Frontline employees’ innovative service behavior as key to customer loyalty:insights into FLEs’ resource gain spiral

Many service firms require frontline service employees (FLEs) to follow routines and standardized operating procedures during the service encounter, to deliver consistently high service standards. However, to create superior, pleasurable experiences for customers, featuring both helpful services and novel approaches to meeting their needs, firms in various sectors also have begun to encourage FLEs to engage in more innovative service behaviors. This study therefore investigates a new and complementary route to customer loyalty, beyond the conventional service-profit chain, that moves through FLEs' innovative service behavior. Drawing on conservation of resources (COR) theory, this study introduces a resource gain spiral at the service encounter, which runs from FLEs' emotional job engagement to innovative service behavior, and then leads to customer delight and finally customer loyalty. In accordance with COR theory, the proposed model also includes factors that might hinder (customer aggression, underemployment) or foster (colleague support, supervisor support) FLEs' resource gain spiral. A multilevel analysis of a large-scale, dyadic data set that contains responses from both FLEs and customers in multiple industries strongly supports the proposed resource gain spiral as a complementary route to customer loyalty. The positive emotional job engagement-innovative service behavior relationship is undermined by customer aggression and underemployment, as hypothesized. Surprisingly though, and contrary to the hypotheses, colleague and supervisor support do not seem to foster FLEs' resource gain spiral. Instead, colleague support weakens the engagement-innovative service behavior relationship, and supervisor support does not affect it. These results indicate that if FLEs can solicit resources from other sources, they may not need to invest as many of their individual resources. In particular, colleague support even appears to serve as a substitute for FLEs' individual resource investments in the resource gain spiral.

A path-dependent contingent-claims approach to capacity investments

This note presents a contingent-claims approach to strategic capacity planning. We develop models for capacity choice and expansion decisions in a single firm environment where investment is irreversible and demand is uncertain. These models illustrate specifically the relevance of path-dependent options analysis to planning capacity investments when the firm adopts demand tracking or average capacity strategies. It is argued that Asian/average type real options can explain hysteresis phenomena in addition to providing superior control of assets in place.

Managing innovative manufacturing

Editorial: The Managing Innovative Manufacturing (MIM) conference series started in 1993 in the UK. The first MIM conference was held at Keele University and, as from the second MIM at Leicester University in 1996, it became a biennial event with the University of Nottingham and Aston University hosting, respectively, the third and fourth conferences. The main areas of interest of the MIM conference series are: Manufacturing Strategy; Technology & Innovation Management; Human Resource Management; Organisation of Work; Product Design; Operations Planning and Control; Supply Chain Management; Performance Management. This special issue of the International Journal of Technology Management is based on selected papers from MIM2000 at Aston University, where it was organised by Aston Business School. The special theme of the Aston conference was Responsive Production and the Agile Enterprise. Altogether 82 papers were presented in parallel sessions. The eight papers included here were selected from the ‘Technology and Innovation’ stream. They have all been independently reviewed and revised before being accepted for publication. The authors of these papers are from the UK, Ireland, Turkey, the USA, the Netherlands and Hong Kong. They address a wide range of issues within the overall scope of Technology and Innovation with some papers having a geographical or sector focus and others being more general in nature. Participation in the MIM conferences has become increasingly international and to reflect this, the 2002 event is leaving the UK and being held at the University of Wisconsin-Milwaukee, in the USA. It is planned to hold the following MIM at the University of Aalborg, Denmark, in 2004.

Keeping in step:measuring the effect of promotional investments ensures strategies stay in line with the market

It is an old adage that "you cannot manage what you cannot measure", yet pharmaceutical managers annually commit 30 per cent of turnover to the promotion of their products without measuring the effect of their investment. This unsatisfactory state of affairs has persisted for over 20 years and, judging by comments at the recent Sales Force Effectiveness conference, seems set to continue.

Location and network effects on innovation success:evidence for UK, German and Irish manufacturing plants

Recent developments in the new economic geography and the literature on regional innovation systems have emphasised the potentially important role of networking and the characteristics of firms' local operating environment in shaping their innovative activity. Modeling UK, German and Irish plants' investments in R&D, technology transfer and networking, and their effect on the extent and success of plants' innovation activities, casts some doubt on the importance of both of these relationships. In particular, our analysis provides no support for the contention that firms or plants in the UK, Ireland or Germany with more strongly developed external links (collaborative networks or technology transfer) develop greater innovation intensity. However, although inter-firm links also have no effect on the commercial success of plants' innovation activity, intra-group links are important in terms of achieving commercial success. We also find evidence that R&D, technology transfer and networking inputs are substitutes rather than complements in the innovation process, and that there are systematic sectoral and regional influences in the efficiency with which such inputs are translated into innovation outputs. © 2001 Elsevier Science B.V.

A study of inputs and their influence on technological innovative activity

Technological innovation has been widely studied: however surprisingly little is known about the experience of managing the process. Most reports tend to be generalistic and/or prescriptive whereas it is argued that multiple sources of variation in the process limit the value of these. A description of the innovation process is given together with a presentation of what is knovrn from existing studies. Gaps identified in this area suggest that a variety of organisational influences are important and an attempt is made to identify some of these at individual, group and organisational level. A simple system model of the innovation management process is developed. Further investigation of the influence of these factors was made possible through an extended on-site case study. Methodology for this based upon participant observation coupled wth a wide and flexible range of techniques is described. Evidence is presented about many aspects of the innovation process from a number of different levels and perspectives: the attempt is to demonstrate the extent to which variation due to contingent influences takes place. It is argued that problems identified all relate to the issue of integration. This theme is also developed from an analytical viewoint and it is suggested that organisational response to increases in complexity in the external environment will be to match them with internal complexity. Differentiation of this kind will require extensive and flexible integration, especially in those inherently uncertain areas associated with innovation. Whilst traditionally a function of management, it is argued that integration needs have increased to the point where a new specialism is required. The concept of integration specialist is developed from this analysis and attempts at simple integrative change during the research are described. Finally a strategy for integration - or rather for building in integrative capability - ln the organisation studied is described.

Capital markets and the market structure of foreign investments

Contrary to the long-received theory of FDI, interest rates or rates of return can motivate foreign direct investment (FDI) in concert with the benefits of direct ownership. Thus, access to investor capital and capital markets is a vital component of the multinational’s competitive market structure. Moreover, multinationals can use their superior financial capacity as a competitive advantage in exploiting FDI opportunities in dynamic markets. They can also mitigate higher levels of foreign business risks under dynamic conditions by shifting more financial risk to creditors in the host economy. Furthermore, the investor’s expectation of foreign business risk necessarily commands a risk premium for exposing their equity to foreign market risk. Multinationals can modify the profit maximization strategy of their foreign subsidiaries to maximize growth or profits to generate this risk premium. In this context, we investigate how foreign subsidiaries manage their capital funding, business risk, and profit strategies with a diverse sample of 8,000 matched parents and foreign subsidiary accounts from multiple industries in 38 countries.We find that interest rates, asset prices, and expectations in capital markets have a significant effect on the capital movements of foreign subsidiaries. We also find that foreign subsidiaries mitigate their exposure to foreign business risk by modifying their capital structure and debt maturity. Further, we show how the operating strategy of foreign subsidiaries affects their preference for growth or profit maximization. We further show that superior shareholder value, which is a vital link for access to capital for funding foreign expansion in open market economies, is achieved through maintaining stability in the rate of growth and good asset utilization.

Faces of pricing and profit planning at the doorstep of the EU: government pricing policy in the innovative pharmaceutical sector in Turkey

The majority of research on the pharmaceutical sector has focused on an overall micro economic, medical oriented welfare issues, whereas the marketing management role of the innovative drug manufacturer has to a large extent been disregarded. Using the case of Turkey, through a series of in-depth interviews with highly innovative companies, other marketing management possibilities to develop pricing strategies and plan for profit are explored based on broader definitions of value and transparency. Our results suggest that pharmaceutical companies as well as governments might have a too narrow focus of value and underestimate the potential long term benefits of a broader approach to marketing management and long term relationships between the various stakeholders.

Twelve steps to heaven:successfully managing change through developing innovative teams

In this article we propose that work teams implement many of the innovative changes required to enable organizations to respond appropriately to the external environment. We describe how, using an input?–?process?–?output model, we can identify the key elements necessary for developing team innovation. We propose that it is the implementation of ideas rather than their development that is crucial for enabling organizational change. Drawing on theory and relevant research, 12 steps to developing innovative teams are described covering key aspects of the team task, team composition, organizational context, and team processes.

Business implications of manufacturing innovation : the experience of increasing automation in smaller to medium sized companies.

Despite the considerable potential of advanced manufacturing technologies (AMT) for improving the economic performance of many firms, a growing body of literature highlights many instances where realising this potential has proven to be a more difficult task than initially envisaged. Focussing upon the implementation of new manufacturing technologies in several smaller to medium sized enterprises (SME), the research examines the proposition that many of these problems can be attributed in part to inadequate consideration of the integrated nature of such technologies, where the effects of their implementation are not localised, but are felt throughout a business. The criteria for the economic evaluation of such technologies are seen as needing to reflect this, and the research develops an innovative methodology employing micro-computer based spreadsheets, to demonstrate how a series of financial models can be used to quantify the effects of new investments upon overall company performance. Case studies include: the development of a prototype machine based absorption costing system to assist in the evaluation of CNC machine tool purchases in a press making company; the economics and strategy of introducing a flexible manufacturing system for the production of ballscrews; and analysing the progressive introduction of computer based printing presses in a packaging and general print company. Complementary insights are also provided from discussion with the management of several other companies which have experienced technological change. The research was conducted as a collaborative CASE project in the Interdisciplinary Higher Degrees Scheme and was jointly funded by the SERC and Gaydon Technology Limited and later assisted by PE-Inbucon. The findings of the research shows that the introduction of new manufacturing technologies usually requires a fundamental rethink of the existing practices of a business. In particular, its implementation is seen as ideally needing to take place as part of a longer term business and manufacturing strategy, but that short term commercial pressures and limited resources often mean that firms experience difficulty in realising this. The use of a spreadsheet based methodology is shown to be of considerable assistance in evaluating new investments, and is seen as being the limit of sophistication that a smaller business is willing to employ. Several points for effective modelling practice are also given, together with an outline of the context in which a modelling approach is most applicable.

Real options and multinational investments : an empirical study of risk, performance and organisational awareness

DUE TO COPYRIGHT RESTRICTIONS ONLY AVAILABLE FOR CONSULTATION AT ASTON UNIVERSITY LIBRARY AND INFORMATION SERVICES WITH PRIOR ARRANGEMENT This thesis is a cross-disciplinary study of the empirical impact of real options theory in the fields of decision sciences and performance management. Borrowing from the economics, strategy and operations research literature, the research examines the risk and performance implications of real options in firms’ strategic investments and multinational operations. An emphasis is placed on the flexibility potential and competitive advantage of multinational corporations to explore the extent to which real options analysis can be classified as best practice in management research. Using a combination of qualitative and quantitative techniques the evidence suggests that, if real options are explored and exploited appropriately, real options management can result in superior performance for multinational companies. The qualitative findings give an overview of the practical advantages and disadvantages of real options and the statistical results reveal that firms which have developed a high awareness of their real options are, as predicted by the theory, able to reduce their downside risk and increase profits through flexibility, organisational slack and multinationality. Although real options awareness does not systematically guarantee higher returns from operations, supplementary findings indicate that firms with evidence of significant investments in the acquisition of real options knowledge tend to outperform competitors which are unaware of their real options. There are three contributions of this research. First, it extends the real options and capacity planning literature to path-dependent contingent-claims analysis to underline the benefits of average type options in capacity allocation. Second, it is thought to be the first to explicitly examine the performance effects of real options on a sample of firms which have developed partial capabilities in real options analysis suggesting that real options diffusion can be key to value creation. Third, it builds a new decision-aiding framework to facilitate the use of real options in projects appraisal and strategic planning.

Innovative measurement methodology in the study of weathering of automotive coatings

An initial aim of this project was to evaluate the conventional techniques used in the analysis of newly prepared environmentally friendly water-borne automotive coatings and compare them with solvent-borne coatings having comparable formulations. The investigation was carried out on microtuned layers as well as on complete automotive multi-layer paint systems. Methods used included the very traditional methods of gloss and hardness and the commonly used photo-oxidation index (from FTIR spectral analysis). All methods enabled the durability to weathering of the automotive coatings to be initially investigated. However, a primary aim of this work was to develop methods for analysing the early stages of chemical and property changes in both the solvent-borne and water-borne coating systems that take place during outdoor natural weathering exposures and under accelerated artificial exposures. This was achieved by using dynamic mechanical analysis (DMA), in both tension mode on the microtomed films (on all depths of the coating systems from the uppermost clear-coat right down to the electron-coat) and bending mode of the full (unmicrotomed) systems, as well as MALDI-Tof analysis on the movement of the stabilisers in the full systems. Changes in glass transition temperature and relative cross-link density were determined after weathering and these were related to changes in the chemistries of the binder systems of the coatings after weathering. Concentration profiles of the UV-stabilisers (UVA and HALS) in the coating systems were analysed as a consequence of migration in the coating systems in separate microtomed layers of the paint samples (depth profiling) after weathering and diffusion co-efficient and solubility parameters were determined for the UV stabilisers in the coating systems. The methods developed were used to determine the various physical and chemical changes that take place during weathering of the different (water-borne and solvent-borne) systems (photoxidation). The solvent-borne formulations showed less changes after weathering (both natural and accelerated) than the corresponding water-borne formulations due to the lower level of cross-links in the binders of the water-borne systems. The silver systems examined were more durable than the blue systems due to the reflecting power of the aluminium and the lower temperature of the silver coatings.

The effectiveness of an innovative intervention aimed at reducing binge drinking among young people:results from a pilot study

Aims: To assess the effectiveness of a digital-story intervention (short videos made by young people) seeking to reduce the prevalence of young people's binge drinking in Caerphilly. Method: A quasi-experimental design was adopted with three intervention sites and one control site providing the sample (mainly aged 1415 years). Three rounds of self-completion questionnaires, completed prior (T1), immediately after (T2) and 6 months after the intervention (T3). Findings: A total of 1031 questionnaires completed across the three time-points. Two-factor ANOVAs revealed a positive effect on knowledge for the intervention sample. The intervention group results showed stable attitudes towards drinking at the three time-points whilst the control group showed increasing positive attitudes towards drunkenness over the same time period. Intentions towards drunkenness were higher in the control group than the intervention group at T2 (ControlT1 Mean 3.37, T2 Mean 3.90; interventionT1 Mean 3.26, T2 Mean 3.29). Intervention participants got drunk on fewer occasions in the last week (mean occasions last week 1.57) compared to control participants (mean occasions last week 2.00), with the difference approaching statistical significance (F 1.90, p 0.07). Conclusions: Promoting negative attitudes towards drunkenness, alongside a greater sense of control and potential regret about drunkenness are likely to be important factors when considering how to change people's intentions to drink. The study shows the potential to reduce the frequency of drinking behaviour when intentions are changed, and provides recommendations for future interventions of this nature. © 2010 Informa UK Ltd.