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Improving Customer Compatibility with Operational Transparency

by Ryan W. Buell and MoonSoo Choi

Service firms seeking prospective customers usually highlight the advantages of their offerings and downplay the tradeoffs. This study suggests a different approach: Provide transparency into advantages as well as tradeoffs. The transparency helps customers make informed decisions and can lead to better outcomes for both firms and customers over the long run.

How Transparency into Internal and External Responsibility Initiatives Influences Consumer Choice

by Ryan W. Buell and Basak Kalkanci

Three studies examined how firms can use transparency into social and environmental responsibility initiatives to differentiate themselves in the consumer market. Results show that transparency into internal, responsible operations practices can increase sales at least as much as transparency into external, corporate social responsibility practices, if not more so.

Infographic: Can I Please Speak to an Actual Person?

by Katherine Vizcardo and Danielle Kost

Customers still want the option to access human help in automated service—even if they don't use it, says research by Michelle A. Shell and Ryan W. Buell. Open for comment; Comment(s) posted.

Learning or Playing? The Effect of Gamified Training on Performance

by Ryan W. Buell, Wei Cai, and Tatiana Sandino

Games-based training is widely used to engage and motivate employees to learn, but research about its effectiveness has been scant. This study at a large professional services firm adopting a gamified training platform showed the training helps performance when employees are already highly engaged, and harms performance when they’re not.

Mitigating the Negative Effects of Customer Anxiety Through Access to Human Contact

by Michelle A. Shell and Ryan W. Buell

Firms increasingly deploy self-service technologies (SSTs) to manage customer interfaces that are inherently stressful. For example, patients may be asked to use kiosks to check themselves into hospitals. This study finds that customer anxiety during SST transactions can reduce customers’ trust in the service provider. Operational design choices may help.

Relative Performance Transparency: Effects on Sustainable Choices

by Ryan W. Buell, Shwetha Mariadassou, and Yanchong Zheng

Encouraging consumers to purchase a more sustainable product or use resources more responsibly is a key challenge for society. This paper discusses experiments involving more than 7,000 participants to shed light on how information and its presentation regarding sustainable performance can be a tool for enhancing sustainable choices in practice.

Customers at the Back of the Line Are Anxious—Can You Keep Them from Leaving?

by Michael Blanding

The irrational anxiety associated with being last in line can lead to unhappy customers, according to new research by Ryan Buell. But there are ways to make people happier while they wait—and keep them from abandoning the queue. Open for comment; Comment(s) posted.

Last Place Aversion in Queues

by Ryan W. Buell

While no one likes standing in line for service, being last intensifies the pain of waiting, doubles the probability of switching queues, and quadruples the chances of leaving the line altogether. Many service settings could be improved if managers actively mitigated last place aversion.

First Look at New Research, March 28

Sean Silverthorne

Countering misperceptions about negotiation 'BATNAs' ... A dairy cooperative’s battle with big brands ... 'Hub-and-spoke' flying versus 'out-and-back.'

IDEO is Changing the Way Managers Think About Thinking

Re: Ryan W. Buell

IDEO’s human-centered design thinking is a systematic approach used to help create new products and services. Professor Ryan Buell explores this process as a leading movie cinema chain in Peru rethinks the movie-going experience. Open for comment; Comment(s) posted.

November 22, 2016

Sean Silverthorne

Résumé whitening ... Breakfast at the Paramount ... AnswerDash looks for answers.

Fix This! Why is it so Painful to Buy a New Car?

by Sean Silverthorne

Car-buying sends shivers up the backbones of American consumers, so why hasn’t the industry stepped up to create a better experience? Leonard Schlesinger, Jill Avery, and Ryan Buell tell their own war stories and talk about how the battle might yet be won. Open for comment; Comment(s) posted.

Deconstructing the Price Tag

by Dina Gerdeman

A new study by Bhavya Mohan, Ryan Buell, and Leslie John has an important conclusion for retailers: Explaining what it costs to produce a product can potentially increase its sales. Open for comment; 10 Comment(s) posted.

Lifting the Veil: The Benefits of Cost Transparency

by Bhavya Mohan, Ryan W. Buell & Leslie K. John

Most managers think about cost transparency in terms of a supplier-firm relationship: when there is a two-way sharing of cost information between a firm and its suppliers, with the goal of collaborating to reduce costs. What does cost transparency do, however, in customer-firm relationships, when firms voluntarily disclose their variable costs explicitly and directly to consumers? This is the question the authors examine in this paper. Results of several experiments indicate that one-way cost transparency enhances consumers' attraction to the brand, in turn increasing their willingness to buy. Overall, marketers can potentially improve both brand attraction and sales by revealing costs. Key concepts include: Relative to other marketing tactics, cost transparency might be an innovative and inexpensive way to build brand attraction and sales. Disclosing sensitive cost information appeals to consumers regardless of their prior relationship with a brand. Benefits of cost transparency weaken—but do not reverse—when a firm discloses higher prices relative to cost Closed for comment; 0 Comment(s) posted.

Decision Making Under Information Asymmetry: Experimental Evidence on Belief Refinements

by William Schmidt & Ryan W. Buell

Managers often have to make decisions in settings where they (1) know more about the prospects of their firm than other parties and (2) care about how the less-informed party responds to their decisions. For instance, a manager may care about how the stock market responds to the firm's expansion plans. In such situations, the manager's decision may signal the firm's prospects to the less-informed party. This phenomenon has been researched in a variety of situations, including new product and service introductions, competitive entry, supplier contracts, and capacity investments. A common assumption in researching such issues is that managers will make decisions that perfectly reveal the firm's prospects to the less-informed party, even if it is costly to do so. For example, a firm facing a big market opportunity will open more stores than is optimal in order to signal its favorable prospects. The number of stores the firm opens must be so high that a firm facing a small opportunity will find it too expensive to mimic the number of store openings. While such predicted outcomes underpin much of the operations theory developed in these settings, they have not been reconciled against the decisions made by actual decision makers. In a laboratory experiment involving more than 200 participants, the researchers conduct such an analysis. Their findings offer the first evidence that decision makers choose not to make decisions that reveal the firm's market opportunity and instead make the same decision regardless of the firm's prospects. The researchers go on to demonstrate that the discrepant predictions change the theoretical implications of prior research. Key concepts include: Pooling behavior, in which firms make the same choice regardless of their market prospects, was widespread among experimental participants, relative to separating behavior, in which firms make the distinct choices based on their market prospects. Participants were more than three times more likely to pool than to separate. Pooling behaviors were especially common among participants who reported a high level of understanding of the experimental setting, and the degree of pooling increased in later rounds of the experiment. Participants who made pooling decisions were rewarded by participants playing the role of an external investor and earned significantly more in the experimental market than participants who made separating decisions. Leveraging the behavioral insight that real decision makers will pool under certain circumstances can materially affect the implications of existing operations theory. Closed for comment; 0 Comment(s) posted.

Creating Reciprocal Value Through Operational Transparency

by Ryan W. Buell, Tami Kim & Chia-Jung Tsay

Our labor is a part of a constant social process in which we work reciprocally on each other's behalf. Yet despite this interconnectivity, labor is becoming less and less interactive. We rarely observe the beneficiaries of our own efforts, nor do we observe and appreciate the people and processes that create the products and services we enjoy. In this paper, the authors argue and demonstrate through experiments that operational transparency between customers and employees essentially positions both parties as actor and observer, each with the potential to benefit from the other, and in ways that create perceived and objective value. The gains in performance can also be economically meaningful. The results therefore cast transparency as one additional lever that service managers may consider to improve the efficiency of their processes and the quality of outcomes they deliver. Furthermore, by making operational processes transparent, the authors suggest that companies can imbue the processes with substantive meaning for customers and employees alike, in ways that could potentially benefit the company. Key concepts include: Seeing the work can cause consumers to better appreciate the effort exerted by producers, increasing their perceptions of service value. Feeling appreciated can cause producers not only to feel more satisfied with their jobs, but also to exert more effort on behalf of consumers, leading to better performance. Transparency visually reveals operating processes to both producers and consumers, and generates a positive feedback loop through which value is created for both parties. Understanding the contextual factors and boundary conditions that influence the effects of operational transparency on service outcomes remains a fruitful area for future research. Closed for comment; 0 Comment(s) posted.

How Government Can Restore the Faith of Citizens

by Michael Blanding

Would we appreciate government more if we could see what it was doing to help citizens? Research by Michael Norton and Ryan Buell. Open for comment; 11 Comment(s) posted.

Surfacing the Submerged State with Operational Transparency in Government Services

by Ryan W. Buell, Ethan Porter, and Michael I. Norton

As Americans’ trust in government nears historic lows, frustration with government performance approaches record highs. We propose that Americans’ views of government can be reshaped by increasing government’s operational transparency—that is, the extent to which citizens can see the often-hidden work that government performs. Closed for comment; 0 Comment(s) posted.

Studying How Income Inequality Shapes Behavior

by Michael Blanding

Professor David A. Moss is studying how growing income disparity affects our decision-making on everything from risk-taking to voting. Closed for comment; 2 Comment(s) posted.