the balanced scorecard in building a framework of wealth management (WM) banks' performance criterion and, using the Delphi method, a sub-criteria framework. The organisational performance of WM banks in Taiwan is evaluated by applying an analytic hierarchy process and sensitivity analysis. The proposed model can assist the banking sector in assessing the organisational performance of WM banks, making it highly applicable for bank managers.
This article explores the growth and geography of Community Development Loan Funds (CDLFs) in the UK. CDLFs usually operate locally to overcome financial exclusion by providing a mechanism that enables wider social inclusion in disadvantaged areas. The article uses two cases studies of CDLFs to show how these alternative financial institutions balance the tension between profitability versus social objectives. CDLFs are 'alternative' financial institutions as their business model is based on alternative discursive formations of profitability related to value. Combining these variables produces a complex uneven regional geography of access; complex as local CDLF availability may still imply that organizations experience financial exclusion.
With the exception of Argos, catalogue showroom retailing has not been a major success in Europe. Argos, founded in 1973 by the Green Shield stamp entrepreneur, Richard Tompkins, has grown to be one of Britain's leading retailers. Its corporate history, with two periods of independence and two periods as a business unit in a conglomerate, is of interest. Its innovativeness, through its catalogue development and format experimentation, makes Argos important to our understanding of retail change. The catalogues themselves are essential social and retailing history documents. Now part of GUS plc, Argos has to face the challenge and opportunities of the Internet. With experience of the catalogue as an intervening element in the customer purchase process, Argos has further potential as a multichannel retailer.
This article examines the pragmatic use of triangulation to assess services brand success, and the theoretical and practical issues faced employing the technique. This is illustrated via a UK case study using triangulation to assess the relative success of services brands, so successful versus less successful brands could be investigated in a larger research project. This article concludes that triangulation is a helpful technique in the assessment of complex and multi-faceted concepts such as services brands' success. It offers a more balanced, holistic picture than would any one method alone, and it enabled the selection of particular brands with more confidence for the next stage of research.
A broad study of employment and skills in Danish services, based on both statistical data and qualitative methods, indicates that skills in services are generally higher than in manufacturing, and that there is a clear tendency towards upskilling. In service work, personal qualities are often more important than professional skills. Many people work in jobs which require different - often higher - skills than they have been formally educated for. High-skill jobs in services are primarily considered good if the work is interesting, while salary level and career opportunities count less. Many of these findings are contrary to conventional labour market theory.
Pricing of card payment services includes many considerations of cost and revenue in an environment of changing payment technology, network effects in two-sided markets and price bundling. This paper describes the consumer pricing methods for card payment services by Scandinavian banks and evaluates their explicit pricing methods. The main findings suggest that Scandinavian banks in general are more interested in earning revenue from implicit prices than in encouraging the use of more cost efficient technology by charging explicit transaction fees. However, the pricing methods applied may vary, depending on the country and a bank's service supply.
This paper presents key branding findings from a qualitative study of consumers and financial services practitioners and explores the current role, importance and challenges associated with branding within Irish retail financial services. Managerial and consumer research highlighted the limited role of branding and the growing gap between brand-based expectations and service brand execution. Key conclusions and implications are proposed in terms of developing an effective multidimensional brand strategy which is both profitable to suppliers and desirable to consumers. The paper recommends that financial services branding be focused upon the promotion of meaningful functional values, delivered through a customer-centred, process-driven approach.
The study addresses the problem of service quality in the banking industry by modifying an importance-satisfaction (I-S) model in order to develop an integrated performance-measurement model for the banking industry, which would enable the priority of items for improvement to be determined. An importance and satisfaction questionnaire has been provided to determine which items do not fall into the appropriate performance-control zone of the performance-control matrix of the model. The performance-control matrix index provided enables the value of certain improvement objectives to be calculated. Finally, quality loss function is then adopted to rank the improvement objectives in terms of priority. A case study of a Taiwanese bank is then presented to demonstrate the applicability of the model in practice. The study thus presents a complete assessment model that helps managers to identify items for improvement, while simultaneously promoting cost and time efficiencies in service processes.
This article attempts to answer two questions, using Spain as a case study: do savings banks, and the regional banking system in general, have specific forms of activity which may be termed 'regionalising'?; and then, is the quantitative importance of the regional banking system sufficient to ensure that the effects of such behaviour upon the regional distribution of credit will be substantial? The evidence shows that in Spain these institutions have a strongly regionally-oriented character that has greatly contributed to financial convergence. The regional orientation has resulted in relatively low inter-regional differences in access to credit.
While most services innovation studies are concentrated on the OECD or EU countries, research on services innovation in the non-OECD context is still rare. This study investigates innovation behaviour of a certain group of services - knowledge-intensive business services (KIBS), compared with the manufacturing sector in Singapore. The main findings of this study are: (1) KIBS firms have higher innovating ratio than manufacturing firms, but innovating manufacturing firms are more likely to do R&D than innovating KIBS firms; (2) KIBS firms have higher human capital intensity, training spending intensity, innovation spending intensity, and R&D spending intensity than manufacturing firms; (3) KIBS firms and manufacturing firms have similar innovation objectives, although some delicate nuances do exist; (4) KIBS firms are less likely to have overseas partners for innovation collaboration than manufacturing firms; (5) there is a U pattern of innovation collaboration with geographic distance for both KIBS and manufacturing firms; (6) social capitals are important for KIBS firms' successful provision of innovation support to manufacturing clients; (7) the importance of spatial proximity varies over different phases of innovation support.
A longstanding basis of empirical economics is that average labour productivity declines during recessions and increases during booms, and thus behaves procyclically. In the short run, in many countries output growth and productivity tend to move together and across a wide range of industries. In recent years, this observation has gained increased prominence as each proposed explanation for the observed procyclicality has important implications for modelling the business cycle and measuring the technical change. By filtering out the influence of business cycles, it is possible to isolate changes in the long run, or structural rate, of productivity growth and so assess the importance of any source for economic growth. Nevertheless, the focus of these empirical works has been the aggregate economy or manufacturing industries, and not the services sector. The novelty of this paper is the focus on the patterns within the services sector. The aim of this paper is to better understand short-run changes in productivity growth within the service sector industries, which are necessarily different from those existing within the manufacturing sector. Another goal of this research is to assess whether this observed procyclicality remains if the service sector is the scope of analysis, and whether this is homogeneous among the different activities within this miscellaneous sector or not. Empirical evidence for the Spanish economy since 1980 is presented.
This article studies the ability of servers to predict their own tips. A distinction is made between the two roles of servers with regard to tipping behaviour: the role of expert and the role of manager. As experts, servers understand the relations between several predictors and tip size, and are able to predict the tip they are about to receive. As managers, servers designate certain tip amounts, and then manage the service encounter so that their predictions are realised. This study maps the necessary conditions for an expert position and outlines the process for managing a service encounter. Empirical testing suggests that servers have an impressive predictive ability. The findings also offer some support to the view of the role of the server as manager.
The study relates six dimensions of organisational citizenship behaviours (OCB) at the branch level with several indicators of the effectiveness of 38 branches of two insurance companies. Results suggest that the branches where employees display more OCB are the most effective. These findings are discussed in the context of a scarcity of empirical studies on the topic, despite researchers' assumption that OCB enhances team and organisational effectiveness.
German consulting engineering firms currently face great difficulties in competing in globalised markets. They are comparatively small. This article asks what the reasons for this situation are and whether there are options for political assistance to help the trade - perhaps Germany can learn from other countries - and describes the results of a benchmarking study which compares the situation of German firms with that of companies in the US, UK and France. The factors that may possibly be important for international competitiveness are analysed. The main result of the study is that the present weakness of German consulting engineering is caused by their lack of adaptation to the needs of the new globalised markets. German firms suffer now from the rather good and secure business opportunities which they have enjoyed during the phase of 'Aufbau Ost' in eastern Germany in the 1990s. They have somewhat missed the restructuring that became necessary. Hence, German consulting engineering has to do the bulk of restructuring itself in order to become competitive again.
The massive under-representation of women at the highest levels in British companies has been noted in retailing as elsewhere. But it has been difficult to set the current situation in perspective in the absence of longitudinal studies of recruitment patterns. This article examines the gender composition of the boards of directors of Britain's largest retail firms over the last 40 years. The results show that, following a lengthy period in which female retail directors were noticeable largely by their absence, a relatively small but significant breakthrough has recently taken place. The educational backgrounds, of the women members of today's retail boards, their length of board service, ages and the positions they hold both inside and outside retailing are also examined and compared with those of their male counterparts.
The search for the maximum use of scale and agglomeration economies and the need to operate firms in the most flexible way have provided a strong impulse for companies to increase their use of external intermediate services. Because of their strategic role, the use of business services that are intensive both in labour qualification and in technological requirements is key for these policies. The purpose of this paper is to analyse the patterns followed by companies in the two relevant decisions on this issue: firstly, whether to use knowledge intensive business services or not and, secondly, whether (and to what extent) to buy these services from another firm or to provide them inside the organisation. In both cases, we intend to identify the factors that affect the 'do versus buy' decision with respect to total KIBS as well as particular categories. A specific feature in our study is that it focuses on the behaviour of firms working in a region without a well-developed supply of KIBS. Applying discrete response models to the data obtained in a survey elaborated by the authors, the most relevant variables for the use of KIBS are satisfaction with previous outsourcing experiences and location of the firm in a large urban centre, but they do not affect their external provision. The size of the firm, its export orientation and its technological complexity have opposite effects on use and outsourcing.
This paper analyses bilateral trade flows between the provinces of Canada and between the member states of the European Union using a gravity model. On average, distance is less a hindrance for services trade than for goods trade. Language and regulation differences hamper intra-EU trade significantly. Services trade, in contrast to goods trade, is also hampered by the level of regulation in the importing country. Services trade within Canada as a share of GDP is twice the intra-EU level, and estimates suggest that intra-EU services trade could more than double if the internal market functioned like the Canadian services market.
This work analyses the strategy of outsourcing information systems and information technology (IS/IT), considering the different activities comprising the IS/IT area. The literature on IS contains numerous works that analyse outsourcing, very few of which examine the relationship with the different types of capabilities in the IS/IT area and their strategic value. Most works centre on the motives for, and advantages of, the strategy of outsourcing the IS/IT area, while scant attention has been paid to the study of the long-term consequences of outsourcing. This work develops a theoretical model which is applied to the hotel sector and which shows that hotels following a more intensive outsourcing strategy develop fewer managerial capabilities related to knowledge in the management of IS/IT resources. This negative relationship extends to other types of capabilities typical of the area and to certain organisational capabilities. A negative relationship is also observed between the level of outsourcing and the strategic value given to the IS/IT area, which may lead to a lower potential for the development of competitive advantage.
Using panel data for the period 1999-2003, this study shows that internal and external financing are not perfect substitutes, not corroborating the theorem of Modigliani and Miller. Portuguese service industries prefer internal to external financing, corroborating Pecking Order theory. The bigger the size of the company, the greater the level of debt, corroborating Trade-Off and Signalling theories. The negative relationship between the amount of fixed capital and debt corroborates Agency theory. The results allow us to conclude that debt contributes to improving management efficiency, agency problems between shareholders and creditors having little relevance.
This paper examines the use of closed-circuit television (CCTV) system notices in banks. This study was designed to measure the effect of the wording of CCTV notices on customer service quality expectations and purchase intent, while also considering the customer involvement as the moderating effects. Results show that customers, in expectation of better service quality, may be more likely to purchase the service when moderately worded CCTV notices (i.e. 'please smile, the CCTV is running!') had been employed in the bank rather than when the negatively worded CCTV notices (i.e. 'Taping now! All your behaviour here is monitored by the CCTV system!') are deployed. These effects were stronger in low-involvement situations. Implications of the findings and the future research directions are also discussed.
This paper develops a knowledge perspective on value creation in organisations that employ mediating technology to facilitate inter-customer relations. Mediators, individually and collectively, build networks of customers between whom linking can take place, and they provide services that facilitate inter-customer exchanges. Earlier research has shown the importance of size and standardisation in mediation. A different stream of research has shown that contextual knowledge is important for problem solving and innovation in organisations. Combining theories of mediating technology and situated problem solving, the paper posits that inter-customer relations constitute the fundamental context for value creation of firms using the mediating technology. LISREL is used to test relationship-level, cross-sectional hypotheses that link knowledge of inter-customer relationships, added value, and customer commitment to bank services for small firms. This work extends Thompson's work on mediating technology with implications for organisation action by demonstrating that mediators' knowledge of inter-customer relationships is an important resource in intermediation. Three contributions are made to strategic management and organisation theory. First, the paper provides a deeper understanding of the relationship between knowledge and committed customers. Second, fundamental resources are developed for firms using mediating technology. Finally, the use of the situated knowledge concept is extended to inter-customer relations, thus explaining performance beyond the contexts to which the concept has previously been applied. The findings have implications for segmentation practices, organisation domain decisions and the corresponding organisational structures, and practices that can provide effective service to inter-customer relations rather than to atomistic independent customers.
A large body of empirical literature ascribes a high degree of responsibility by the service sector for the difficulties in lowering inflation in the Spanish economy in the 1980s and early 1990s. Despite the fact that most of the branches in this sector are characterised by their lower ability to increase productivity, service wages have increased at a similar rate to those of other activities that, however, have been able to generate constant growth in productivity. On the other hand, tertiary activities have been able to transmit the growth in wage costs to prices without this having significant repercussions on the amount demanded as they are more protected from international competition. In this context, the reasons why service growth is accused of being one of the key causes of price growth are understandable. Nevertheless, throughout the1990s, important changes have taken place due to the technological revolution of modern economies that have created a doubt that services are still for the most partly protected from competition. This article makes a comparative study of the evolution of wages in industry and services, finding initial evidence that tertiary wages are presenting in their evolution the lowest productivity of most of tertiary activities pressurised by greater competition, which is lowering the incidence on inflation of the sector and of the economy in general.
This article explores the determinants of two crucial decisions in franchising relations: the contract length and the franchisers' propensity to allow franchisees to own several stores. The results show that franchisers alleviate franchisees' fears of hold-up by providing them with longer contract length. The findings also show that the lower the contracting experience of the franchisers and the higher the potential free-riding in a franchise system, the shorter the contract duration. Regarding multi-unit franchising, franchisers have a lower propensity to allow franchisees to own several outlets when the cost of monitoring outlet managers are high, and they have a greater propensity to offer multi-unit opportunities when free-riding appears to be a threat. The findings also show the existence of complementarities between the decisions studied, such that they constitute a system of interdependent elements.
This study examined how customers perceived and classified a set of 12 self-service technologies (SSTs) based on multidimensional scaling. The authors describe first, how the classifications developed by Lovelock are perceived by consumers and then, how the individual SSTs map onto those classifications. Results of the study show that 67% of the variance in classification is explained by two dimensions of customization/standardization and separability/inseparability. The authors also propose a typology for the SSTs based on their groupings in the classification framework. The authors discuss the managerial implications of the findings and suggest directions for future academic research.
The creation of long-term customer purchasing relationships depends upon continually aligning products to customer's needs, fulfilling their expectations, building/sustaining trust, and facilitating satisfaction. Product elimination can potentially destroy these. In financial services the ownership of the product remains shared between the customer and organisation. To fully eliminate a product requires that it is removed from customers, which may drive them to seek alternative suppliers. The product management challenge is how to manage customers through an elimination action whilst strengthening their purchasing relationship with the organisation, if desired. Financial service product elimination is fundamentally about managing customers out of one product into another, or out of the organisation. Elimination can, by choice of elimination strategy, be used to improve the offerings a customer has, or to encourage them to exit the organisation. This provides the basis for using product elimination as customer relationship management tool.
This study examines the concept of customer value based on the views shared by service firms and their consumers. Using qualitative and quantitative approaches, the study reveals customer satisfaction and retention as outcomes of front-line service employees' value delivery practices. Our results suggest that service employees' efforts to deliver customer value, even when based on a dyadic view, do not necessarily lead to customer retention. Rather, customers become more loyal when the value provided by service employees is matched by consumers' satisfaction. In other words, satisfaction is an important and necessary mediating variable between employees' efforts and customer retention.
This paper is the first to apply the three-stage data envelopment analysis procedure to analyze the impact of ecommerce on hotel performance. After purging the effects of exogenous factors, this study found that there are no significant differences in efficiency owing to different ecommerce adoption status. In other words, ecommerce adoption is not the main determinant of the efficiency of international tourist hotels in Taiwan.
In service management studies, various sets of quality dimensions have usually been considered to represent sub-components of quality perceptions. However, when focusing on a relationship instead of a service, this study suggests that the content of quality perceptions are of two inherently different types: quality domains and quality dimensions, which in turn can be combined into a new relationship quality model, labelled the D&D model. This refined way of categorising quality perceptions offers better analytical depth for research by more accurately distinguishing the wide range of different aspects being evaluated in a business relationship. For managers, the model offers a tool for broadening the company's quality work which can be used for improving quality and assessing compatibility between firms.
Service organizations are encouraged by the literature [Grönroos, 1996, 1997; 2000; Zeithaml and Bitner, 2000] to consider the manner in which employees perform at the customer/front-line employee interface, as a means to gain competitive advantage. The employee's behaviour requires 'emotional labour' [Hochschild, 1983] where the front-line employee has to either conceal or manage actual feelings for the benefit of a successful service delivery. The implication is not necessarily of equality or mutual benefit but of satisfaction for the customer and profit for the management. The article discusses whether the service employee is being exploited in this three-way relationship, and how surplus value accrues and its benefit distributed. Expecting emotional labour from employees can be exploitative, thus increasing the risk of potential deceit, in particular where poor recruitment, training and support recovery accompany the expectations of the emotional labourer. To illustrate this argument, data gathered from in-depth interviews with three holiday 'reps' are used.
It appears to be implicit in most research about the service sector that services are only produced in the private sector. This brief note submits that to calculate service output for the whole economy, the services produced in the public sector by national, regional and local governments must of necessity be included. This enhanced calculation demonstrates that service-producing industries are a much larger proportion of total economic activity than has been realised, and may, in the US for example, constitute around 80 per cent of total employment.
In this analysis of investment manager performance, two questions are addressed. First, do managers that actively trade stocks create value for investors? Second, can the multifactor model of Gruber capture the cross-section of average fund returns for the Australian setting? The answers from this study are as follows: as an industry, investment managers destroyed value for superannuation investors for the period 1991 through 1999, under-performing passive portfolio returns by 2.80-4.00 per cent per annum on a risk-unadjusted basis and 0.50-0.93 per cent per annum on a risk-adjusted basis. Evidence is provided in support of the four-factor model of Gruber; however, the model fails to capture the impact of investment style for the Australian setting. The findings suggest that Australian superannuation investors would transform their retirement savings into retirement income more efficiently through the use of passive alternatives to the stock selection problem.
Service failure recoveries play an important role in the service process. Previous research on service recovery has focused on the development of classification schemes, such as service failure types (e.g., outcome- or process-related failure), service recovery attributes (e.g., psychological or tangible recovery), and failure magnitude. Few studies in the literature have developed a theory-driven model of customer satisfaction that considers whether different types of service failure warrant different types of service recovery. This article, which reports the results of two studies, draws on mental accounting theory to examine the effect of the relationship between service failure and service recovery on customer satisfaction. The results of Study 1 show that customer satisfaction is greater when service recovery efforts truly make up for what customers have lost and that prior experience of service failure has a significant influence on the effectiveness of those efforts. The results of Study 2 indicate that the magnitude of a service failure also has an impact on the effectiveness of service recovery efforts.
Various researchers have reported that in routine grocery shopping the quantity consumers buy varies little across shopping occasions. Even in the presence of promotions, the largest part of promotional sales peaks has been attributed to brand switching. Recent investigations, however, indicated that the quantity consumers buy may include complex intra- and inter-consumer and intra- and inter-brand choice patterns. Using panel data from more than 1500 British consumers purchasing four food products during 52 weeks, the present study examined whether such complex patterns occur and assessed their relative contribution to overall quantity elasticity. Results showed that consumers buy larger quantities when paying lower prices, both within and across brands, and that consumers who buy larger quantities tend to pay lower prices, both within and across brands. The results also indicated that intra-brand price variations, especially those associated with consumers switching across package sizes, account for the largest portion of changes in quantity. Methodological differences might explain discrepancies among previous findings such as the duration of the sample used, the number of brands examined, and the conceptualization of a brand as including or excluding different package sizes.
Recent developments in management have highlighted the need for research on corporate sustainability strategies at the value chain level and in particular in the context of franchising. Although franchising is a widespread phenomenon, there is little empirical evidence of how companies approach the issue. By employing a multi-method research approach, this study explores the importance that franchisors assign to sustainability and the way they deal with it. Our findings show that franchisors adopt three main different sustainability strategies, with an increasing relevance of social sustainability as an enabler of environmental sustainability. The study sheds some light also on the interplay between the franchisor–franchisee relationship features and the company's approach toward sustainability. Preliminary propositions are presented as a starting point for further research in this area.
This article explores the implications of a 'service-informed' understanding of economic growth and restructuring for regional analysis and policies. As well as growing tradability, the more fundamental role of service functions is to support other activities with specialist expertise. 'Service' qualities are also keys to innovativeness, including interactivity, market awareness and intangible qualities such as trust. These qualities remain outside technology-focused economic modelling and monitoring. The 'new economy' debate is contrasted with recent theoretical insights into service-based innovation. Innovation studies need to be broadened to encompass wider issues of economic adaptability, largely determined by service relationships. The growth of knowledge-intensive business services (KIBS) reflects wider regional differences in the corporate, SME and public sector nexus of knowledge-based service functions. Regional competitiveness is thus favoured more by the diversity of global urban regions than the technologies within regional innovation systems. A service-informed perspective should emphasise the full knowledge base required for regional adaptability.
Networks are an important area of study for the services industries. The guest editors of this volume contend that networks are indeed a fundamental feature of services - services intangibility makes service providers heavily dependent on the recommendations of others to direct customers to a particular business; makes acquisition of knowledge about customers and competitors more difficult and often leads to exchange of information through knowledge networks. Fluctuations in services demand are perhaps more difficult to deal with as the 'product' cannot be stockpiled, but one strategy to deal with this is to work within a referral network to cater to demand peaks. Services require people to be engaged in their production. This leads to an increased proportion of smaller firms in the service industries because scaling up volume is more difficult with people involved. These are just a few of the reasons why networks in the service industries are important. This introduction to the special issue on advances in service network research concludes that firstly, many of the concepts of central concern for service researchers, especially those interested in inter-organisational relationships, are related to concepts that have been developed from, and studied using, the network perspective. Secondly, there is a need to move to the use of more quantitative techniques for network analysis and lastly, recent developments in network research show much promise in the use of complex systems mathematical techniques to simulate and model networks and the effect of interventions. Thus it is possible to provide suggestions as to how a network may evolve over time and inform those involved within networks as to the relative advantages of alternative modes of action. Overall this collection of papers indicates that there are significant opportunities for further research in this emergent field of study. 2010 Taylor & Francis.
Strategic resources are key inputs to strategy that can form the basis of superior service performance, yet there is scarce research on the strategic resources used by managers to realise ambidexterity: the simultaneous pursuit of alignment and adaptability. In this article, we draw on a qualitative case study of a leading European airline and examine the resource bundles used by managers in their orchestration of ambidexterity. Adopting a resource-advantage perspective, the study illustrates elements of human, organisational, and informational capital that are mobilised by managers in their incorporation of alignment-oriented and adaptability-oriented activities. By moving beyond a linear association between strategic resources and ambidextrous organisations, we argue that managers' orchestration of ambidexterity is central to how service organisations manage their strategic resources and enhance competitiveness. Overall, we highlight the micro managerial level as an important point of observation to extend current thinking on the ‘how’ of ambidexterity in service organisations.
An emerging source of competitive advantage for service industries is the knowledge, skills and attitudes of their employees. Indeed, achievement of a 'service quality' culture, considered imperative for competitive advantage in service organisations, supposedly results from the use of best practice human resource management (HRM), and from a strategic approach to their implementation. This paper empirically explores the use of these dimensions of HRM as a source of competitive advantage. It finds high-performing service organisations actively engage best practices across the areas of recruitment and selection, training and development, communication and team working. Evidence of a strategic approach to the implementation of these practices is also found.