2021

PULLING THE PIECES

TOGETHER: CREATING A

WORLD-CLASS SERVICE
CULTURE
GROUP 7

BAPTISTA VARANI C.A 195264005

CLARISSA APRILA I. 195264008
RINRIN DAMAYANTI 195264025
LEARNING OBJECTIVES

Compare and contrast the concept of sevice seamlessness to

departmentalization and functionalism.

Describe how a service firm's internal logics impacts its service culture

Understand the fundamental differences between the industrial

management approach versus the market-focused management approach.

Describe observational and indirect questioning approaches for assessing

the organization's current culture.

Explain the basic components of a service audit.

Discuss four fundamental strategies that facilitate cultural change.

 SEAMLESS SERVICE

Creating a seamless service organization

means providing services without interruption,
confusion, or hassle to the customer.

THE TRADITIONAL INDUSTRIAL

INTRODUCTION
MANAGEMENT MODEL

Departmentalization and functionalism that

serve as obstacles to creating a world-class
service culture.
 OBSTACLE TO WORLD-CLASS SERVICE:
DEPARTMENTALIZATION AND FUNCTIONALISM
Traditional industrial-based organizational models based on the
foundations of functionalism and departmentalization kill
seamlessness.

FROM THE OPERATIONS FROM THE PERSONNEL

FROM THE MARKETING DEPARTMENT: DEPARTMENT:
DEPARTMENT:
As you are aware, we are facing an Our staff members are becoming
We shortly will be launching a new increasingly militant. This is due, in
increasingly competitive
advertising campaign based on the large part, to the availability of
marketplace and, as a result, our
friendliness of our staff. This is in alternative employment with our new
profits have come under pressure.
direct response to the increasingly competitors. We currently are
It is crucial, therefore, that we
competitive marketplace we face. involved in a particularly delicate set
minimize waste to keep our costs
Please ensure that your staff of negotiations and would be grateful
under control. From today,
members deliver the promises we if you could minimize any disruptions
therefore, no recruitment
are making. at the local level.
whatsoever will be allowed.

These instructions from the three different departments obviously conflict with one another.
 FUNCTIONAL AND
DEPARTMENTAL MINDSET
Firms are often besieged by internal conflict as departments
compete against one another for resources instead of pulling
together to provide exceptional service. The conflict that often
occurs between marketing, operations, and human resources is
a result of the different cultures which are functions of each
department’s goals, planning horizons, departmental structure,
people-management systems, and the specific individuals in each
department.
OVERCOMING THE SILO MENTALITY:
UNDERSTANDING INTERNAL LOGICS
This silo mentality isolates the department from the rest of the
organization as it pursues self-interested goals in the forms
of departmentalization and functionalism.
INTERNAL LOGICS
 OPERATIONS LOGIC MARKETING LOGIC
Driven by the goal of reducing or containing costs Provide customers with options that better enable
through mass production or the use of advanced the service offering to meet individual consumer
technologies. needs.

HUMAN RECOURCES
LOGIC
Recruit personnel and develop training that
enhances the performance of existing personnel.

Service logic stitches the departmental and functional seams together in

order to help provide flawless service.
 INDUSTRIAL
MANAGEMENT MODEL
An approach to organizing a firm that focuses
on revenues and operating costs and ignores
the roles personnel play in generating
customer satisfaction and sustainable profits. BUSINESS PHILOSOPHIES: THE
INDUSTRIAL VERSUS MARKET-
FOCUSED MANAGEMENT
MARKET-FOCUSED MODELS
MANAGEMENT MODEL
A new organizational model that focuses on
the components of the firm that facilitate the
firm’s service delivery system.
 INDUSTRIAL MANAGEMENT MODEL

This model believe that: (1) location strategies, sales promotions, and
advertising drive sales revenue; and that (2) labor and other
operating costs should be kept as low as possible.

Example: the keys to the hotel’s success were quite simple—maximize

daily room rates and minimize daily labor costs.

As a result, employees are held to low job performance expectations,

their wages are kept as low as possible, and few opportunities exist for
advancement.
The industrial model has produced dead-end front-
line jobs, poor pay, superficial training, no opportunity
for advancement, and little, if any, access to
company benefits.
CONSEQUENCES
OF THE
INDUSTRIAL
The industrial approach has led to customer
MANAGEMENT
dissatisfaction, flat or declining sales revenues, high
MODEL
employee turnover, and little or no growth in overall
service productivity.
 THE MARKET-FOCUSED
MANAGEMENT MODEL

The market-focused management approach promotes a service-

oriented culture that benefits customers, employees, and the
organization itself.

The Services Triangle framework

visually depicts six key relationships that
comprise the market-focused
management approach.
 THE SERVICES TRIANGLE
STEP 1 STEP 2
The firm’s service strategy (commitment to service
Customers need to be made aware of the firm’s
excellence) needs to be communicated to the firm’s
commitment to service excellence.
employees.
STEP 4 STEP 5
Organizational rules and regulations should
Interactions with the firm’s systems should
not be obstacles in the way of employees
enhance the customer’s service experience.
wishing to provide great service.
STEP 3
The firm’s service delivery systems should flow
logically from the service strategy and enhance
the service encounter for all involved.
STEP 6
“critical incidents” or “moments of truth,” the
importance of the interaction between service
providers and customers cannot be overstated.
The market-focused management approach believes
employees want to do good work and experience
individual career growth.
RESULT OF THE
The market-focused management approach is MARKET-
consistent with the service-profit chain’s emphasis FOCUSED
on internal service quality and employee satisfaction. MANAGEMENT
APPROACH
This approach promotes the stance that the firm
should be organized in such a way to help serve the
people who serve the customer.
DEVELOPING A SERVICE
CULTURE
A service firm’s culture reflects the shared values and beliefs
that drive the organization—the formally written, the
unwritten, and actual occurrences that help employees
understand the norms for behavior in the organization (see
Global Services in Action).
 ASSESSING THE CURRENT CULTURE OF THE SERVICE
FIRM:
OBSERVATION AND INDIRECT QUESTIONING TECHNIQUES

3
1 2
Observe objects and 4
Observe the current Gauge employee
artifacts. Observe what is
culture as an impartial emotions.
missing
observer.
ASSESSING THE CURRENT CULTURE OF THE SERVICE
FIRM:
OBSERVATION AND INDIRECT QUESTIONING TECHNIQUES

5 6
Conduct culture interviews
Go for a culture walk.
and surveys
a. Space allocation and office location—who gets the most a. What would employees tell their friends
space, the best offices, and who is separated from whom? about working at this organization?
b. Bulletin boards and displays—conduct a content analysis of
b. What is the one thing employees would like
what is being posted
to change?
and what it says about the organization.
c. Common areas—what are the common areas used for and c. Who are the company heroes? Why these
for whom? persons?
d. Memos and emails—what is the content, what is the tone, d. What is the employee’s favorite characteristic
and do people primarily communicate verbally or through of the company?
written communications?
e. What kinds of people would fail in this
e. Employee interaction—is there any employee interaction and
organization?
is there emotion displayed?
f. What is your favorite question to ask a job
candidate?
LEARN MORE EFFECTIVELY
GLOBAL
SERVICE
IN
ACTION
 A series
ASSESSING THE
of questions that force CURRENT CULTURE OF
the firm to think about
what drives its profits THE SERVICE FIRM:
and suggests strate-
gies for competitive
CONDUCTING A
differentiation and
long-term profitability
SERVICE AUDIT
The service audit asks direct questions of front-line and top
management personnel, and requires the firm to think about
the forces that drive its current profits.
SERVICE AUDIT
THE SERVICE
AUDIT: THE
PROFIT AND
GROWTH
COMPONENT
 1 2
How Does the Firm Define Does the Firm Measure Profits
Customer Loyalty? from Referrals?

3
What Proportion of the Firm’s
Development Funds Are Spent on
Retaining Customers as Opposed
to Attracting New Ones?
4
When Customers Do Not
Return, Do We Know Why?
 THE SERVICE
AUDIT: THE
CUSTOMER
SATISFACTION
COMPONENT
 5 6
Is Customer Satisfaction Data Collected in a What Methods Are Utilized to Obtain
Systematic Manner? Customer Feedback?

7
How Is Customer Satisfaction Data
Used? Is the information used at all, or
is it stuffed in the bottom drawer of a
manager’s desk?
 8 THE SERVICE AUDIT:
How Does the Firm Measure Value?
THE EXTERNAL
SERVICE VALUE
COMPONENT
9
How Is Information On Customer
Perceptions of the Firm’s Value Shared
within the Company?
 THE SERVICE AUDIT: THE EXTERNAL SERVICE
VALUE COMPONENT
10. Does the Firm Actively Measure the Gap between Customer
Expectations and Perceptions of Services Delivered?

11. Is Service Recovery an Active Strategy Discussed among

Management and Employees?

THE SERVICE AUDIT: THE EMPLOYEE

PRODUCTIVITY COMPONENT

12. How Does the Firm Measure Employee Productivity?

THE SERVICE AUDIT: THE EMPLOYEE LOYALTY
COMPONENT

13. Does the Firm Actively Pursue Strategies to Promote Employee loyalty?

14. Does the Firm Set Employee Retention Goals?

15. Are Employee Satisfaction Measures Linked to Customer Satisfaction

Measures?

16. Are Customer and Organizational Needs Considered When Hiring?

17. Are Employee Reward Programs Tied to Customer Satisfaction,

Customer Loyalty, and Quality of Employee Performance?
 THE SERVICE AUDIT: THE INTERNAL SERVICE
QUALITY COMPONENT
18. Are Employees Aware of Internal and External Customers?

19. Do Employees Have the Support Necessary to Do Their

Jobs?

THE SERVICE AUDIT: THE FIRM’S LEADERSHIP

COMPONENT
20. Does the Firm’s Leadership Help or Hinder the Service
Delivery Process?

21. Is the Firm’s Leadership Creating a Corporate Culture that

Helps Employees as They Interact with Customers?
THE SERVICE AUDIT: THE MEASUREMENT
RELATIONSHIP COMPONENT

22. How Do the Preceding Measures of Service Performance

in the Service Audit Relate to the Firm’s Overall Profitability?
 STRATEGIES THAT
FACILITATE CULTURAL
CHANGE
 STRATEGIES THAT
FACILITATE CULTURAL
CHANGE
CHANGING CULTURE THROUGH STRUCTURE

UTILIZING MARKETING RESTRUCTURING AROUND THE

DEPARTMENT AS CHANGE AGENTS CUSTOMER EXPERIENCE
SOME PRO-CUSTOMER
EXPERTS ARE WARY
Once the marketing department has For example, one major airline has
been created, other departments all departments that have direct
may quickly transfer the complete customer contact report to the head
responsibility for customer of marketing
satisfaction to the marketing
department
This transfer is likely to create open
warfare among departments in the
organization
CHANGING CULTURE THROUGH SYSTEM AND
PEOPLE
SYSTEM PEOPLE

REWARD STRUCTURES

Based on customer satisfactions

Bringing in outsiders to champion
scores
the marketing effort
Based on revenue targets
Based on participation in marketing
planning
 CHANGING CULTURE DIRECTLY

Mixed groups are cross-sectional or interdepartmental

Family groups can be departments or a naturally occurring group
based on process
Low levels of empowerment imply that people will change their
behavior, but that the group will have no authority to change the
processes and systems of the organization
High-level empowerment implies an ability to change the processes
and systems of the organization
THANK
YOU
For joining today's class