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A transformative service aims to improve wellbeing; however, current approaches have an implicit assumption that all wellbeing dimensions are equal and more dimensions led to higher wellbeing. The purpose of this paper is to present evidence for a new framework that identifies the paradox of competing wellbeing dimensions for both the individual and others in society – the transformative service paradox (TSP).

Data is drawn from a mixed-method approach using qualitative (interviews) and quantitative data (lab experiment) in an electricity service context. The first study involves 45 household interviews (n = 118) and deals with the nature of trade-offs at the individual level to establish the concept of the TSP. The second study uses a behavioral economics laboratory experiment (n = 110) to test the self vs. other nature of the trade-off in day-to-day use of electricity.

The interviews and experiment identified that temporal (now vs. future) and beneficiary-level factors explain why individuals make wellbeing trade-offs for the transformative service of electricity. The laboratory experiment showed that when the future implication of the trade-off is made salient, consumers are more willing to forego physical wellbeing for environmental wellbeing, whereas when the “now” implication is more salient consumers forego financial wellbeing for physical wellbeing.

This research introduces the term “Transformative Service Paradox” and identifies two factors that explain why consumers make wellbeing trade-offs at the individual level and at the societal level; temporal (now vs. future) and wellbeing beneficiary.

Following the identified need for more explicit contextual studies in servitization research, the purpose of this paper is to investigate the relationships between and among economic context, service provision and service return, including the service paradox.

Firm-level and macroeconomic (country competitiveness) data are combined to operationalize the constructs considered in the study. Structural equation modeling and cluster analysis are used to investigate the direct relationships between economic context, service provision and service return, and the negative association between the development of economic context and the service paradox.

The analyses confirm the general assumption that service provision has a positive direct effect on service return. Economic context seems to have no direct effect on service return and, contrary to what was expected, it has a negative impact on the intensity of service provision. Thus, service provision fully mediates the negative impact of context on service return. Finally, the service paradox occurs more frequently in less-developed economic contexts, where the probability of a relatively low service return coupled with high service provision is significantly higher.

The study identifies five key elements of economic context that have to be incorporated into the strategic decision-making process regarding product-related services offered by manufacturers.

The paper contributes to the contextual research of services offered by manufacturers. Subject to future empirical testing, it is proposed that a more favorable economic context offers more possibilities for manufacturers to cooperate with other business actors to provide services.

Despite having been widely studied in traditional (bricks‐and‐mortar) services, the effect of service failures and recovery (SFR) on customer loyalty has received only limited attention in the context of e‐services. This paper sets out to empirically test the following set of hypotheses in an e‐service setting: H1, service failures have a negative effect on customer loyalty intentions; H2, failure resolution has a positive effect on customer loyalty intentions; H3, satisfaction with the recovery has a positive effect on customer loyalty intentions; H4, outstanding recovery results in loyalty intentions which are more favorable than they would be had no failure occurred (service recovery paradox).

The paper is based on an online survey of actual customers of a commercial e‐banking service.

H1‐H3 are supported, suggesting that: the detrimental effects of failures are also present online; problem resolution leads to increased loyalty; despite the challenging nature of online failures and the reduced degree of human interaction, it is possible to achieve effective recovery in e‐services. H4 is also supported. We observes a recovery paradox effect but it only take place for a small proportion of “delighted” customers, i.e. those who perceived an outstanding recovery. Although unlikely, the impact (size effect) of outstanding recovery on loyalty is substantial.

Future research should examine other types of e‐services.

E‐service delivery systems should be designed with a strong failure‐prevention mindset and include effective service recovery mechanisms. However, in general, e‐service providers should not look at superior recovery as a substitute for error‐free service. Despite not being a viable strategy in general, delighting customers in the recovery may make sense for the most profitable customers.

The paper provides empirical evidence of the effects of SFR in the context of online service, an area which has received limited attention to date. Unlike other research, this paper draws on data from customers of an actual e‐service and therefore benefits from increased external validity.

The service recovery paradox (SRP) is the phenomenon that happens when customer satisfaction level post-service failure and recovery surpasses the customer satisfaction level achieved at error-free service. The aim of this study was to identify how large the size of compensation has to be at recovery for customer satisfaction to surpass that of error-free service (i.e. to identify a threshold value for SRP). The purpose of this is to inform managers how to restore customer satisfaction yet avoid overcompensation.

The paper covers two studies. Study 1 used the novel approach of asking participants who had experienced a service failure in the hotel industry what amount of money (recovery) would make them more satisfied than in the case of error-free service. Study 2 then tested the compensation levels expressed by Study 1 participants to be sufficient for the service recovery paradox to occur.

Study 1 indicated that the threshold for the SRP was (on average) around 1,204 SEK, or just over 80% of the original room reservation price of 1,500 SEK (approx. $180). Study 2 found that (on average) the customer satisfaction of participants who received 1,204 SEK in compensation for service failure marked the point where it surpassed that of error-free service. Participants who received 633 SEK were less satisfied; participants who received 1,774 SEK were more satisfied.

The findings are context-specific. Future research should test the findings' generalizability.

The approach used in this paper could provide managers with a tool to guide their service recovery efforts. The findings could help hotel managers to make strategic decisions to restore customer satisfaction yet avoid overcompensation, given a legitimate service failure in which the organization is at fault.

Numerous previous studies have investigated the occurrence or absence of the SRP at predetermined compensation levels. This paper used a novel approach to find a quantitative threshold at which the magnitude of the recovery effort makes customer satisfaction surpass that of error-free service.

This paper aims to examine the effects of a general service recovery effort in consumers who were not victims of the service failure.

This study uses a 2 × 2 between-subjects design comparing a service failure announcement with apology and an anniversary event announcement, either with a 15% discount or no discount on purchase intentions.

A service recovery effort involving an apology and 15% discount leads to higher purchase intention in consumers who were not victims of the service failure in comparison to a control. The unexpected apology generates surprise, which amplifies the effect of the discount, leading to higher purchase intention.

The results of this study suggest that apologizing and offering a discount for a minor service failure can have positive effects on consumers who were not victims of the service failure. Thus, if a company is unsure which consumers have been affected by a service failure, this study shows that issuing a general apology for the failure does not have negative effects in unaffected consumers.

To the best of the author’s knowledge, this paper is the first to examine the effects of a service recovery effort in consumers who were not victims of the service failure and the first to find evidence of a service recovery paradox in unaffected consumers.

The purpose of this paper is to explore the interplay between firm boundary decisions and the management of both efficiency and flexibility and the implications this has for modular design in the provision of advanced services.

A single case study in the defence industry employs semi-structured interviews supplemented by secondary data. Data are analysed using thematic analysis.

The findings provide a process model of boundary negotiations for the design of efficient and flexible modular systems consisting of three phases; boundary ambiguity, boundary defences and boundary alignment.

The study provides a process framework for boundary negotiations to help organisations navigate the management of both-and efficiency and flexibility in the provision of advanced services.

Drawing upon modularity, paradox and systems theory, this article provides novel theoretical insight into the relationship between firm boundary decisions and the management of both-and efficiency vs. flexibility in the provision of product upgrade services.

This study serves two purposes: (1) to evaluate the effects of organizational ambidexterity by examining how the balanced and the combined sales–service configurations of chatbots differ in their abilities to enhance customer experience and patronage and (2) to apply information boundary theory to assess the contingent role that chatbot sales–service ambidexterity can play in adapting to customers' personalization–privacy paradox.

An online survey of artificial intelligence chatbots users was conducted, and a mixed-methods research design involving response surface analysis and polynomial regression was adopted to address the research aim.

The results of polynomial regressions on survey data from 507 online customers indicated that as the benefits of personalization decreased and the risk to privacy increased, the inherently negative (positive) effects of imbalanced (combined) chatbots' sales–service ambidexterity had an increasing (decreasing) influence on customer experience. Furthermore, customer experience fully mediated the association of chatbots' sales–service ambidexterity with customer patronage.

First, this study enriches the literature on frontline ambidexterity and extends it to the setting of human–machine interaction. Second, the study contributes to the literature on the personalization–privacy paradox by demonstrating the importance of frontline ambidexterity for adapting to customer concerns. Third, the study examines the conduit between artificial intelligence (AI) chatbots' ambidexterity and sales performance, thereby helping to reconcile the previously inconsistent evidence regarding this relationship.

The objective of this research is to analyze the extent to which street-level bureaucrats (SLBs) have exercised discretion (low, medium and high) and the contributing factors involved (i.e. the influence of personal, work environment and demographic factors on the exercise of discretion).

The mixed-methods research uses the embedded design approach. Data were collected during the COVID-19 pandemic through a survey of 2,867 Official Certifier of Title Deeds (Pejabat Pembuat Akta Tanah/PPAT) as SLBs spread across fifty regencies/cities in ten provinces in Indonesia.

This field study found a significant and positive correlation between SLBs' economic motive and the client's knowledge of land issues with the exercise of discretion. In addition, the study found a significant correlation between the age and gender of SLBs and their practice of discretion.

This study provides insights into that new policies should not further complicate the system but reduce face-to-face interactions between SLBs and their clients by allowing digital technology.

The novelty of this research is the paradox of SLB service during the COVID-19 pandemic differed from the paradoxes identified in earlier studies. SLBs commonly cope with service paradox by limiting their services or focusing solely on the most profitable clientele. However, this study shows that some SLBs actively reach out to clients using a “friendly” service model.

Previous research reports mixed results regarding the performance impact of servitization in manufacturing firms. To resolve this, the purpose of this paper is to develop a conceptually consistent and comprehensive measurement framework for both dimensions, servitization and its performance effect, and apply in a configurational analysis to reexamine previous evidence, arriving at a configurational theory of the relationship between servitization and firm performance.

Combining systematic literature review (SLR) and inductive reasoning, the existing indicators for servitization and performance are identified and clustered into groups that adequately represent both dimensions. The dataset is reanalyzed against the resulting framework to identify the configurational patterns and to formulate the theoretical propositions.

Financial and nonfinancial indicators of servitization and its performance impact are organized into a comprehensive measurement framework grounded on existing research. The subsequent meta-analysis shows that the positive or negative impacts of servitization on performance depend on how firms implement servitization strategies and which performance aspects are examined.

The results explain when servitization can be successful and confirm the existence of the so-called servitization paradox. The meta-analysis identified patterns that explain the previous mixed results, shaping a configurational theory of servitization. Thus, the measurement framework is conceptually robust and has sufficient detail to capture servitization and its performance outcome as it feasibly distinguished between different organizational configurations.

The framework provides a comprehensive portfolio of indicators for both managers and scholars to measure servitization intensity and performance. This supports managers of servitizing firms in leading this organizational transformation while avoiding its organizational and financial paradoxes.

The service recovery paradox (SRP) refers to a particular effect whereby an excellent recovery can turn angry and frustrated customers into loyal ones. Researchers who have studied the SRP have reported mixed findings, with some providing evidence in its support and others not finding any such evidence. To address this discrepancy, this study aims to investigate the SRP.

This study re-examined the phenomenon of the SRP with a field study and provided further evidence in a subsequent experimental study in which the failure and recovery conditions were carefully manipulated.

The results of this study suggest that the SRP was observed in neither the field study nor the scenario experiment.

This study can influence the current service management of restaurants with regard to service failures in several ways.

This research is a pioneering effort to examine the SRP by conducting both a field study and a scenario experiment.