Production and Operations Management

Rosenzweig, Eve D; Kelley, Ken; Bendoly, Elliot

2024 Production and Operations Management

doi: 10.1177/10591478241252150

Excellent service is often discussed with an assumption of equivalency in its application, yet the reality is far more complex. Customers have distinct needs that pose distinct challenges for frontline service employees. In hotel settings, providing excellent service to a diverse set of guests is more nuanced when frontline employees themselves are from a wide variety of backgrounds. Whereas the literature considers operational tactics to promote excellence in guest service, it is unclear whether training, policies and procedures, and leadership designed to advance excellence have the same impact on employees who, by virtue of their background, are more attuned to guests’ needs. We extend the literature by empirically demonstrating that operational tactics impact frontline employees’ perceptions of service equality, with racial/ethnic minority employees seeing statistically distinct impacts. Employing a sample of 25,698 employee-year observations across 32 luxury hotels in the United States over 3 years, we find that codified policies and procedures, as well as training, improve assessments of guest service equality. In contrast, racial/ethnic minority employees are less impacted than their White counterparts by leadership stances that seem to promote equality more broadly. After controlling for time and other relevant employee- and hotel-level variables, operational tactics (a) improve perceptions of service equality, and (b) reduce the disparity between White and racial/ethnic-minority service-quality assessments. Our findings provide further direction for managers to elevate such perceptions of customer service equality across the board by leveraging training and by reinforcing clear operating policies and procedures.

Sun, Haoyan; Fang, Eric (Er); Dong, Beibei; Li, Xiaoling

2024 Production and Operations Management

doi: 10.1177/10591478241243385

Hybrid retailing is an emerging business model that melds traditional reselling with the newer platform approach. A platform owner resells directly to consumers (the reselling model) and also allows third-party retailers (TPRs) to sell on the platform for a commission (the platform model). Given the integral role of TPRs in the hybrid retailing ecosystem, research is imperative to understand how the strategic actions of the platform owner could affect the performance and activities of TPRs. Using a longitudinal dataset of an online platform that adopts a hybrid-retailing structure, the research proposes that the platform owner's strategies, specifically price promotion and in-platform advertising, can affect TPR sales performance directly (through positive spillover effects and negative crowding-out effects) and indirectly (by prompting TPRs to respond with their price promotion and in-platform advertising). Further, such direct and indirect effects depend on TPR size. The findings indicate significant direct effects: the platform owner's price promotion has a positive spillover effect on TPR sales, and more so for larger TPRs; the platform owner's in-platform advertising has a negative crowding-out effect on TPR sales and more so for smaller TPRs. The paper also reports indirect effects: TPRs tend to use price promotion to respond to both strategies of the platform owner, and TPR's price promotion also has positive consequences for TPR sales, and the effects are stronger for larger TPRs. Given the unique coopetition relationship between the platform owner and TPRs in the hybrid retailing context, this research provides firsthand empirical evidence that the platform owner's strategies can significantly affect TPR performance through direct and indirect effects, shows larger TPRs benefit the most from the platform owner's price promotion, while smaller TPRs suffer the most from the platform owner's in-platform advertising, and TPRs favor price promotion regardless what strategies the platform owner uses. These results indicate that both platform owners and policymakers should consider the differential implications for TPRs of different sizes in terms of the social welfare of the platform ecosystem.

Yao, Dai; Lu, Shijie; Chen, Xingyu

2024 Production and Operations Management

doi: 10.1177/10591478231224948

Live streaming has emerged as an innovative means for content providers (broadcasters) to monetize their content in real time under pay-what-you-want pricing. In a typical live stream, consumers (viewers) watch the content and decide whether and how much to tip the broadcaster in the form of virtual gifts that have been purchased with real money. Unlike offline contexts where payment is often nontransparent, both payment activities and sender identities are transparent or publicly observable in live streams. Hence, understanding to what extent and how tipping influences broadcasters’ emotional reactions and peer viewers’ engagement activities becomes relevant and meaningful. In this study, we examine the social impact of viewer tipping activity by running a field experiment on a popular live-streaming platform in China. We deploy synthetic viewers to both treated and control streams. These synthetic viewers send random tip amounts at random times in only the treated and not the control streams, which then exogenously alters the tips that are observed by the audience. We find that broadcasters tend to provide an emotional and reciprocal reaction in response to additional viewer tips, which is measured by the broadcasters’ level of happiness as discerned from their facial expressions. Viewers tend to tip less, chat less, and leave the current stream sooner when seeing more tips from peers, suggesting a negative crowding-out effect on viewer engagement. Nevertheless, the crowding-out effect does not apply to the number of likes, which are displayed without viewer identities in a live stream. In addition, such crowding-out effects manifest mainly in those viewers who tipped heavily before the experiment, possibly because heavy tippers care more about social status than their counterparts. These results collectively suggest that the pursuit of social status is a plausible driver of the observed crowding-out effects.

Metters, Richard; George, Jordana

2024 Production and Operations Management

doi: 10.1177/10591478241238976

We postulate that the study of diversity, equity, and inclusion can deepen and add relevance to research in operations management (OM). Specifically, the role of gender is little studied in the existing OM literature—to the detriment of the field. This article considers OM issues by employing the theories, data, and topics from the field of Women's Studies. Our findings indicate that incorporating viewpoints from Women's Studies can change what is considered research, improve the accuracy of OM research, extend existing studies in the field through new parameters, and open new areas of inquiry.

Son, Yoonseock; Wowak, Kaitlin D; Angst, Corey M

2024 Production and Operations Management

doi: 10.1177/10591478241243381

In the wake of the Black Lives Matter protests, numerous companies took action to advance racial equality. Several online platforms added a feature that identified “minority-owned” businesses to help users locate and, thus, support them. In this study, we investigate how reviews and ratings of restaurants in New York City change after being identified as Black-owned on an online platform. We find that the number of reviews increases, but the average rating decreases after restaurants are identified as Black-owned. We investigate how various contextual factors, such as the number of hate crimes where the restaurant is located and restaurant popularity, as well as reviewer characteristics, such as reviewer race and gender, impact this relationship. We also examine mechanisms that could be contributing to our findings. Collectively, and in contrast to the positive findings in other studies, our results reveal a possible unintended consequence of identity disclosure for minority-owned businesses. Findings from our study offer important implications for society, business owners, and online platforms.

Siamionava, Katsiaryna; Mitra, Sabyasachi; Westerman, George

2024 Production and Operations Management

doi: 10.1177/10591478241266524

Achieving cognitive coordination in cross-functional teams is a perennial challenge in organizations. It is especially challenging in the context of information systems, where strategic alignment remains a top concern of leaders despite decades of research on the topic. In this study, we develop and empirically validate a theoretical model that explores the role of communicating about performance metrics in fostering cognitive coordination between the Chief Information Officer (CIO) and top management team (TMT). Building on a theoretical lens of transactive memory systems, we hypothesize how the use of unit-specific metrics of information technology (IT) performance and collective metrics of organizational performance can differentially influence mutual trust and shared understanding in the CIO–TMT relationship. Through a survey of 268 CIOs, an experiment with 106 participants using a novel IT leadership game, and an algorithmic analysis of 3200+ articles in a trade publication, we find that communications using narrowly focused IT unit metrics improve mutual trust between the CIO and the TMT, while communications using broader organizational metrics (along with mutual trust) increase shared understanding of IT's role in improving organizational performance. Our multimethod study adds an important new facet to the rich literature on IT strategic alignment as well as the use of performance metrics in operations management. We discuss its implications for both theory and practice in improving cognitive coordination among the CIOs and TMT. Our model and findings are also relevant to other cross-functional teams where specialized individuals must collaborate to achieve collective goals.

Chen, Hongqiao; Hu, Ming; Liu, Jingchen; Ravid, Yaniv

2024 Production and Operations Management

doi: 10.1177/10591478241265645

We show how prospect theory uncovers critical decision-making insights in the design of sequential experiences by formulating a general framework and applying it to three experience design settings. First, we study the problem of releasing a piece of good news versus bad news, where a firm may incrementally reveal the news over a preemptive period. We characterize the optimal release strategy for both types of news and show that when the ultimate news is good (resp., bad) and the audience is sufficiently gain-seeking, it is optimal first to release information of a negative (resp., positive) sentiment. Second, we consider the problem of organizing an event such as a concert with performances of known valuations, where an event organizer needs to arrange the sequence of all performances. We show that for both loss-averse and gain-seeking audiences, interior peaks can be optimal, where pleasant and aversive performances are arranged to alternate throughout the event. Lastly, we investigate the problem of simultaneous versus sequential release of a series, such as songs or TV episodes, where a content  provider does not know a priori the audience’s exact valuation of each item. We show that if the audience’s sensitivity to losses is sufficiently small (resp., large), the optimal strategy is to release all items in the series sequentially (resp., simultaneously). Across all of the settings, we show that the audience’s sensitivity to losses relative to a reference point is a critical factor that governs how to design and manage the audience’s evolving experience dynamics.

Balakrishnan, Maya; Nam, Jimin; Buell, Ryan W.

2024 Production and Operations Management

doi: 10.1177/10591478241239934

Many companies are making efforts to diversify their workforces, motivated by documented operational performance benefits and increased pressure to “walk the talk” on diversity, equity, and inclusion (DEI) initiatives. One specific call to action from stakeholders is the public disclosure of intersectional diversity data in EEO-1s, which companies with 100+ employees must report each year to the federal government, but which companies rarely make publicly available. Conducting five online experiments to examine how consumers perceive transparency into an operation’s workforce diversity, we find no evidence that disclosing workforce diversity data undermines customer attitudes or behaviors toward the company, even when the disclosures reveal racial disparities across job categories. Instead, we find that consumers perceive firms that disclose their workforce diversity data to be more committed to DEI initiatives, view disclosing firms more positively, and are more likely to choose their offerings over those of non-disclosing firms. We find these attitudinal and behavioral differences to be especially pronounced when the disclosures reveal progress in diversification.

Adamopoulos, Panagiotis; Todri, Vilma

2024 Production and Operations Management

doi: 10.1177/10591478241259422

Consumers often rely on their social connections or social technologies, such as (automated) system-generated recommender systems, to navigate the proliferation of diverse products and services offered in online and offline markets and cope with the corresponding choice overload. In this study, we investigate the relationship between the consumers’ social connectedness and the economic impact of recommender systems. Specifically, we examine whether the social connectedness levels of consumers moderate the effectiveness of online recommendations toward increasing product demand levels. We study this novel research question using a combination of datasets and a demand-estimation model. Interestingly, the empirical results show a positive moderating effect of social connectedness on the demand effect of online-to-offline recommendations. Further delving into the findings, we also provide empirical evidence that social identification might explain why denser social connectedness with local users accentuates the effects of collaborative-filtering online-to-offline recommendations. Our study enhances the understanding of community factors affecting the efficacy of social technologies in multichannel operations while also extending the social identity theory in operations in the digital realm. The results also have intriguing operational implications for operations managers and practitioners, while suggesting several interesting avenues for future research on social technologies and operations management.

Fu, Ke; Lai, Guoming; Shang, Weixin; Xu, Jiayan

2024 Production and Operations Management

doi: 10.1177/10591478241265483

Competing firms may engage in group buying (GB) to benefit from a quantity discount from a common supplier. We study GB under different power structures (i.e., Nash and Stackelberg) and investigate how the power structures can be endogenized along with the resulting GB outcome. We employ a game-theoretic framework in which two firms under Cournot competition can group their purchases if it is beneficial compared to individual purchasing. We show that under exogenous power structures, when the two firms have highly asymmetric market bases, Nash GB is unattainable due to severe co-opetition conflict, and Stackelberg GB can better resolve the conflict. Our results suggest that power structures may fundamentally affect firms’ GB incentives, and no power structure is always superior to others. We then endogenize the power structures of the two firms based on a two-stage extended game. Using Pareto-risk dominance, we identify conditions under which one firm endogenously emerges as the Stackelberg leader with the rival as the follower, as well as the conditions under which both firms endogenously choose Nash GB or opt for independent purchasing. We demonstrate that the two firms can largely resolve the battle for GB leadership and achieve an efficient outcome in most cases. Our study is the first to compare different exogenous power structures and consider endogenous power structures in the context of GB.