Page 289 - DMGT522_SERVICES MANAGEMENT

Services Management

Notes technology can backfire by frustrating customers and fostering distrust.

Therefore, appropriate technologies and systems should be introduced not only to gain or
retain customers by effective delivery mechanism but also to gain productivity.
Biema and Greenwald expressed similar views. They identified that the primary reason why the
productivity growth rate has stagnated in the service sector is poor management. They also
suggested that by putting the existing technologies, labor force and capital stock to work,
managers can raise productivity growth rates considerably.
Figure 14.3: Pyramid Model

Source: A. Parsuraman, Augmented Marketing, Business Today, Jan. 7-21, 1997

Self Assessment

Fill in the blanks:
1. The staff in contact with the ................... provides a visible element of the service.
2. Productivity is usually described as the ratio of output of a ................... process to an
aggregate value of inputs.
3. Managing productivity is yet another strategic issue in ................... organisations.
4. As early as ..............., Rathmell emphasized the need of productivity in service organisations.
5. The factors of output are perfectly defined so that they can be ..................... and second; the
utility of output is not questioned.

Reducing Service Levels

Productivity can be improved by reducing quality of service (e.g. a doctor can give less time to
a patient and the preliminary investigations or patient’s history can be documented by a junior
doctor). But here one has to strike a balance between quantity and quality of service delivered.

Did u know? As a strategic tool, one can differentiate their services by broadening the
quantity and thereby quality.

Substituting Products for Services or Adding New Services

One can increase productivity by increasing number of services. For example, Department of
Post introduced courier service and followed it by introducing the non-document courier service
thus adding to their services. A hotel can add parties and marriages to their banquet services to
introduce productivity.

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