“Scalability”: the paradox of human resources in e‐commerce
International Journal of Service Industry Management
ISSN: 0956-4233
Article publication date: 1 March 2001
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.
Keywords
Citation
Hallowell, R. (2001), "“Scalability”: the paradox of human resources in e‐commerce", International Journal of Service Industry Management, Vol. 12 No. 1, pp. 34-43. https://doi.org/10.1108/09564230110694820
Publisher
:MCB UP Ltd
Copyright © 2001, MCB UP Limited