Management Service Management
by
Robert C. Ford
  • LAST REVIEWED: 13 July 2020
  • LAST MODIFIED: 28 January 2013
  • DOI: 10.1093/obo/9780199846740-0033

Introduction

Service management is the study of the principles and processes unique to organizations that coproduce experiences with customers. These experiences typically persist only as memories. Services are commonly considered to have four principal characteristics: they are intangible; they are variably experienced by each customer, so that customers’ service experiences are heterogeneous; the services are produced and consumed simultaneously; and they are perishable. Service management is multidisciplinary and becoming more so with the emergence of the field of service science. The field represents a convergence and extension of work in marketing, hospitality, and production management.

Textbooks

These texts take different approaches to covering the field of knowledge that represents service management. Ford, et al. 2012 comes at it from a hospitality perspective and frames the book as an exploration of “guestology” or the study of guest behavior. Fitzsimmons and Fitzsimmons 2011 attacks the field from an operations management perspective, as do Johnston and Clark 2008 and Davis and Heineke 2005. Grönroos 2007 is included as a midpoint book that is heavily influenced by the service marketing literature but still includes a perspective on the issues and concerns of management in service organizations.

  • Davis, Mark M., and Janelle Heineke. Operations Management: Integrating Manufacturing and Services. 5th ed. Burr Ridge, IL: McGraw-Hill Irwin, 2005.

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    This is an operations-focused text for courses that emphasize the tools and techniques of operations management as applied to service organizations.

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  • Fitzsimmons, James A., and Mona J. Fitzsimmons. Service Management: Operations, Strategy, Information Technology. 7th ed. New York: McGraw-Hill Irwin, 2011.

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    This is one of the more popular texts for courses that combine the unique challenges of operations management in service organizations with an overall view of service management.

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  • Ford, Robert C., Michael C. Sturman, and Cherrill P. Heaton. Managing Quality Service in Hospitality. Clifton Park, NY: Cengage, 2012.

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    This text defines the service management challenges and opportunities as they pertain to the hospitality industry. It is sometimes paired with a service marketing text.

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  • Grönroos, Christian. Service Management and Marketing: Customer Management in Service Competition. 3d ed. Hoboken, NJ: Wiley, 2007.

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    This is a popular text for courses that seek to combine the management-related topics from services marketing with those specifically focused on managing service organizations.

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  • Johnston, Robert, and Graham Clark. Service Operations Management. 3d ed. Upper Saddle River, NJ: Prentice Hall, 2008.

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    This is an alternative text for courses that combine the unique challenges of operations management in service organizations with an overall view of service management.

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Reference Works

Since service management is a relatively new field of inquiry, the body of knowledge is largely found in the journals specializing in the topic. There has, however, been one major series that was published annually by SAGE in seven volumes beginning in 1992; it offers a broad overview of the field through the contributions of major authors primarily specializing in services marketing. This had various titles and editors, but the first volume is Swartz, et al. 1992. This series was succeeded by Swartz and Iacobucci 2000. More recent scholarship focuses on service science, and an overview of this is in Maglio, et al. 2010.

  • Maglio, Paul P., A. Cheryl Kieliszewski, and James C. Spohrer, eds. The Handbook of Service Science. New York: Springer, 2010.

    DOI: 10.1007/978-1-4419-1628-0Save Citation »Export Citation » Share Citation »

    This is an edited compendium of chapters seeking to explain and provide examples of service science written by the leading scholars in this emerging discipline.

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  • Swartz, Teresa A., David E. Bowen, and Stephen W. Brown, eds. Advances in Services Marketing and Management: A Research Annual. Greenwich, CT: JAI, 1992.

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    Six subsequent volumes appeared annually until 1998. This valuable series provides a wealth of seminal work on services with an emphasis on service marketing. For anyone seeking to capture the evolution of this discipline, this series presents the work of key scholars.

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  • Swartz, Teresa A., and Dawn Iacobucci. Handbook of Services Marketing and Management. Thousand Oaks, CA: SAGE, 2000.

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    This is the last volume in the series that Swartz had previously edited with Bowen and Brown. It compiles thinking on the evolution of service management and marketing as of the publication date and is a rich source of scholarly thinking on the topic.

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Journals

Journals are the most commonly used references in service management. The most up-to-date trends are found in the leading journals detailed here. They range from service-specific journals, such as the Journal of Service Research, Journal of Service Management, Journal of Service Science Research, Service Science, Managing Service Quality, and Service Industries Journal, to more general journals that have included many articles on service management, such as the Journal of Business Research, Production and Operations Management Journal, and Manufacturing and Service Operations Journal. For example, journals focusing on health care, public administration, hospitality, not-for-profit management, and retail and sales management will often have relevant articles on managing service organizations. The list here is not complete, and those seeking information are encouraged to do a Google Scholar search of a specific topic to find relevant research in other journals. All of the journals listed here are available online, some by subscription, and many allow access to forthcoming articles before they appear in print.

History and Trends

The early works exploring what differences producing a service can make in both production management and marketing define the history of the domain of service management. In production management Chase 1978, Levitt 1972, and Sasser 1976 (cited under Waits, Waiting Lines, and Queues) are articles published in the Harvard Business Review that introduced the differences that producing services made to traditional manufacturing models. These articles began discussions by scholars who questioned whether the unique qualities of producing an intangible product made a difference in the practices of operations management. At about the same time scholars in marketing began to rethink the differences between selling tangible things and selling intangible experiences. Service marketing scholars generally trace their lineage to the discussions generated by George and Barksdale 1974. These articles encouraged a number of scholars to write articles (summarized in Fisk, et al. 1993 and Berry and Parasuraman 1993) that distinguished between marketing products and services. During this same period several industrial psychologists became interested in the unique aspects of service and their influence on organizational behavior. This group was led by the work in Schneider 1980. More recently several articles have sought to define the differences between managing organizations producing experiences and those producing things. Heskett, et al. 1994 introduced the idea of linkage research in its service profit chain model to call attention to the connection between how well employees are managed, customer satisfaction, and organizational success. Vargo and Lusch 2004 has stirred an active discussion on coproducing value with customers and offers a “service dominant logic” as the framework. Another trend captured by writers in service management has been led by Maglio and Spohrer 2008; the authors, at IBM, are seeking to create a new discipline that specifically addresses services. This is usually referred to as “service science,” a shortened version of service science manufacturing and engineering (SSME). The focus of this effort is to create an educational experience that prepares students for jobs in the service sector.

  • Berry, Leonard L., and A. Parasuraman. “Building a New Academic Field: The Case of Services Marketing.” Journal of Retailing 69.1 (1993): 13–60.

    DOI: 10.1016/S0022-4359(05)80003-XSave Citation »Export Citation » Share Citation »

    With Fisk, et al. 1993, this is one of the two classic articles from services marketing pioneers describing the history of the research work and ideas that established the field of service marketing.

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  • Chase, Richard. “Where Does the Customer Fit in a Service Organization?” Harvard Business Review 56.6 (1978): 137–142.

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    This is a classic article presenting the idea that service organizations have different production issues to resolve than do traditional manufacturing companies.

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  • Fisk, Raymond P., Stephen W. Brown, and Mary J. Bitner. “Tracking the Evolution of the Services Marketing Literature.” Journal of Retailing 69.1 (1993): 61–103.

    DOI: 10.1016/S0022-4359(05)80004-1Save Citation »Export Citation » Share Citation »

    With Berry and Parasuraman 1993, this is one of the two classic articles in marketing that seeks to trace the evolution of this emerging discipline written by leaders in its definition and research.

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  • George, William R., and Hiram C. Barksdale. “Marketing Activities in the Service Industries.” Journal of Marketing 38.4 (1974): 65–70.

    DOI: 10.2307/1250394Save Citation »Export Citation » Share Citation »

    This empirical study of the differences between manufacturing and service organizations opened the door to a wide range of subsequent studies of exactly what those differences are and how they influence the management of the marketing function. This study is regarded as a pathbreaking study that initiated a large stream of research on services.

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  • Heskett, James L., Thomas O. Jones, G. W. Loveman, W. E. Sasser Jr., and L. A. Schlesinger. “Putting the Service Profit Chain to Work.” Harvard Business Review 72.2 (1994): 164–174.

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    This is a classic presentation of the service profit chain that has informed the concept and research on linkages between employee satisfaction and customer satisfaction. The chain establishes relationships between profitability and customer loyalty; employee satisfaction and loyalty; and productivity.

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  • Levitt, Theodore. “Production-Line Approach to Service.” Harvard Business Review 50.5 (1972): 41–52.

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    This is one of the early articles suggesting that production and service organizations need to acknowledge different issues and techniques in their production.

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  • Maglio, Paul P., and James Spohrer. “Fundamentals of Service Science.” Journal of the Academy of Marketing Science 36.1 (2008): 18–20.

    DOI: 10.1007/s11747-007-0058-9Save Citation »Export Citation » Share Citation »

    This article provides an excellent overview of service science and describes how it can combine organization and human understanding with business and technological understanding to categorize and explain the many types of service systems that exist and how service systems interact and evolve to cocreate value.

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  • Schneider, Ben. “The Service Organization: Climate Is Crucial.” Organizational Dynamics 9.2 (1980): 52–65.

    DOI: 10.1016/0090-2616(80)90040-6Save Citation »Export Citation » Share Citation »

    This offers an early insight into how service organizations have different challenges than manufacturing organizations in managing their people to create intangible services.

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  • Vargo, Stephen L., and Robert F. Lusch. “Evolving to a New Dominant Logic for Marketing.” Journal of Marketing 68.1 (2004): 1–17.

    DOI: 10.1509/jmkg.68.1.1.24036Save Citation »Export Citation » Share Citation »

    This is a classic article on describing and defining the service-dominant logic for marketing. This has been elaborated in more recent journal articles and books.

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The Nature of Services

Although there is considerable debate over what a service is and how it differs from a manufactured good, most writers, following the classic work Pine and Gilmore 1988, rely on the traditional definition of a service as an intangible experience that persists only as a memory. As reviewed in Verhoef, et al. 2009, services are commonly considered to have the four characteristics of intangibility, heterogeneity, simultaneity, and perishability. “Intangibility” refers to the fact that service is an experience that customers remember primarily as a psychological response even if there are physical aspects of that experience. Thus, a hotel experience is remembered as a good, bad, or exceptional stay even though a physical room, lobby, bed, and so on are associated with the experience. “Heterogeneity” refers to the fact that every experience will be as distinctive as every interaction between company and customer. No two customers are exactly alike, and even the same customer may be quite different from one experience to another. A customer entering a restaurant after the funeral of a loved one will be entirely different in his or her expectations of the restaurant experience than the same customer entering after a wedding. “Simultaneity” refers to the fact that the production of the experience occurs at the time of its consumption. An experience has no inventory to draw from, no rework pile to toss defectives into, and no presale quality inspection to protect against offering a bad experience to the customer. It happens when it happens, and it either meets or does not meet the customer’s expectations. This characteristic puts considerable emphasis on employee monitoring of the experience to ensure that it meets customer expectations and ensuring that any failures are quickly and appropriately noticed and fixed. “Perishability” refers to the fact that once an experience is produced or created, it is gone forever. This has important implications for capacity planning and the management of waits. Once a flight leaves for New York, the empty seats will never be available again. These distinctions have been discussed in Rose, et al. 2011 in the context of a virtual world where the experience takes place through the World Wide Web.

  • Pine, B. Joseph, and James H. Gilmore. “Welcome to the Experience Economy.” Harvard Business Review 76.4 (1988): 97–105.

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    This article defined the idea of an experience and how the economy moved from creating things to creating services to creating experiences.

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  • Rose, Susan, Neil Hair, and Moria Clark. “Online Customer Experience: A Review of the Business-to-Consumer Online Purchase Context.” International Journal of Management Reviews 13.1 (2011): 24–39.

    DOI: 10.1111/j.1468-2370.2010.00280.xSave Citation »Export Citation » Share Citation »

    This is a comprehensive review of the existing literature on online experiences.

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  • Verhoef, Peter C., Katherine N. Lemon, A. Parasuraman, Anne Roggeveen, Michael Tsiros, and Leonard A. Schlesinger. “Customer Experience Creation: Determinants, Dynamics, and Management Strategies.” Journal of Retailing 85.1 (2009): 31–41.

    DOI: 10.1016/j.jretai.2008.11.001Save Citation »Export Citation » Share Citation »

    This is an excellent overview of the ideas and concepts underlying customer experiences.

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Service Quality and Value

Different authors have proposed different definitions of service quality; see Ladhari 2008 for a review. Service quality and value are measured by comparing customer expectations against the service experience delivered (Oliver 1980). Since an experience persists entirely in the mind of the customer, assessing its quality and value relies on measures of customer perceptions. Service organizations consequently spend considerable time and effort on surveying their customers to gauge their satisfaction with the quality and value of “key drivers,” or the features and aspects of an experience that customers rate as so important that these aspects influence return visit and purchase behavior. Thus, if a customer enters a restaurant expecting a fine dining experience and finds plastic forks and tablecloths, that customer will be as disappointed as a customer who enters a fast service restaurant expecting the typical quick service decor and being met with starched white linens and servers in tuxedos. In other words, the expectations customers have for the service experience determine their satisfaction with quality and perceptions of value. One of the most widely used measures is SERVQUAL, described in Parasuraman, et al. 1988. Measuring service quality is important, because service organizations expend considerable effort to manage quality expectations through communications with their customers about what to expect, and then they ensure that those expectations are met or even exceeded. One important managerial tool has been developed to enable better planning and training to meet customers’ expectations: service standards. For example, a manager may require that all customer phone calls be answered before the third ring. Service standards can be established for all phases of the customer experience so that the minimum expectations of most customers will be met (see Blind 2006 for a taxonomy; see Ensuring Service Quality for further discussion).

  • Blind, Knut. “A Taxonomy of Standards in the Service Sector: Theoretical Discussion and Empirical Test.” Service Industries Journal 26.4 (2006): 397–420.

    DOI: 10.1080/02642060600621597Save Citation »Export Citation » Share Citation »

    This reviews the different tools and techniques of service standards and seeks to organize them for easier reference.

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  • Ladhari, Riadh. “Alternative Measures of Service Quality: A Review.” Managing Service Quality 18.1 (2008): 65–86.

    DOI: 10.1108/09604520810842849Save Citation »Export Citation » Share Citation »

    This article reviews the different measures of service quality and is an excellent resource for those seeking the pros and cons of alternative quality measures.

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  • Oliver, Richard. “A Cognitive Model of the Antecedents and Consequences of Satisfaction Decisions.” Journal of Marketing Research 17 (1980): 460–469.

    DOI: 10.2307/3150499Save Citation »Export Citation » Share Citation »

    This is the classic presentation of the confirmation-disconfirmation model of customer expectations, which argues that customers’ satisfaction with a product or service is a result of the degree to which their expectations are met. This research and other studies based on this model indicate that expectations do provide a standard against which deviations are perceived by customers, and this in turn determines their satisfaction.

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  • Parasuraman, A., Valarie A. Zenithal, and Leonard L. Berry. “SERVQUAL: A Multiple-Item Scale for Measuring Consumer Perception of Service Quality.” Journal of Retailing 64.1 (1988): 12–40.

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    This is the classic work on developing and explaining SERVQUAL, one of the most widely used nonproprietary tools available for customer assessment of quality. While there are a large number of subsequent articles debating the validity of this tool, it remains a widely accepted measure.

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Service Culture

As noted in Ford, et al. 2008, service culture is often referred to as the “software” of a service organization, because it is the overarching beliefs and values that employees share about the norms for their job performance. Because they are coproducing a customer experience, employees depend on their understanding of the organization’s culture to guide their behavior in their interactions (“moments of truth”) with customers. Since teaching culture is considered in Schein 2004 as one of the most important things managers do, understanding culture is critical for service managers. Thus, managers of service organizations must spend considerable time teaching and consistently modeling the organization’s cultural values in everything they do, say, and write. They recognize that they are always “onstage” for their employees and must be consistent. A comprehensive treatment of this topic and the methods available to managers to teach and model culture is in Ashkanasy, et al. 2000.

  • Ashkanasy, Neal M., Celeste P. M. Wilderom, and Mark F. Peterson, eds. The Handbook of Organizational Culture and Climate. Thousand Oaks, CA: SAGE, 2000.

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    This is an excellent resource for the nature and importance of culture in defining organizations, and it also includes an excellent discussion of service climate.

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  • Ford, Robert C., Celeste P. M. Wilderom, and John Caparella. “Strategically Crafting a Customer-Focused Culture: An Inductive Case Study.” Journal of Strategy and Management 1.2 (2008): 143–167.

    DOI: 10.1108/17554250810926348Save Citation »Export Citation » Share Citation »

    This article includes a detailed case study of how the textbook tools of creating a strong service culture are successfully applied to a new organization.

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  • Schein, Edgar H. Organizational Culture and Leadership. San Francisco: Jossey-Bass, 2004.

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    This is a classic book by one of the most important writers on defining culture and creating it in organizations.

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Service Setting

As defined in Bitner 1992 and expanded in Rosenbaum and Massiah 2011, the service setting is frequently referred to as the “servicescape” to reflect the combination of the environment (landscape) and the influence the environment has on the service experience. This can be seen in the various extensions of the traditional concerns of environmental psychology to how the environment affects both customers and employees in the setting in which they interact to coproduce the service experience. An excellent example of this is Augustin 2009. Thus, an overly hot waiting line, too little (or too much) lighting in a retail space, poorly groomed employees, an overly complicated spatial layout in the service setting, or confusing signage can all lead to a bad customer experience. A bad experience for customers generally means a bad experience for employees, both because they share the same space and because the employees are the ones customers can find most readily to complain about the space. Unlike the production facility that the customers neither see nor coproduce manufactured goods in, service experiences typically have the customers in the “service factory,” and that space must accommodate their presence and coproduction participation. This means that service organizations dedicate significant time and money to creating a coproduction setting that customers will not only be comfortable in but will also find set up in a way that enables them to enjoy the experience they came for. A more recent extension of this thinking is in Vilnai-Yavetz and Rafaeli 2006, which presents the issues associated with virtual servicescapes.

  • Augustin, Sally. Place Advantage: Applied Psychology for Interior Architecture. Hoboken, NJ: Wiley, 2009.

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    This entire book is dedicated to presenting the impact of place on customers. It offers many insights into how the service environment can affect the customer’s experience.

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  • Bitner, Mary Jo. “Servicescapes: The Impact of Physical Surroundings on Customers and Employees.” Journal of Marketing 56.2 (1992): 57–71.

    DOI: 10.2307/1252042Save Citation »Export Citation » Share Citation »

    This is the classic work defining and explaining the nature and importance of a service setting on both employee and customer. Nearly every discussion of service setting can be traced to this article.

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  • Rosenbaum, Mark S., and Carolyn Massiah. “An Expanded Servicescape Perspective.” Journal of Service Management 22.4 (2011): 471–490.

    DOI: 10.1108/09564231111155088Save Citation »Export Citation » Share Citation »

    This article expands the definition of servicescape beyond the original work of Mary Jo Bitner in important ways. It offers additional perspective on how the environment affects the customer’s experience.

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  • Vilnai-Yavetz, Iris, and Anat Rafaeli. 2006. “Aesthetics and Professionalism of Virtual Servicescapes.” Journal of Service Research 8.3 (2006): 245–259.

    DOI: 10.1177/1094670505281665Save Citation »Export Citation » Share Citation »

    The impact of the computer screen and its importance as the place of interaction for many customers of web-based organizations have led to several studies of how that environment affects users. This is one such study.

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Service Staffing

Service staffing covers the human resources management issues that are unique to service organizations.

Selecting Employees

As initially noted in Schneider and Bowen 1993 and more recently in Chuang and Liu 2010, selecting employees in services has the added challenge of finding people who are not only technically competent to perform the necessary tasks associated with their jobs but who also have, as Berry 1999 discusses, the right attitude for performing in a service role where interacting with customers is key to a successful service experience; they must have the decision-making skills to notice and fix customer service problems. Thus, as Gross 2004 points out, service organizations tend to hire for attitude and train for skills in many of their service jobs involving interaction with customers. Because of this emphasis on attitude, many service organizations design their customer contact jobs so that they can be readily learned to minimize the time needed to acquire task skills. This also means that these organizations have to find ways to motivate these employees when job challenges, decision autonomy, and task variety are not options or are traded off for the requirement to hire people who can come to the job with excellent customer service attitudes instead of the task skills that are more expensive to teach. Another facet of the selection process for service organizations, noted in Rupp and Spencer 2006, is the need to hire people who are able to tolerate and even enjoy the emotional labor of providing high levels of customer service across their entire workday. Smiling for eight hours while successfully engaging and interacting with a wide range of people and providing every customer with the same level of service is not easy.

  • Berry, Leonard L. Discovering the Soul of Service: The Nine Drivers of Sustainable Business Success. New York: Free Press, 1999.

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    Berry offers a wide range of useful ideas for managing a successful service organization, but this book is included here because he also covers the idea of selecting and empowering employees to be successful in service roles.

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  • Chuang, Chih-Hsun, and Hui-Lu Liu. “Strategic Human Resource Management in Service Context: Taking Care of Business by Taking Care of Employees and Customers.” Personnel Psychology 63.1 (2010): 153–196.

    DOI: 10.1111/j.1744-6570.2009.01165.xSave Citation »Export Citation » Share Citation »

    This reports a study of a high-performance work system’s human resource management practices that found that a business unit’s market performance was enhanced in a service context by facilitating two types of strategically targeted organizational climate: concern for customers and concern for employees.

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  • Gross, T. Scott. Positively Outrageous Service. 2d ed. Chicago: Dearborn, 2004.

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    This author is a successful service business practitioner who offers very useful ideas about hiring strategy based on his long-term experience in providing customer service.

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  • Rupp, Deborah E., and Sharmin Spencer. “When Customers Lash Out: The Effects of Customer Interactional Injustice on Emotional Labor and the Mediating Role of Discrete Emotions.” Journal of Applied Psychology 91.4 (2006): 971–978.

    DOI: 10.1037/0021-9010.91.4.971Save Citation »Export Citation » Share Citation »

    This article serves as an overview and expansion of the emotional labor issues affecting service employees and a resource for finding other important research on this topic.

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  • Schneider, Benjamin, and David E. Bowen. “The Service Organization: Human Resources Is Critical.” Organizational Dynamics 21.4 (1993): 39–52.

    DOI: 10.1016/0090-2616(93)90032-VSave Citation »Export Citation » Share Citation »

    This is a classic work that seeks to define the importance of human resources to the service organization. This work is extended and elaborated upon in the authors’ 1995 book, Winning the Service Game (Cambridge, MA: Harvard Business Press).

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Training for Service

Training service employees has several components (reviewed in Nishii and Schneider 2007) that make this especially challenging. As is true for any organization, the service industry has task performance requirements that will require training. Beyond the task training, however, are three additional skills required of service employees, as noted in Berry 1999: connecting-with-people skills, training skills, and problem-solving skills. The skills of connecting with people are required to build relationships with customers. Whether the particular service experience requires a short-term or longer-term relationship, the customer contact employee has to be able to ensure that the customer feels connected to the organization, preferably at an emotional level. The second skill is training: the customer contact person has to identify quickly what knowledge, skills, and abilities the customer is bringing to the service experience. If the customer must successfully coproduce some or all of that experience, then the employee must be trained to recognize what the customer can do, will do, or needs training to do in the coproducing role. Companies that are successful at this not only train their employees to pick up the signals customers send about their capabilities to perform their roles but also train their employees to be trainers (Rafaeli, et al. 2008). Service employees also require training in problem solving. Most services require human interaction, and human interaction will inevitably have problems or failures that will require a fix, service recovery, or remedy. There are two other skills required of service employees. One is to interpret the culture so employees know what the organization expects from them in their interaction with customers. This means using the teaching tools of cultural training to ensure that the employees know what the guests expect and expend effort to provide it. The second is to cope with the job’s interactional demands. It is not easy for most people to listen to, coproduce with, and interact with customers for an entire workday, and service organizations teach stress reduction and coping techniques as part of their ongoing training. See also the chapters in Ford, et al. 2012 and Grönroos 2007 (both cited under Textbooks) on human resources as excellent overviews of training.

  • Berry, Leonard L. Discovering the Soul of Service: The Nine Drivers of Sustainable Business Success. New York: Free Press, 1999.

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    Berry offers a wide range of useful ideas, but this book is included here because he covers the idea of training to empower employees to be successful in service roles.

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  • Nishii, Lisa, and Ben Schneider. “HRM in Service: The Contingencies Abound.” Working Paper 07–07. Ithaca, NY: Cornell University, School of Industrial and Labor Relations, Center for Advanced Human Resource Studies, 2007.

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    An excellent overview of human resource management (HRM) practices as they relate to service organizations. There is a section focusing on training in this overview.

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  • Rafaeli, Anat, Lital Ziklik, and Lorna Doucet. “The Impact of Call Center Employees’ Customer Orientation Behaviors on Service Quality.” Journal of Service Research 10.3 (2008): 239–255.

    DOI: 10.1177/1094670507306685Save Citation »Export Citation » Share Citation »

    Study reports findings of the importance of customer orientation behaviors: (a) anticipating customer requests, (b) offering explanations and justifications, (c) educating customers, (d) providing emotional support, and (e) offering personalized information in customer determination of service quality.

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Motivating Service Employees

Motivating service employees has some special issues to consider because of the characteristics of services. Motivated employees can make the difference in a customer’s service experience, and the best service managers know that there is a connection between how they provide service to employees and how employees provide service to customers (see Ehrhart, et al. 2011 and Bowen and Schneider 1988). Service organizations are heavily dependent upon empowerment, positive thinking, and transformational leaders who are also effective transactional managers. Empowerment is critical to creating service experiences. As Bowen and Lawler 1992 notes, the person interacting with the customer not only needs the necessary training to coproduce the tasks associated with the experience but must also be able to personalize it and solve any problems on the spot. This means these employees must be empowered to meet each customer’s unique expectations and to solve any customer problems quickly. Maintaining a positive attitude is another feature unique to service organizations. With rare exceptions, service organizations provide services that must be seen by customers as enjoyable. Thus, motivating employees not just to perform their tasks but to do so with a smile is important. Service organizations emphasize recognition activities and celebratory events that help generate a positive if not fun work environment (see Freiberg and Freiberg 1998 and Michelli 2008). Employees who are having fun not only have greater job satisfaction but are also likely to infect customers in a contagious spreading of positive emotions (Karl and Peluchette 2006). Having leaders who are both transactional and transformational is critical in services. It is not only important for employees to have the necessary tools supplied to perform their tasks (transaction activities), it is also important for them to see a reason to do what they are doing and to understand how it transcends their individual capability. They need to see how important it is to be part of an organization that provides the service being offered. Vision-based leadership leads the way to employee commitment to providing service excellence. Every customer expects employees to provide enthusiastic, caring, smiling service. Being “up” all the time is a particular challenge in services and one that service organizations address constantly with their motivational strategies and practices. Special attention is given to the “emotional labor” this adds to the physical labor of customer service jobs. As Bettencourt and Brown 1997 points out, managers must treat their employees fairly.

  • Bettencourt, Lance A., and Stephen W. Brown. “Contact Employees: Relationships among Workplace Fairness, Job Satisfaction, and Prosocial Behaviors.” Journal of Retailing 73.1 (1997): 39–61.

    DOI: 10.1016/S0022-4359(97)90014-2Save Citation »Export Citation » Share Citation »

    A thorough review of the impact of fairness on employees in customer contact roles.

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  • Bowen, David E., and Edward E. Lawler III. “The Empowerment of Service Workers: What, Why, How, and When.” Sloan Management Review, 15 April, 1992, 31–39.

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    A classic discussion of empowerment as it relates to the service sector employee.

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  • Bowen, David E., and Ben Schneider. “Service Marketing and Management: Implications for Organizational Behavior.” In Research in Organizational Behavior. Vol. 10. Edited by Barry M. Staw and Larry L. Cummings, 43–80. Greenwich, CT: JAI, 1988.

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    One of the classic reviews of the human resources issues in service management, written by two of the most widely cited authors on the topic.

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  • Ehrhart, Karen Holcombe, L. A. Witt, Benjamin Schneider, and Sara Jansen Perry. “Service Employees Give as They Get: Internal Service as a Moderator of the Service Climate–Service Outcomes Link.” Journal of Applied Psychology 96.2 (2011): 423–431.

    DOI: 10.1037/a0022071Save Citation »Export Citation » Share Citation »

    Study of internal service. Findings were that high-quality internal service is necessary for the service climate to yield superior external customer service quality.

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  • Freiberg, Kevin, and Jackie Freiberg. Nuts! Southwest Airlines’ Crazy Recipe for Business and Personal Success. New York: Broadway, 1998.

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    This book offers an inside look at how Southwest Airlines built the unusual and effective culture that motivates its employees to provide excellent service.

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  • Karl, Katherine, and Joy Peluchette. “How Does Workplace Fun Impact Employee Perceptions of Customer Service Quality?” Journal of Leadership and Organizational Studies 13.2 (2006): 2–13.

    DOI: 10.1177/10717919070130020201Save Citation »Export Citation » Share Citation »

    Article reports a study that showed that employees who experienced fun in the workplace had greater satisfaction with their jobs and believed that their organization provided customer service that was reliable, responsive, and empathetic.

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  • Michelli, Joseph. The New Gold Standard: 5 Leadership Principles for Creating a Legendary Customer Experience Courtesy of the Ritz-Carlton Hotel Company. New York: McGraw-Hill, 2008.

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    The Ritz-Carlton is often cited as the premier practitioner of motivated customer service, and this book gives many examples of why and how it gets its employees to go the extra mile in serving customers.

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Coproducing with Customers

As discussed in other parts of this section, the nature of most services requires customers to perform some part in obtaining their experience (Bettencourt 1997). Thus, a patient cannot secure medical services without telling the doctor what hurts, the restaurant diner cannot get a meal without ordering, and the bank customer cannot get a loan without filling out the forms. The coproducing role of the customer has benefits for both customer and organization. For the customer, the more involvement in the coproduction of the service experience, the more customized, the more on demand, and the more “as expected” it can be (Bendapudi and Leone 2003). When the customer plays an important role in coproducing the service or even has the opportunity for self-service, then the service experience can be exactly what is wanted, when it is wanted. For the company, coproduction reduces labor cost, increases its customers’ satisfaction, and improves capacity usage (Lovelock and Young 1979). There are downsides to coproduction for both customer and organization, however. These include customers not performing their roles well, legal issues, extra training for employees to enable coproduction, increased costs to prepare the service facility to accommodate customer coproduction requirements, and increased employee stress (Hsieh and Yen 2005). Nonetheless, coproduction is a reality that service organizations plan for and accommodate; it is part of the experience their varied customers want and expect in varying degrees. Variation in customer capabilities and expectations is a significant challenge for service organizations to manage and an important capability for their employees to possess.

  • Bendapudi, Neeli, and Robert P. Leone. “Psychological Implications of Customer Participation in Co-Production.” Journal of Marketing 67.1 (2003): 14–28.

    DOI: 10.1509/jmkg.67.1.14.18592Save Citation »Export Citation » Share Citation »

    This reports findings and implications of two studies investigating how self-serving bias affects the customer in coproduction.

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  • Bettencourt, Lance A. “Customer Voluntary Performance: Customers as Partners in Service Delivery.” Journal of Retailing 73.3 (1997): 383–406.

    DOI: 10.1016/S0022-4359(97)90024-5Save Citation »Export Citation » Share Citation »

    This article details the issues in customer coproduction and offers strategies for ensuring their effectiveness as partners.

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  • Hsieh, An-Tien, and Chang-Hua Yen. “The Effect of Customer Participation on Service Providers’ Job Stress.” Services Industry Journal 25.7 (2005): 891–905.

    DOI: 10.1080/02642060500134162Save Citation »Export Citation » Share Citation »

    This is an excellent study of the connection between customer involvement in organizations as coproducers and the impact this has on employee stress.

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  • Lovelock, Christopher, and Robert F. Young. “Look to Customers to Increase Productivity.” Harvard Business Review 57.4 (1979): 168–178.

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    This classic article suggests that customers can coproduce and offers suggestions on ways to let them do so.

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Service Delivery Systems

Service delivery systems include the people, technology, and organizational systems and processes that get the service product delivered to the customer (Bretthauer 2004). As Ford and Sturman 2011 notes, these range from the communication systems that keep the physical inventory monitored and supplied to the physical setting of the experience, the employees connected to each other, and the customers connected to the organization. Thus, the communication system tells the chef when the supply of fresh fruit is low, the theme park attendant when the ride is ready for sending the next car, the audit team when it is ready for the next phase, or the customers which checkout lanes are open; these all enable the service experience to happen as customers expect it to, because they were planned well (see Wyckoff 1984 and Bitner, et al. 2008 for examples of tools that facilitate planning). These systems also include monitoring systems so the organization can know when it has failed and warning systems to prevent failures (Chase and Stewart 1994). Because they are so heavily dependent on human interaction, service organizations accept and prepare for eventual failure to meet a customer’s expectations by creating systems to find and fix their mistakes. Service delivery systems also include the technology that gets what is needed to whoever needs it when it is needed and the equipment that produces the physical aspects of the experience (e.g., scheduling street sweepers to keep the amusement park clean, stocking and locating the ATMs that deliver the money, the high-speed drill that cleans teeth). The delivery systems include the organization that coordinates all parts of its resources to ensure they are ready and able to deliver the experience when it is desired by the customer. These include management, financial, staffing, and operational systems and procedures that come together to make it possible for the customer to get what is wanted when it is wanted.

  • Bitner, Mary Jo, Amy L. Ostrom, and F. N. Morgan. “Service Blueprinting.” California Management Review 50.3 (2008): 66–95.

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    This article presents an excellent explanation of service blueprinting along with clear examples and suggestions on other applications.

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  • Bretthauer, Kurt M. “Service Management.” Decision Sciences 35.3 (2004): 325–332.

    DOI: 10.1111/j.0011-7315.2004.35031.xSave Citation »Export Citation » Share Citation »

    This is the introductory article of a special issue of ten articles on services in one of the top journals in operations management. It reviews the other articles and the overarching theme of the special issue.

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  • Chase, Richard B., and Douglas M. Stewart. “Make Your Service Fail-Safe.” Sloan Management Review, 15 April, 1994, 36.

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    This is a unique application to service organizations of a quality assurance tool that offers excellent insights into the challenges of managing service operations.

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  • Ford, Robert C., and Michael C. Sturman. “Designing a Self-Healing Service System: An Integrative Model.” Cornell Hospitality Report 11.15 (2011): 5–18.

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    This provides a systematic overview of the elements in a service delivery system that collectively ensure the provision of a high-quality, valued service experience to a customer with particular emphasis on finding and fixing errors or failures in that experience.

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  • Wyckoff, D. Daryl. “New Tools for Achieving Service Quality.” Cornell Hotel and Restaurant Administration Quarterly 25 (1984): 78–81.

    DOI: 10.1177/001088048402500317Save Citation »Export Citation » Share Citation »

    This classic article describes important tools that are unique to the management of operations in service organizations.

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Ensuring Service Quality

Ensuring service quality for a product that persists only in the mind of a customer is a unique challenge for service organizations (see Mukherjee and Nath 2005, Berry and Parasuraman 2004, and Ladhari 2009). Since the experience happens at the moment of its production, there is no possibility of asking a quality inspector to make sure the experience leaves the service factory at predefined standards, no rework pile to throw defective experiences into for later repair, and no standardized production process to ensure every experience meets the standard. Instead, services are judged at the moment they are consumed by the customer, who decides if the quality and value meet expectations. This puts an enormous burden on the service provider to survey customers extensively to find out what they expect in sufficient detail that service standards can be established for defining minimum levels of quality that should be met in delivering every customer’s service experience. Moreover, as Ford and Sturman 2011 notes, the service organization creates systems and procedures for monitoring the experience as it happens to ensure that it is as expected and then surveys customers afterward to assess the degree to which the experience met expectations. Employees consequently must be trained to observe systematically and ask customers about their satisfaction with the experience so that failures can be identified and fixed before the customer leaves. Employees must also be empowered and trained to take the actions necessary to ensure that what is expected is delivered. Data collection systems must be developed to gather and assess customer feedback, such as SERVQUAL (Ladhari 2008), so that system-caused failures, employee training issues, and operational processes can be identified and improved. Customers must be given incentive to voice their concerns and complaints. Service organizations have invented ways to obtain this feedback either from its customers by offering service guarantees (see Hogreve and Gremler 2009) or from people hired to impersonate customers, called “mystery shoppers” (see Ford, et al. 2011).

  • Berry, Leonard L., and A. Parasuraman. Marketing Services: Competing through Quality. Glencoe, IL: Free Press, 2004.

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    Building on eight years of research, the authors present a model for understanding the relationship between quality and marketing in services and offer dozens of practical insights into ways to improve services marketing.

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  • Ford, Robert C., G. P. Latham, and G. Lennox. “Mystery Shoppers: A New Tool for Coaching Employee Performance Improvement.” Organizational Dynamics 40.3 (2011): 157–164.

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    This article reviews the role and nature of mystery shoppers as a tool both for assessing the quality of the service experiences provided to customers against service standards and for keying training needs for employees to provide better service.

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  • Ford, Robert C., and Michael Sturman. “Designing a Self-Healing Service System: An Integrative Model.” Cornell Hospitality Report 11.15 (2011): 5–18.

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    This article offers a comprehensive review of the tools available to plan and deliver service quality. It presents quality assurance tools to use before, during, and after the customer service experience.

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  • Hogreve, Jens, and Dwayne D. Gremler. “Twenty Years of Service Guarantee Research: A Synthesis.” Journal of Service Research 11 (2009): 322–343.

    DOI: 10.1177/1094670508329225Save Citation »Export Citation » Share Citation »

    This article describes and assesses the nature and value of service guarantees by reviewing the published work on this topic.

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  • Ladhari, Riadh. “Alternative Measures of Service Quality: A Review.” Managing Service Quality 18.1 (2008): 65–86.

    DOI: 10.1108/09604520810842849Save Citation »Export Citation » Share Citation »

    This is an excellent and comprehensive review of the measures of service quality.

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  • Ladhari, Riadh. “A Review of Twenty Years of SERVQUAL Research.” International Journal of Quality and Service Sciences 1.2 (2009): 172–198.

    DOI: 10.1108/17566690910971445Save Citation »Export Citation » Share Citation »

    An excellent and thorough review of this important measure of service quality.

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  • Mukherjee, Avinandan, and Prithwiraj Nath. “An Empirical Assessment of Comparative Approaches to Service Quality Measurement.” Journal of Services Marketing 19.3 (2005): 174–184.

    DOI: 10.1108/08876040510596858Save Citation »Export Citation » Share Citation »

    This article assesses and reviews the different approaches available for measuring service quality.

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Waits, Waiting Lines, and Queues

Because customers seldom arrive in a completely predictable pattern, matching the capacity of a service organization with customer demand is a very important challenge to meet (Sasser 1976). There are both economic implications for the organization’s management of its capacity utilization and customer service implications for customer satisfaction with the service. Since there is an inevitable imbalance between customer arrivals and an organization’s ability to have the available capacity to serve them immediately, nearly every service experience has a wait in it somewhere. Consequently, service organizations try to do two things to match supply with demand (Pullman and Thompson 2003). First, they spend considerable time and effort predicting customer demand patterns so they can build, hire, or shift capacity to meet expected demand (Sasser 1976). Second, because demand predictions are imprecise, they spend considerable time and resources planning and managing the inevitable customer waits (Maister 1985). The waits involve standing in a service line at a retail store or bank, lying on a gurney in a hospital, waiting for the cable guy, listening to recorded music on a telephone hold, or watching the spinning globe while a web page loads. All require the customer to spend time waiting while the organization does something to provide the service. What the organization does to fill that time will often determine the difference between a good and a bad experience, between customers staying and leaving, and between their being satisfied or dissatisfied with an experience. Thus, as Dickson, et al. 2005 notes, service organizations either fill the time with alternative things to do or with pleasant distractions or manage the wait by matching capacity with demand through reservations, virtual queues, or other appointment-scheduling devices.

  • Dickson, Duncan, Robert C. Ford, and Bruce Laval. “Managing Real and Virtual Waits in Hospitality and Service Organizations.” Cornell Hotel and Restaurant Administration Quarterly 46.1 (2005): 52–68.

    DOI: 10.1177/0010880404271560Save Citation »Export Citation » Share Citation »

    This article defines the various ways organizations can manage waits and defines the virtual queue as developed at Walt Disney World.

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  • Maister, David. “The Psychology of Waiting Lines.” In The Service Encounter: Managing Employee/Customer Interaction in Service Businesses. Edited by John Czepiel, Michael R. Solomon, and Carol F. Suprenant, 113–124. Lexington, MA: Lexington, 1985.

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    This is the classic discussion of how to manage the “feel” of waiting. It offers important ideas as to ways organizations can make their inevitable waits feel less long.

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  • Pullman, Madeleine E., and Gary M. Thompson. “Strategies for Integrating Capacity with Demand in Service Networks.” Journal of Service Research 5.3 (2003): 169–183.

    DOI: 10.1177/1094670502238913Save Citation »Export Citation » Share Citation »

    This article offers an excellent review of the strategies for matching demand with capacity.

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  • Sasser, W. Earl, Jr. “Match Supply and Demand in Service Industries.” Harvard Business Review 54.6 (1976): 133–140.

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    This article describes the ways an organization can either manage supply or manage demand and offers strategies for doing both.

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Service Failures

Service organizations, like any other organizations, seek perfection in providing their products. Unlike production organizations, however, they know that failure is something they have to manage in a timely and effective manner. Since the service experience occurs when it is produced, failures must be anticipated and routines and procedures developed to handle them quickly and adequately. Recall that service experiences persist only in the mind of the customer. Thus, what meets, exceeds, or fails to meet expectations is defined in customers’ minds as well. It is inevitable therefore that no matter how well employees are trained, systems prepared, and service standards defined, there will be a service failure for some customers. The quicker the failure is addressed by the organization, the easier and generally the cheaper it is to resolve (Hart, et al. 1990; Davidow 2003). The customer contact employee becomes the critical link between the company and the customer and must know how to quickly find and implement an equitable resolution of a failure that minimizes both organizational costs and customer dissatisfaction. The impact of failure on customers includes loss of loyalty and decreased repatronage (Tax and Brown 1998). The impact on organizations includes developing systems for finding and fixing failures, motivating employees to self-report errors, training employees to find and fix failures and errors, and balancing the costs of service recovery with the value of a loyal lifetime customer. A unique aspect of this issue is the “service recovery paradox,” which occurs when an organization seeks to fix a customer service failure and makes the customer more dissatisfied by not fixing it well enough to overcome the original dissatisfaction (Matos, et al. 2007; Liao 2007). It is a situation in which a customer’s postfailure dissatisfaction exceeds prefailure dissatisfaction. In other words, the organization fails the customer twice. Since there is a lifetime value in a customer, ensuring that failures are fixed is an important aspect of service management (Borle, et al. 2008; Michel, et al. 2009).

  • Borle, Sharad, S. Siddharth Singh, and Dipak C. Jain. “Customer Lifetime Value Measurement.” Management Science 54.1 (2008): 100–112.

    DOI: 10.1287/mnsc.1070.0746Save Citation »Export Citation » Share Citation »

    This article seeks to quantitatively assess the value of a satisfied customer over an anticipated lifetime of repatronage.

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  • Davidow, Moshe. “Organizational Responses to Customer Complaints: What Works and What Doesn’t.” Journal of Service Research 5.3 (2003): 225–250.

    DOI: 10.1177/1094670502238917Save Citation »Export Citation » Share Citation »

    This article summarizes research on complaint handling, specifically focusing on how organizational responses affect customer behavior and offering a model framework categorizing organizational responses.

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  • Hart, Christopher W. L., James L. Heskett, and W. Earl Sasser Jr. “The Profitable Art of Service Recovery.” Harvard Business Review 68.6 (1990): 148–156.

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    This is one of the earliest articles to recognize the value of fixing a service failure in terms of its benefits for customer loyalty and repatronage.

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  • Liao, H. “Do It Right This Time: The Role of Employee Service Recovery Performance in Customer-Perceived Justice and Customer Loyalty after Service Failures.” Journal of Applied Psychology 92.2 (2007): 475–489.

    DOI: 10.1037/0021-9010.92.2.475Save Citation »Export Citation » Share Citation »

    This is an empirical study that also provides a brief review of the literature on justice, customer loyalty, and service recovery.

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  • Matos, Celso de, Jorge L. Henrique, and C. Alberto Vargas Rossi. “Service Recovery Paradox: A Meta-analysis.” Journal of Service Research 10.1 (2007): 60–77.

    DOI: 10.1177/1094670507303012Save Citation »Export Citation » Share Citation »

    This article reports a meta-analysis of the service recovery paradox and its impact on customer behavior.

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  • Michel, Stefan, David Bowen, and Robert Johnston. “Why Service Recovery Fails: Tensions among Customer, Employee, and Process Perspectives.” Journal of Service Management 20.3 (2009): 253–273.

    DOI: 10.1108/09564230910964381Save Citation »Export Citation » Share Citation »

    This article discusses the tensions among the organization, the employees, and the customers that result from efforts to fix service failures and proposes an integration of all three perspectives to be successful.

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  • Tax, Stephen S., and Stephen W. Brown. “Recovering and Learning from Service Failure.” Sloan Management Review, 15 October, 1998, 75–88.

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    This is a classic article on the cost and benefits of recovering from service failure for the organization and the customer. Among other issues, it identifies the problem of failing the customer twice by not fixing the problem correctly and notes how often this happens.

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Service Science

Service science represents the latest evolution of thinking on service management. As reported in Chesbrough and Spohrer 2006 (see also Dickson and Ford 2010), it developed as a result of interest at IBM and other service technology organizations in developing a better candidate pool for their increasingly important service jobs. Their managers believed that educational programs were not teaching or developing the curriculum that would provide the range and depth of knowledge these companies were seeking but not finding in their new hires. Thus, a major effort was undertaken to define and develop a science of service that would adequately capture the skills and training necessary for the evolving service employee (Maglio and Spohrer 2008). It now includes a growing body of scholarship encompassing production management, industrial and design engineering, service marketing, and other subfields of the social sciences that are jointly engaged in developing service science into a new discipline.

  • Chesbrough, Henry, and James Spohrer. “A Research Manifesto for Service Science.” Communications of the ACM 49.7 (2006): 35–40.

    DOI: 10.1145/1139922.1139945Save Citation »Export Citation » Share Citation »

    This article is one of the earlier works defining the emerging field of service science and its key characteristics.

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  • Dickson, Duncan D., and Robert C. Ford. “Founding a Science of Service: A Discussion with IBM’s Jim Spohrer.” Journal of Applied Management and Entrepreneurship 15.3 (2010): 81–90.

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    This article reports an interview with one of the founding fathers of the service science discipline and offers historical framing for the ideas behind its development.

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  • Maglio, Paul P., and James Spohrer. “Fundamentals of Service Science.” Journal of the Academy of Marketing Science 36.1 (2008): 18–20.

    DOI: 10.1007/s11747-007-0058-9Save Citation »Export Citation » Share Citation »

    This article provides an excellent overview of service science and describes how it can combine organization and human understanding with business and technological understanding to categorize and explain the many types of service systems that exist and how service systems interact and evolve to cocreate value.

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