When should customers control service delivery? Implications for service design

What do a Mongolian stir-fry restaurant and a medical lab providing home testing solutions have in common? They are both innovative services that base their success on customers controlling part of the service delivery. These providers allow service tasks to be performed by the customers as a means of shaping the overall experience and not strictly as a means of "outsourcing" the service. Motivated by such practices, we explore whether and how should providers allocate the control of different tasks of their service to the customers. We model services as multi-step processes with each step affecting customers' experience at other steps. At certain steps the provider may hold an “expert" role and be more capable of performing than the customers, whereas at other steps she holds an “administrative" role and is less capable of performing than the customers. We distinguish between routine services, where the service outcome must conform to standardized specifications, and non-routine services, where the value of the service outcome relies on subjective dimensions. We show that the optimal design is determined by an economically intuitive rule whereby the provider controls the steps based on the marginal benefit she can derive compared to self-service. For routine services, this rule translates to managing “blocks" of steps because the provider benefits from containing the volatility of the experiences across the service even when this implies the provision of service steps with a negative marginal benefit, i.e., steps which she is less capable of performing than the customers. Instead, in non-routine services providers should focus on the value advantage they can ensure through a "core provision" even if this implies forgoing control of steps for which they are more capable of performing than the customers and from which they can derive positive marginal benefit. This implies that in non-routine services the provider exercises more control up to a certain process length; beyond that she delegates more steps to the customers. When customers differ in their abilities to perform the different steps, the provider may offer a service line. Service lines facilitate better segmentation than a single service offering, but their economic benefit exhibits an inverted “U-shaped" relationship with respect to the number of steps that a service comprises. Finally, we find that competition between two providers who differ in their capabilities to perform a service results in service design differentiation where the more capable provider offers a higher-end "focused service" against a lower-end "super-service" offered from the less capable provider

Moving from a Product-Based Economy to a Service-Based Economy for a More Sustainable Future

Traditionally, economic growth and prosperity have been linked with the availability, production and distribution of tangible goods as well as the ability of consumers to acquire such goods. Early evidence regarding this connection dates back to Adam Smith's Wealth of Nations (1776), in which any activity not resulting in the production of a tangible good is characterized as unproductive of any value." Since then, this coupling of economic value and material production has been prevalent in both developed and developing economies throughout the world. One unintended consequence of this coupling has been the exponential increase in the amount of solid waste being generated. The reason is that any production and consumption of material goods eventually generates the equivalent amount of (or even more) waste. Exacerbating this problem is the fact that, with today's manufacturing and supply chain management technologies, it has become cheaper to dispose and replace most products rather than to repair and reuse them. This has given rise to what some call a disposable society." To put things in perspective: In 2012 households in the U.K. generated approximately 22 thousand tons of waste, which amounted to 411 kg of waste generated per person (Department for Environment, Food & Rural Affairs, 2015). During the same time period, households in the U.S. generated 251 million tons of waste, which is equivalent to a person generating approximately 2 kg of waste every day (U.S. Environmental Protection Agency, 2012). Out of these 251 million tons of total waste generated, approximately 20% of the discarded items were categorized as durable goods. The disposal of durable goods is particularly worrisome because they are typically produced using material from non- renewable resources such as iron, minerals, and petroleum-based raw materials

Inferior vestibular neuritis: 3 cases with clinical features of acute vestibular neuritis, normal calorics but indications of saccular failure

BACKGROUND: Vestibular neuritis (VN) is commonly diagnosed by demonstration of unilateral vestibular failure, as unilateral loss of caloric response. As this test reflects the function of the superior part of the vestibular nerve only, cases of pure inferior nerve neuritis will be lost. CASE PRESENTATIONS: We describe three patients with symptoms suggestive of VN, but normal calorics. All 3 had unilateral loss of vestibular evoked myogenic potential. A slight, asymptomatic position dependent nystagmus, with the pathological ear down, was observed. CONCLUSION: We believe that these patients suffer from pure inferior nerve vestibular neuritis

Universal Rights and Wrongs

This paper argues for the important role of customers as a source of competitive advantage and firm growth, an issue which has been largely neglected in the resource-based view of the firm. It conceptualizes Penrose’s (1959) notion of an ‘inside track’ and illustrates how in-depth knowledge about established customers combines with joint problem-solving activities and the rapid assimilation of new and previously unexploited skills and resources. It is suggested that the inside track represents a distinct and perhaps underestimated way of generating rents and securing long-term growth. This also implies that the sources of sustainable competitive advantage in important respects can be sought in idiosyncratic interfirm relationships rather than within the firm itself

The Digital Transformation of Search and Recombination in the Innovation Function: Tensions and an Integrative Framework*

Search and recombination are important mechanisms in the creativity phase of innovation. Digital transformation and the resulting pervasive digitalization of the innovation function have often been associated with increasing possibilities for search and recombination. In this paper, by systematically integrating the search and recombination literature with the literature on digitalization, we demonstrate that digitalization may engender new idiosyncratic tensions in the organizational antecedents of search and recombination and, by implication, in their likely outcomes. We propose that, depending on the interactions among the idiosyncratic tensions identified herein, knowledge recombination might spur very different outcomes, including knowledge layering, knowledge integration, knowledge grafting, or even no recombination at all (which we label “search for the sake of search”). These outcomes may not always be the initially planned desired outcomes. Finally, we provide implications of our integrative framework pertaining to product development and to organizing for innovation

Learning Sequences: Their Existence, Effect, and Evolution

Much is known about the importance of learning and some of the distinct learning processes that organizations use (e.g., trial-and-error learning, vicarious learning, experimental learning, and improvisational learning). Yet surprisingly little is known about whether these processes combine over time in ordered ways, because most research on learning explores one particular process. Using theory elaboration and theory-building methods and data on the accumulated country entries of entrepreneurial firms, we address this gap. Our core contribution is an emergent theoretical framework that develops the concept of learning sequences. We find that learning sequences exist and are influenced by initial conditions. We also find that learning sequences evolve in fundamentally distinct ways over time and with repeated use. Finally, data show how different learning sequences differentially affect both shorter- and longer-term performance, suggesting that it matters which learning processes are used and when. Overall, our findings on learning sequences have important implications for learning theory, international entrepreneurship, and the growing literature on process management

Research on Markets for Inventions and Implications for R&D Allocation Strategies

Several streams of literature have examined the phenomenon of “markets for inventions”, that is, the trade of elements of knowledge which are “disembodied” from individuals, organizations, and products. The aims of this paper are to bring together the various streams of research in this area and discuss their major assumptions and limitations, in order to provide a comprehensive framework for understanding the phenomenon, and identify promising paths for future research. We start our review by identifying the object of market exchange—that is, an invention whose knowledge has been codified and disembodied from individuals, organizations, or artifacts. We then identify those factors that enable firms to trade inventions, distinguishing between institutional-, firm-, and industry-level factors. We close our analysis of the extant literature by discussing the implications of markets for inventions for firm behavior and performance. Against this background, we highlight an important avenue for future research. A neglected implication of the development of invention markets is that firms are confronted with a wide variety of technological paths from which to choose, because the opportunity to acquire technologies on the market offers them a greater variety that can their internal R&D departments. However, the streams of research on markets for inventions and on R&D allocation strategies have been surprisingly disconnected so far. Hence, in the final section, we start to establish and explore the link between these literatures, and to identify a research agenda in this domain

Explicitly searching for useful inventions: dynamic relatedness and the costs of connecting versus synthesizing

Inventions combine technological features. When features are barely related, burdensomely broad knowledge is required to identify the situations that they share. When features are overly related, burdensomely broad knowledge is required to identify the situations that distinguish them. Thus, according to my first hypothesis, when features are moderately related, the costs of connecting and costs of synthesizing are cumulatively minimized, and the most useful inventions emerge. I also hypothesize that continued experimentation with a specific set of features is likely to lead to the discovery of decreasingly useful inventions; the earlier-identified connections reflect the more common consumer situations. Covering data from all industries, the empirical analysis provides broad support for the first hypothesis. Regressions to test the second hypothesis are inconclusive when examining industry types individually. Yet, this study represents an exploratory investigation, and future research should test refined hypotheses with more sophisticated data, such as that found in literature-based discovery research

Alliances and the innovation performance of corporate and public research spin-off firms

We explore the innovation performance benefits of alliances for spin-off firms, in particular spin-offs either from other firms or from public research organizations. During the early years of the emerging combinatorial chemistry industry, the industry on which our empirical analysis focuses, spin-offs engaged in alliances with large and established partners, partners of similar type and size, and with public research organizations, often for different reasons. We seek to understand to what extent alliances of spin-offs with other firms (either large- or small- and medium-sized firms) affected their innovation performance and also how this performance may have been affected by their corporate or public research background. We find evidence that in general alliances of spin-offs with other firms, in particular alliances with large firms, increased their innovation performance. Corporate spin-offs that formed alliances with other firms outperformed public research spin-offs with such alliances. This suggests that, in terms of their innovation performance, corporate spin-offs that engaged in alliances with other firms seemed to have benefitted from their prior corporate background. Interestingly, it turns out that the negative impact of alliances on the innovation performance of public research spin-offs was largely affected by their alliances with small- and medium-sized firms