Creating Reciprocal Value Through Operational Transparency

41 Pages Posted: 13 Jun 2014 Last revised: 26 Nov 2015

Ryan W. Buell

Harvard Business School

Tami Kim

Harvard Business School

Chia-Jung Tsay

University College London

Date Written: November 24, 2015

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 that 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. 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 observed process transparency perceived greater employee effort and thus were more appreciative of the employees and valued the service more. Employees who observed 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, perceived value

Suggested Citation

Buell, Ryan W. and Kim, Tami and Tsay, Chia-Jung, Creating Reciprocal Value Through Operational Transparency (November 24, 2015). Management Science (Forthcoming); Harvard Business School Technology & Operations Mgt. Unit Working Paper No. 14-115. Available at SSRN: https://ssrn.com/abstract=2449029 or http://dx.doi.org/10.2139/ssrn.2449029

Ryan W. Buell (Contact Author)

Harvard Business School ( email )

Soldiers Field Road
Morgan Hall 429
Boston, MA 02163
United States
617-496-6918 (Phone)

HOME PAGE: http://www.hbs.edu/rbuell

Tami Kim

Harvard Business School ( email )

Soldiers Field Road
Morgan 270C
Boston, MA 02163
United States

Chia-Jung Tsay

University College London ( email )

Gower Street
London, WC1E 6BT
United Kingdom

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