How Do Customers and Companies Benefit from Service Firm Transparency?

JSR Cover[We’re pleased to welcome Andreas B. Eisengerich, who collaborated with Omar Merlo, Seigyoung Auh, and Hae Eun Helen Chun on their paper “Service Firm Performance Transparency: How, When and Why Does It Pay Off?” from the May issue of Journal of Service Research.]

Calls for greater business transparency have become louder in recent years and transparency has risen to the top of the agenda of many organizations. Businesses in a wide range of industries have started to embrace transparency, as their managers swear by the benefits of providing accessible and objective information to customers. Yet, many firms remain wary of the benefits of transparency and are unsure about how to implement it. How does transparency impact customers’ relationships with a firm? Is being transparent worth the risk? In our research, we focus on one particular aspect of firm transparency, which we deem particularly important to customers and firms. We term it performance transparency, and it reflects the extent to which customers view the information provided by businesses about their service performance as accessible and objective. We find that performance transparency benefits both customers and the firm. Customers benefit because when service quality is difficult to evaluate prior to a purchase, transparency can enable customers to minimize uncertainty by “seeing through” the firm and its offerings. Companies benefit because in a context where it is increasingly more difficult to conceal negative information about a firm’s performance, transparency can actually be used as a source of competitive advantage that increases a customer’s purchase intention and reduces price sensitivity. Surprisingly, we also find that being transparent best impacts companies that tend perhaps to be the most afraid of transparency.

You can read “Service Firm Performance Transparency: How, When and Why Does It Pay Off?” from Journal of Service Research by clicking here. Want to know about all the latest news and research from Journal of Service Research? Just click here to sign up for e-alerts!

Yeyi Liu is an Assistant Professor at Leeds Business School. He holds a BSc in Industrial Engineering and MSc in Management Science and Engineering from Xi’an Jiaotong University, China. He also holds a PhD from Imperial College London. Prior to joining Leeds University Business School, he worked as research associate at Strathclyde University Business School.

Andreas Eisingerich

Andreas B. Eisingerich is an Associate Professor of marketing at Imperial College Business School, Imperial College London. He earned his PhD at the University of Cambridge and worked at the Center for Global Innovation at the University of Southern California, Marshall School of Business. He has published on customer-brand relationships, customer engagement, and service management in the Journal of Consumer Psychology, Journal of Marketing, Journal of Service Research, Journal of Business Research, Harvard Business Review, and MIT Sloan Management Review, among others.

Seigyoung Auh

Seigyoung Auh is an Associate Professor of global marketing at Thunderbird School of Global Management. He earned his MBA and PhD from The Ross Business School, University of Michigan. He is also a research fellow at the Center for Marketing and Public Policy Research, Villanova University. His research interests are in knowledge sharing in sales teams, effect of leadership on extra-role behavior of frontline service employees, and customer orientation diversity. He has published articles in various outlets, including Journal of Service Research, Journal of the Academy of Marketing Science, Journal of Consumer Psychology, International Journal of Research in Marketing, Journal of Retailing, Journal of Product Innovation Management, Marketing Letters, Journal of Personal Selling & Sales Management, Journal of Business Research, and Industrial Marketing Management, among others.

Omar Merlo

Omar Merlo is an Assistant Professor of marketing at Imperial College Business School, Imperial College London. He earned his PhD from University of Melbourne, Australia. As a consultant and executive educator, he works with numerous service organizations around the world. His main research interests are in strategic marketing, marketing’s role within the firm, firm orientations, and service management. His research has appeared in journals such as Journal of Service Research, Industrial Marketing Management, Marketing Letters, Journal of Business Research, European Journal of Marketing, MIT Sloan Management Review, and Marketing Theory, among others.

Hae Eun Helen Chun

Hae Eun Helen Chun is an Assistant Professor of marketing at Cornell School of Hotel Administration. Helen earned her PhD in business administration (marketing) from the Marshall School of Business at University of Southern California. Her research interests include consumer experience management in the service context, with a focus on the role of consumer emotions, anticipation, memory, and sensory marketing. Her research has appeared in journals such as Journal of Consumer Psychology, Sensory Marketing, and Foundations and Trends in Marketing, among others.

The March Issue of Administrative Science Quarterly is Now Online!

The March issue of Administrative Science Quarterly is now available and can be read online for free for the next 30 days. This issue offers a range of compelling articles on organizational studies as well as astute book reviews.

The lead article, “Creativity from Constraint? How the Political Correctness Norm Influences Creativity in Mixed-sex Work Groups” was authored by Jack A. Goncalo, Jennifer A. Chatman, Michelle M. Duguid and Jessica A. Kennedy. You can read the abstract below:

As work organizations become increasingly gender diverse, existing theoretical models have failed to explain why such diversity can have a ASQ_v60n1_Mar2015_cover.inddnegative impact on idea generation. Using evidence from two group experiments, this paper tests theory on the effects of imposing a political correctness (PC) norm, one that sets clear expectations for how men and women should interact, on reducing interaction uncertainty and boosting creativity in mixed-sex groups. Our research shows that men and women both experience uncertainty when asked to generate ideas as members of a mixed-sex work group: men because they may fear offending the women in the group and women because they may fear having their ideas devalued or rejected. Most group creativity research begins with the assumption that creativity is unleashed by removing normative constraints, but our results show that the PC norm promotes rather than suppresses the free expression of ideas by reducing the uncertainty experienced by both sexes in mixed-sex work groups and signaling that the group is predictable enough to risk sharing more—and more-novel—ideas. Our results demonstrate that the PC norm, which is often maligned as a threat to free speech, may play an important role in promoting gender parity at work by allowing demographically heterogeneous work groups to more freely exchange creative ideas.

You can access the Table of Contents for this issue of Administrative Science Quarterly by clicking here. You can keep up-to-date on all the latest news and research from Administrative Science Quarterly by clicking here to sign up for e-alerts!

Property Rights Design and Market Process

“Property Rights Design and Market Process: Implications for Market Theory, Marketing Theory, and S-D Logic” was recently published in Online First in Journal of Macromarketing by Michaela Haase and Michael Kleinaltenkamp, both of Freie Universitat.

Professor Kleinaltenkamp discusses the article below.

Who is the target audience for this article?

Scholars interested in the fields of marketing theory and market theory; preconditions and modes of resource integration; interdisciplinary research at the intersection of law, economics, marketing and other disciplines; institutional economics and institutional sociology.

What inspired you to be interested in this topic?

We were interested in how property rights based analyses can inform service-dominant logic and vice versa. In marketing theory, we have worked on resource integration and the collaboration of the customer in this regard. In service-dominant logic, there is a comparative focus on resource integration and value co-creation. Without the property rights to resources, no service can be exchanged for service. The provision of service depends on the respective property rights bundle held by an economic actor.

Were there findings that were surprising to you?

This study developed its arguments theoretically; there was therefore no basis for surprises which could result from a comparison of theoretical and evidence-based sentences.

How do you see this study influencing future research and/or practice?

The analysis of property rights arrangements leads directly to the study of contracts and thus to a research program at the intersection of economics, law, and other disciplines. We think that this study is part of the development of a property rights-based or contractual approach to marketing. It will hopefully be the beginning of further theoretical and empirical analyses on the relevance of ownership and contractual design for the analysis and making of markets.

How does this study fit into your body of work/line of research?

The study draws on several strands of theory building in market and marketing theory which are a source of the resources-processes-outcomes (RPO) approach to the German theory of the firm. The RPO approach identifies three dimensions of a transaction: information, the integration of resources stemming from both parties to a transaction, and property rights. Although no resources can be integrated without having the property rights to them, and ownership as well as non-ownership of resources opens up different opportunities to economic activity, this field of analysis is still rather under-researched in marketing. The rental-access approach by Christopher Lovelock and Everett Gummesson has addressed the relevance of ownership or non-ownership, respectively, for the characterization of transactions and the understanding of market offerings. Although they did not refer to property rights theory in their analysis they highlighted the distinction between ownership and non-ownership and paved thus the way for our distinction between exchange type I and II. Austrian market process theory is another theoretical source of our paper. It emphasizes the relevance of human action and learning processes for the understanding of the market process. Service and the improvement of the actors’s abilities to provide service – learning – is related to this dynamic perspective. 

How did your paper change during the review process?

The paper has gained a lot from the comments of our reviewers and the editing work by Steve Vargo.

What, if anything, would you do differently if you could go back and do this study again?

We guess we have built our theoretical study on sound sources which need no change at the actual point of time.

Bookmark and Share