Date of Award

8-2012

Document Type

Dissertation

Degree Name

Doctor of Philosophy (PhD)

Legacy Department

Management

Advisor

Roth, Aleda V

Committee Member

Ozkan , Gulru

Committee Member

Mroz , Thomas A

Committee Member

Verma , Rohit

Abstract

This dissertation explores the service design antecedents and the performance outcomes of Service Improvisation Competence (Serv-IC) the ability of service employees to deviate from established processes and routines in order to timely respond to unexpected events, using available resources. Service operations and strategy research have strongly highlighted the importance of possessing flexibility in order to face the uncertainty derived from the interaction with the external environment (Tansik and Chase 1988, Eisenhardt and Tabrizi 1995, Brown and Eisenhardt 1998, Frei et al. 1999, Menor et al. 2001, Frei 2006). An important component of the ability of service rms to adapt to customer requests, expectations, and needs rests in the systemic ability of frontline employees to creatively adapt to the challenges posed by the constant struggle to satisfy customers.
This dissertation is composed of three essays. In Essay 1, we build the theoretical framework necessary to advance a theory of Service Improvisation Competence, and we propose a nomological network that links service delivery design choices facility design, managerial practices, information distribution, and the procedures that regulate customer-contact to the development of a Service Improvisation Competence (Serv-IC). Furthermore, Essay 1 oers a causal theory of the effects of Serv-IC on service outcomes.
Essay 2 builds on the theoretical foundations of Essay 1, as well as on previous empirical and theoretical work (Moorman and Miner 1998b, Weick 1998, Miner et al. 2001, Vera and Crossan 2005), and develops psychometrically sound measures of Service Improvisation Competence, using a survey of frontline hotel employees. In addition, in Essay 2 we operationalize and test a model of antecedents and outcomes of Serv{IC constructed on the theoretical framework proposed in Essay 1, using path analysis. We find that the development of a Service Improvisation Competence is the result of a holistic design process which takes into consideration simultaneously the different design elements presented in Essay 1. Employee empowerment plays a pivotal role in the enactment of a Service Improvisation Competence (Serv-IC), by fully mediating the relationship between strategic design choices and Serv-IC. We also confirm the insights of Mintzberg (1994), and show that an increase in scripting of the service encounter leads to a decrease in improvisation only up to a certain point, after which the increase in scripting becomes counterproductive to the end
of standardization, and results in an increase in improvisation. In other words, the intended managerial goal of increasing the degree of scripting (increase in standardization) results in the opposite outcomes (increase in the amount of deviations from scripted behaviors).
Essay 3 builds on the results of the previous essays and, applying econometrics methods to a survey of hotel managers, deepens our understanding of the differential effect of Serv-IC on the business performance of distinct typologies of service offerings. First, we develop a theoretically-driven typology of service firms, based on the operational characteristics of the service delivery system (i.e., how much the service encounter follows a predetermined script) and on the experiential content of the service offering (i.e., how much the service encounter is intended to elicit an emotional response). Then, using a Two Stage Least Squares (2SLS) procedure, we estimate the effect of Serv-IC on performance outcomes within the previously identified service types. We find that Serv-IC has a positive influence on occupancy rates in highly experiential hotels, and has a negative effect on room rates as well as occupancy. Moreover, we find preliminary evidence that Serv-IC is a necessary element in the ability to provide a service that is at the same time highly scripted and possesses high experiential content.
Collectively, the three essays provide a nuanced picture of the role that Serv-IC plays in the design and implementation of service operations. The development of such competence requires a focused and deliberate arrangement of several organizational and operational elements, which can potentially outweigh its benefits. In addition, depending on the type of service offered and hence on the characteristics of the target market, Serv-IC can have a deleterious effect on performance and customer satisfaction. Nonetheless, we show that when Serv-IC, and the service delivery design choices that lead to its development, are aligned with the service concept and the target market, it can be a powerful driver of customer satisfaction and, ultimately, loyalty.

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