THE INFLUENCE OF B2B SERVICE BUYER NETWORK STRUCTURE ON SUPPLY DISRUPTIONS: AN EMPIRICAL INVESTIGATION IN BRAZILIAN TELECOMMUNICATIONS SERVICES
Abstract
This dissertation introduces, operationally defines, and empirically tests the influence of service buyer network structure complexity factors on supply disruptions. A large body of supply chain literature related to disruptions focuses on complexity factors in network structure of upstream suppliers to manufacturers; however, little is known about downstream network complexity, and even less is known about complexities associated with service buyer network and service configurations. We conceptualize business-to-business (B2B) service buyer network structure in terms of both its own operating network structure configuration (e.g. distance among organizational subunits) and the service offering configurations (e.g. number of services purchased).
From theory, we posit that the B2B service buyer network structure varies in complexity, and in turn, the buyer can influence the service performance purchased by a service provider. The theoretical underpinnings of this premise are derived from service operations strategy literature, where customers play a role in the production and introduce task complexity and variation to service delivery systems. We extend this customer contact theory to B2B buyers' internal enterprise networks. Our theory is particularly applicable to downstream B2B buyers of service providers, with service offerings that are information and knowledge intensive and/or continuous in nature (e.g. telecommunications, energy, Internet, etc.). Another boundary condition for our theory's practicality is that customers play a role in the service delivery process.
This dissertation has three main objectives. First, it seeks to theoretically explain how physical network and service offering complexity factors, which are introduced by B2B service buyers, can influence service disruptions. Based on multidisciplinary literature such as complexity, service management, information systems, and network theory, propositions about network and service characteristics of B2B buyers are developed and transformed into hypotheses that are tested empirically. Second, we introduce sets of formative indicators of complexity based on both the characteristics of the buyers' physical network structure and the service offerings. Finally, this dissertation empirically tests the theory that two types of B2B service buyer network structure complexity factors - physical structure and service offerings configurations - have a distinguishable influence on service disruptions. More specifically, the empirical model evaluates the effects of these two types of network complexity factors on the likelihood and mean time of service disruptions.
To reach our objectives in this dissertation research, we employ secondary data from a large telecommunication company located in Brazil. The unit of analysis is a sample of B2B 'buyers' (e.g. business customers) from this 'service provider' (e.g. service company). One hundred ninety-four (194) B2B buyers were deemed applicable to be investigated in this study. The service provider granted access to all of its available customer data related to the buyers' operational locations (e.g. buyers' physical locations), service offerings, and supply disruptions spanning a 14-month period from March 2008 to April 2009. Because of the secondary nature of the data, an exploratory data analysis was performed to obtain a better understanding of the distributional characteristics of the variables used in the study. Results show that many variables did not have a well-behaved, normal distribution, so transformations were made that improved their distributional forms for statistical analysis.
Briefly, results of multiple logistics and ordinary least regression show that one salient complexity factor existent in the physical network and three in the service offering structures of B2B buyers were important in explaining the variability in the performance of service disruptions. Thus, the main contribution of this dissertation is to extend service management theory by shedding light onto B2B buyers and providing insights on how their physical network and service offering configurations may be important factors affecting service performance. While not directly measured in this study, from theory the study suggests that downstream network structures, B2B network structure complexity, and the resultant customer introduced variability, can induce supply disruptions. While these are typically beyond the control of (or at least not well-understood by) the service provider, they not only influence their customers' performance but their own as well. For practitioners, our new B2B buyer network theory suggests that service providers might intervene more proactively in mitigating the variation introduced by the complexity of their customers' internal enterprise network and service offering configurations.