Management of services


Effective management of service firms depends on the understanding of nature of services. If the nature of the service is comprehensively understood, it will lead to efficient operation of a service firm. By nature, any service has four basic characteristics. They are perish ability, intangibility, inseparability and variability (as mentioned earlier)

These characteristics make the management of services firms different from management of manufacturing firms. Because of this, the service firm has to design a well defined management strategy. The following elements should be considered while evolving the strategy:

1. A well defined target market.
2. A well defined service concept.
3. A focused operating strategy.
4. A well-designed service delivery system.

A well defined target market

Unlike a manufacturing firm, a service firm cannot provide all things to all people. A service firm has to identify groups of customers for a particular service, in which members within each group should have identical qualities. The needs of these customers have to be determined and a service concept has to be developed which provides a competitive advantage.

A well defined service concept

The service concept has to be put in a written form. It should contain how the firm wants its service to be perceived by customers, employees, shareholders, lenders and the society. Which would help not only in identifying the target segment of customers, but also, helps the service provider in serving them effectively?

A focused operating strategy

The operating strategy should describe the way of achieving the service concept. It should contain the decisions about operation, financing, marketing, human resources and control. An accurate operating strategy would help the service firm serve its customers effectively.

A well designed service delivery system

The service delivery system should be designed in such a way that it delivers successfully its operations. The decisions about the various jobs, equipments, facilities, lay outs etc., carefully developed should be to attain objectives. A well devised service delivery system would help the service firm to deliver the service effectively to its customers.

Threats to Service Sector Management

The service sector is gaining prominence as is has created a lot of avenues for employment. But, if suffers from the following drawbacks:

1. The invention of computers, robots etc., may lead to a lot of unemployment.
2. The welfare state concept has dominated the political philosophy in the post industrial period. The new right philosophers in their advocating for the freedom of individuals and their capital have started hitting at the very foundations of the non-communist democracies.

How to improve service mindedness in employees?

The organizations can maintain service mindedness in the personnel by using three Distinct Strategies.

1. Through power and coerciveness.
2. By offering incentives to employees in order to serve better.
3. To inculcate a voluntary spirit of service in the personnel.

Service sector continues to achieve the mantle of importance. In the years to come it has to overcome the challenges it faces, through professional management approach. Effectiveness of service is more important than who manages them.

Managing Service Quality

One of the major ways to differentiate itself from its competitors is by delivering consistently a higher service. Many companies find that outstanding service quality can give them a potent competitive advantage leading to superior sales and profit performance. Though, greater service quality results in greater consumer satisfaction, it also requires higher costs.
Service firms cannot always meet customers’ service quality desires. It is a tradeoff between customer satisfaction and company profitability.

  • S.Fuls

    Management of services

  • Annapurna


    this is a very useful site for hr professionals.