Larry J. Menor

New service development: areas for exploitation and exploration

Abstract The management of new service development (NSD) has become an important competitive concern in many service industries. However, NSD remains among the least studied and understood topics in the service management literature. As a result, our current understanding of the critical resources and activities to develop new services is inadequate given NSD’s importance as a service competitiveness driver. Until recently, the generally accepted principle behind NSD was that “new services happen” rather than occurring through formal development processes. Recent efforts to address this debate have been inconclusive. Thus, additional research is needed to validate or discredit the belief that new services happen as a result of intuition, flair, and luck. Relying upon the general distinctions between research exploitation and exploration, this paper describes areas in NSD research that deserve further leveraging and refinement (i.e. exploitation) and identifies areas requiring discovery or new study (i.e. exploration). We discuss the critical substantive and research design issues facing NSD scholars such as defining new services, choice in focusing on the NSD process or performance (or both), and specification of unit of analysis. We also examine what can be exploited from the study of new product development to further understanding of NSD. Finally, we explore one important area for future NSD research exploration: the impact of the Internet on the design and development of services. We offer research opportunities and research challenges in the study of NSD throughout the paper.

Agility in Retail Banking: A Numerical Taxonomy of Strategic Service Groups

This research demonstrates that operations agility--defined as the ability to excel simultaneously on operations capabilities of quality, delivery, flexibility, and cost in a coordinated fashion--is a viable option for retail banks encountering increasing environmental change. The question of whether there is empirical evidence that services, specifically retail banks, display the characteristics of agility like their manufacturing counterparts is open to debate. Conventional wisdom in operations management posits that most successful services trade off one capability for another. Drawing from the resource-based view of the firm, combinative capabilities view, and the cybernetics work of Ashby (1958), theoretical arguments suggest the contrary. The agility paradigm is viable in environments calling for a mix of strategic responses. Applying cluster analytic techniques to a sample of retail banks, using capabilities as taxons, we identify four strategic service groups: agile, traditionalists, niche, and straddlers. Our empirical results provide thematic explanations consistent with theory that account for how the agile strategic group offers a unique configuration of service concept, resource competencies, strategic choices, and business orientation. Profiles of the operations strategies of each strategic service group suggest that each group has found a fit between what certain segments of the market may want and what they have to offer. In particular, we found that the agile group exhibited greater resource competencies than its counterparts, requiring greater investments in infrastructure and technology. Consistent with theory, agile banks performed better over time on an absolute measure of return on assets.

Examining the Influence of Operational Intellectual Capital on Capabilities and Performance

Managers have long been challenged by an abundance of internal and external demands and uncertainties in their operating environments. Anecdotal evidence and a growing number of research studies have advocated process flexibility and product innovation as organization-level operating capabilities critical for responding to such demands and uncertainties, and have highlighted the need for more efficient and effective management of the firms knowledge-based resources. Leveraging arguments from the resource-based and knowledge-based views of the firm, we introduce a second-order latent construct called operational intellectual capital, which represents the organizations operating know-how embedded in a system of complementary (i.e., covarying) knowledge-based resources. We argue that operational intellectual capital influences organization-level operating capabilities such as process flexibility and product innovation, which, in turn, influence business performance. We empirically examine these relationships using structural equation modeling on a cross-section of U.S. manufacturing survey data. Statistical results from the estimation of a coalignment model and comparisons with several other models support our operational intellectual capacity conceptualization and its impact on operating capabilities and business performance, respectively. Our research thus suggests the importance of possessing and leveraging a system of complementary knowledge-based operating resources, and addresses the need for the reformulation of operations strategy theory in terms of the emergent knowledge-based view of the firm.

Toward a Provider-Based View on the Design and Delivery of Quality E-Service Encounters:

The advent of electronic-based service (e-service) transactions has resulted in numerous operational challenges for service providers. Extending previous service management insights, this article offers a provider-based framework identifying four overarching types of online interactions useful for advancing understanding on the design and delivery of quality e-service encounters. This framework allows for examination of the amount of service intervention, the degree of user participation, and the type of user connection underlying online interactions for both Web 1.0 and Web 2.0 applications and platforms. The article discusses how the quality of each e-service encounter type—informational, self-directive, intervenient, and intensive— requires, from a systems quality and operational standpoint, the management of three elements (i.e., target market, concept, and delivery system) underlying the firm’s e-service operations strategy. The article proposes promising areas in e-service encounter quality research where further investigation of design and delivery issues is urgently needed. One immediate implication stemming from this framework is that there is likely no single best strategy or approach to designing and delivering effective (i.e., quality) online moments of truth. What is required is the apt configuration of strategic e-service elements underlying each distinct e-service encounter type vis-à-vis critical e-service system quality dimensions (e.g., manageability, reliability, usability).

Service competitiveness – An international benchmarking comparison of service practice and performance in Germany, UK and USA

This paper provides a cross‐country examination of service management practice and performance of service organizations in the UK, USA and Germany. The findings reported are based on a sample of firms from the international service study (ISS) from four service sectors: financial services, professional services, hotels, and utilities. The paper argues that generally there are differences in services management practices and performance and, more specifically, that service quality performance may be explained by the nature and market dynamics of the service sector within the individual countries.

A Complementary Resource Bundle as an Antecedent of E-Channel Success in Small Retail Service Providers

This study proposes an e-service resource bundle (E-SRB) as an antecedent of electronic service channel (e-channel) success in small retail service providers. The E-SRB indicates a collection of three resources: e-market acuity, e-IT competence, and e-service agility. Given the interdependence of these three resources in delivering quality e-services, the authors hypothesize about their complementarity and its positive effect on performance. The results of this structural equation modeling using survey data show support for the proposed hypotheses, demonstrating that the E-SRB positively influences e-channel performance. The performance impact is not limited to perceived financial performance but extends to self-reported dollar-based sales and profits. These results have theoretical implications when it comes to linking e-service quality to financial performance. They also carry managerial implications for small-scale e-retailing, where limited resources can seriously impede the full use of the e-channel. One of these implications concerns what resources are necessary and how to allocate them in order to improve an e-service system. In the end, this study suggests that managers should understand the interrelationships that might exist among resources that collectively influence performance.

Service operations: what’s next?

The purpose of this paper is to present exciting and innovative research questions in service operations that are aligned with eight key themes and related topics determined by the Journal of Service Management (JOSM) Service Operations Expert Research Panel. By offering a good number of such research questions, this paper provides a broad range of ideas to spur conceptual and empirical research related to service operations and encourage the continued creation of deep knowledge within the field, as well as collaborative research across disciplines that develops and incorporates insights from service operations.,Based on a Delphi study, described in the companion article, “Service Operations: What Have We Learned?,” the panel identified eight key research themes in service operations where leading-edge research is being done or has yet to be done (Victorino et al., 2018). In this paper, three or four topics within each theme are selected and multiple questions for each topic are proposed to guide research efforts. The topics and questions, while wide-ranging, are only representative of the many ongoing research opportunities related to service operations.,The field of service operations has many interesting research topics and questions that are largely unexplored. Furthermore, these research areas are not only increasingly integrative across multiple themes within operations but often transcend functional disciplines. This creates opportunities for ever more impactful research with a greater reach throughout the service system and suggests that service researchers, regardless of functional affiliation, can contribute to the ongoing conversation on the role of service operations in value creation.,Leveraging the collective knowledge of the JOSM Service Operations Expert Research Panel to expand on the research themes generated from the Delphi study, novel questions for future study are put forward. Recognizing that the number of potential research questions is virtually unlimited, summary questions by theme and topic are also provided. These questions represent a synopsis of the individual questions and can serve as a quick reference guide for researchers interested in pursuing new directions in conceptual and empirical research in service operations. This summary also serves as a framework to facilitate the formulation of additional research topics and questions.

Service operations: what have we learned?

Purpose n n n n nThe purpose of this paper is to identify research themes in service operations that have great potential for exciting and innovative conceptual and empirical work. To frame these research themes, the paper provides a systematic literature review of operations articles published in the Journal of Service Management (JOSM). The thorough review of published work in JOSM and proposed research themes are presented in hopes that they will inspire impactful research on service operations. These themes are further developed in a companion paper, “Service operations: what’s next?” (Field et al., 2018). n n n n nDesign/methodology/approach n n n n nThe JOSM Service Operations Expert Research Panel conducted a Delphi study to generate research themes where leading-edge research on service operations is being done or has yet to be done. Nearly 700 articles published in JOSM from its inception through 2016 were reviewed and classified by discipline focus. The subset of service operations articles was then further categorized according to the eight identified research themes plus an additional category that primarily represented traditional manufacturing approaches applied in service settings. n n n n nFindings n n n n nFrom the Delphi study, the following key themes emerged: service supply networks, evaluating and measuring service operations performance, understanding customer and employee behavior in service operations, managing servitization, managing knowledge-based service contexts, managing participation roles and responsibilities in service operations, addressing society’s challenges through service operations, and the operational implications of the sharing economy. Based on the literature review, approximately 20 percent of the published work in JOSM is operations focused, with earlier articles predominantly applying traditional manufacturing approaches in service settings. However, the percentage of these traditional types of articles has been steadily decreasing, suggesting a trend toward dedicated research frameworks and themes that are unique to the design and management of services operations. n n n n nOriginality/value n n n n nThe paper presents key research themes for advancing conceptual and empirical research on service operations. Additionally, a review of the past and current landscape of operations articles published in JOSM offers an understanding of the scholarly conversation so far and sets a foundation from which to build future research.

Illuminating the Service Provider’s Strategic Mandate on Realizing Apt Quality and Value Through Service Innovation

The pursuit and achievement of success in service innovation constitutes a critical strategic imperative for many organizations. Yet, service providers typically encounter a myriad of issues and challenges when attempting to develop and deploy new strategies, means, and offerings. Among the most vexing of issues and challenges for service providers is the determination of how best to manage their services and servicing innovation efforts. Leveraging empirical findings obtained through field-based examination of the innovative initiatives of North American symphony orchestras, we highlight critical service firm operations strategy and operational system-related principles that providers must collectively manage in an orchestrated manner in order to strategically benefit from their systematic services and servicing innovation efforts.