Philip Davies, Glenn Parry, Laura Anne Phillips and Irene C.L. Ng
The purpose of this paper is to explore the interplay between firm boundary decisions and the management of both efficiency and flexibility and the implications this has for…
Abstract
Purpose
The purpose of this paper is to explore the interplay between firm boundary decisions and the management of both efficiency and flexibility and the implications this has for modular design in the provision of advanced services.
Design/methodology/approach
A single case study in the defence industry employs semi-structured interviews supplemented by secondary data. Data are analysed using thematic analysis.
Findings
The findings provide a process model of boundary negotiations for the design of efficient and flexible modular systems consisting of three phases; boundary ambiguity, boundary defences and boundary alignment.
Practical implications
The study provides a process framework for boundary negotiations to help organisations navigate the management of both-and efficiency and flexibility in the provision of advanced services.
Originality/value
Drawing upon modularity, paradox and systems theory, this article provides novel theoretical insight into the relationship between firm boundary decisions and the management of both-and efficiency vs. flexibility in the provision of product upgrade services.
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The purpose of this paper is to highlight why service firms have difficulty in establishing channels and how transaction costs increase as a result. The paper shows how such…
Abstract
Purpose
The purpose of this paper is to highlight why service firms have difficulty in establishing channels and how transaction costs increase as a result. The paper shows how such difficulties may be overcome a mechanism that uses service capacity strategically.
Design/methodology/approach
The paper uses a case study approach, and conducts a transaction cost analysis of the archival data of a cruise line along with the contract between the cruise line and a tour operator.
Findings
The results show that service intermediaries aren't able to take inventory and are unable to demonstrate their commitment. Consequently, both parties would be unwilling to establish a contract. However, commitment can be achieved through the intermediary investing in relationship‐specific assets that it could recover, subject to performance. Similarly, the firm could pledge its capacity for its investment in the specific assets. Such a mechanism aligns the interests of both.
Practical implications
This case analyses an actual contract between two service firms and the issues surrounding it.
Originality/value
As contracts and actual company data of this nature are usually confidential, this paper is useful to provide insights into the process of deliberation and formation of service contracts.
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Ralph Badinelli, Sergio Barile, Irene Ng, Francesco Polese, Marialuisa Saviano and Primiano Di Nauta
The purpose of this paper is to highlight how systems thinking contributes to decision making in uncertain contexts that are characteristic of service systems. Based on the…
Abstract
Purpose
The purpose of this paper is to highlight how systems thinking contributes to decision making in uncertain contexts that are characteristic of service systems. Based on the assumption that service systems face complex conditions, the paper posits that systems thinking may support the understanding of key issues in service management.
Design/methodology/approach
This paper proposes an interpretation of complexity in the context of service systems, which highlights the perspective change that occurs when a systems approach is adopted. The offered conceptual perspective is then brought to an operational level, in spite of the complexity of the decisions driving a viable system, by modelling a service system as a network of agents, resources, processes and decisions through the use of fuzzy logic. The paper reviews service management research streams, and takes a deeper look at the concepts of service systems and complex service systems. The paper then proceeds to discuss how systems thinking contributes to service management by proposing a systems interpretation of complexity.
Findings
Service management theories and models may be enhanced by integrating prevailing approaches, based on a quantitative and mechanistic view of service systems dynamics, with systems thinking‐based meta‐models that can be used in better understanding service exchanges. The findings of the paper also show how the integration of an engineering approach can be insightful to the understanding of service systems; adopting a Viable Systems Approach (VSA) as a meta‐model can be useful in fully comprehending market behaviour in uncertain conditions.
Originality/value
The originality of this paper lies in exploring the contribution of systems thinking, in particular of the Viable Systems Approach (VSA), to service management and decision making.
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The purpose of this paper is to study the non‐consumption of a service by advance buyers, the re‐selling of relinquished capacity at spot time and the effect on the pricing of…
Abstract
Purpose
The purpose of this paper is to study the non‐consumption of a service by advance buyers, the re‐selling of relinquished capacity at spot time and the effect on the pricing of advance and spot demand of services.
Design/methodology/approach
The paper employs mathematical economics modeling technique.
Findings
The model shows that advance prices are always lower than spot prices due to the non‐consumption effect and also that providing a refund to advance buyers, as insurance against non‐consumption, may be. By modeling in the capacity of the firm, the paper also presents the firm's capacity conditions when the firm does not sell in advance and also when market failure occurs i.e. when the firm does not sell in advance nor at consumption time.
Research limitations/implications
The model does not consider uncertainty in the spot price and assumes a one‐stage optimization. Furthermore, the model extension with refund is numerically derived.
Practical implications
This model informs industry on the significance of non‐consumption of a service and the re‐selling of relinquished capacity. It also highlights the importance of the interaction between capacity and refunds in advance and spot selling.
Originality/value
This paper contributes to extant literature by demonstrating that when heterogeneous demand behavior is explicitly modeled with non‐consumption, capacity and refunds, firms would then be able to understand where and how service revenue is being obtained (higher price or higher demand) and the impact of various sensitivities on revenue.
Irene C.L. Ng and Laura A. Smith
Purpose – The purpose of this chapter is to provide a comprehensive understanding of current literature on value. In exploring perspectives on economics, choice, consumption and…
Abstract
Purpose – The purpose of this chapter is to provide a comprehensive understanding of current literature on value. In exploring perspectives on economics, choice, consumption and evaluation of value, assumptions and limitations of extant approaches are highlighted and an integrative framework of value is proposed. It is suggested that this integrative perspective on value has a number of implications for marketing theory and research.
Methodology/approach – This chapter conducts an extensive review and assimilation of value from management, marketing, philosophy and economics.
Findings – The chapter categorises the existing value literature into six themes of value understanding: utility, economic worth, perceived satisfaction, net benefit, means end and phenomenological experience. In so doing, the chapter identifies implicit assumptions in philosophy, chronology and consciousness of value and offers an integrative value framework which brings in the literature to understand the contextual invariances of value creation within a phenomenon (i.e. offering, affordance, context, agency and individual resources). In addition, it reconciles creation with choice and evaluation of the value ex ante and ex post. Finally, our chapter proposes the paradox of value – value which can be assessed, measured and even judged by an individual cannot be the value created.
Research limitations/implications – In shifting value away from exchange towards use, it is suggested that marketing positioning, segmentation and targeting strategies may need to consider five elements identified in the integrative value framework. Furthermore, as proposed by the framework, new business models may be achieved from understanding value creation in context.
Originality/value of chapter – This chapter extends existing literature on value through reconciliation of various theoretical literatures in management, marketing, philosophy and economics. Notably, it highlights implicit assumptions in philosophy, chronology and consciousness of value and their potential limitations. It proposes an integrative framework that can be used for understanding the future of marketing and new business models.
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John Ahmet Erkoyuncu, Rajkumar Roy, Essam Shehab and Elmar Kutsch
In the light of challenges experienced in cost estimation at the bidding stage of complex engineering services in the defence industry (e.g. contracting for availability), the…
Abstract
Purpose
In the light of challenges experienced in cost estimation at the bidding stage of complex engineering services in the defence industry (e.g. contracting for availability), the purpose of this paper is to present a framework to manage the influence of uncertainty on cost estimates.
Design/methodology/approach
The research applied the Soft Systems Methodology and benefitted from interaction with four major organisations in the defence industry through document sharing, semi-structured interviews, workshops, and case studies.
Findings
The framework is composed of seven stages to plan, identify, prioritise, classify, and manage cost uncertainties. Through the validation of three case studies some of the key benefits of the framework were realised in project planning, uncertainty visualisation, and capability management.
Research limitations/implications
The research has been applied in the defence sector in the UK and focuses on the bidding stage. Further research needs to be applied to confirm that the findings are applicable across industries and across the life cycle.
Originality/value
The paper builds on the theory behind risk and uncertainty management and proposes an innovative framework that avoids the assumption of “perfect” knowledge by raising questions about the validity of the input data.
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Irene Ng, Glenn Parry, Laura Smith, Roger Maull and Gerard Briscoe
The purpose of this paper is to present a visualisation of the firm's offering from a service‐dominant logic (S‐DLogic) perspective. The case of Rolls‐Royce is presented as an…
Abstract
Purpose
The purpose of this paper is to present a visualisation of the firm's offering from a service‐dominant logic (S‐DLogic) perspective. The case of Rolls‐Royce is presented as an avenue through which to explore an alternative view of the firm's value proposition, a visualisation informed by S‐DLogic that could aid organisations in their transition from goods‐dominant logic (G‐DLogic) to S‐DLogic.
Design/methodology/approach
Through integration of an operations management approach in process mapping and design and simulation with choice modelling in business‐to‐business marketing, this paper operationalises some of the key aspects of S‐DLogic, most notably focusing on the constructs of value and resources. This is explored through a single case; Rolls‐Royce which provides access to a rich source of internal and customer data.
Findings
The study finds that the S‐DLogic visualisation of the firm's value proposition in equipment‐based service consists of its contribution to 11 value‐creating activities towards value‐in‐use. The visualisation depicts both the highest possible bundle of benefits for the customer along with the resources and their costs associated with delivering those bundles. When brought together these enable the identification of the optimal bundle of value‐creating activities from both customer and firms' perspective.
Originality/value
This paper provides empirical evidence of the difference between a G‐DLogic and S‐DLogic view of the firm's value proposition. In doing so, extending existing literature on S‐DLogic by contributing to a methodological and empirical gap. Notably, it makes abstract concepts of S‐DLogic concrete, providing a pathway for future empirical work and begins the process of systematising a methodology in S‐DLogic.
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Laura Smith, Roger Maull and Irene C.L. Ng
The purpose of this paper is to provide further insight into operations management of the product-service (P-S) transition, known as servitization, and the resulting product…
Abstract
Purpose
The purpose of this paper is to provide further insight into operations management of the product-service (P-S) transition, known as servitization, and the resulting product service system (PSS) offerings. In exploring the P-S transition, this paper adopts a service-dominant (S-D) logic view of value creation, using it as a lens through which to explore value propositions of the P-S transition and their operations design.
Design/methodology/approach
This paper presents an in-depth case study of an original equipment manufacturer of durable capital equipment who, over the last five years, has expanded its offerings to include use- and result-orientated PSS. The research design uses a multi-method approach; employing 28 in-depth qualitative interviews with customers and employees and analysis of texts, documents and secondary data including five years of enterprise resource planning (ERP), call centre and contract data.
Findings
The paper identifies ten generic P-S attributes that are abstracted into four nested value propositions: asset value proposition; recovery value proposition; availability value proposition; and outcome value proposition. In examining the operations design for delivery of these value propositions, it is found that the role and importance of contextual variety increases as the organisation moves through the value propositions. Interdependencies amongst the value propositions and differences in operational design for each value proposition are also found.
Research limitations/implications
The paper investigates PSS through a S-D logic mindset. First, the paper considers value propositions of PSS not according to “product” or “service” but in terms of how resources (both material and human) are optimally designed to co-create customer value. Second, a value co-creation system of nested value propositions is illustrated. In so doing, the findings have a number of implications for literature on both PSS and S-D logic. In addition, the research adds to the PSS literature through the identification and consideration of the concept of contextual use variety.
Practical implications
The paper demonstrates the complexity of the transition from product to service. Specifically, service cannot be seen as a bolt-on extra to their product offering; complexity caused by interactions and changes to the core offering require a systems perspective and consideration of both firm and customer skills and resources.
Originality/value
This paper extends existing literature on the P-S transition and its implications for operations management. Notably, it takes an S-D logic perspective of value creation and in so doing highlights the importance and role of contextual use variety in the P-S transition. It also provides further empirical evidence that the P-S transition cannot be treated as discrete stages but is evolutionary and requires a complex systems perspective.