“Scalability”: the paradox of human resources in e‐commerce

“Scalability”: the paradox of human resources in e‐commerce This paper develops a framework exploring the question, “How does service affect the economics of e‐commerce?” Development of the framework requires an understanding of the different forms service takes in e‐commerce. These are described as “virtual” (either pure information or automated) and “physical” (requiring some degree of human intervention). The framework suggests that because the nature and quantity of physical service necessary to deliver value to customers influences the quantity of human intervention required, it also influences a firm’s ratio of variable to fixed costs, which alters its “scalability”. The paradox comes in that while reduced scalability is viewed negatively by many venture capitalists and proponents of e‐commerce, the cause of that reduction in scalability, human intervention, may help a firm to differentiate its offering to customers, thus providing a source of competitive advantage. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png International Journal of Service Industry Management Emerald Publishing

“Scalability”: the paradox of human resources in e‐commerce

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Publisher
Emerald Publishing
Copyright
Copyright © 2001 MCB UP Ltd. All rights reserved.
ISSN
0956-4233
DOI
10.1108/09564230110694820
Publisher site
See Article on Publisher Site

Abstract

This paper develops a framework exploring the question, “How does service affect the economics of e‐commerce?” Development of the framework requires an understanding of the different forms service takes in e‐commerce. These are described as “virtual” (either pure information or automated) and “physical” (requiring some degree of human intervention). The framework suggests that because the nature and quantity of physical service necessary to deliver value to customers influences the quantity of human intervention required, it also influences a firm’s ratio of variable to fixed costs, which alters its “scalability”. The paradox comes in that while reduced scalability is viewed negatively by many venture capitalists and proponents of e‐commerce, the cause of that reduction in scalability, human intervention, may help a firm to differentiate its offering to customers, thus providing a source of competitive advantage.

Journal

International Journal of Service Industry ManagementEmerald Publishing

Published: Mar 1, 2001

Keywords: Service; Internet; Economies of scale; Human resource management; E‐commerce; Competitive advantage

References

  • Technology infusion in service encounters
    Bitner, M.J.; Brown, S.W.; Meuter, M.L.

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