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Many small-to-medium sized service shops (e.g. jewelry shops, fine-dining restaurants etc.) operate in a unique service environment. They often face customers in transit (i.e. transient delivery) and with minimal information of their preferences (i.e. high uncertainty). This study investigates how such shops create service experience to customers by focusing on three constructs, namely, customer orientation, management commitment to service quality and quality of leader-member exchange in service systems with the uncertain and transient nature. Building on a systems approach of service experience design, the authors examine all possible effects (main effects and two-way and three-way interaction effects) on customer experience. Specifically, to frame the two-way and the three-way interaction effects, the authors adopt the contingency and configuration approaches, respectively.

This study employs a multiple respondent approach involving managers, employees and customers to collect data from 225 service shops in Hong Kong. Hierarchically moderated regression analysis is employed to analyze the collected data.

Contrary to our initial conceptualization, most of the direct effects and two-way interaction effects among the three constructs are insignificant. The authors do, however, uncover a significant effect of the three-way interaction term. The authors analyze the results from the configuration perspective.

The finding suggests that the configuration approach is necessary to determine the configuration concerning how design elements align with one another to generate an integrative effect on customer experience. The authors conclude that for high-contact services of the transient and high-uncertainty type, all three constructs must operate simultaneously to evoke favorable customer experience. Customer experience is holistically developed in a service system with high-uncertainty and transient nature, requiring simultaneous alignment across a range of design choices among those involved in service delivery (manager, employee and customer).

The purpose of this paper is to address the gap in the literature by extending the service profit chain (SPC) model and testing the validity of the proposed model in high-contact service contexts rather than by testing the key elements of the SPC in regard to a single business.

The study uses the exploratory factor analysis to identify a set of observables to use in representing the relationships included in the proposed extended model and employs the structural equation modeling to test the eight proposed hypothesis.

The study shows that the best-fit structural model supports the notion that employee internal service quality drives employee satisfaction that drives employee loyalty and employee productivity. In addition, employee productivity is shown as partially mediating the relationship between employee satisfaction and employee loyalty.

The results presented in this study have managerial implications and shed light on the importance of operational factors in the service industry, in particular high-contact services.

The integration of operations management and SPC still remain limited in the literature. Therefore, the study extends the SPC by integrating other operational factors, namely, employee productivity and internal service quality, and tests its validity in high contact services where the prolonged contact between the customer and the service system creates more opportunities to influence a customer’s perception of service quality.

The aim of this paper is to investigate how the distinction between contact and non‐contact activities influences the design of service delivery systems and to identify key design decisions for structuring front office and back office work.

Building on current literature, the paper identifies three design decisions and associated performance trade‐offs. The design decisions regard the degree of customer contact in the process, the decoupling of activities and the grouping of employees. The design decisions and the trade‐offs are empirically validated in five case studies of 15 service delivery systems in the financial services sector.

Distinguishing between the three design decisions is more suitable for describing today's practices than traditional front office – back office thinking. For each design decision a trade‐off was observed consisting of several design considerations. However, the trade‐offs do not involve the weighing of one set of performance objectives against another, as the design choices contribute to the same objectives, yet in different ways.

This study concentrated on a limited number of cases in the financial services sector. The contents of the trade‐offs should be tested on a larger scale and in different industries. In order to develop design guidelines, future research should also examine the impact of contingency factors, such as the service being delivered and strategic priorities.

The three design decisions and the trade‐offs improve understanding of the impact of customer contact on a service organisation and provide support for designing service delivery systems in practice.

Research on the service–profit chain (SPC) provides important insights regarding how organizations attain service excellence. However, this research stream does not shed light on the mechanisms by which service organizations sustain such excellence, despite the struggles of many organizations to do so. Thus, the purpose of this paper is to develop the SPC as a more dynamic system characterized by feedback loops, accumulation processes, and time delays based on the service operations, human resources, and marketing literatures.

The authors posit the feedback loops operate as virtuous cycles, such that increases in customer perceptions of service quality and in profit margins lead to subsequent increases in the quality of the internal working environment, which ultimately reimpacts performance in a positive way, and so on. The authors test the hypotheses using five years of archival data on 417 full-service US hotels. The unique data set combines longitudinal data from multiple functions, including employee assessments regarding their tools, practices, and abilities to serve customers, customer perceptions of service quality, and objective measures of financial performance.

The authors find support for the idea that some organizations provide customers with high-quality service over time by reinvesting in the inputs responsible for generating the initial success, i.e., in various aspects of the internal working environment.

The analysis of 417 hotels from a single firm may influence the extent to which the findings can be generalized.

By expanding the boundaries of previous conceptual and empirical models investigating SPCs, the authors offer a deeper understanding of the cross-functional character of modern operational systems and the complex dynamics that these systems generate.

The development of a service improvisation competence (Serv-IC), operationally defined as “the systemic ability of a service firm’s employees to deviate from established service delivery processes and routines to respond in a timely manner to unforeseen events using available resources” (Secchi et al., 2019, p. 1329), has been proposed as an effective way to accommodate customer variability while increasing the quality of the service experience. However, empirical evidence of its impact on service performance is scant. This paper tests the effect of Serv-IC on performance in the hospitality industry.

This paper develops a conceptual typology of service delivery systems (hereafter service typology is used interchangeably) in the hotel industry based on the experiential content of the service and the amount of standardization of service delivery routines. Then, using a survey of hotel managers, the effect of Serv-IC on hotel performance is estimated within each service group in the typology.

Serv-IC is associated with increased occupancy in high-process-standardization and high-experience hotel operations but does not have a significant relationship with the average price per room. The results suggest that managers could invest in Serv-IC to increase loyalty and positive word of mouth but not to increase prices.

This paper provides evidence of the effectiveness of developing a service improvisation competence while also offering boundary conditions to its applicability. The proposed service typology disentangles the design of service processes from their execution, thereby shedding new light on the complex relationships among service design, employee behaviors and business outcomes.

Explains that efficient service delivery can often present a problem for marketers due to the nature of the services. Summarizes the two general methods already suggested for improving the efficiency of service delivery – technological and humanistic. Discusses managerial guidelines for the implementation of these approaches to service delivery in several service industries, based on two service classification schemes.

Examines the way in which managers perceive the relative importance of the three costs as applied to professional service firms, financial services firms and retail distribution and manufacturing. Managers′ perceptions may be determined by the nature of the business, the operational focus and the opportunities for the control of costs. Examines the existing literature for indications of the importance attached to each of these costs. Concludes that managers have more discretion of the control of operating costs where they represent a high proportion of the three types and where supply and overhead costs form a high proportion of total costs, managers can exercise discretion by challenging existing industry recipes through restructuring their operations.

Proposes to provide practicing managers and academic researchers with a framework that will help them to understand better the nature of domestic inter‐cultural service encounters.

Social identity theory is used to demonstrate how salient identity cues such as physiognomy, linguistic, and behavioral differences are likely to influence customer expectations during initial and subsequent encounters between domestic customers and culturally distant service providers.

The framework developed, and the associated propositions, provide practicing managers with insights into how domestic service customers are likely to respond to domestic inter‐cultural service encounters.

Domestic intercultural service encounters have special practical implications for staffing policy and training requirements in service organizations (e.g. there may be ethical and legal challenges for service organizations that refuse to hire service providers unless they can demonstrate competence in the domestic language, customs, etc., or because of visible salient cultural identity cues).

Existing service encounter frameworks do not address the role that cultural identity plays in service exchange relationships. The value of this paper is that it uses cultural identity theory to extend an existing model that examines the nature and determinants of customer expectations of service. This extension enhances managers' understanding of service exchange relationships.

Introduces a framework for integrating the operations management and marketing approaches within a service operation. Focuses on customer satisfaction with waiting time, with the aim of providing improved satisfaction for a given level of resources. Provides an application of this methodology by presenting an example in the fast food industry. Concludes with suggestions for extending such a framework to other service organizations.

This study aims to investigate how the relationship factors, including equity, shared responsibility and relationship dependence leverage the value co-creation. The research studies the value co-creation process in a business-to-business (B2B) context between suppliers and customers and provides empirical evidence of the underlying effects.

Using social exchange theory, the research uses a mixed-method of in-depth interviews and questionnaire surveys. The sample of the survey has 123 business customers.

The findings suggest that equity not only positively affects but also mediates the effect of shared responsibility on value co-creation. The mediation effect is further moderated by the relationship dependence that buyers have on the seller.

The cross-sectional survey used cannot establish causality relationships. Although the goal was not to establish causality, it could limit the rigor of the study. The longitudinal design could be used in the future to better address this deficiency. While the paper is the initial step to analyze the factors influencing value co-creation empirically, more studies could examine other commonly discussed constructs.

This empirical study enriches the value co-creation literature by examining the antecedents’ detailed mechanism that facilitates value co-creation in a B2B context.