Service Research in Taiwan

Editor: Sheng-Tsung Samuel Hou, Professor, Graduate Institute of Public Affairs and Social Innovation, Feng Chia University, Taiwan

Mar. 2019

The service sector has been a predominant contributor to Taiwan’s economic development. For the past few years, in terms of industrial transformation, Taiwanese firms have not only endeavored to keep pace with innovation but also strived to initiate and adopt service-oriented approaches as a promising direction in achieving strategic transformation. In particular, with the explosive growth of e-platforms and digital technologies, the concept of service is constantly and dramatically self-renewing and applying or integrating with other fields. As a result, Taiwanese firms, to maintain sustainable competitive advantage in a new era, have to pursue service-oriented approaches as opposed to merely providing remarkable products. On the scholarly research front, management scholars who persistently and collectively engaged in overarching service research have made notable contributions to the related topics, including service innovation, service experience, industrial service and organizational behavior, respectively. The rapid development both in practical and academic fields presents an ideal opportunity for us to use the theme “Service in Taiwan” for this virtual issue. By comprehensively reviewing the service studies within a decade, we found that the research topics pertaining to service have covered institutional and environmental perspectives, individual behavior, and e-communities by employing a variety of methodologies including use of surveys, case studies, experiments and big data. The following are three major topics of service research that have received significant attention:

 1. Service innovation: Previous research have determined that technologies, such as the emergence of e-communities, sharing economy, platform integration, GPS dispatching system, self-service, and teleservice, have been a prominent factor in enabling and redefining service. Thus, there is a tremendous need to re-think and re-design the processes of service supply and inventory.

2. Service experience: One of the research streams on service experience is devoted to examining the topic of how to connect with customers emotionally, including in service experience management as well as in service failures and recovery. Another research stream, through the lens of organizational behavior, discusses how leadership enhances employees’ positive attitude in customer service and further enables ffective customer experience management.

3. Servitization: Research has elucidated the value of new supply chains, the innovation of products/services, and the complexity of technology/systems in the manufacturing, transportation, and healthcare industries, pointing a potential direction for firms striving toward servitization.

The Titles of Review Papers

Methodology

The Effects of Attribution and Price Compensation on Perceived Price Fairness under Various Service Failures.(2012)

Experiment

Emotional Episode, Retaliation and Altruism: Negative Online Word-of-Mouths after Service Failure. (2013)

Survey

A Study on Modes of the Servitization of Manufacturing. (2014)

Case study

The Influence Mechanisms of Transformational Leadership on Job Engagement: The Role of Psychological Capital and Service Climate. (2014)

Survey

Healthcare Service Design Planning Model for Service Innovation and Design: The Case of Tele-Health. (2016)

Case study

Service Experience Management in Asia: A Review and Directions for Future Research. (2016)

Literature review

Institutional Work in Building Service Innovation. (2016)

Grounded theory

An Empirical Study on the Relationship between Service Inventory and Operational Performance: Taiwan Taxi Fleet Taken as an Example. (2017)

Trajectory data analysis

 

Huang, H. H., Su, H. J., Cheng, K. F., and Chang, C. J. 2012. The Effects of Attribution and Price Compensation on Perceived Price Fairness under Various Service Failures. NTU Management Review, 22 (2): 309-340.

Huang, Su, Cheng and Chang (2012) revealed the interaction effect of controllability and stability on customers’ perceived price fairness after encountering service failures, which filled the research gap in examining how the types of service failures, the attributions of service failures, and the strategies of compensation influence the customers’ perception of price fairness, respectively. This study moved beyond survey analyses and extended their research methods (e.g., conducted two experiments), which is instrumental to increasing causality and internal validity. The research results showed the interaction effect of controllability and stability as well as how price compensation moderate the relationship between the types of service failures and perceived price fairness. They further suggest managers should actively detect the types of service failures and how customers view these service failures to maintain the firm’s reputation and enhance customers’ repurchase intention.

Wang, C. C., and Wu, Y. H. 2013. Emotional Episode, Retaliation and Altruism: Negative Online Word-of-Mouths after Service Failure. NTU Management Review, 24 (1): 173-206.

Wang and Wu (2013) shed light on customers’ negative online word-of-mouth behavior in response to service failure, which is currently a pivotal issue in management along with the blooming of social networking service. This study proposed an integrative framework of online word-of-mouth, which attempts to divide intention into altruism and revenge and further explore the essential role of customers’ personality on word-of-mouth communication. By doing so, this study compensated for prior dominant focus on the results gathered from solely examining a single dimension, which is beneficial to increasing internal validity. Moreover, by conducting four empirical studies and making use of customers in a real-world context as research samples, this study provided strong empirical evidence, which is conducive to increasing external validity. The results showed that when customers feel disappointment in the face of service failure, they are more likely to have altruistic intentions when it comes to word of mouth. However, when customers feel anger, intentions for revenge will be triggered, and customers with more vengeful dispositions tend to engage in negative online word-of-mouth behavior. Moreover, this study highlighted that the negative emotions of customers who suffered one service failure could last at least one month. Therefore, companies should consider every single service failure seriously and proactively address customers’ issues and manage their emotions.

Yu, P. J., Chen, S. H., and Wen, P. C. 2014. A Study on Modes of the Servitization of Manufacturing. NTU Management Review, 25 (1): 325-354.

Over the past few years, the manufacturing firms in Taiwan have gradually integrated and applied broader forms of service, which make the boundaries between the manufacturing and service industries more blurred. This kind of servitization process involved a series of strategic changes including strategic realignment at the corporate level, the rearrangement of intra-firm and inter-firm organizations and institutional relationships, capability-building, and new pricing and revenue models, which incrementally transformed the whole manufacturing industry. By comparing domestic and foreign cases, Chen and Wen (2014) found that domestic cases (e.g., Taiwanese firms) have lower levels of “technology and capability” and “customer orientation and product flexibility” while foreign cases have higher levels of “technology and capability” and “customer orientation and product flexibility”. Furthermore, the notion of manufacturing servitization has been redefined as a business model of “value-co-creation”, which imply that shared values are a driving force for both suppliers and users. This study suggested a potential path of servitization for firms in the manufacturing industry as well as for policy making.

Chen, S. L., and Huang, Y. J. 2014. The Influence Mechanisms of Transformational Leadership on Job Engagement: The Role of Psychological Capital and Service Climate. NTU Management Review, 25 (1): 129-156.

Despite the widespread impact of positive leadership and positive organizational behavior research, it is surprising that they haven’t received much attention from management scholars until recent years, resulting in a lack of merging of these two prominent research perspectives. Chen and Huang (2014) attempt to fill this research gap by proposing a cross-level encompassing framework, which employed these two perspectives and discussed the mediating roles of psychological capital and service climate between transformational leadership and job engagement. Based on a sample consisting of 606 employees collected from 40 petrol stations in Taiwan, this study found that psychological capital mediated the relationship between individual-level transformational leadership and job engagement as well as the relationship between service climate and job engagement. Service climate mediates the relationship between team-level transformational leadership and job engagement. This study further provided some implications for business practices. For example, team leaders should be aware of and able to provide a desired context or environment for employees to foster positive psychological capital, which is beneficial to enhancing employees’ job engagement.

Yu, J. Y., and Cheng, P. Y. 2016. Healthcare Service Design Planning Model for Service Innovation and Design: The Case of Tele-Health. NTU Management Review, 27 (1): 225-254.

Healthcare service, despite being a huge and prosperous industry, confronted several urgent issues in recent years, including management and competition, and thus revolutions and innovations for this industry should be a top priority. However, the scholarly research in the medical field primarily focuses on clinical effectiveness while the research in management and innovation fields emphasized broader service. The service in healthcare is quite different from other general services, thus requiring a new architecture specifically for the healthcare service industry. Yu and Cheng (2016) integrated the existing research in both management and healthcare service fields to explore how designers deploy resources to meet the needs of clients and stakeholders and further developed a comprehensive healthcare service design planning model. They started with the perspective of innovation management and proposed a comprehensive guideline for service design innovation. Moreover, their consideration of emerging trends and future development of the relationship between doctors and patients has offered significant insights for business practices and scholarly research.

Chris, J. S., Lin, C. Y., and Chou, E. Y. 2016. Service Experience Management in Asia: A Review and Directions for Future Research. NTU Management Review, 26 (2): 303-352.

Within the context of intensely competitive environments, creating the best customer service experience should be a must and first priority for firms. Experience, which was widely used for the evaluation of products and services, has played an increasingly imperative role in servitization over various sectors. Undergoing an exhaustive review of abundant studies on service experience from several high-impact scholarly journals in the fields of marketing, organizational behavior and human resources from 2000 to 2015, Chris, Lin and Chou (2016) did a credible work in summarizing seven distinct but related themes of service experience research in the context of Asia, namely, customer/employee emotion, service employee management, service environments, customer participation, self-service technologies, service failure/recovery, and customer loyalty management. Specifically, they schematically outlined the research domain and highlighted the arguments and research findings for each study. This study suggested there is a great potential for cross-fertilization between service experience and other research streams, further introducing several prominent service experience research themes for future research, as well as setting the stage for future research in this field.

Tu, M. F., and Hung, S. C. 2016. Institutional Work in Building Service Innovation. NTU Management Review, 27 (1): 129-154.

Service innovation has been a prevailing issue this decade, which emphasize an improved and comprehensive service experience in order to retain customers and maximize profit. Service innovation, however, cannot simply be seen as the reshaping of products and/or services; it involves a reconfiguration of the value proposition. Tu and Hung (2016) focused on institutional change at the macro-level (e.g., institutional logics of service innovation) to delineate three types of institutional works. This study focused on the research question of “how strategic actors change institutional logics” and illuminated the process of implementing service innovation. By conducting an in-depth case study of ITRI, they make the argument that service innovation, as a new institutional logic, would not completely replace manufacturing, however, it was expected to be a “structural innovation”. This argument reflected an interactive and flexible transformation process of “coexistence” and “integration”, which compensated for prior dominant focus on the perspective of “replacement”.

Hou, S. T., Lien, W. C., and Chou, C. M. 2017. An Empirical Study on the Relationship between Service Inventory and Operational Performance: Taiwan Taxi Fleet Taken as an Example. NTU Management Review, 27(2S): 63-92.

Drawing on the research results of Hou (2010), who first introduced the concept of service inventory and discussed how a taxi fleet in Taiwan managed service inventory by adopting Global Positioning System (GPS) for enabling vehicle-dispatching, Hou, Lien and Chou (2017) extended and reinforced this concept by conducting empirical research with data mining and cluster analysis methodologies. By using time-space air-queuing data from 300 taxi drivers retrieved from the GPS dispatching system in Taiwan Taxi Fleet, they identified four categories of taxi drivers’ service inventory patterns: “Customized”, “High-Speed”, “Flexibility” and “Routine”, respectively. Particularly, they found drivers with “Flexibility” patterns of work practices could deploy timely service by effectively using technology. Using these two studies, Hou and his colleagues’ provided a solid example of the concept of service inventory by employing quantitative and qualitative approaches, respectively, which showed how technology innovation enhanced the service processes in traditional industries as well as strove toward knowledge value-added service and technology transfer in the global context. Moreover, the adoption of this innovative technology created a win-win situation for all stakeholders, including operators, passengers, the government, and even for our environment.

Articles in the Virtual Issue
  • The Effects of Attribution and Price Compensation on Perceived Price Fairness under Various Service Failures

    By Hui-Hsiung Huang, Hung-Jen Su, Kong-Fah Cheng and Chia-Jung Chang

    Published Jun. 2012

    Based on social exchange theory, attribution theory and carryover effects, this study postulated that consumers' perceived price fairness in service failure situations is influenced by the main effect and interaction effect of three factors: the causes of service failure, the types of service failures, and the compensation for service failure. Two experiments were conducted to test the hypotheses. The significant findings are as follows: (1) Consumers who participated in the study of employee response to service delivery system failures perceived lower price fairness as compared to participant...

  • Emotional Episode, Retaliation and Altruism: Negative Online Word-of-Mouths after Service Failure

    By Chih-Chien Wang and Yi-Huan Wu

    Published Dec. 2013

    This research focuses on the influence of emotions and intentions on consumer negative word-of-mouth (WOM) communications when service failure occurred. The paper conducted four empirical studies to examine the relationship between emotions, intentions, personality trait and negative WOM communications. The results revealed that the disappointed customers were usually with altruism intention, and would with higher intention to help/warn others; whereas consumers with a higher level of anger had more revenge intention to engage in negative WOM after service failure....

  • A Study on Modes of the Servitization of Manufacturing

    By Pei-Ju Yu, Shin-Horng Chen and Pei-Chang Wen

    Published Dec. 2014

    With the trend towards blurred boundaries between manufacturing and services, the servitization of manufacturing (also known as industrial services, servicizing) has surged as an important thrust of transformation for a growing number of manufactures. The servitization of manufacturing may involve issues, such as strategic realignment at the corporate level, the rearrangement of intra-firm and inter-firm organizations and institutional relationships, capability-building, and new pricing and revenue models. This paper refers to the existing literature to propose three modes of the servitization...

  • The Influence Mechanisms of Transformational Leadership on Job Engagement: The Role of Psychological Capital and Service Climate

    By Shu-Ling Chen and Yen-Ju Huang

    Published Dec. 2014

    Drawing on the perspective of positive organizational behavior and positive organizational scholarship, we tested meso-mediating model linking transformational leadership and job engagement. Data collected involving 606 employees at 40 chained petro-stations in north Taiwan. Results of hierarchical linear modeling indicated that individual-level transformational leadership and team-level transformational leadership were positively related to employee job engagement, separately. Furthermore, at the individual level, indicated the relationship between individual-level transformational leadership...

  • Healthcare Service Design Planning Model for Service Innovation and Design: The Case of Tele-Health

    By Jiun-Yu Yu and Pei-Yi Cheng

    Published Dec. 2016

    This study focuses on the theme of healthcare service design. Based on the framework proposed by Goldstein, Johnston, Duffy, and Rao (2002), this study develops a comprehensive healthcare service design planning model. This model integrates various viewpoints to investigate the conceptual construction of service design and the corresponding implications on practical implementation. The full process from service strategy development to outcome measurement and feedback is discussed. The main features of this proposed model are as follows. First, it investigates the “what” and “how” of the health...

  • Service Experience Management in Asia: A Review and Directions for Future Research

    By Jiun-Sheng Chris Lin, Cheng-Yu Lin and En-Yi Chou

    Published Jun. 2016

    Service experience is an important issue for the management of service firms in Asia, yet there lacks a thorough review of research literature in this field. In this review paper, we address two key questions from a service experience perspective: (1) what have we learned from prior research about service experience in Asia and (2) what major issues should future research in this area address. We examine these questions under seven major topics: customer/employee emotion, service employee management, service environments, customer participation, self-service technologies, service failure/recov...

  • Institutional Work in Building Service Innovation

    By Min-Fen Tu and Shih-Chang Hung

    Published Dec. 2016

    We draw on the concept of institutional work to explore how strategic actors change institutional logics. Concerned with the “how” question, we adopt an in-depth case study to examine ITRI, a Taiwan-based statutory agency, which has successfully promoted the new institutional logics of service innovation. We identify three types of institutional work. The first is identity work in which ITRI engaged in defining the problem, developing an agenda, and restructuring organization positions. The second is professional work in which ITRI networked with professional communities, promoted foresights, ...

  • An Empirical Study on the Relationship between Service Inventory and Operational Performance: Taiwan Taxi Fleet Taken as an Example

    By Sheng-Tsung Hou, Wan-Chien Lien and Chieh-Min Chou

    Published May. 2017

    The term “service inventory” implies that a firm keeps a “service in process” within a service-based supply chain as a form of temporary stock. The “temporary service stock” belongs to a certain value activity within the service supply chain; once the service is demanded by a customer, the service provider will deploy temporary service as “the final service”. Due to the lack of empirical studies regarding this concept, we conducted research by way of a quantitative approach, using the data mining and cluster analysis methodologies to identify and analyze the relationship between service invent...

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