Knowledge that Transforms

AbstractOmnichannel retailing features, such as ship‐to‐store (STS) service, are designed to deliver a seamless shopping experience for customers. For a retailer, introducing omnichannel capabilities requires major investments to integrate physical stores and online marketplaces, yet holds a promise of potentially enhancing revenue streams from both brick‐and‐mortar (BM) stores and online store channels. We assess the promise of ship‐to‐store capabilities by analyzing transactional data from a national jewelry retailer to study impacts of introducing ship‐to‐store on a retailer's operating performance, in terms of sales and customer returns. Contrary to expectations, the findings show that online sales decreased after ship‐to‐store was introduced, although BM store sales increased. Detailed analysis of the transactional data suggests that, after STS implementation, some customers switched from the online channel to the brick‐and‐mortar channel. This switch occurred mainly for high‐value purchases. The customers who actually remained with and fully completed a sale using the ship‐to‐store service typically were those that bought low‐value items. Our findings also suggest that introducing ship‐to‐store increased cross‐channel customer returns of online purchases to physical stores. Concurrently, these new ship‐to‐store returns generated additional BM store sales. The paper contributes by showing how introducing ship‐to‐store service can have different impacts in terms of sales and returns across a retailer's channels.

AbstractAlthough multinational companies (MNCs) have increasingly embraced a sustainability strategy for their own operations, fewer have tried to engage their (tier‐one) suppliers in their sustainability initiatives. It is even rarer that MNCs engage their suppliers' suppliers (lower‐tier suppliers), despite the latter having a higher incidence of violations with more acute environmental and social impacts that can jeopardize the MNCs’ operations and reputation. We conducted inductive research on three supply networks in the automotive, electronics, and consumer product/pharmaceutical industries. We collected data on three leading sustainable MNCs and a subset of 9 tier‐one suppliers and 22 lower‐tier suppliers and complemented that information with data on several NGOs and industry organizations. This study (1) reveals that many lower‐tier suppliers address their environmental and labor issues passively and constitute the riskiest suppliers in a supply network; (2) provides a grounded theoretical framework for managing a sustainable supply network that accounts for multiple network members as well as three sustainability dimensions (the 3Ps: profit, people, and planet); and (3) shows how processes MNCs use to manage their suppliers differ from processes these suppliers use with their own (lower‐tier) suppliers. The study reveals the practices that leading sustainable MNCs use to manage their supply networks and provides important future research directions.

AbstractAlthough experiments are the gold standard for establishing causality, several threats can undermine the internal validity of experimental findings. In this article, we first discuss these threats, which include the lack of consequential decisions and outcomes, deception, demand effects and unfair comparisons, as well as issues concerning statistical validity (e.g., minimum sample size per cell, estimating variance correctly). We expose each problem, show potential solutions, and bring to the fore issues of relevance of the findings (i.e., external and ecological validity). Thereafter, we take stock of the state‐of‐the‐science regarding validity threats using a representative sample of 468 recent experiments from 258 articles published in top‐tier journals. We compare research practices in three fields of study—management, social psychology, and economics, which regularly use experimental research—to operations management, which has more recently begun to use the experimental paradigm. Our results underscore the importance for journals and authors to follow what we identify to be best‐practice methodological suggestions (i.e., the “ten commandments” of experimental research). We show that—on average—markers of methodological rigor and generalizability positively and significantly predict the citations received by published articles. Finally, given that experiments are infeasible in some settings, we conclude with a brief review of often overlooked quasi‐experimental designs, which are useful for generating strong counterfactuals and hence allow making causal claims in the field.

AbstractAddressing endogeneity can be a challenging task given the different sources of endogeneity and their impacts on empirical results. While premier business journals typically expect authors to rigorously address endogeneity, this expectation is relatively new to many Operations Management (OM) scholars, as exemplified by a recent editorial in Journal of Operations Management that calls for more rigorous treatment for endogeneity. This study serves two purposes. First, we summarize recent OM literature with respect to the treatment for endogeneity by reviewing studies published in leading OM journals between 2012 and 2017. The review provides evidence that endogeneity problems have received increasing attention from OM scholars. However, we also find some common problems that may render the chosen techniques for addressing endogeneity less effective and potentially lead to biased analysis results. Second, since instrumental variable regression is the most prevalent technique for dealing with endogeneity in the OM literature according to our review, we provide an empirical illustration tailored to OM researchers for using instrumental variable regression in the post‐design (data analysis) phase. Using variables from a publicly available healthcare dataset, our analysis sheds light on the importance of examining instruments' quality and triangulating results based on more than one test/estimator.

AbstractCrowdsourced delivery is a service operations model that has proliferated in recent years, bringing unique opportunities and challenges to online retail operations. In particular, new technology enabled features, such as the disclosure of delivery drivers' identities, introduce a social dimension prior to delivery service encounters that might influence customers' service quality expectations and ultimately impact their attitudes towards the retailers. Building on premises of social identity theory, this research investigates effects of various crowdsourced delivery system designs related to driver disclosure and ethnicity on customers' attitudes towards the drivers and retailers. Using data from a scenario‐based experiment with 761 participants across two studies, we find that crowdsourced delivery designs that disclose drivers' identity increase customers' trust, satisfaction, and repurchase intentions only when customers perceive the drivers to be similar to them, particularly with regard to ethnicity. The designs that offer driver choice options are also found to be highly regarded by customers. In addition, the similarity effects of crowdsourced delivery designs differ depending on certain customer characteristics. Overall, our research shows crowdsourced delivery ‐ as a technology‐driven phenomenon ‐ may portend unexpected and challenging social dilemmas for operations managers. Our findings contribute to emerging research on the intersection of service design, technology management, and the sharing economy.

AbstractResearch on social sustainability in multi‐tier supply chains is limited. Specifically, we know very little about a) the micro‐processes involved in the way in which sub‐suppliers (i.e., first‐tier suppliers or sourcing agents) respond to the sustainability requirements imposed by their intermediaries; and b) the micro‐level antecedents that condition their responses. To address these gaps, we used a longitudinal multiple case study method to explore multiple intermediary – sub‐supplier dyads in South India's knitwear garment industry and drew upon constructs of behavioural economics. We found that the way in which intermediaries frame social sustainability requirements and their associated procedures influence both the way in which sub‐suppliers perceive the procedural fairness of those requirements and the way in which they thus reciprocate. When intermediaries frame social sustainability requirements as ‘opportunity’ and engage in various procedures perceived to be procedurally fair by sub‐suppliers, the latter reciprocate positively. Contrastingly, when intermediaries frame social sustainability requirements as ‘insulation’ and engage in various procedures perceived to be procedurally unfair by sub‐suppliers, the latter reciprocate negatively. Under the production‐dominant framing, sub‐suppliers exhibit positive reciprocity only related to processing production orders. Our analysis inductively generated propositions that emphasize the important role played by framing in shaping the perceptions of fairness held by sub‐suppliers towards social sustainability requirements and the reciprocity of the latter's responses to them.

AbstractThis study examines whether financial dependence upon a few customers is negatively related to the allocation of innovation resources of supplier firms. Furthermore, this study investigates whether these negative effects of supplier dependence on research and development (R&D) intensity are reduced when the supplier leverages social capital conceptualized in terms of eigenvector centrality and interconnectedness. Using panel data, we find that a supplier firm's dependence upon major customers has a negative relationship with the supplier firm's R&D intensity. Our results, however, reveal that a dependent supplier having high eigenvector centrality or working with other companies that are densely connected to each other mitigates the negative effects of supplier dependence on R&D intensity. These findings highlight the importance of external information or resources being available in supply networks when suppliers that are dependent upon major customers explore and exploit opportunities for new product development.

AbstractEmpirical research examining whether and how competition influences product recalls is limited. We address this important research gap by creating a novel measure of product competition using data from the Food and Drug Administration's Orange Book, and combining it with product recall data across a 12‐year period. Our results show that product competition is positively associated with manufacturing‐related recalls, providing evidence of a possible downside to competition in the pharmaceutical industry. Although competition is fostered by numerous federal regulations, we find that it may encourage companies to relax quality standards during the manufacturing process, which may result in lower quality products. We also find that this relationship is contingent on managerial discretion surrounding the recall decision. While product competition is associated with an increase in high severity, low discretion recalls, it is associated with a decrease in low severity, high discretion recalls. Findings from this study have critical implications for policy‐makers who regulate product competition in the pharmaceutical industry.