1 Introduction
2 Literature review and theoretical framework
2.1 Design characteristics of feedback mechanisms on digital platforms
2.2 Management control systems
Property | Explanation |
---|---|
Precision | The management control system does not include uncontrollable factors for the subordinate that cause distortion (Burkert et al. 2011). |
Sensitivity | |
Verifiability | The subordinate understands the management control system and knows how it is calculated (Merchant 2006). |
Multiple performance measures | |
Participation in target setting | |
Feedback quality |
2.3 Theoretical framework—taking a management control perspective for analyzing properties of feedback mechanisms on digital platforms
Property | Explanation in the context of the feedback mechanism | Difference from management control systems |
---|---|---|
Precision | Platform users can actually influence what the feedback mechanism measures, such that the mechanism does not include any uncontrollable factors. | • The measurement can be multi-directional (e.g., can include multiple market sides). • The measurement not only includes quantitative measures but can be ambiguous due to unstructured texts. |
Sensitivity | The feedback mechanism covers changes caused by the evaluated user’s effort: If the evaluated user performs well, it is directly reflected in better feedback. | • Similar to management control systems, the feedback mechanism reflects the level of effort. • The performance improvements involve several sides of the market and not just one subordinate. • The increase in performance is reflected not only in quantitative figures (e.g., higher star ratings) but also in more positive texts. |
Verifiability | The feedback mechanism is verifiable; i.e., the users understand how the feedback mechanism is calculated and see all individual evaluations. | • In contrast to management control systems, the property focuses not only on understanding the rating guidelines for determining the overall rating but also on displaying each feedback. • The feedback given is a subjective opinion of a single user, but this can be attenuated in the case of a large number of feedback instances. |
Multiple performance measures | The measurement consists of both multiple quantitative categories and qualitative feedback. | • The multiple measures do not refer to financial and non-financial measures. • In contrast to management control systems, the feedback mechanism can include textual feedback. |
Feedback evaluation | The feedback system allows users to give clear, timely and accurate feedback on previous feedback. | • The feedback quality does not refer to the individual user that provided feedback but instead to the evaluations of the feedback given. • Both the evaluator and the consumer of feedback for future transactional decisions can evaluate previous measurements. |
3 Method
3.1 Descriptive analysis
3.2 Qualitative analysis
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application of a feedback mechanism,
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characteristics of feedback mechanism,
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feedback mechanism properties.
Platform | Interviewee’s position | Platform type | Time since foundation (years) | Employees | Revenue (Mio. €) | Feedback |
---|---|---|---|---|---|---|
1 | CFO | Travel | ≤ 15 | ≤ 1500 | > 40 | Yes |
2 | Managing director | Marketplace | ≤ 5 | ≤ 10 | – | Yes |
3 | CFO | Marketplace | ≤ 20 | ≤ 1500 | > 40 | No |
4 | Managing director | Marketplace | ≤ 5 | ≤ 10 | ≤ 0.7 | Yes |
5 | Head of legal Services | Marketplace | ≤ 20 | ≤ 250 | ≤ 40 | Yes |
6 | COO | Marketplace | ≤ 5 | ≤ 50 | ≤ 0.7 | No |
7 | CFO | Marketplace | ≤ 5 | ≤ 10 | ≤ 0.7 | No |
8 | Product manager | Rating | ≤ 25 | ≤ 1500 | > 40 | Yes |
9 | Sales executive | Rating | ≤ 15 | ≤ 1500 | > 40 | Yes |
10 | Senior manager Supply chain consulting | Marketplace | ≤ 20 | ≤ 1500 | > 40 | No |
11 | Head of product management | Rating | ≤ 15 | ≤ 251 | ≤ 40 | Yes |
12 | CFO | Travel | ≤ 15 | ≤ 1500 | > 40 | Yes |
13 | Head of quality management | Rating | ≤ 15 | ≤ 10 | – | Yes |
14 | Director customer care | Travel | ≤ 15 | ≤ 250 | > 40 | No |
4 Results
4.1 Results of the descriptive analysis
4.2 Results of the interviews
Application of a feedback mechanism | • Behavior control • The development stage of the platform • Implementation and monitoring costs • Other control mechanisms • Platform type and variety of its supply |
Design characteristics of feedback mechanisms | • Other platforms • Detailed information vs simplicity • Psychological factors |
Feedback mechanism properties | • Customer experience vs accessibility • Detailed information vs simplicity • Invested time and capital of users • Supply and diversity |
4.2.1 Application of a feedback mechanism
4.2.2 Design characteristics of feedback mechanisms
4.2.3 Application of feedback mechanism properties
5 Discussion
Current literature | Results | Recommendation | |
---|---|---|---|
Application of feedback mechanism | • Importance of feedback mechanism for a platform’s control (Kornberger et al. 2017) • Positive impact on trust (e.g., Bolton et al. 2013) | • Rare use of feedback mechanisms • Reasons for application of feedback mechanisms | • Check whether there are sufficient users on the platform. • Check whether users use the feedback mechanism for their transaction decision. • Analyze the impact on conversion rates. |
Design characteristics of feedback mechanisms | • Dysfunctional effects result from the incorrect design of multi-sided feedback (Bolton et al. 2013) • Frequent use of star symbols (Sparling and Sen 2011) | • Rare use of multi-sided feedback • Frequent use of star symbols • Frequent use of a five-point scale • Reasons for using different design characteristics | • Use one-sided feedback if the asymmetries are only distributed to one market side; multi-sided feedback should be in line with the recommendations of Bolton et al. (2013) (e.g., double-blind). • Decide on symbols based on conversion rates. • Start with a five-point scale. In case of extreme ratings, reduce levels of scale. |
Feedback mechanism properties | • Uncontrollable factors must be measured to bring them into focus (Burkert et al. 2011) • Various measures can prevent dysfunctional effects of subjective measurements (Ittner et al. 2003; Prendergast and Topel 1993) • Importance of feedback quality within management control systems (Klein et al. 2019) | • Low compliance with precision • Low compliance with multiple measures • Half of the platforms fulfilled feedback evaluation • Reasons for using feedback mechanism properties | • Use influenceable factors within the mechanism but be aware of the trade-off with customer experience. • Use multiple measures but be aware of simplicity in providing and consuming feedback. • Only introduce the feedback evaluation if this evaluation does not reduce the amount of feedback given. |