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  • June 2017
  • Article
  • Management Science

Creating Reciprocal Value Through Operational Transparency

By: Ryan W. Buell, Tami Kim and Chia-Jung Tsay
  • Format:Print
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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 Management; Production Management; Organizational Performance; Behavioral Operations; Service Operations; Service Delivery; Consumer Behavior; Labor; Organizational Design; Operations; Service Industry; United States; Kenya

Citation

Buell, Ryan W., Tami Kim, and Chia-Jung Tsay. "Creating Reciprocal Value Through Operational Transparency." Management Science 63, no. 6 (June 2017): 1673–1695.
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About The Author

Ryan W. Buell

Technology and Operations Management
→More Publications

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    Surfacing the Submerged State: Operational Transparency Increases Trust in and Engagement with Government

    By: Ryan W. Buell, Ethan Porter and Michael I. Norton
More from the Authors
  • Elevate Employees, Don't Eliminate Them By: Ryan W. Buell
  • Multi-location Workers in Multinational Firms? Tradeoffs in Contextual Specialization of Employees and Organizational Outcomes By: Hise O. Gibson, Ryan W. Buell and Prithwiraj Choudhury
  • Surfacing the Submerged State: Operational Transparency Increases Trust in and Engagement with Government By: Ryan W. Buell, Ethan Porter and Michael I. Norton
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