A framework for sustainable service system configuration

Abstract

Purpose While innovative service systems may create substantial value for certain stakeholders, they often destroy value for others. This value paradox frequently leads to unsustainable service systems. The purpose of this paper is to explore the use of multiple theories to pinpoint and explain these value paradoxes, build a framework allowing potentially more sustainable value configuration of service systems and develop an agenda for future research. The framework is illustrated with examples from the hospitality industry. Design/methodology/approach The paper draws on prevalent theories and approaches, including service-dominant logic, business modeling, transaction cost economics, stakeholder theory, configuration theory and set theory, to develop a value configuration framework. Findings In a service system, the configuration of resources and relationships between these resources (i.e. the set of value propositions for various stakeholders of the system) determines which stakeholders will gain and which will lose and to what extent. For that reason, insight into the range of possible service configurations – or business models – will help decision makers consider the effects on various stakeholders, and, where possible, set their priorities right and make their businesses more sustainable. The research produces a rich research agenda. Research limitations/implications Examples from hospitality allow an in-depth examination of a range of dynamic configurational and technological innovations, but some idiosyncratic characteristics of the context may impede the wider applicability of the conceptual framework. Future research could complement this work by studying other service sectors. Practical implications The paper aims to provide decision makers in the service industry with a conceptual tool to explore, diagnose and, if needed, adjust the value configuration of their service operations. In practice, this tool may help explicate the service system configuration, thus helping managers determine their organizations’ desired positioning in terms of value creation and destruction, and to choose strategic directions by adapting configurations. Social implications Legislation and regulations are being adapted to various new service configurations. This paper attempts to – at least conceptually – distinguish different service configurations, allowing policy makers to identify the value trade-offs between stakeholders, including society at large. Originality/value Previous research focused primarily on value creation by innovative services and business models. Value creation for one stakeholder, however, could lead to value destruction for another. Taking this paradox into consideration may result in more open service ecosystems that explicitly consider sustainability and value implications in multiple dimensions and for a broader group of stakeholders.

Exploring Paradoxical Tensions in Circular Business Models—Cases from North Europe

“…Simultaneously address multiple desirable but conflicting economic, environmental and social outcomes in different temporal (e.g., short and long term) and spatial arenas (e.g., firm level and societal level) [13,14,[27][28][29][30][31][32][33][34][35]…”

“…Increasing revenues from services fails to deliver greater profits because of spiraling costs or overestimation of revenues Specific characteristics of the PSS design (e.g., promoting customer interaction, modularity in service offerings, independent and synergetic value of products and services, etc.) [34] [35]…”

Evolving service thinking: disruption and opportunity in hospitality and tourism

“…The emergence of new business models like peer-to-peer sharing platforms presents unique challenges such as identifying ideal service system designs. In response to these challenges, Van Riel et al (2019) develops a framework that conceptualizes how twenty-first century service systems need to be configured for enhanced sustainability. In consideration of the complexity that such new service systems create with respect to stakeholder involvement and value proposition attainment, the paper advances critical thinking with respect to how different service business models create and destroy value with the intent of informing future service system design decisions.…”

“…platform owner), service providers and users, a comprehensive review enables a thorough understanding of all sharing platform stakeholders' roles with the intention of enhancing the platform's utility.The emergence of new business models like peer-to-peer sharing platforms presents unique challenges such as identifying ideal service system designs. In response to these challenges, Van Riel et al (2019) develops a framework that conceptualizes how twenty-first century service systems need to be configured for enhanced sustainability. In consideration of the complexity that such new service systems create with respect to stakeholder involvement and value proposition attainment, the paper advances critical thinking with respect to how different service business models create and destroy value with the intent of informing future service system design decisions.Implicit in both Wirtz et al (2019) and Van Riel et al (2019), is the ever-evolving intricacy of service experience stakeholders in the service ecosystem.…”

“…In response to these challenges, Van Riel et al (2019) develops a framework that conceptualizes how twenty-first century service systems need to be configured for enhanced sustainability. In consideration of the complexity that such new service systems create with respect to stakeholder involvement and value proposition attainment, the paper advances critical thinking with respect to how different service business models create and destroy value with the intent of informing future service system design decisions.Implicit in both Wirtz et al (2019) and Van Riel et al (2019), is the ever-evolving intricacy of service experience stakeholders in the service ecosystem. Acknowledging the necessity for all stakeholders to make meaningful contributions to the service experience for a sustained competitive advantage to be realized, King et al (2019) emphasize the need…”