Operationalisation of service innovation: a systems thinking approach

This paper initialises an effort to explore the impact of an innovative systems thinking approach for service operations design on creating innovation. A qualitative exploratory case study approach in two of the UK’s service sector departments was conducted, using face-to-face semi-structured interviews, focus groups, and extractions from both observations and documents. The results identify that operationalising service innovation is positively linked with applying the Vanguard Method for service operations design. Twelve micro-determinants for service innovation operationalisation have been identified that reside at three different levels in the service organisation, namely employees level (i.e. Micro), the functional level (i.e. Meso), and corporate level (i.e. Macro). The value of this paper is the introduction of a step-by-step guidance on how to build service operations design to operationalise service innovation, the paper also theorises service innovation with systems thinking methodology that emphasises holistic, multi-disciplinary, and integrative characteristics of the service system.     

The war for talent: human capital challenges for professional service firms

Abstract

Professional service firms face particular human capital challenges. This study reflects on the distinctive characteristics of professional service firms through the concepts of knowledge intensity, low capital intensity and professionalized workforce. Based on in-depth interviews with 21 partners of Australian law firms, we provide empirical evidence on the war for talent challenges faced by professional service firms and in particular, law firms. The findings point to talent management challenges including reputation building and maintenance, employee autonomy, knowledge acquisition, revenue and profitability through internationalization, managing knowledge across borders, managing employee mobility, talent acquisition and retention, talent engagement, performance management and developing leadership capability. These challenges are important issues to be considered by professional service firms as they attempt to compete more effectively in global business contexts.     

Advanced information technology: transforming service innovation and design

This research explores the role of advanced information technologies at the ‘fuzzy’ front-end of service innovation and design. Service researchers have been exploring the application of technology to services for a while, however there has been little attention paid to the use of technology at the front-end of service innovation and design. Research suggests that advanced information technologies should be useful in research and development for services; but how this may occur has not been explored. Bringing together design thinking and the technology–organization–environment framework for technology adoption this research develops propositions for research to expose how technology can advance and transform service innovation and design. Theoretical and practical research questions are offered to guide inquiry in this emerging research space.     

Operations flexibility and outsourcing benefits: an empirical study in service firms

Outsourcing is a widely extended practice for many industries competing at the global level. Through outsourcing, firms are able to clearly define their core field of activities while transferring non-core activities to organizations enabled to perform them with higher degrees of efficiency. However, outsourcing is not exempted from some risks, especially those derived from process coordination, information sharing, or oportunistic behaviours. Operations flexibility can play a fundamental role in moderating these risks while increasing the benefits from outsourcing by decreasing the level of dependence on the outsourced activities. In this paper, a structural analysis is performed to analyse the relationship between operations flexibility and outsourcing benefits in service firms. Results show that higher levels of flexibility in the informations systems, markets, expansion, and personnel dimensions are directly related to higher outsourcing benefits.     

Entrepreneurial failure and discrimination: lessons for small service firms

This paper draws lessons from a case decided by the USA Supreme Court, wherein the firm failure was perceived by the minority entrepreneur as an outcome of racial discrimination. Implications of this case are significant because the failure rate of minority-owned US businesses has been consistently higher than the average failure rate of US business. We argue that the impact of discrimination by a customer is greater for small service firms. Through the Domino's Pizza case, we assert that issues relating to equal employment, inter-company contracting and choice of business organisation must be managed by the owner of a service firm.     

Process completeness: Strategies for aligning service systems with customers’ service needs

Increasingly, customers are expecting more and better service. As such, enterprises need guidelines and frameworks for addressing these expanding requirements. The concept of process completeness helps us to consider service from the customer's viewpoint; arguably, the only perspective to take. Process completeness is achieved when a firm's service delivery system matches the typical customer's breadth of expectations. While customers think in sets of services (e.g., I need a flight, a hotel, airport parking, wireless Internet), firms think in terms of single services (e.g., we can provide a flight). There are four basic service systems: (1) transaction—execute a basic request and nothing else, (2) process—handling all firm-related service requests through one touch point, (3) alliance—handling service requests through a single touch point via stitching together a static firm-selected alliance of service partners, and (4) agility—handling service requests through a single touch point via stitching together a dynamic customer-selected alliance of service partners. In addition to exploring the four service systems, this article guides executives regarding the selection and implementation of the appropriate service strategy that meets their typical customer's process completeness expectations.     

Lessons from the COVID19 pandemic: The case of retail and consumer service firms

The COVID-19 pandemic has impacted business operations in every industry and sector around the world. Scholars, practitioners and policymakers continue to engage in understanding the effects of lockdowns, social distancing measures and other restrictions on trade; the impact of government stimulus and support measures, and how businesses have adapted their operations. The dynamic nature of the virus, and the changing socio-political and economic landscape, provide the opportunity for empirical scholarly research examining how retail and service firms have responded to the challenges and potential opportunities presented by the pandemic, and how owner/managers have pivoted in an (often) uncertain trading environment. This paper presents the findings of an applied study involving business owners (N = 268) of SME retail and service firms in the island state of Tasmania, in Australia, during the first wave of the pandemic in 2020. Findings show: (1) despite over 65 per cent of respondents reporting a downturn in revenue during 2020, almost 80 per cent indicated they had confidence in business survival heading into 2021; (2) whilst on average, businesses did not rate the level of environmental hostility as being particularly high, there was a significant correlation between perceived environmental hostility and assessment of business performance and with the level of confidence of business survival; (3) Australian federal government support and other stimulus measures were deemed crucial for business survival during 2020 with three quarters of businesses accessing the ‘JobKeeper’ scheme, and (4) businesses adapted their operations during the pandemic in terms of new products and services, increased marketing, pivoting their use of technology and promoting ‘localness’.     

Influence of innovation on performance: analysis of Spanish service firms

The main objective of this research was to analyse innovation in service firms. In strategic management, the methodology of fit allows us to study the adjustment between two dimensions by revealing the internal consistency between them and its influence on the efficiency of firms. This paper is focused on the analysis of fit between types of services (classified according to intensity of innovation) and the innovation decisions made by these firms. The fit has been contrasted through the methodology of adjustment as an approach to the ideal profile. An important question in this paper consists in revealing whether the fit between the type of services and innovative decisions influences a firm's performance.     

Taking services to foreign markets: A taxonomy of Brazilian service firms

This study develops a taxonomy of international service firms from an emerging market, Brazil, and assesses whether there are significant differences in international performance between the groups. After an extensive literature review, a survey was carried out with a sample of international service firms located in an emerging economy, Brazil. Using as a departure point two theoretical perspectives, the internationalization process theory and industrial organization theory, in addition to service dimensions extracted from the empirical service management literature, the study identifies four groups—large traditionals, generalist neophytes, solitary traditionals, and daring differentiators—based on firm characteristics, international services delivered, internationalization process characteristics, and international strategies adopted. The findings suggest that there are significant differences in performance between the groups.     

Transformative service research and service design: synergistic effects in healthcare

ABSTRACT

This conceptual paper answers the question: How do we design service experiences in whole to increase the well-being of all participants in the healthcare system – patients, families, and caregivers? In order to do so, we position service design as an essential tool and even a mindset needed for transformative service research success. We discuss the transformative role service design plays in improving service and consumer entities’ well-being with a focus on how this approach can lead to improved healthcare service outcomes. We also add to the conversation surrounding service and consumer entities’ well-being by broadening the concept and application of service design to consider social, existential, psychological, and physical well-being. We particularly explore how healthcare services can benefit from further consumer engagement and collaborative patient–provider relationships, two key factors essential for redesigning the industry.     

Managing service employees: literature review,expert opinions,and research directions

This article reviews the service management and marketing literature on managing people with a particular emphasis on managerial relevance. This review explores the market and financial results of managing people effectively, emphasizing that it is probably harder to duplicate high-performing human assets than any other corporate resource. The challenges inherent in boundary-spanning frontline jobs are discussed, including role conflict and emotional labor. Next, recommended human resources (HR) strategies and practices related to recruitment, training, empowerment, service delivery teams, and employee motivation are reviewed. The literature review concludes with a section on service culture, climate, and leadership. Each section is complemented with further research suggestions that emerged from interviews with eight academic and practitioner experts. The last section outlines six themes for new research opportunities with high potential managerial relevance; they relate to (1) the financial impact of HR practices and strategies, (2) motivating service employees, (3) training, (4) emotional labor, (5) dealing with rude customers, and (6) the impact of technology on managing service employees.     

Seven challenges to combining human and automated service

We introduce this special issue by addressing seven key challenges associated with managing hybrid human-automated service systems. These consist of the following:

• 1 What strategic and tactical issues arise when managing hybrid service systems?
• 2 How should the core “value proposition” be set?
• 3 What special considerations arise in the design and implementation phases?
• 4 How can service delivery be managed to identify systemic problems and to address service breakdowns?
• 5 How can communications with clients improve the functioning of service systems?
• 6 What performance measures should be used to monitor process, outputs, client perceptions, and financial outcomes?
• 7 How can we coordinate the various interdisciplinary activities needed to address the previous six issues?

We consider these challenges after first characterizing the historical evolution of service delivery, reviewing some of the literature in the administrative sciences, and proposing a conceptual framework. Copyright © 2009 ASAC. Published by John Wiley & Sons, Ltd.     

Delivering ‘effortless experience’ across borders: Managing internal consistency in professional service firms

This article explores how professional service firms (PSFs) manage across borders. When clients require consistent services delivered across multiple locations, especially across borders, then firms need to develop an organization that is sufficiently flexible to be able to support such consistent service delivery. Our discussion is illustrated by the globalization process of law firms. We argue that the globalization of large corporate law firms primarily takes place in terms of investments in the development of protocols, processes and practices that enhance internal consistency such that clients receive an ‘effortless experience’ of the service across multiple locations worldwide. Over the longer term the ability to deliver such effortless experience is dependent upon meaningful integration within and across the firm. Firms that achieve this are building a source of sustainable competitive advantage.     

Knowing your boundaries: Integration opportunities in international professional service firms

This study presents three different business models (continuous, repetitious, and unique) identified in international professional service firms that pursue a transnational strategy. These business models have varying opportunities for global integration. We extend the integration–responsiveness framework by offering a framework for analyzing how to balance global integration with local responsiveness when pursuing a transnational strategy. By identifying the content, structure, and governance transactions of the three business models, we can determine when to pursue headquarters-initiated global integration and when to choose strategies that ensure local responsiveness and subsidiary competitiveness in local markets.     

How professional service firms compete in the market: an exploratory study

Abstract

This study investigates how professional service firms (PSFs) compete in the market. Drawing on strategic marketing literature, a managerial rather than customer perspective is adopted. The study investigates the competitive positions sought by professional service providers and the specific marketing activities actually undertaken to achieve these positions. Thirty-seven depth interviews with senior management from a range of PSFs indicate that firms seek to differentiate themselves by developing long-term relationships, providing better service quality and greater value, and developing brands with strong reputations. Organisations typically seek such interrelated competitive positions simultaneously. A list of marketing activities used by the PSFs to achieve these competitive positions offers practical insights into the specific activities needed to achieve the various competitive positions sought.     

Managerial routines in professional service firms: transforming knowledge into competitive advantages

This paper is about managerial routines in professional service firms (PSFs) and takes a resource-based perspective. It describes how managerial routines can be used to transform capabilities into competitive advantages. The empirical data explore three PSFs facing dilemmas concerning the management of their human resources and their professionals, and show how new managerial routines have been established. It further shows that PSFs' innovations are routine and are mainly reactive. Most routines are directed towards exploration, which is caused by the need to focus on projects for clients who in the daily routines supersede the need for developing HRM routines. Due to the importance of the projects and the markets the PSFs operate in, we will also look at the relations between PSFs and their markets. The concept of managerial routines is seen in relation to exploration and exploitation, which are subsequently used in an empirical analysis. In doing this, the analysis reveals a conflict between external demands from the clients and the internal utilization of the capabilities within the firms.     

Managing for customers and employees in Hong Kong: The quality and teamwork challenges

Service marketing, total quality management, and human resource management researchers have proposed that employee teamwork is a foundation for service quality. North American research suggests that developing cooperative relationships and constructive controversy among employees can empower employees to serve customers and to strengthen their work relationships and commitment to the organization. Chinese employees in an American-style restaurant in Hong Kong were interviewed on specific incidents that affected service quality. Correlational and structural equation results support the hypotheses that cooperative goals help employees discuss their diverse views open-mindedly and that this constructive controversy results in quality customer service. Competitive and independent goals were largely negatively correlated with dynamics and outcomes. Results were interpreted as suggesting that service teams should develop strong cooperative goals and the skills and procedures of constructive controversy. Deutsch's theory of cooperation and competition, although developed largely through North American research, seems useful for understanding and developing service quality teamwork in Asia.     

Exploring the effects of international sourcing on manufacturing versus service firms

As the extent of international sourcing rises and the number of functional activities spreading across-national borders increases, there is a call for a better understanding of its impact on structural change. In this work, we explore the effects of international sourcing comparatively and look for differences between manufacturing and service firms. This study is based on a unique Slovenian data set that links the recently conducted Eurostats survey on international sourcing with a detailed financial firm-level data. The results from the matching methodology suggest that service firms involved in international sourcing gain an improvement in the quality and technological learning, resulting in the employment growth and development. This is not the case for manufacturing firms driven primarily by cost cutting. In our view, a better understanding of these effects is vital for both manufacturing as well as service firms that are influenced by this new trend.     

Driving dynamic knowledge articulation and dynamic capabilities development of service alliance firms

By investigating drivers of dynamic learning in service alliance firms, this empirical study demonstrates the locus of dynamic knowledge articulation (DKA) and dynamic capabilities (DCs) development. This study uses a sample of 363 service alliance firms to test the distinctive role of drivers of dynamic learning in DKA and DC development. The results show that manager integration powers, external linkages, codification of experience, and ambiguity have positive effects on DKA. Moreover, DKA has a strong positive influence on DC development. This study contributes to the literature by focusing on DKA and DC development from the perspective of processes, structure, and DCs of service alliance firms.