MIT Sloan Management Review

Service and Quality

 

How Can Service Businesses Survive and Prosper?

By Roger W. Schmenner

April 15, 1986

Given the competitive spirit of the service sector, the time has come for service businesses to recognize that they are really a part of a larger whole, and not merely unique, entrepreneurial entities unto themselves. In fact, the author of this article warns that if service businesses remain isolated from one another, their mortality rate will continue to rise. Through the use of a service matrix, the author shows how service businesses can broaden their professional relationships with other services that have similar operations and managerial challenges, and in so doing, gain the economic foothold needed to survive and prosper. Ed.

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Presently the service sector of our economy is characterized by both profusion and confusion. By profusion, I mean that it has done wonderfully well at generating jobs, for new kinds of services are sprouting continually. By confusion, I mean that service businesses seem to rise and fall from Wall Street grace with regularity. Moreover, as many are markedly entrepreneurial in spirit, they all claim to have idiosyncratic operations. For example, while manufacturing management enjoys the benefits of various professional societies (i.e., those for materials management, manufacturing engineering, industrial engineering, and quality control) whose roles are to find management principles that apply across many different kinds of manufacturing enterprises, service business management does not enjoy such cooperation. All too often, service companies view themselves as unique, and consequently they do not promote service operation management techniques with the same vigor as does the manufacturing sector.

Some manufacturers, of course, also claim that they are unique. However, over the years, manufacturers have been unified by their acceptance of certain terminology to describe generic production processes — job shop, batch flow, assembly line, continuous flow process. This not only helps to solidify manufacturers of sometimes widely divergent product lines, but it also helps to reveal the challenges manufacturers face.

The Characteristics of a Service Business

The confusion surrounding service operations can be lessened in part by looking at key aspects... To read the complete article, login or sign-up using the form below.

 
 

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