The Development of Products in the Global Internet Marketplace

Service implementation and management requires a keen understanding of the organization and the process of development. Executives that understand these steps are likely to realize higher levels of success when designing new services and creating new revenue streams. Ignoring any aspect of the process could result in poor design, poor implementation, ineffective customer interface or poor cultural fit that loses capital and investments.

Ideas for service innovation can come from a variety of sources ranging from individual employees to customer feedback. When such ideas are brought forward they are often screened to ensure feasibility and fit with the organization’s strategic plan. As a basic process the organization develops the concepts, analyzes its utility, designs the product and then launches it into the market (Johnson, et. al., 2000). The process is cyclical in that feedback from customers and improvements in design encourages produce relevancy. 

No matter how effective innovation is it must have some value to customers. This value can be real or imaginary in terms of a cost or social benefit. Since these values are often dependent on individual perception some organizations consider using a more systematic approach to possible revenue streams.

The value of the product to the customer is one of the most important ways of determining whether or not the successes of such innovations are likely. Some organizations use an equation to determine the relative value of the product or service. An analysis helps to maintain a level of objectivity when making important strategic offerings. 

Value = Results produced for the customer + process quality/price to customer + costs of acquiring the service. 

In such an equation the results produced are based on the value to the customer, the process quality is the value of the delivery system, price to the customer is its monetary cost, and costs of acquiring the service is the amount of effort in obtaining the product. Each of these factors is analyzed in terms of their quantitative value in order to determine the market value of the product or service. 

Organizations that have moved online and capitalized in the virtual e-commerce market have created dominance in commercial selling and activity. With a proper customer interface and a strong distribution network such organizations allow customers to complete much of their shopping and effort themselves. More importantly the amount of actual customer cost in terms of effort has been reduced significantly with improved search engine performance. 

Technology has also been beneficial in developing efficient service quality by bridging the virtual and physical worlds. Ensuring that the entire process of purchasing online to delivery at the door is efficient raises the perceived value of the service. The easier the process the more satisfaction created. Some organizations might use the SEVQUAL approach which includes analysis of reliability, responsiveness, assurance, empathy and tangibles (Fitzscommon & Fitzscommon, 2011). 

The nature of the Internet also creates world integration of services, ideas, and interaction. Despite this growing trend specific cultures still have their own particular customs. Organizations that bridge these cultural gaps to sell products seek ways of understanding how to not only operate businesses but how to manage the labor thus associated. Gert Hofstead (n.d.) conducted a survey that assessed the work-related values in fifty countries that used the following five dimensions of Power Distance (equality), Individualism (individual treatment), Masculinity (traditional work roles), Uncertainty Avoidance (ambiguity tolerance) and Long-Term Orientation (time commitment). Each of these aspects shed lights of how local customers impact business imperatives.

The success of service innovation and development rests on understanding how new developments are processed within organizations, assessed for value, implemented in the market, and relate to specific cultural needs of the target customers. Understanding this chain of development helps to create executive awareness of the overall wider steps to successful service development. Failure is more likely to occur when steps are either skipped or discounted in development. 

Johnson, S., Menor, L. Roth, A. & Chase, R. A critical evaluation of the new service development process: Integrating service innovation and service design. In New Service Development, eds.

Fitzsimmons and Fitzsimmons. Thousand Oaks, Calif.: Sage Publications, 2000, pp.1-32.

Fitzsimmons, J. & Fitzsimmons, M. (2011). Service Management: Operations, Strategy, Information Technology (Seventh Edition). NY: McGraw-Hill. 

Hofstead, G. (n.d.) Cultural Insights. Retrieved April 2^nd, 2013 from http://geert-hofstede.com/

The Cost of Embedded Group Networks within the Workplace

Workplace groups create their own values over time through social and economic associations that can damage the efficiency and financial viability of any organization. When organizations develop their own group standards, that lay in productive and accurate perceptions, their premises can encourage higher levels of organizational performance. Inappropriately socialized members often develop their own groups which influence the organizational culture and costs of transactions throughout their networks.  Left untouched the groups’ decisions become less logical and more damaging to the financial success of the total organization. It is important for executives to understand how they groups form and the potential wide reaching problems they can create.

It is first beneficial to define what a group is. Groups perceive themselves as belonging to the same social unit (Lawler, Thye, and Yoon 2008). Their place in society is defined by their shared experiences and understandings. To change a group member’s identity and perceived station in life requires the ability to change both self-perception and the members of their social group. This is one of the reasons why a poor organizational culture can be improved by moving employees to new locations and bringing in fresh members with outside perceptions.

When members see themselves as part of a group they begin to view each other as having similar characteristics and traits that bind them together. The group is a method of moderating self-interest and seeking positive perceptions of each other (Ellemers, Spears, and Doosje, 1997). Once initiated into a group, the members begin to view each other as more worthwhile and having more positive traits than those who exist outside the group.  Within an organization, in and out-group mentality can create encampment, hoarding of resources, and influence the financial success of the entire organization through poor decision making.

This can be expected as groups seek to create advantages for their individual members at the exclusion of competing organizational interests. They do this through the formation of a group network that continues to expand throughout the organization. According to Thye, Lawler and Yoon actors a) perceive the network as a group;  and , b) share rewards and resources with each other when opportunities arise (2011).  Such networks will continue to seek additional rewards and resources even at the expense of their employer and society.

Within the group certain behaviors will produce certain reactions and results from participating members. As long as these behaviors continue to produce the expected results the group members will remain entrusted to each other. The actions that become dependent on the response from other members are called social exchanges (Blau 1964). Groups live and breed these social exchanges and common rules of engagement. Outside intervention by managers and investors can be resented creating difficulty and passive resistance to requested changes.

Since such groups have social, as well as economic purposes, they create higher forms of identity the more these needs are gratified. Such relational commitment further solidifies the identity of group members which separates them from other groups (Cook and Emerson, 1984). Each group has their own relational commitment assumptions that help them define their distinct identities and existence. Outsiders may have difficulty understanding the unique set of underlining assumptions the group is using to define their identity and social interaction.

Over time the group becomes so distinct that their identity creates new realities of perceiving the world. According to social constructionists the group eventually uses their assumptions to create “objective” perceptions of the world (Berger and Luckmann 1966).  The person is thus fully embedded in the group and therefore sees their existence from the vantage point of the group assumptions and uses these assumptions to judge others and make strategic decisions. Any management team, new executive, or consulting firm is seen as an outsider attempting to intrude upon the groups identity which damages self-identity. This is one reason why outside intervention is often staunchly opposed.

Such similarity in subjective truth can define “stickiness” in economic decisions that are weighted and judged against societal norms. Independent objective thought becomes more difficult the more people define themselves based upon their distorted group identity. Such relational identities impact both the sociological and economic transactions of the members (Emerson 1981). Having two different economic approaches within an organization can damage that organizational viability through waste and inefficiency that is rooted in inappropriate premises.

At times the group identity can be so far removed from organizational and societal norms that they run counter to these wider expectations. Socially embedded market transactions can defy rational thought and logic (DiMaggio and Louch 1998). Such logic creates their own market influence based upon information sharing and thought patterns of members who interpret environment actions from a skewed lens. Changing the group identity and thought patterns requires exposing them to new people, methods of needs attainment, and ways of thinking.

Group identity can either encourage productive behavior or be destructive by nature. In organizations group identity that is stronger than organizational norms should concern both executives and investors. Such networks continue to expand their influence and waste of organizational resources by financially and socially feeding group members at the expense of more logical choices. It is through the development of strong cultural assumptions and organizational identity that more effective uses of organizational resources can be achieved.

Berger, P. and Luckmann, T. (1966). The Social Construction of Reality. New

York: Doubleday.

Blau, P. (1964). Exchange and Power in Social Life. New York: John Wiley.

DiMaggio, P. and Louch, H. (1998). Socially Embedded Consumer Transactions:

For What Kinds of Purchases Do People Most Often Use Networks? American Sociological Review 63:619–37.

Ellemers, N., Spears, R. and Doosje, B. (1997). Sticking Together or Falling Apart: In-group Identification as a Psychological Determinant of Group Commitment versus Individual Mobility.

Journal of Personality and Social Psychology 72:617–26.

Emerson, R. (1981). Social Exchange Theory. pp. 30–65 in Social Psychology: Sociological Perspectives, edited by M. Rosenberg and R. H. Turner. New

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Cook, K. and Emerson, R. (1978) Power, Equity, and Commitment in Exchange Networks. American Sociological Review 43:721–39.

Lawler, E., Thye, S, & Yoon, J. (2008). Social Exchange and Micro Social Order. American

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Thye, S., Lawler, E. & Yoon, J. (2011). The emergence of embedded relations and group formation in networks of competition. Social Psychology Quarterly, 74 (4).