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1 Productiveisalllabourwhichfixesandrealisesitselfinaparticularsubjectorvendiblecommodity unproductiveisalllabourwhichgenerallyperishintheveryinstantoftheirperformance AdamSmith 1776 2 PartOneTHENATUREOFSERVICES PartThreeHUMANRESOURCESINSERVICEORGANIZATIONS PartTwoCUSTOMERLOGIC PartFourOPERATIONSMANAGEMENTINSERVICEORGANIZATIONS PartFiveANINTEGRATEDAPPROACH 3 Thenatureofservices Servicesarebecomingmoreandmoreimportantintheeconomyofthecountriesallovertheword 2 Explainthemaincharateristicsthatdistinguishservicesfromgoods 3 Serviceclassificationsandtheirpracticalrelevance 4 PartTwoCUSTOMERLOGIC 4Relationshipmarketing5Promotingservices6Pricingservices7Customersatisfactionandcomplaintmanagement8Serviceguaranteesandservice levelagreements 5 PartThreeHUMANRESOURCESINSERVICEORGANIZATIONS 9Theroleofhumanresourcepracticesinserviceorganizations10Competenciesandserviceorganizations11Collaboration integratingworkandlearning12Theroleofempowermentinserviceorganizations13Rolestressamongfront lineemployees 6 PartFourOPERATIONSMANAGEMENTINSERVICEORGANIZATIONS 14Serviceprocessdesignandmanagement15Capacitymanagement16Facilitiesmanagement17ITdevelopmentsandtheirimpactonservices 7 PartFiveANINTEGRATEDAPPROACH 18Performancemeasurementsystemsinservicefirms19ManaginginnovationinaserviceEnvironment20Managingservicesacrossnationalboundaries21Definingaservicestrategy 8 ServicesManagement AnIntegratedApproach ThisbookoriginatedoutofcontinuousdiscussionsandresearcheffortsThefirstpointofdiscussionisthenotionofservicesandservicemanagement Alltoooftenoneistemptedtotakewell establishedinsightsandknow howcomingfrommanufacturingenvironmentsandapplythemtoservices 9 servicesdohavesomecharacteristics Intangibilityposesspecificchallengestothecommunicationandmarketingeffort simultaneity i e thepresenceofthecustomerduringtheservicedeliveryprocess impliesadirectlinkbetweenemployees feelingsandbehaviourandcustomers perceptionsofservicequality 10 theperishablenatureofserviceservicehasseriousimplicationsformanagingtheservicedeliverysystemandtheavailablecapacity 11 Second servicesareprocesses Theyrequireanintegratedandconcertedapproach theoperationalservicedeliverysystem employeesandcustomersallneedtobeattunedtodelivervalueinaseamlessway 12 Thisawarenessofthespecificnatureofservicesand henceinspiredseveralcompanies togetherwiththeVlerickLeuvenGhentManagementSchool toestablishaforumthatallowedforexplorationandin depthdiscussionofthespecificnatureofservicemanagement 13 Thecentrefollowedamultidisciplinaryapproachfromthestart peoplewithanengineering marketingororganizationalbehaviourbackgroundhavebeeninvolved andbothacademicsandpractitionershavecollaboratedinthediscussions 14 Overthepastyears workshopshavebeenorganizedcoveringthemessuchascustomersatisfaction informationtechnology empowerment theserviceprofitchain innovation performancemanagement capacitymanagementandwaitinglines tonamejustafew In depthcasestudiesandsurveyresearchhavealsobeenpartoftheseexplorationefforts 15 Duringtheseyearsofworkingtogetheritbecameclearthatservicesneedtobeapproachedinanintegratedway theoperationalservicedeliverysystem employees competencies behaviorandfeelings andcustomerneedsandpreferencesall 16 needtobebalanced resultinginaconfigurationthateventuallywillleadtovaluecreationandbenefitsforallstakeholdersinvolved Inthelightofthisapproachwehaveestablishedthestructureofthisbookasfollows 17 Inthefirstpart weexplorethenatureandimportanceofservicesintoday seconomies Thiswillleadtothedevelopmentofafirstguidingframework theserviceconcept andthedelineationofitsconstitutingelements Chapters1and2 18 Moreover wewillarguethatthenotionofservicesandhenceofservicemanagement isbecominganimportantissueformanufacturingcompaniesaswell Chapter3 19 Nextwefocusoncustomers Wewilllookatthecrucialrelationshipsbetweencustomersatisfaction customerloyaltyandeventualprofitability Chapter4 discusswaysofmeasuringcustomersatisfactionandimprovingitbymeansofcomplaintmanagementandtheintroductionofservicelevelagreementsandguarantees Chapters7and8 Promotingandpricingserviceswillalsobeconsidered Chapters5and6 20 Employeesplayadecisiveroleindeliveringservicequality Therefore inthethirdpartwelookatthedynamicsofthescriptunderlyingthiscrucialrole Chapter9 Consecutively wedevelopthenotionofcompetenciesandtheirdevelopment theimportanceofcollaborationandtherelevanceofempowerment Chapters10 11and12 Finally wefocusonthespecificissuesrelatedtojobdesignandperformanceoffront lineemployees Chapter13 21 servicedeliverysystem chapter14 Asservicesareintangibletheybecomeperishableaswell thereisnopossibilityofstockpilingservices Designingandmanagingcapacityadequatelywilloftenaffectdirectlythelevelofprofitabilityinservices 22 Wedevoteacompletechaptertorelevantapproachesandtechniquesofcapacitymanagementaswellasrelatedconceptssuchasyieldmanagement Chapter15 InPartFour wewillalsodiscusslocationandfacilities Chapter16 andexploretheroleinformationtechnologycanplayintheservicedeliveryprocess Chapter17 23 Thefifthpartisdevotedtoissuesofamoreintegratedanddynamicnature designingadequateperformancemeasurementsystems Chapter18 updatingyourserviceconceptbymeansofinnovation Chapter19 extendingservicesacrossnationalboundaries Chapter20 andservicestrategyasanoverreachingconcept Chapter21 24 Ofcourse wecannotcoverallissuesrelatedtothedifferentthemeslistedinthetableofcontents Rather wehavetriedtohighlightthoseelementsthatrelatedirectlytothenatureofservicesorbearacrucialimportanceforservicemanagement 25 Byplacingserviceaspectsinthespotlight thisbookcanbeseenascomplementarytoothermanagerialtextsfocusingonafunctionalareaordomain 26 Thenatureofservices Whatmakesservicessospecialthatacompletebookshouldbedevotedtomanagingservices Twotrendsemerge servicesaccountforanever increasingpartofwealthcreationineconomiesallovertheworld andservicesarebecomingglobaltoagreaterextent 27 Next weexaminethedifferentcharacteristicsthatdistinguishservicesfromgoods Whilethesefirstchaptersmightsuggestasharpdistinctionbetweenservicesandgoods itisbecomingclearthatboundariesbetweenmanufacturingcompaniesandserviceprovidersareincreasinglyblurred 28 THEGROWINGIMPORTANCEOFSERVICES Economistsliketodivideourindustriesintothreeorsometimesevenfourbroadsectors Theprimarysector farming forestryandfishing Thesecondarysector theindustrialsector includinggas miningandmanufacturing electricity waterandconstruction Thetertiarysector asynonymfortheservicesector 29 RoleofServicesinanEconomy INFRASTRUCTURESERVICE Communications Transportation Utilities Banking PERSONALSERVICES Healthcare Restaurants Hotels CONSUMER Self service GOVERNMENTSERVICES Military Education Judicial Policeandfireprotection DISTRIBUTIONSERVICES Wholesaling Retailing Repairing FINANCIALSERVICES Financing Leasing Insurance MANUFACTURINGServicesinsidecompany Finance Accounting Legal R Danddesign BUSINESSSERVICES Consulting Auditing Advertising Wastedisposal 1 29 30 Thecontributionofservicestothecreationofwealth Theservicesectorhasexperiencedasteadyincreaseinimportanceintheworldeconomy Theservicesectorcanbeconsiderageneraltrend But thedevelopmentoftheservicesectorisdifferentbetweenthedevelopedcountriesandthedevelopingcountries 31 DistributionofGDPintheUSEconomy 1 31 32 Nowadays overtwo thirdsofallemploymentindevelopedcountriesisintheseservicesector TheUSalsoheadsthelistoftheservicesector sshareinemployment withalmostthree quartersofall1999employmentintheservicesector Why Thecontributionofservicestothecreationofwealth 33 Distributiveservicesincludetransportation communicationandtrade Producerservicesinvolveservicessuchasinvestmentbanking insurance engineering accounting bookkeepingandlegalservices 34 Socialservicesincludehealthcare education non profitorganizationsandgovernmentagencies Personalservicesincludetourism drycleaning recreationalservicesanddomesticservices 35 Thecontributionofservicestothecreationofwealth 36 Belgium France Japan Netherlands 1970 56 47 53 55 1980 66 64 54 65 59 62 1990 69 70 56 68 67 64 68 1999 73 74 74 71 71 ContributionofservicesectortoGDPinsomedevelopedcountries 1970 99 Source UNCTAD 2001 Servicespresentlyamounttoanaverageof70percentofGDPintheseeconomies 37 ThesituationisslightlydifferentintheformerlyCommunistcountriesofEasternEurope 38 Figure1 1Contributionofservicesectortoemployment 1999 Contributionofservicesectortoemployment 1999 Source UNCTAD 2001 39 Drivingforcesbehindthegrowthofservices reasons Increasingconsumerincomesandsociologicalchangeshaveledtoagreaterdemandforservices Increasingprofessionalismincompaniesandtechnologicalchangeshavebroughtaboutthecreationofnewservices notablyofproducerservices 40 Drivingforcesbehindthegrowthofservices TheimpactofincomechangesonbuyingbehaviourPeoplewithhigherincomestendtospendmoreonservicesandlessongoods 41 Drivingforcesbehindthegrowthofservices 42 SociologicalanddemographicchangesAgingofthepopulationTwo incomefamiliesGrowthinnumberofsinglepeople Drivingforcesbehindthegrowthofservices 43 TheimpactofincomechangesonbuyingbehaviourSociologicalanddemographicchangesThegrowingimportanceofproducerservicesTechnologicaldevelopments 44 SERVICES WHATMAKESTHEMSPECIAL 45 Producingadefinitionofservicesisnotaneasytask 46 Servicesareactuallyallthoseeconomicactivitiesinwhichtheprimaryoutputisneitheraproductnoraconstruction QuinnandGagnon 47 Anyactivityorbenefitthatonepartycanoffertoanotherthatisessentiallyintangibleanddoesnotresultintheownershipofanything Kotler 48 Aserviceisanactivityorseriesofactivitiesofamoreorlessintangiblenaturethatnormally butnotnecessarily takeplaceininteractionsbetweenthecustomerandserviceemployeesand orphysicalresourcesorgoodsand orsystemsoftheserviceprovider whichareprovidedassolutionstocustomerproblems Gr nroos 49 Servicescanthusbedefinedas allthoseeconomicactivitiesthatareintangibleandimplyaninteractiontoberealizedbetweenserviceproviderandconsumer 50 Intangibility simplymeansthattheresultofaservicetransactionisnotphysicalgoods Aserviceisaprocessoranact 51 Simultaneity meansthattherealizationofaserviceimpliesthepresenceofprovideraswellascustomer bothplayanactiveroleintherealizationofservices Productionandconsumptionareinthesimultaneousinteractionbetweenconsumerandprovider 52 perishability Servicescannotbekeptinstocklikegoods Itisnotpossibletoproduceservicesatonemomentintime storethem andtakethemfromtheshelftosellwhenappropriate asitiswithgoods 53 heterogeneity Thefactthatbothproviderandcustomerneedtointeractatacertainpointwithintheservicedeliveryprocess opensuppossibilitiesforvariation Customers serviceproviders thesurroundingsandeventhemomentofinteractionareallsourcesofvariation consequently servicedeliveryprocesseswilltendtobecharacterizedbyincreasedheterogeneity 54 ACLOSERLOOKATSERVICES IntangibilityWhilegoodsareproduced servicesareperformed Aserviceisanactoradeedthatwecannottakehomewithus 55 Whataretheimplicationsofthisintangibility 1 Searchqualities2 Experiencequalities3 Credencequalities 56 Simultaneity saim lt ni ti Asecondcommoncharacteristicofservicesisthesimultaneityofproductionandconsumption Whereasgoodsareproducedfirstandthenconsumed servicesareproducedandconsumedatthesametime Thecustomertakespartintheproductionprocessandconsumestheserviceasitisbeingproduced 57 Atthesametime insomecases thecustomermustbejustas educated astheemployee Howwellcertainservicesareperformeddependsnotonlyontheperformanceoftheserviceprovider butalsoontheabilityofthecustomertospecifyorperformhisorherownpartoftheservice 58 Heterogeneity Heterogeneityisrelatedtothepotentialofvariabilityintheperformanceofservices 59 Wheredoesthisheterogeneitycomefrom 1 TheserviceproviderHumansarenotrobots abletorepeatconsistentlythesameactiondayinanddayoutwithouterror Therefore afirstsourceofheterog
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