By Jaymee Ng, Principal Writer, China Business Knowledge@CUHK

The global hospitality and tourism industry has seen an increased prevalence in the use of robots, from the front desk and concierge services, to robotic waiters and room service. While most people would associate robots with a stereotypical image of a human-like android, in reality they can take many different forms. It is with this in mind that a recent research study by The Chinese University of Hong Kong (CUHK) sought to examine how the appearance of robots may affect customer intentions in using them.

The study found that, at least within the hospitality context, customers are more willing to use friendly-looking service robots when they are looking for suggestions such as dining locations. On the other hand, customers prefer to use professional and competent-looking service robots when seeking instructions related to tax refunds or travel insurance.

“It’s hugely important for companies to use the right robot with the right looks in the right circumstances.”

Prof. Lisa Wan

“They say you never get a second chance to make a good first impression. When using robotics in a service encounter, what we find is that not only do appearances matter in making that crucial good first impression, but that context is key,” says study author Lisa Wan, Associate Professor at the School of Hotel and Tourism Management and Department of Marketing at CUHK Business School. “It’s hugely important for companies to use the right robot with the right looks in the right circumstances.”

The study Friendly or Competent? The Effects of Perception of Robot Appearance and Service Context on Usage Intention was co-written by PhD students Liu Xing and Yi Xiao at the School of Hotel and Tourism Management at CUHK Business School. The researchers conducted four experiments with hundreds of online participants to find out how the physical appearance of robots that are used within the service context can affect their effectiveness in different scenarios.

Different Types of Service Encounters

Although people normally associate the service industry with leisure and pleasure-seeking activities, such as vacations and fine dining, some parts of it can be downright mundane. In the study, Prof. Wan and her co-authors divided the different service contexts into whether they were leisure-dominant or utility-dominant. For example, getting dining and shopping suggestions would be classified as the former while getting information on tax refunds and foreign currency exchange would be classified as the latter.

The study suggests that the appearance of service robots should match the service context. For example, when a customer is looking for restaurant suggestions from a service robot (a leisure-dominant encounter), they may prefer to interact with a robot whose appearance is designed to elicit a feeling of warmth, such as by making them more childlike. However, in more utility-dominant encounters, such as when a tourist is requesting tax refund information, they may prefer a robot which is designed to look competent and professional, which can be done by making them look adult-like.

The researchers reached the above finding after measuring people’s preferences for child-like and adult-like robots in different service contexts on a scale of seven. They found that study participants preferred robots that look more childlike in leisure-dominant service encounters, scoring them 5.8 out of seven for that specific scenario. In contrast, the preference for robots with a more adult appearance in this context came in lower at 4.79. In the utility-dominant context, participants showed more inclination towards robots that look more adult-like, with an average score of 5.55 out of seven. The preference for child-like robots in this context was lower at 4.81.

“When a customer is staying at a nice hotel and wants to have a fun night out, they would want to interact with a robot with a fun and friendly appearance because that’s what they are looking for – fun! But when someone is in dire need to exchange foreign currency, they don’t have the time to play around, so naturally they would prefer robots with a more competent, adult-like look,” says Prof. Wan. “This just underscores the importance of matching robot appearance to the service encounter scenario.”

Appearance and Trust

In the 2000 film State and Maine, the character Doc Wilson, played by the late actor Michael Higgins, introduced the world to the statement: “Never trust a man in a bow tie”. That single line was meant to be a throwaway joke, but the researchers note that appearance can play an important role in gaining trust.

The same goes for robots. Prof. Wan and her co-authors examined whether the appearance of the two types of service robots affected their credibility. In one experiment, study participants were told to score a robot’s trustworthiness in a scale of seven in either a leisure or utility-dominant context. When the service encounter was leisure-dominant, they rated friendly-looking robots to be more trustworthy with an average score of 4.68 out of seven, compared to professional-looking robots which only received an average score of 3.85. In the scenario related to the provision of utilitarian services, professional-looking robots were rated 4.64 out of seven in terms of trustworthiness, whereas friendly-looking robots received an average score of only 3.88.

The researchers theorised that the appearance of a competent, adult-like robot connotes a sense of reliability, which is crucial to customers who are seeking professional advice in mundane but nevertheless important service situations. On the other hand, the appearance of a friendly, child-like robot connotes a sense of sincerity, which may resonate more with customers who are looking for dining or shopping tips. In other words, the appearance of an adult-like robot evokes a perception of reliability among customers, and this perception makes the customers trust these robots more when the service context is utilitarian in nature. Similarly, a child-like robot’s look induces a perception of friendliness among customers, and this perception makes the customers trust it more when seeking information on pleasure activities.

“Trust is a key component of customer satisfaction with service encounters. The more trust that customers have in the robots, the more likely that they would use them,” says Prof. Wan. “Our study shows that the appearance of robots can play a significant role in whether robots are able to gain customer trust.”

The Right Robots in the Right Places

The researchers note that the study’s findings provide rich implications for the future development of robotics, especially as it relates to their use in the tourism and hospitality sector. For instance, robotics companies may consider designing robots with physical features that induce trustworthiness among customers depending on the service scenario. For example, child-like physical features may be adopted when the goal is for customers to use these robots in a pleasure-seeking context.

For companies that are considering purchasing robots, they may consider selecting the robots that best match with their operational context. For example, friendly-looking robots would be best suited in a leisure-oriented context such as tour guiding, assisting and welcoming. Professional looking robots should be placed in utility-oriented contexts like giving guidance on tax refunds, currency exchange or travel insurance.

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How ‘Human’ Should Robots Be?

In addition, Prof. Wan says the findings may be applicable to other industry sectors outside of the hospitality contexts mentioned in the paper. For example, it might be a good idea to use child-like robots to serve in a companion role, such as to accompany patients in hospitals or to reduce the loneliness of astronauts in space stations. Some companies have already caught on to this idea – for example, Belgian company ZoraBots’ Boo Boo robots have been used in Belgian hospitals to play games with patients. On the other hand, Kirobo – Japan’s first robot astronaut completed its first mission on the International Space Station in 2015.

“Robots are increasingly being adopted for use in the service industry, and one of the reasons for that is that they can be quite versatile and serve in a wide range of roles. We hope that through this study, we can help companies, especially hospitality and tourism sector operators, to select the right robot for the right role,” says Prof. Wan.

The post Does the Appearance of Robots Matter to Customers? first appeared on China Business Knowledge.

By Jaymee Ng, Principal Writer, China Business Knowledge@CUHK

It is widely acknowledged that diversity is good for business. Companies are all trying to make their workplaces as diverse and inclusive as possible. In the 2016 Diversity and Inclusion (D&I) index launched by Thomson Reuters ranking the top 100 most diverse and inclusive listed companies, tech giant Microsoft and multinational conglomerate Procter & Gamble were among the top performers.

However, does diverse work team really outperform homogeneous teams? Do diverse teams make better business decisions? The answer seems to be yes, according to a study by the Boston Consulting Group (BCG) which reveals companies with more diverse management teams produce an increase of revenue by 19 percent.

However, there are always two sides to every coin. Having a diverse team may spark more creativity. But, at the same time, being exposed to people with different cultural upbringing and values can increase discomfort at work. Various conflicts and the feeling that you can’t seem to get on with fellow team members are not uncommon for those working in diverse teams. And it is natural for people to bond with those who share a few similarities. Such behaviour create the so-called group faultlines.

Similar to the faultline in geological context, group faultlines are used to describe the hypothetical dividing line that separates different subgroups within a group. These subgroups can be formed based on surface attributes such as race, gender and age. Deeper individual characteristic, such as personality and personal beliefs, can also lead to the formation of group faultlines. Past research studies have shown that the effects of surface diversity tend to be short term while diversity caused by deep personal characteristics are likely to last longer.

Faultines Exist in Teams

Specializing in demographic diversity and faultline management, Prof. Dora Lau, Associate Professor of the Department of Management at The Chinese University of Hong Kong (CUHK) Business School, says that group faultlines may go undetected for many years.

“The issues across the members of a group may go unnoticed even for many, many years; team members may never become fully aware of their existence,” Prof. Lau explains. “Hence, the triggering or activation of faultlines within a group can shake team members’ understandings of each other and can create subgroup conflicts, detrimental group processes, and reduced performances.” Just like when the Earth’s crust gets disturbed, an “earthquake” may happen to the group when the faultline is activated.

Her research study entitled “Faultines”, in collaboraton with the late Prof. Keith Murnighan from Kellogg Graduate School of Management at Northwestern University, reveals the fact that faultlines can remain dormant also explains the mixed and inconsistent effects of diverse workplaces.

Some group faultlines are also stronger than others. She says: “For instance, a group of two young female Hispanic secretaries in their 20s and two older male African American accountants in their 50s would have a strong faultline due to the homogeneity underlying the two subgroups. In contrast, a more random mixing of their demographic characteristics of the group members would create a group with weaker faultlines, if one existed at all,” says Prof. Lau.

Triggers of Faultlines

Previous literature have identified several triggers for faultlines. One of them is faultline-related events or issues. For example, the discussion of retirement packages in a workplace with strong age faultline may make team members become more aware of their age differences. Language is another trigger for faultlines. Studies have found that people felt excluded when they heard conversations in a language they did not understand and such feelings can have consequences on their evaluations of their own self-worth and wiliness to contribute to the team. In addition, external context including group tasks, group meetings, socio-political context, organizational cultural alignments and the roles of group leaders can all activate faultlines.

Even in the same culture, such as Chinese, subgroups may also exist, depending on the city you’re born or currently living in. An interview study revealed that Shanghai residents are keenly aware of their residency and would like to include other Shanghainese as in-group members while Beijing residents are less concerned.

“When members strive to obtain more resources and protect their subgroups, between-subgroup conflict, behavioural disintegration, lack of trust and willingness to share information, and communication challenges are likely to happen,” said Prof. Lau. “As a result, group performance is often negatively affected, and sometimes groups may even be dissolved.”

Faultlines in Top Management

In fact, not only individual employees can be affected by faultlines. Past research have shown that top management teams and even board of directors can be influenced by faultlines.

“For example, top management teams with strong faultlines did not favour novel foreign explosion while board of directors were less reluctant to discuss critical entrepreneurial issues,” she says, adding the reason being that strong faultlines often increase the difficulty of getting commitment from teams’ members in making risky decisions.

“For the non-family team members, their demographic similarity provides social support for them to voice their expertise opinions. Large faultline size also gives rise to more elaborated and innovative strategic decision making, which is essential for a family business to achieve better performance.”

Prof. Dora Lau

Faultlines in Family Business

However, there is one scenario in which faultlines can be useful in management – family business.

In another study, she looked at family faultlines, referring to the natural division of family versus non-family members. Past literature have already established that the primary purposes of family business owners to hire non-family members as professional managers are to gather external information, knowledge and non-redundant skills to support business growth.

In the study, after measuring firm performance by the Return on Assets (ROA) of all the family-owned firms listed on the Shanghai and Shenzhen Stock Exchanges from 2004 to 2010, the team found that large family faultline size was actually beneficial to a firm’s performance, given that there is low unfavourable treatments to non-family members than family members and limited alternative sources of expertise.

“Large faultline size in family business the top management team are characterized by similar demographic characteristics within subgroup while large differences between subgroups. For the non-family team members, their demographic similarity provides social support for them to voice their expertise opinions,” Prof. Lau says. “Large faultline size also gives rise to more elaborated and innovative strategic decision making, which is essential for a family business to achieve better performance.”

Faultlines and Performance: Size Matters

However, are group faultlines always bad for group performances?

Expanding on past research studies, Prof. Lau concluded that the bonding between members due to similarities can increase communication, trust and support in a group’s development processes and consequently enhance group performance. On the other hand, faultlines based on education and functional backgrounds can facilitate an exchange of knowledge which can achieve the overall group goal. However, things can get ugly when some of the subgroups grow in size.

“Subgroup size is often a matter of power. Larger subgroups imply more support from relatively homogeneous members, who therefore are more likely to be ready to voice their opinions. In contrast, members of smaller subgroups are more likely to worry that their voice will receive little support and be opposed or even ignored by the members of larger subgroups,” Prof. Lau explains.

“In sum, at a minimum, different subgroup sizes in faultline groups can activate power plays, members’ perceptions of threats, and variations in their expectations of self and others,” she says.

How to Manage Faultlines

How do we avert group faultlines? Most importantly, how can we dampen their effects on group performance once they have been formed?

According to Prof. Lau, there are some management tactics which can help.

“Companies can introduce cross-cutting membership, encourage friendship ties between subgroups, and emphasize overall group identity and objectives. However, when all tactics fail to work, they may have no choice but to change member composition,” she says.

It is also worth to note that difficult cultures may react differently to group faultlines. For example, the basis of group faultlines in North America are likely to be about individualistic culture and differences; whereas for collective cultures such as Asia, their subgroups could be formed based on their personal identification with leaders or political interests.

“These contextual differences are important avenues for understanding the boundary conditions of group faultline effects,” says Prof. Lau.

The post When Diversity Becomes a Problem first appeared on China Business Knowledge.