Service Management and Marketing: Managing the Service Profit Logic, 4th Edition

CHAPTER 8MANAGING PRODUCTIVITY IN SERVICE ORGANIZATIONS

“The productivity of service operations is not an internal affair. In service customers decide what is high productivity and what is not.”

INTRODUCTION

The productivity concept as it has been developed for manufacturing firms cannot readily be used in service contexts. In this chapter the problem is discussed in detail. The shortcomings of a traditional manufacturing-based productivity concept are analysed, and a service productivity concept is developed. It is observed that in service organizations decisions based on traditional productivity measurements will almost always lead in the wrong direction. Internal and external consequences have to be taken into account simultaneously if productivity is to provide management with meaningful guidance. In the final sections of this chapter the possibility of creating measurement instruments is explored. No final calculation models can yet be offered. The theoretical understanding of service productivity has to be developed further before robust measurement models can be developed. After reading this chapter the reader should understand the problems of a traditional manufacturing-oriented productivity concept in service contexts and the pitfalls of using productivity measurements based on such a concept. The reader should also understand the nature of service productivity and how service productivity measurements could be made and, finally, know how continuous learning in a relationship ...