Creating Reciprocal Value Through Operational Transparency

Ryan W. Buell (), Tami Kim () and Chia-Jung Tsay ()
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Ryan W. Buell: Harvard Business School, Technology and Operations Management Unit
Tami Kim: Harvard Business School
Chia-Jung Tsay: University College London

No 14-115, Harvard Business School Working Papers from Harvard Business School

Abstract: We investigate whether organizations can create value by introducing visual transparency between consumers and producers. Although operational transparency has been shown to improve consumer perceptions of service value, existing theory posits that increased contact between consumers and producers may diminish work performance. Two field and two laboratory experiments in food service settings suggest transparency that 1) allows customers to observe operational processes (process transparency) and 2) allows employees to observe customers (customer transparency) not only improves customer perceptions, but also increases service quality and efficiency. In our fully specified models, the introduction of this transparency contributed to a 22.2% increase in customer-reported quality and reduced throughput times by 19.2%. Laboratory studies revealed that customers who experienced process transparency perceived greater employee effort, and as a consequence, were more appreciative of the employees and valued the service more. Employees who experienced customer transparency felt that their work was more appreciated and more impactful, and thus were more satisfied with their work and more willing to exert effort. We find that transparency, by visually revealing operating processes to consumers and beneficiaries to producers, generates a positive feedback loop through which value is created for both parties.

Keywords: operational transparency; service quality; efficiency; customers; employees (search for similar items in EconPapers)
Pages: 41 pages
Date: 2014-06, Revised 2015-09
New Economics Papers: this item is included in nep-exp and nep-hrm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:hbs:wpaper:14-115

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