Greetings from the Editors desk!
It is my pleasure to bring you the final issue of the year 2021, with its mix of articles. Four of the articles in this issue visit the e-commerce and online consumer experience space. A brief discussion on all the articles follows.
In “Understanding consumer preference through fuzzy-based recommendation system”, Madhu Mandal, B.K. Mohanty, and Satyabhusan Dash preface their study with the observation that with the increasing complexity of the market, it has become a challenging task for consumers to find the right product. The rising dependence of the consumer on the Internet has made an online recommendation system all the more relevant. However, in real-life scenarios, the consumer perception is fuzzy and available in day-to-day linguistic terminology. But most recommendation systems take the information in precise and exact values and do not deal with everyday linguistic terms. In their paper, the authors introduce a methodology that converts the qualitatively expressed views of consumers into quantitative terms by using the 2-tuple fuzzy linguistic model. Additionally, they apply the fuzzy market research system (FUZMAR) approach to calculate the power of one attribute in predicting another. Their recommendation technique accounts for buyers’ trade-offs by taking user generated content (UGC) from social media or online product reviews and using natural language processing (NLP) methods to convert them into probabilistic comparisons. The predictive powers of the attributes are used to derive the weights associated with the attributes using analytical hierarchy process, which in turn gives consumers’ sequential preference of products. The proposed recommendation technique is illustrated with an empirical study capturing buyers’ trade-offs amongst the attributes of a multi-attributed product such as the smartphone. Online recommendation sites can leverage from this technique to design web portals according to the consumers’ choice behaviour and facilitate better online search experiences for consumers.
In “Exploring the relationship between emotionality and product star ratings in online reviews”, Rahul Ramachandran, Subin Sudhir, and Anandakuttan B. Unnithan draw our attention to online product reviews or UGCs that serve as non-commercial sources of information, in an e-commerce setting, reducing the customer’s uncertainty about the product. However, as they observe, inconsistency between the two elements of the review’s content – namely, the text valence and the product star rating – could reduce the trustworthiness of the review and the customer’s subsequent intention to purchase the product. The authors propose that there exists an asymmetrical relationship between the negative and positive valences in the review text and the product star rating assigned to the review. Using the lens of negativity bias theory, they explain how negatively valenced statements in the review text are more influential than positively valenced statements in determining the review’s corresponding product star rating. The data used in this study were obtained from the e-commerce website, Amazon.in. and the analysis was performed using generalised logistic regression methods.
The most important insight that emerges from this study is that the negative and positive sentiments in the review text exert a differential effect on the star rating of the product. When the reviewer is assigning a product star rating, which serves as a measure of the reviewer’s overall consumption experience, negative experiences are recollected more readily and given more weight than positive experiences. Consequently, the product ratings would be more influenced by the negative valence statements in the review text than the positive valence statements. The findings also bear testimony to the inappropriateness of using a composite (average) score to represent the sentiments of the review. The arguments raised in this paper call for the use of sentiment analysis-based methods in quantifying the valence of the review for further analysis instead of the popular heuristic of using product star ratings. The study provides important insights to managers in designing and managing the online review systems of companies. In the long run, sentiment analysis of low-rated reviews would reveal major customer pain points. These can be addressed by making suitable modifications to the design or manufacturing process of the products.
In “Examining ePWOM-purchase intention link in Facebook brand fan pages: Trust beliefs, value co-creation and brand image as mediators”, Kunja Sambashiva Rao, Bramhani Rao, and G.V.R.K. Acharyulu observe that the simultaneous emergence of electronic word-of-mouth (eWOM), and multiple media alternatives, including social networking sites (SNSs), serving as platforms for eWOM transmission, has garnered the attention of researchers. One of the most effective sources of eWOM on social media are virtual brand communities that include communities created by companies. Consumers perceive such social electronic positive word-of-mouth (ePWOM) information as highly effective and reliable and therefore, it has a significant influence on their purchase intentions and actual purchase decisions. The authors test a comprehensive ePWOM-purchase intention framework by integrating specific components of the theory of reasoned action, the value co-creation theory, and the attribution theory. They examine customer’s purchase intentions as an outcome of ePWOM under the mediating effects of customer’s trust beliefs, value co-creation, and customer’s perceived brand image. Their study is conducted in the context of fan pages of smartphone brands on Facebook in India.
Congruent to the existing literature, a positive association between ePWOM and purchase intentions of consumers in the context of SNSs emerged. Trust beliefs, value co-creation, hedonic brand image, and functional brand image were found to partially mediate the relationship between ePWOM and purchase intentions. Results supported the serial mediation model where ePWOM influenced purchase intentions through trust beliefs and value co-creation in a sequential manner. The study provides insights to marketers on the potential of various customer-related factors in leveraging the social media platforms, and to firms in ensuring positive trust beliefs among consumers by providing relevant product-related information, and addressing product-related concerns.
In “Privacy breach perceptions and litigation intentions: Evidence from e-commerce customers”, Rejikumar G, V. Gopikumar, K. G. Sofi Dinesh, Aswathy Asokan Ajitha, and Ajay Jose observe that while firms commonly collect personal information to understand individual preferences and to provide better customer experience through personalisation, customers are becoming increasingly concerned about the confidentiality of their personal information. Further, the absence of comprehensive government regulations related to customer data collection and data usage has made customers sceptical about how businesses use their data. The authors develop a framework that explains the litigation intentions of online customers in the event of privacy threats. The framework includes antecedents such as customers’ privacy dispositions, consumer awareness about the data management practices of firms, perceived effectiveness of firms’ privacy policies, perceived vulnerability to data breaches while safe surfing, and social risks associated with privacy breaches, as also customer-centric traits such as privacy control beliefs, efficacy in coping with issues related to a privacy breach, and litigation complexity. Using a cross-sectional survey design, responses from e-commerce customers about items measuring constructs were collected. A structural equation modelling analysis of the tool revealed that privacy breach perceptions significantly predict litigation intentions.
Results showed that customers' dispositions toward privacy, the vulnerability of privacy breaches, and the fear of social reputation damage were significant predictors of privacy breach perceptions. Furthermore, the privacy control beliefs and coping skills positively moderated the power of antecedents to predict litigation intentions, while the task complexity associated with litigation negatively moderated the effect. It emerged that firms may face many litigations on privacy issues when reliable legal procedures and remedies are in place. The way to address such challenges would be to develop trust perceptions among customers with regard to the customer data management practices followed by firms. Transparency related to the handling and use of customer data is becoming a core competency that provides a competitive advantage to firms.
In “Multinational corporation finance and accounting: An empirical transaction cost economics analysis”, Jeannie Hoh and Kin Boon Tang leverage transaction costs economics to analyse the economic drivers that propel multinational corporations (MNCs) to offshore source their finance and accounting (FA) activities. Their study was based on a survey of Malaysia-based international companies with FA offshore establishments.
The findings reveal that talent and technology significantly influence insourcing and implied that the MNCs made a trade-off between the costs of setting up their own foreign establishments and the value derived from resources they could own and manage. The decision to increase the offshore insourcing of the FA activities is highly related to the investment in technological innovations of the FA systems and resources. Further, the operating implications and success of the FA support involve the preservation of their invested resources and knowledge in performing the work; the MNCs are cautious about losing the tacit knowledge as it was considered an asset for a breakthrough into greater FA innovations and improvements. Thus, MNCs’ aspirations in offshoring FA activities deviate from solely seeking costs effectiveness or in acquiring FA professionals; these high specificity companies are seeking the availability of resources in terms of technology advancement and talent that could be trained with the specific knowledge of the companies. Managers need to be aware that creating value for the FA organisation will be a combination of proactive investment and development; securing of inimitable and knowledgeable FA skills would be pivotal to orchestrate the firms’ strategy and to broaden the globalisation of their FA activities.
Navneet Kaur and Lakhwinder Singh Kang preface their study in “Person-organisation fit, person-job fit and organisational citizenship behaviour: An examination of the mediating role of job satisfaction” with the observation that the fundamental presumption of fit theory is that individuals experience more positive attitudes when they work in an organisational environment which is congruent with their personal characteristics. In the long run, employees’ fit with different facets of their work environment affects multiple attitudinal and behavioural outcomes, such as job satisfaction, organisational commitment, organisational citizenship behaviours, and turnover intentions. The authors investigate the simultaneous impact of person-organisation (P-O) and person-job (P-J) fit on citizenship behaviour directed at co-workers (OCBI), at customers (OCBC) and at the organisation (OCBO). They investigate the role of job satisfaction as psychological mechanism underlying the relationship between perceived P-O and P-J fit and various dimensions of OCB. Multi-stage random sampling was used to collect data from 419 employees working in private sector banks located in three major cities of the state of Punjab, India. Structural equation modelling (SEM) was used to test the hypothesised relationships.
The findings reveal that both P-O and P-J fit are significant predictors of frontline employees’ job satisfaction in the Indian banking sector. Further, contrary to existing literature, the relative impact of P-O fit on job satisfaction is significantly greater than the impact of P-J fit on job satisfaction. P-O fit is found to be significantly related to frontline employee’s display of OCBI, OCBC and OCBO. While no significant impact of P-J fit on OCBI and OCBC has been observed except for OCBO. The results also reveal that P-O fit was more intensely related to OCB dimensions as compared to P-J fit. The findings of the present study highlight that both P-O and P-J fit either directly or indirectly can impact the organisational effectiveness through the display of citizenship behaviours. Therefore, organisations in addition to hiring individuals based on their value congruence, should also keep in mind the skills, knowledge and personal traits of the individual performing those specific jobs in order to create a milieu for relational/social exchange with employees.
In ”Factors affecting changes in insured status of rural and urban households: A study over two time periods in India”, Manohar Giri and Devlina Chatterjee use a short panel dataset from the Indian Household Development Survey (IHDS) which includes 1503 villages and 971 urban neighbourhoods across the country. The first round of survey was conducted in 2004–2005, and in the second round of the survey, most of the households were re-interviewed in 2011–2012. They examine the effect of changes in the socio-economic and demographic aspects of the surveyed households on life insurance ownership decisions taken between 2004 and 2005 and 2011 and 2012. The availability of data for individual households from the two periods allowed them to model changes in life insurance demand within the same household over time. They build logistic regression models to estimate the probability of uninsured households acquiring life insurance or insured households dropping insurance cover.
Results show that socio-economic factors such as an improvement in financial conditions, financial inclusion, and availing loans, as well as demographic factors such as higher age, increase in education levels of the family head, and increase in family size are positively correlated with the probability of acquiring life insurance. Conversely, a worsening of financial conditions and the closing out of a relationship with a bank are positively correlated with dropping of life insurance cover. This indicates that only households that can afford to pay life insurance premiums, households where the head has higher levels of education, households which have a male head, and households that have initiated a relationship with financial institutions or those that have availed loans tend to take up insurance coverage. The main difference between rural and urban households was that financial inclusion affected the former but not the latter. Results also indicate that poor households that would benefit the most from insurance do not, in fact, have such coverage. Financial inclusion and education may improve insurance penetration among such households. The results of this study could provide further support for policies aimed at financial inclusion among all sections of society.
On behalf of the IMR team, I wish all readers a very happy and prosperous new year 2022!
Jishnu Hazra
Editor-in-Chief
IIMB Management Review
E-mail address: eic@iimb.ac.in
