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Managing Customer Uncertainty in Making Service Offshoring Decisions

Authors: Lu, L; Gregory, G; Ngo, L; Bagozzi, R;

Managing Customer Uncertainty in Making Service Offshoring Decisions

Abstract

Despite a long-standing interest in service offshoring from both academics and practitioners, the questions how and under what conditions customers react when a well-known national brand decides to outsource its services to an offshore service provider (OSP) is an understudied area. Drawing on cognitive consistency theory, we test a new construct called, “service offshoring fit” (SOF) that captures customer overall perceptual consistency in their memory networks between the focal firm and the OSP as indicated by the suitability, appropriability, and logicality of the alliance. Using 393 responses from a panel of customers of focal brands, we show that customer certainty mediates the relationship between SOF and intention not to switch by current customers. Our findings also reveal an inverted U-shaped relationship between marketing communications and customer certainty at different levels of SOF. Specifically, if firms communicate consumers’ benefits associated with offshoring, they can mitigate or avoid negative customer reactions (and subsequently increase customer certainty); however, after a certain point, such effects are reduced.

Country
Australia
Related Organizations
Keywords

anzsrc-for: 3503 Business Systems In Context, 3507 Strategy, Management and Organisational Behaviour, anzsrc-for: 3504 Commercial services, 330, anzsrc-for: 35 Commerce, anzsrc-for: 1504 Commercial Services, 35 Commerce, 3503 Business Systems In Context, anzsrc-for: 3507 Strategy, 650, anzsrc-for: 1505 Marketing, Management, anzsrc-for: 3506 Marketing, 3506 Marketing, Tourism and Services

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    5
    popularity
    This indicator reflects the "current" impact/attention (the "hype") of an article in the research community at large, based on the underlying citation network.
    Top 10%
    influence
    This indicator reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
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    impulse
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selected citations
These citations are derived from selected sources.
This is an alternative to the "Influence" indicator, which also reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
BIP!Citations provided by BIP!
popularity
This indicator reflects the "current" impact/attention (the "hype") of an article in the research community at large, based on the underlying citation network.
BIP!Popularity provided by BIP!
influence
This indicator reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
BIP!Influence provided by BIP!
impulse
This indicator reflects the initial momentum of an article directly after its publication, based on the underlying citation network.
BIP!Impulse provided by BIP!
5
Top 10%
Average
Average
Green