Bridging what we know: The effect of cognitive distance on knowledge-intensive business services produced offshore

The rise of offshoring of knowledge-intensive business services (KIBS), causing a physical separation between clients and service providers in co-created services, is a major trend in practice but challenges existing theories. International business literature has addressed many types of distance that may affect (service) offshoring, such as cultural or geographic distance. However, limited emphasis has been placed on the implications of differing cognitions of individuals that produce a cognitive distance (CD). We address this gap and ask how increased CD through offshoring affects KIBS production processes. This conceptual paper focuses on how CD interacts with the modularity of different process stages in service production and what effect CD has on repeated production processes. In order to do so we first predict what stages of KIBS production processes can be offshored and what implications offshoring has on these services. We contribute to literature by deepening the understanding of CD and providing a process perspective on KIBS offshoring that looks at modularity within services, rather than firms as bundles of modular production, and on the impact repeated production processes have on service characteristics.     

What the eye does not see,the mind cannot reject: Can call center location explain differences in customer evaluations?

Moving call centers offshore may be an effective way to increase service productivity by lowering costs, yet recent research suggests that customers associate offshore call centers with lower service quality. This study clarifies customer evaluations of call centers with a field study that examines how customer perceptions of a foreign accent, call center location, and the agent's customer orientation relate to nonmonetary performance outcomes. Multivariate analysis of data collected from more than 800 customers using call centers located in three countries suggests that neither accent detection nor call center location relates to customer satisfaction, trust, or word-of-mouth communication; only perceived customer orientation has an effect on these outcomes. These findings suggest offshore call center locations are not necessarily associated with lower performance outcomes and that service firms should place a higher priority on ensuring call center agents have a strong customer orientation, rather than on avoiding the use of call centers abroad.     

Embracing realism and recognizing choice in IT offshoring initiatives

As more and more firms move activities offshore to countries that are distantly located from their home base of operations, the initial advantages of making this move are increasingly tempered by realities on the ground. For firms contemplating offshoring today, it is important to weigh the advantages and disadvantages of undertaking or extending this strategy in light of what we now know. Broadly speaking, successful offshoring must begin with an understanding of the market and competitive pressures that encourage offshoring, and then build on recognition of how these pressures can be addressed using or modifying the offshoring options currently practiced. Our discussion of these issues is based on analysis of offshoring of IT-enabled services by Fortune Global 500 firms in such areas as software development and business processes that support customer interaction.     

Effects of personalized e-mail messages on privacy risk: Moderating roles of control and intimacy

New communication platforms have enabled firms to collect personal data on their consumers and provide more personalized services. Personalized service facilitates interpersonal communication and interactions based on consumers’ personal and preference information, and therefore constitutes a way to improve firm–customer relationships. However, such personalized services may be vulnerable to privacy issues. This study investigates the effects of personalized e-mail messages (an archetypal example of personalized service) on consumers’ risk perceptions and two moderating variables: consumers’ control and message intimacy. In three experiments, we show that an increase in the level of personalization in e-mail messages increases consumers’ privacy risk perceptions. However, giving consumers more control over their personal information and adding intimate cues to e-mail messages moderate the negative effects of personalized e-mail messages on their privacy risk perceptions. The study provides important implications for both academics and managers in developing and employing personalized service in new media communication.     

Multinational investment and host country development: Location efficiencies for services offshoring

Services offshoring has become an important source of investment and development in many emerging economies. While much attention has been paid to companies’ use of services offshoring to lower costs, not all of these offshoring activities have yielded the anticipated results. Thus, the choice of where to locate offshore facilities is an important yet complex one that has substantial implications for both the investing firm and host country. In this paper, we adopt the perspectives of service firms located in the U.S. and empirically examine the attractiveness of host countries for offshoring of services. Using data envelopment analysis (DEA), we examine which countries use their resources or inputs most efficiently in order to produce outputs that make them attractive for services offshoring. We find that China, India, Ireland, the Netherlands, Pakistan, Slovakia, Spain, and the U.K. are particularly attractive locations for services offshoring. All of these countries have at least one core efficiency-creating competency among the key inputs of wages, education, and infrastructure. We discuss implications for firms and government policy makers and offer recommendations for future research.     

Customer Service as a Strategic Weapon in International Operations

Customer service is an important competitive weapon in international markets becuase of its ability to acquire and retain overseas customers (especially intermediate firms) and, thus, enhance companies' revenues. Customer service is especially critical when foreign vendors are perceived as offering similar products at comparable prices, and purchasers have doubts about suppliers' willingness to carry out various post-purchase responsibilities. This paper reports the results of a study of the customer service programs of 151 U.S. non-service companies with international operations in five or more foreign countries. Sixty-nine firms responded to their customer service efforts in international markets and 81 addressed domestic customer service programs, allowing for comparisons to be made between international and domestic customer service operations. The study's results indicate that copmanies realize the importance of customer service in marketing to international customers, yet customer service for international markets is not considered to be appreciable more important than it is for domestic ones. Much similarity in perceptions about international and domestic customer service programs being in place. Whether this similarity occur from a careful analysis of domestic and international markets or simple expediency is uncertain.     

The Impact of Chinese Culture on Service Predisposition

376 service employees at 27 Hong Kong food service outlets were surveyed using Lee-Ross's Service Predisposition Index instrument together with the cultural values questionnaire of the Chinese Culture Connection. The objective was to examine the influence of Chinese culture upon employees’ willingness to deliver service. Results suggested that cultural values influence service predisposition through specific job attitudes. Respondents perceived humbleness, loyalty to superiors and tolerance of others to have the greatest positive effect on their job attitudes. This influence was most pronounced for the service dimensions disposition and communication and the moderator deference. The cultural values that had the most negative influence on service predisposition were protecting face, conservatism and repayment of good/evil. Respondents interpreted delivering service in terms of personal deference, to the customer or their employer, rather than as a relationship with the customer. There seemed also to be a cultural reluctance to accord (unknown) customers status and hence to perceive them as worthy recipients of service.     

CRM中主动利用信息不对称性的客户服务模式研究

应用四种客户服务模式,阐述了客户服务涉及的相关主体、各主体间的信息流以及信息的不对称性,参考前人的相关研究成果,综合考虑企业客户服务流程以及客户服务担负的辅助决策功能,建立了包括虚拟客户服务中心、终端客户、中介组织和管理层辅助决策支持四部分的客户服务模式,以降低企业的综合客户服务成本,提高终端客户、内部客户、服务中介组织以及供应商的忠诚度和满意度。     

Offshore Outsourcing and Non‐production Workers: Firm‐level Relationships Disaggregated by Skills and Suppliers

In analysing the impact of offshoring on the skill composition, previous empirical studies have established that offshoring firms employ more non‐production workers. However, not all non‐production workers are highly skilled. This paper disaggregates non‐production workers into the following three categories: (i) skilled non‐production workers, (ii) unskilled non‐production workers and (iii) non‐production workers with special skills for offshoring and other overseas business management. By linking our offshoring survey data with firm‐level data for Japanese manufacturing firms, this paper finds that the share of skilled non‐production workers tends to be significantly high in offshoring firms but that of unskilled non‐production workers is not. As offshoring has expanded from production to non‐production tasks, this result implies that the distinction between skilled versus unskilled workers becomes critical among non‐production workers. Using our unique data on supplier types in offshoring, this paper finds that the share of non‐production workers for the management of overseas activities tends to be high in foreign direct investment firms and in firms outsourcing to foreign independent suppliers, but not in Japanese firms outsourcing to offshore suppliers located abroad but owned by other Japanese firms. This difference indicates that coordination burdens are likely to be at least partly mitigated by common languages or shared business practices. These findings suggest that offshoring has different impacts on employment depending on suppliers and the worker’s skill. The principal results are confirmed robust even after various firm characteristics are controlled for in panel regressions, though we should not give any causal interpretations.     

Competitive Positioning in International Logistics: Identifying a System of Attributes Through Neural Networks and Decision Trees

Abstract

Firms involved in international logistics must develop a system of service attributes that give them a way to be profitable and to satisfy customers' needs at the same time. How customers trade-off these various attributes in forming satisfaction with competing international logistics providers has not been explored well in the literature. This study explores the ocean freight shipping sector to identify the system of attributes that maximizes customers' satisfaction. Data were collected from shipping managers in Singapore using personal interviews to identify the chief concerns in choosing and evaluating ocean freight services. The data were then examined using neural networks and decision trees, among other approaches to identify the system of attributes that is connected with customer satisfaction. The results illustrate the power of these methods in understanding how industrial customers with global operations process attributes to derive satisfaction. Implications are discussed.     

Value creation through production offshore–inshore strategies in a footwear industry cluster: A coevolutionary perspective

In many industries, production offshoring towards countries with low labour costs has been a common trend in recent decades. However, we find some resistance to dismantling factories in a footwear industry cluster in Spain. From a customer perspective of value creation, and based on qualitative and quantitative data, we analyse the evolution of firms’ offshore–inshore strategies associated with the main periods of cluster expansion and contraction over the last 25 years. We highlight three main findings. First, the pressures of the environment can terminate firms but not necessarily the entrepreneurial orientation of their owners to continue in the same industry. Second, adaptive processes to create value for the consumer in the footwear industry seek a balance between production offshoring and domestic production in order to optimize the firm's competitive position. Third, coevolutionary theory should consider not only the selection and adaptation processes but also the capacity of firms to influence their environment, since the alternative strategies to create value for customers in footwear industry have resulted in speeding up the footwear fashion market. We also suggest implications for research and practice.     

Customer e-complaining behaviours using social media

This paper develops a conceptual framework about customer complaining behaviours (CCB), using social media. Specifically, this research expands the current understanding of CCB by examining the differential impact of unfairness, firm response, retaliation, locus attribution, stability attribution, and personal identity on public complaining and private complaining using social media, and their subsequent impact on post-complaining satisfaction (PCS) and loyalty. Public complaining refers to customer complaints directed to a service provider, while private complaining refers to service failure complaints directed towards other customers. A structural equation model shows that high levels of unfairness, firm response, locus, and personal identity have a strong influence on public complaining, while desire for retaliation is a significant factor influencing private complaining. The findings contribute to practice by providing useful and pertinent information for developing suitable web care interventions to effectively deal with public complaining and private complaining through social media platforms.     

THE EMPOWERMENT OF FRONTLINE SERVICE STAFF IN 3PL COMPANIES

Research on third‐party logistics (3PL) service providers has focused more on managing customer relationships than on managing the frontline personnel who interact with customers on a daily basis. Thus, even though the overall need for 3PL's to be market‐oriented is well‐recognized, relatively little is known about how 3PL companies support and develop frontline service staff to provide better service. This study draws on 3PL company site managers' responses to a postal survey that examines the influences of internal communication, customer service training and managerial coaching for customer contact employees on the relationship between market orientation and frontline service recovery empowerment.     

Hidden Costs of Offshore Outsourcing: an Analysis of Offshoring Decisions

Offshore outsourcing has grown as a form of industrial organisation to increase profitability of firms. However, offshoring may be less lucrative than envisaged, due to the presence of hidden costs. We study the strategic interaction amongst onshore Cournot firms in the decision to offshore when they receive signals about offshore hidden costs. The analysis helps suggest policy implications for countries which are potential offshoring locations. We find the precision of signals and the range of possible hidden costs to be crucial in determining offshoring destinations. Updating of information about hidden costs leads to different equilibria including herding in offshoring.     

Exploring antecedents of customer citizenship behaviors in services

Social exchange theory explains how a party in social interaction provides the other party with reciprocal rewards. Applying this concept to the customer context, this study empirically investigates determinants of customer citizenship behaviors (CCBs) in services. For the generalizability of the study across various service providers, the data were collected based on Bowen’s (1990) classifications of services. With a total of 665 usable customer responses, structural equation modeling was adapted to test the theoretical research model. This study reveals that customers’ perceived support and justice from the service provider positively influence affective commitment toward the organization, resulting in CCBs. The results show that customers’ perception of organizational support has the partial mediation effect between customers’ perception of organizational justice and their affective commitment. Furthermore, customers’ affective commitment partially mediates the relationship between customers’ perceived organizational justice and CCBs, but fully mediates the effect of customers’ perceived organizational support on CCBs.     

Customer-to-customer interactions on customer citizenship behavior

This study examines how both positive and negative customer-to-customer interactions (CCIs) simultaneously influence customer citizenship behavior. Specifically, we posit that (1) positive CCI and dysfunctional customer behavior (negative CCI) influence customers’ affection with service, (2) customers’ affection with service leads to positive customer citizenship behavior, and (3) service providers’ relationship investment moderates the relationships between positive (negative) CCI and customers’ affection with service. The study sample consisted of 362 customers at a major public recreation center in South Korea. We used latent moderated structural equation modeling and the bootstrapping technique to test the proposed hypotheses. The results offer full support for the expected differential effects of positive CCI and dysfunctional customer behavior on customer citizenship behavior, and provide important implications for research and practice.     

A systems perspective on offshoring strategy and motivational drivers amongst onshore and offshore employees

Extant research tends to view firm level offshoring strategies and micro level motivational drivers as self-contained units of analysis. By contrast, this paper draws on an inductive study of two global service firms to demonstrate how the implementation and success of an advanced task offshoring strategy depends on certain systemic interdependencies between (a) the strategy, (b) onshore employees’ motivation to transfer advanced tasks and (c) offshore employees’ motivation to spend effort on their tasks and stay with the firm. We analyse how these three elements interact and produce feedback loops to create an ‘offshoring system’. Extrapolating from our findings, we propose how the offshoring system is likely to develop within the external constraints set by the attainable expertise of offshore employees and by client demands.     

Unraveling the Personalization Paradox: The Effect of Information Collection and Trust-Building Strategies on Online Advertisement Effectiveness

Retailers gather data about customers’ online behavior to develop personalized service offers. Greater personalization typically increases service relevance and customer adoption, but paradoxically, it also may increase customers’ sense of vulnerability and lower adoption rates. To demonstrate this contradiction, an exploratory field study on Facebook and secondary data about a personalized advertising campaign indicate sharp drops in click-through rates when customers realize their personal information has been collected without their consent. To investigate the personalization paradox, this study uses three experiments that confirm a firm's strategy for collecting information from social media websites is a crucial determinant of how customers react to online personalized advertising. When firms engage in overt information collection, participants exhibit greater click-through intentions in response to more personalized advertisements, in contrast with their reactions when firms collect information covertly. This effect reflects the feelings of vulnerability that consumers experience when firms undertake covert information collection strategies. Trust-building marketing strategies that transfer trust from another website or signal trust with informational cues can offset this negative effect. These studies help unravel the personalization paradox by explicating the role of information collection and its impact on vulnerability and click-through rates.     

Retaining customers in traditional retail financial services: interviewing 'les responsables'

This paper explores organizational concerns with retaining customers in traditional retailing of financial services. Managers, charged with retaining customers ('les responsables') in banks and building societies, are interviewed seeking their views on how their organizations retain customers. The study finds that there are a number of shared themes in the sample of informants, which are evolution/flux, customer information systems, a product/sales orientation, delivering financial services, staff and relationships with customers. Underlying these themes, however, appears some equivocation as these organizations try to retain customers when customer acquisition seems to be the thrust of their marketing.     

Receiving,Recording, and Responding to Customer Complaints: The Effects of Formalizing Customer Complaint Handling Policies in Retail Firms

ABSTRACT

Given the critical need for retail firms to provide high quality customer service and satisfaction, this article investigates the importance of formalizing customer complaint handling policies and procedures with regard to its relationship to the ways in which retail companies receive, record, and respond to customer complaints. A survey of 184 firms from the retail environment of a midsized community reveals that the existence of such formalized procedures is significantly associated with firm size, better channels of communication with customers, mechanisms of recording customer feedback, and better-trained employees, which have been shown to relate to higher firm performance.