Quality Service Management: An Introduction PDF

QUALITY SERVICE MANAGEMENT: AN 3. CHANGING PRODUCT MIX INTRODUCTION - The shift from low volume, high price to high volume, low price have resulted in a need to...

QUALITY SERVICE MANAGEMENT: AN 3. CHANGING PRODUCT MIX INTRODUCTION - The shift from low volume, high price to high volume, low price have resulted in a need to QUALITY CONCEPTS reduce the internal cost of poor quality. QUALITY 4. PRODUCT COMPLEXITY - As systems have become more complex, the - Essential characteristics reliability requirements for suppliers of - Superior components have become more stringent. - “Quality is customer satisfaction” 5. HIGHER LEVELS OF CUSTOMER SATISFACTION - “Quality is fitness for use” (Joseph Juran) - Higher customers expectations are getting TOTAL QUALITY MANAGEMENT (TQM) spawned by increasing competition - A comprehensive organization—wide effort to QUALITY PERSPECTIVES improve the quality of products and services, Everyone defines Quality based on their own applicable to organizations. perspective of it. Typical responses about the CUSTOMER definition of quality would include: - Anyone who is impacted by the product or 1. Perfection process delivered by an organization. 2. Consistency - Guest, Client, Passenger, Buyer, Purchaser, 3. Eliminating waste Consumer, Participants, Player, Tourist 4. Speed of delivery 5. Compliance policies and procedures EXTERNAL CUSTOMER 6. Doing it right the first time 7. Delighting or pleasing customers - The end user as well as intermediate 8. Total customer satisfaction and service processors. - Other external customers may not be QUALITY LEVELS purchasers but may have some connections with the product. ORGANIZATIONAL LEVEL INTERNAL CUSTOMER (Employee) - Which products and services meet your expectations? - Other divisions of the company that receive - Which products and services you need that the processed product. you are not currently receiving? PRODUCT PROCESS LEVEL - The output of the process carried out by the - What products and services are most organization. important to the external customer? - It may be goods, software, or services. - What processes produce those products and - A service product is a combination of both services? the tangible (goods) and intangible (services) - What are the key inputs to those processes? - Which processes have most significant HOW IS THE CUSTOMER SATISFACTION effects on the organization’s performance ACHIEVED? standards? PRODUCT FEATURES ADDITIONAL VIEWS OF QUALITY IN SERVICE - Manufacturing Industry: Refers to quality of TECHNICAL QUALITY VS. FUNCTIONAL QUALITY design, performance, reliability, durability, ease of use, and aesthetics. TECHNICAL QUALITY - Service Industry: Accuracy, timeliness, friendliness and courtesy, knowledge of - The core element of the good or service server. - “How the service should be done?” FREEDOM FROM DEFICIENCIES FUNCTIONAL QUALITY - Refers to quality of conformance - Customer perception of how the good (consistency) function of the service is delivered - Higher conformance means fewer complaints - “How the customer should be satisfied?” and increased customer satisfaction EXPECTATIONS AND PERCEPTIONS/EXPERIENCE WHY QUALITY? - Customers’ prior expectations (generalized 1. COMPETITION and specific service experiences) and their - Today’s market demand high quality products perception of service performance affect at low cost. Having ‘high quality’ reputation is their satisfaction with a service. not enough. THE QUALITY GURUS - Internal cost of maintaining the reputation should be less. - Walter A. Shewhart 2. CHANGING CUSTOMERS - W. Edwards Deming - The new customer is not only commanding - Joseph M. Juran priority based on volume but is more - Armand Feigenbaum demanding about the “quality system” - Philip Crosby  - Genichi Taguchi 3. DESIGN OF THE OPERATIONS FUNCTION - Kaoru Ishikawa (fish bone diagram) - Developed to focus on the identified competitive properties - Structure: Facilities, Flow of Goods, & CHAPTER 2: MEETING GUEST EXPECTATIONS Technology THROUGH PLANNING - Infrastructures: Planning & Controlling System, Workers, Pay, Quality IMPORTANCE OF OPERATIONS STRATEGIES COMPETING ON COST 1. Companies often do not understand the Offering product at a low price relative to competition differences between operational efficiency and - Typically high volume products strategy - Economies of Scale: the cost advantages - Operational efficiency is performing task that enterprises obtain due to size, well, even better than competitors throughput, or scale of operation, with cost - Strategy is a plan for competing in the market per unit of output generally decreasing with place increasing scale as fixed costs are spread out 2. Operation strategy is to ensure all tasks over more units of output. performed are the right tasks - Often limit product range & offer little customization DEVELOPING A BUSINESS STRATEGIES - May invest in automation to reduce unit costs 1. A business strategy is developed after taking - Can use lower skill labor into many factors and following some - Probably use product focused layout strategic decisions: - Low cost does not mean low quality - What business is the company in? (Mission) - Analyzing and understanding the market COMPETING ON QUALITY (Environmental Scanning) - Quality is often subjective - Identifying the companies’ strengths (Core - Quality is defined differently depending on Competencies) who is defining it - 2 MAJOR DIMENSIONS: 3 INPUTS TO A BUSINESS STRATEGY o High Performance Design: superior BUSINESS STRATEGY – the long-range plan for the features, high durability, and excellent company customer service 1. MISSION o Product & Service Consistency: - Statement that defines what is our business; meets design specifications, close Who are our clients; and How our values tolerances, and error free delivery defines our business - QUALITY NEEDS TO ADDRESS: - Holiday Inn – “The best surprise is no o Product Design Quality: surprise” product/service meets requirements 2. ENVIRONMENTAL SCANNING o Process Quality: error free products - Monitoring the business environment for market trends, threats, and opportunities COMPETING ON TIME - Political trends, social trends, economic - Time/Speed is one of the most important trends, market place trends, and global competition priorities trends - First than can deliver often wins the race 3. CORE COMPETENCIES - TIME RELATED ISSUES INVOLVED: - Unique strengths that can help us win the o Rapid Delivery: focused on shorter market time between order placement and - Strength of staffs, modern facilities, market delivery understanding, best technologies, financial o On-time Delivery: deliver products know-how, and logistics exactly when needed every time DEVELOPING AN OPERATIONAL STRATEGY COMPETING ON FLEXIBILITY - Operations Strategy is a plan for the design - Company environment changes rapidly and management of operations functions - Company must accommodate change by - Operations Strategy developed after the being flexible business strategy o Product Flexibility: easily switched - Operations Strategy focuses on specific production from one item to another; capabilities which give it a competitive edge – easily customized products/service to Competitive Priorities: Cost, Quality, Time, & meet specific requirements of a Flexibility customer o Volume Flexibility: ability to ramp OPERATIONS STRATEGY – DESIGNING THE production up and down to match OPERATIONS FUNCTION market demands 1. BUSINESS STRATEGY - Defines the long-range plan for the company THE NEED FOR TRADE OFFS 2. OPERATIONS STRATEGY - Decisions must emphasize priorities that - Develops a plan for the operations function supports business strategies focusing on specific competitive priorities in - Decisions often require trade offs order to meet the long range plan  - Decisions must focus on order qualifiers and - Capacity Utilization order winners - Finance o Which order are “Order Qualifiers”? - Marketing o Must have excellent quality since everyone expects it THINGS TO REMEMBER o Which priorities are “Order 1. We Have an Uncertain Future Winners”? - Even with planning everything can happen o McDonald’s competes on 2. Involving Employees in Planning consistency - Get employees on board with company’s plans and goals GENERIC STRATEGIES IN OPERATIONS (MICHAEL PORTER) 1. LOW PRICE PROVIDER (low Cost-Low Price) GUESTOLOGY: The Basics of Wow 2. DIFFERENTIATE 3. MARKET NICHE THE HOSPITALITY INDUSTRY - The Hospitality Industry is made up of HOSPITALITY PLANNING organizations that offer guests, courteous, professional food, drink and lodging services, alone or in combination. - Even more challenging for those in the hospitality organizations is the simple reality of service quality and service value are defined not by the managers, auditors, or rating organizations. GUEST EXPERIENCE WHAT THE FUTURE MAY HOLD? - Sum total of the experience that the guest has CHANGING DEMOGRAPHICS with the service provided on a given occasion - Generations X, Y, or the millenniums and the or set of occasions. next generation MOMENTS OF TRUTH - Demographic implications - Any key or crucial moment or period during a - Generation Y in the workplace service encounter, a make-or-break moment; - Different way of thinking subsequently expanded by others to include - Gig Economy: a segment of the service any significant or memorable interaction. economy based on flexible, temporary, or freelance jobs, often involving connection GUESTOLOGY clients and customers through an online - The study of guest and their behavior. platform - Their wants, needs, and expectations with the aim of aligning the organization’s strategy, MORE CHNAGES staff and systems so as to provide - Social Expectations outstanding service to guest. - Economic Forces - Competitors - Other Relevant Groups: resource suppliers, capital suppliers, and labor suppliers - Surprises STRATEGIC PREMISES - Definition - Impact of Change - Wendy’s founder Dave Thomas INTERNAL AUDIT - Core Competencies - Internal Assets - Vision and Mission Statement EXCELLENT SERVICE STRATGIES THE GUEST EXPERIENCE - Service Product - Service Delivery - Service Settings GUESTOLOGIST - A guestologist seeks to understand and plan ACTION PLANS for the expectations of an organizations’ KEY ACTION PLAN AREA: target customers before they even enter the - Management service settings, so that everything is ready - Staffing  for each guest to have a successful and - A service product does not refer specially to enjoyable experience. the tangible items that may accompany the transaction, though it can include them SECTORS - Both the organization and the guest define it, - Agriculture, Mining, & Construction 6% and the definitions may not be the same - Finance, Insurance, & Real Estate 20% - Wholesale & Retail Trade 13% SERVICE INDUSTRY - Transportation, Warehousing, & Utilities 5% - There are no such thing as service industries. - Educational & Health Services 8% There are only industries whose service - Professional & Business Services 11% components are greater or less than those of - Manufacturing 13% their industries. Everybody is in service – - Government (Mostly Services) 13% Theodore Levitt - Other Services (Includes Information & Entertainment) 11% GOODS TO SERVICES TO EXPERIENCE - More and more, today’s consumers want their TANGIBILITY SPECTRUM goods and services packaged as part of a memorable experience that has an emotional impact. UNDERSTANDING THE GUEST - Each guest is unique. - VIP: Very Important/Individual People - Understanding the guest includes: o The traditional Demographic Breakdown of age, race, gender, and guests’ home locations o Psychographic Breakdowns of how they feel, what their attitudes, belief COMPARING GOODS & SERVICES and values are o Capabilities (their KSA – knowledge, skills, attitudes) to coproduce the experience - Meeting the expectations of a customer who arrives needing but not really wanting the services and angry at the service provider, perhaps even at the world itself, is difficult. - In such situations, ensuring the quality of the service experience is even more crucial because of the circumstances leading to the SERVICE need for services. - Intangible part of a transaction relationship that creates value between a provider THE GUEST EXPERIENCE organization and its customers, client or - A Service Delivery System consists of: guest. o An inanimate Technology Part - Services can be provided directly to the (organization and information customer, or it can be done for the systems and process techniques). customer. o People Part (most importantly, the - Services can be provided by a person or via frontline server who delivers, or technology. presents the service, or co-produces it with the guest). WHAT IS SERVICE? THE OLD VIEW - No two guest experiences are exactly alike. - Service is a technical after-sale function that - The uniqueness is what provides the primary is provided by the service department challenge to the hospitality service provider. - You can’t please every guest, but the SERVING INTERNAL CUSTOMERS hospitality organization has to try even though INTERNAL CUSTOMERS everybody is different. - Persons or units within the organization that - But these reactions of guest sometimes are depends on and serve each other somehow similar and can be studied. MEETING INCREASED COMPETITION COMPONENTS OF GUEST EXPERIENCE - If they don’t provide the experience their 1. SERVICE PRODUCT guests expect, someone else will - Usually the reason for being is embodied in the name of the business. SERVICE PRODUCT 2. SERVICE SETTING - The entire bundle of tangibles and intangibles - Environment where the experience takes provided by a hospitality organizations to place. guests during a service experience, same as 3. SERVICE DELIVERY SYSTEM Service Package - The technology and people part.  CHAPTER 4: CRAFTING THE SERVICE ENVIRONMENT/SERVICESCAPE PURPOSE OF SERVICE ENVIRONMENT - Helps firm to create distinctive image and unique positioning - Service environment affects buyer behavior in 3 ways: 1. Message-Creating Medium: Symbolic cues to communicate the distinctive nature and quality of the service experience. - Emotional responses to environments can be 2. Attention-Creating Medium: Make servicescape described along 2 main dimensions: stand out from competition and attract PLEASURE: Direct, subjective, customers from target segments. depending on how much individual 3. Effect-Creating Medium: Use colors, textures, likes or dislikes environment. sounds, scents, and spatial design to enhance AROUSAL: How stimulated individual desired service experience. feels, depends largely on information - Each servicescape clearly communicates rate or load of an environment. and reinforce its perspective positioning and - Russell separated cognitive part of emotions sets service expectations as guest arrives. from these 2 emotional dimensions. - Advantage: simplicity, allows a directs SERVICESCAPE AS PART OF VALUE PROPOSITION assessment of how customers feel. - Physical surroundings help shape appropriate Firms can set targets for affective feelings and reactions in customers and states. employees. 3. Drivers of Affect EX: Disneyland & Denmark’s Legoland - Affect can be caused by perceptions and - Servicescape form a core part of the value cognitive processes of any degree of proposition. complexity. EX: Club Med, Las Vegas - It’s the simple cognitive process that (entertainment center), Florida-based determine how people feel in a service Muvico (extravagant movie theatre) setting. “What sets you apart is how you - If higher levels of cognitive processes are package it...” – Hamid Hashemi triggered, the interpretation of this process - The power of servicescape is being determines people’s feelings. discovered. - The more complex a cognitive process becomes, the more powerful its potential UNDESTANDING CONSUMER RESPONSES TO impact on affect. SERVICE ENVIRONMENTS - However, most service encounters are routine, and simple processes can determine 1. The Mehrabian-Russell Stimulus-Response affect. Model - Feelings are a key driver of customer 4. Behavioral Consequence of Affect responses to service environments - Pleasant environments result in approach, whereas unpleasant ones result in avoidance. - Arousal amplifies the basic effect of pleasure on behavior: In environment is pleasant, increasing arousal can generate excitement, leasing to a stronger positive consumer response. If environment is unpleasant, increasing arousal level will move customers into the “distressed” - Simple yet fundamental model of how people region. respond to environments. - Feelings during service encounters are - The environment, its conscious and important driver of customer loyalty. unconscious perceptions, and interpretation influence how people feel/respond in that 5. Integrated Framework: Bitner’s Servicescape environment. Model - Feelings rather than perceptions/thoughts drive behavior. - Typical outcome variable is approach or avoidance of an environment, but other possible outcomes can be added to model. 2. Russell Model of Affect  - Identifies the main dimensions an a service IMPACT OF SCENT environment and views them holistically. - An ambient smell is one that pervades an - Internal customer and employee response environment. can be categorized into cognitive, emotional, May or may not be consciously and psychological responses, which lead to perceived by customers. overt behavioral responses towards the Not related to any particular product. environment. - Scents have distinct characteristics and can - Key to effective design is how well each be used to solicit emotional, physiological, individual dimensions fits together with and behavioral responses. everything else. - In service setting, research has shown that scents can have significant effect on DIMENSIONS OF SERVICE ENVIRONMENT: MAIN customer perceptions, attitudes, and DIMENSIONS IN SERVICESCAPE MODEL behaviors. - Effects of Scents on Perceptions of Store 1. Ambient Conditions Environments: - Characteristics of environment pertaining to our five (5) senses. 2. Spatial Layout and Functionality - Spatial Layout: Floorplan, size and shape of furnishings, counters, machinery, equipment, and how they are arranged. - Functionality: Ability to those items to facilitate performance. 3. Signs, Symbols, & Artifacts - Explicit or Implicit Signals to: Communicate firm’s image, Help consumers find their way, & Convey rules of behavior. - Aromatherapy: Effects of Selected Fragrances on People: IMPACT OF AMBIENT CONDITIONS - Ambient environment is composed of hundreds of design elements and details that must work together to create desired service environment. - Ambient conditions are perceived both separately and holistically, and include: Lighting & color schemes Size & shape perceptions Sounds: noise & music Temperature IMPACT OF COLOR Scents - Colors can be stimulating, calming, - Clever design of these conditions can elicit expressive, disturbing, impressional, culture, desired behavioral responses among exuberant, symbolic. consumers. - Color pervades every aspect of our lives, embellishes the ordinary, gives beauty and IMPACT OF MUSIC drama to everyday objects. - In service settings, music can have a powerful - Colors have a strong impact on people’s effect on perceptions and behaviors, even if feelings. played at barely audible levels. - Colors can be defined into 3 Dimensions: - Structural characteristics of music (tempo, Hue: Pigment of the color. volume, and harmony) are perceived Value: Degree of lightness or holistically. darkness of the color. Fast tempo music and high-volume Chroma: Hue-intensity, saturations, music increase arousal levels. or brilliance. People tend to adjust their pace, - Common Associations & Human either voluntarily or involuntarily, to Responses to Colors: match tempo of music. - Careful selection of music can deter wrong type of customers. - Impact of Music on Restaurant Diners: IMPACT OF SIGNS, SYMBOLS, & ARTIFACTS understand customer response to service - Guide customers clearly through process of environments. service delivery. Pleasure & Arousal Customers will automatically try to Approach & Avoidance draw meaning from the signs, - Servicescape Model is integrative framework symbols, and artifacts of customer responses to service Unclear signals from a servicescape environments. Main Dimensions: can result in anxiety and uncertainty Ambient Conditions (Music, Scent, about how to proceed and obtain the Color, etc.) desired service. Spatial Layout & Functionality For instance, signs can be used to Signs, Symbols, & Artifacts reinforce behavioral rules. - People are also part of service environment. Signs Teach & Reinforce Behavioral - Firms should: Rules in Service Settings: Design with holistic view Design from a customer’s perspective Use tool to guide servicescape design - Some tools for guiding servicescape design are: - People are part of the service environment. PUTTING IT ALL TOGETHER CHAPTER 5: STAFFING (MANAGING PEOPLE FOR SERVICE ADVANTAGE) SELECTION OF ENVIRONMENTAL DESIGN ELEMENTS STAFFING - Consumers perceived service environments - Part of the management function which is holistically. somehow critical because of the different - Design with a holistic view: areas that we need to consider. Servicescape Have to be Seen - Most concerned about the human factor or Holistically: No dimension of design the people who will be filling up the different can be optimized in isolation, positions in the company. because everything depends on - The most critical and somehow very different everything else. to control aspect of the operation for you to Holistic characteristic of control is people/manpower/the human environments makes designing resource itself, it’s not money, it’s not the service environment an art. physical and tangible resources that you - See Research Insights: Match and Mismatch have. of Scent and Music in Singapore. - Even though you have put up a very good - Must design from a customer’s perspective. policies, guidelines, standard operating - “A theme is a vision of what should be”. procedures, if the people/staff would not be able to follow the procedures, everything that TOOLS TO GUIDE SERVICESCAPE DESIGN you have set up would be useless. - Keen observation of customer’s behavior and - You would need to put in and fill the responses to the service environment by organization structure with the right, management, supervisors, branch managers, qualified, and fit people for the job. and frontline staff. - Feedback and ideas from frontline staff and PEOPLE customers, using a broad array of research - The Service Advantage in Marketing tools from suggestion boxes to focus groups - Technically, is a very big service advantage in and surveys. the field of marketing. When we are in the - Field experiments can be used to manipulate operations of service, we are trying to market specific dimensions in an environment and our services, people are very critical. the effects observed. - Multicultural Diversity in the Workplace – Vic - Blueprinting or service mapping – extended to Alcuaz (Hospitality Headhunter) include physical evidence in the environment. - Service Employees are Extremely Important, because this is our brand, this is how we SUMMARY CRAFTING THE SERVICE represent our organization, through service ENVIRONMENT employees. - Service Environment: Shapes customer’s experiences and IMPORTANCE OF SERVICE PERSONNEL behavior. - Help’s maintain firm’s positioning. They are: Facilitates service encounters. A core part of the product Enhances productivity. The staff represent the service firm - Mehrabian-Russell Stimulus-Response The staff are a core part of the service Model & Russell’s Model of Affect help us brand.  - Frontline is an important driver of customer - Performing emotional labor in response to loyalty. societies or management’s display rules can Anticipate customer needs be stressful. Customize service delivery - Good HR practice emphasizes selective Build personalized relationships recruitment, training, counseling, strategies, - Key driver of productivity of frontline to alleviate stress. operation. - The Stress of Emotional Labor – Nature of the - Generate sales, cross-sales, and up-sales. Job and High Customer Expectations - Service personnel represent the firm. CYCLE OF FAILURE, MEDIOCRITY & SUCCESS FRONTLINE IN LOW-CONTACT SERVICES - Many routine transactions are now conducted without involving front-line staff: ATMs (Automated Teller Machine) IVR (Interactive Voice Response) system Websites for reservations, ordering, payment - Though technology and self-service interface is becoming a key engine for service delivery, front-line employees remain crucially important. - “Moments of Truth” affect customer’s views of the service firm. - Frontline work is very difficult and stressful. BOUNDARY SPANNING & ROLE STRESS - Boundary Spanners (frontline employees) link the organization to outside world. - The Employee Cycle of Failure (2): - Municipality of Roles often results in service Narrow job design for low skills levels. staff having to pursue both operational and Emphasis on rules rather than marketing goals. service. - Consider management expectation of service Use of technology to control quality. staff: Bored employees who lack ability to Delight customers respond to customer problems. Be fast and efficient in executing Dissatisfied with poor service operational tasks attitude. Do selling, cross selling, and up- Low service quality. selling High employee turnover. Enforce pricing schedules and rate - Cycle of Failure Breeds Boredom on the Job. integrity. - The Employee Cycle of Failure (3): - Boundary spanners link inside of the Repeated emphasis on attracting new organization to outside world and often customers. experience role stress from multiple roles Customers dissatisfies with employee they must perform. performance. Customers always served by new BOUNDARY SPANNING AND ROLE STRESS faces. Fast customer turnover. 3 MAIN CAUSES OF ROLE STRESS: Ongoing search for new customers to 1. Organization vs. Client: Dilemma whether to maintain sales volume. follow company rules or to satisfy customer - Costs of Short-Sighted Policies are Ignored: demands. Constant expense of recruiting, hiring, - This conflict is especially acute in training. organizations that are not customer oriented. Lower productivity of inexperienced 2. Person vs. Role: Conflicts between what jobs new workers. require and employee’s own personality and Higher costs of winning new beliefs. customers to replace those lost-more 3. Client vs. Client: Conflicts between need for advertising and promotional customers that demand service staff discounts. intervention. Loss of revenue stream from dissatisfied customers who go EMOTIONAL LABOR elsewhere. - “The act of expressing socially desired Loss of potential customers who are emotions during service transactions” turned off by negative word-of-mouth (Hochschild, The Management Heart) customers. - Occurs when there is a gap between what employees feel inside, and emotions that SERVICE SABOTAGE management requires them to display to customers.  - Broadened job descriptions with empowerment practices enable front-line staff to control quality, facilitate service recovery. - Regular customers more likely to remain loyal because: Appreciation continuity in service relationships. Have higher satisfaction due to higher quality. CYCLE OF MEDIOCRITY HUMAN RESOURCE MANAGEMENT – HOW TO GET IT RIGHT? - The Service Talent Cycle for Service Firms: HIRING THE RIGHT PEOPLE - Be the Preferred Employer Create a large pool: “Compete for - Most commonly found in large, bureaucratic Talent Market Share” organizations. What determines a firm’s applicant - Service delivery is oriented towards: pool? Standardized service operational 1. Positive image in the community efficiencies. as place to work. Promotions based on long service 2. Quality of its services. successful performance measured by 3. The firm’s perceived status. absence of mistakes. Select the right people Rule-based training. There is no perfect employee Little freedom in narrow and repetitive 1. Different jobs are best filled by jobs. people with different skills, styles, or personalities. CYCLE OF SUCCESS 2. Hire candidates that fit firm’s core values and culture. 3. Focus on recruiting naturally warm personalities for customer- contact jobs. TOOLS TO IDENTIFY THE BEST CANDIDATES - Employ multiple, structured interviews Use structured interviews built around job requirements. Use more than one interviewer to reduce “similar to me” biases. - Observe candidate behavior Hire based on observed behavior, not words you hear. Best predictor of future behavior is part behavior. - Longer-term view of financial performance; Hire those with service excellence firm seeks to prosper by investing in people. awards and complimentary letters. - Attractive pay and benefits attract better job - Conduct personality test applicants. Willingness to treat co-workers and - More focused recruitment, intensive training, customers with courtesy, and higher wages make it more likely that consideration and tact. employees are: Perceptiveness regarding customer Happier in their work. needs. Provide higher quality, customer- Ability to communicate accurately pleasing services. and pleasantly.  - Give applicants a realistic preview of the - Teams, training and empowerment go hand in job hand. Chance for candidates to “try on the - Creating Successful Service Delivery Teams job”. Emphasis on cooperation, listening, Assess how candidates respond to coaching, and encouraging one job realities. another. Allow candidates to self-select Understand how to air differences, tell themselves out of the job. hard truths, ask tough questions. Management needs to set up a TRAIN SERVICE EMPLOYEES ACTIVELY (Service structure to steer teams towards employee need to learn) success. - Organizational culture, purpose, and strategy MOTIVATE AND ENERGIZE THE FRONTLINE (Use full Get emotional commitment to core range of available rewards effectively) strategy and core values. - Job Contents Get managers to teach “why”, “what”, People are motivated and satisfies and “how” of job. knowing they are doing a good job. - Interpersonal and technical skills - Feedback & Recognition Both are necessary but neither alone People derive a sense of identity and is enough for performing a job well. belonging to an organization from - Product/service knowledge feedback and recognition. Staff’s quality knowledge is a key - Goal Achievement aspect of service quality. Specific, difficult but attainable and Staff must explain product features accepted goals are strong motivators. and help consumers make the right choice. SERVICE LEADERSHIP AND CULTURE IS POWERMENT ALWAYS APPROPRIATE? - Empowerment is most appropriate when: Firm’s business strategy is based on SERVING WITH A SMILE: MOTIVATING personalized, customized service and EXCEPIONAL SERVICE competitive differentiation. Emphasis on extended relationships rather than short-term transactions. - To motivate means to instill a desire within a person that encourages the person to act. Use of complex and non-routine technologies. IN MOTIVATING EMPLOYEES, MANAGERS MUST: Service failures are non-routine and - Understand what employees need and want. cannot be designed out of the system. - Know what tools are at their disposal to help Business environment is motivate employees. unpredictable, consisting of - Understand how employees react to both surprises. financial and nonfinancial rewards. Managers are comfortable letting the - Understand how their roles as managers and employees work independently for leaders are critical for doing all this effectively benefit of firm and customers. and in a way that is seen as fair and Employees seek to deepen skills, like trustworthy. working with others, and have good interpersonal and group process THE NEEDS PEOPLE HAVE skills. 1. Survival Needs - The most basic employee need is survival. LEVELS OF EMPLOYEE ENVOLVEMENT - The meet employee survival needs, the most - Suggestion Involvement obvious inducement is money provided Employees make recommendations through a paycheck. through formalized programs. 2. Social Needs - Job Involvement - Most people enjoy being part of a group or Jobs redesigned. team. This sense of belonging can be helpful Employees retrained; supervisors in managing employee direction and behavior reoriented to facilitate performance. in the workplace. - High Involvement - Formal Group: includes the company as a Information is shared. whole. Employees skilled in teamwork, - Informal Group: social group that forms problem solving, etc. without a guidance from the organization. Participate in management decisions. 3. Financial Rewards Profit sharing and stock ownership. BUILD HIGH-PERFORMANCE SERVICE DELIVERY TEAMS - Many services require cross-functional coordination.  - Heuristic Task: no algorithm exists for it, you have to experiment the possibilities and devise a novel solution. (Drive: The surprising truth about what motivates us - https://www.youtube.com/watch?v=u6XAPnuFjJc) MOTIVATION - The general desire or willingness of someone to do something. ENGAGEMENT - Employees as those who are involved in and enthusiastic about their work and workplace. ORGANIZATIONAL CULTURE & SERVICE QUALITY - In any organization, there are the ropes to skip and the ropes to know. – R. Ritti & G. Funkhouser 4. Recognizing a Job Well Done - Recognition Program’s purpose is to publicly ENVIRONMENT & CORPORATE CULTURE and officially say thank you for a job well done. 5. Making the Job Fun - “You don’t work for dollar – you work to create and have fun.” – Walt Disney 6. Minimizing the Negatives - Another way to make a job enjoyable is to eliminate or minimize the things that make it uninteresting or unpleasant. - Managers can motivate employees by providing fun ways to minimize these less attractive aspects. 7. Empowerment - The assignment of decision-making responsibility to an individual. ORGANIZATIONAL CULTURE - I am empowered to create unique, - A system of meaning shared by the memorable and personal experiences for our organization’s members. guests. – The Ritz-Carlton - Cultural Values are collective beliefs, - “You can achieve so much more by assumptions, and feelings about what things empowering people to achieve on their own. are good, normal, rational, valuable, etc. Don’t be too hands-on.” – Norman Brinker - Empowerment helps to: CHARACTERISTICS OF THE ORGANIZATIONAL CULTURE Achieve the company’s mission. Tell employees that organization trusts them. Allow employees to make decisions when their boss is away. Fill the gaps when the circumstances are new, unique, or unexpected. - Employee Implementation Keys: Training Willingness Measurement Incentives Managerial buy-in ELEMENTS OF ORGANIZATIONAL CULTURE MODERN MOTIVATION THEORIES (FOR THE MANAGERS & PRODUCT MANAGERS) - Self-determination Theory – Daniel Pink - RESPECT Model – Paul Marciano - ABCD Model – Ken Blanchard - SCARF Model – Neuro Leadership, David Rock - Algorithmic Task: you follow a set of established instructions down single pathway to one conclusion. ARTIFACTS: ORGANIZATIONAL STORIES - Social prescriptions of desired behavior. - Demonstrate that organization objectives are attainable. - Most effective stories: Describe real people Assumed to be true Known throughout the organization Are prescriptive - Dominant Culture (practiced culture) - Subculture (minority culture) ARTIFACTS: RITUALS & CEREMONIES - D.C + S.C = Core Values - Rituals Programmed routines (conducting BENEFITS OF STRONG CORPORATE CULTURE meetings, employee forums, x-mass party, etc.) - Ceremonies Planned activities for the audience (awarding ceremonies, etc.) - Heroes Figure who exemplifies character and deed (founders as Tom Watson of IBM, Bill Gates of Microsoft, etc.) ARTIFACTS: ORGANIZATIONAL LANGUAGES - Words used to address people, describe ORGANIZATIONAL CULTURE clients, etc. (sir/ma’am, 1st name calling) FUNCTIONS LIABILITIES - Leaders use phrases & metaphors as cultural - Controlling - Blocking symbol (General Electric’s “grocery store”) Behavior Mergers - Language also found in subcultures - Defining - Inhibiting (whirlpools “PowerPoint Cultures”) boundaries diversity - Slogans (Nokia Connecting People) - Conveying - Inhibiting - Organizational Subcultures identity change Located throughout the organization. - Promoting - Blocking Can support or oppose commitment acquisitions (countercultures) firm’s dominant culture. MANAGING, CHANGING, & MERGING CULTURES - 2 Functions of Countercultures: - Managing through stories, heroes, symbols, & Provide surveillance and evaluation. ceremonies. Source of emerging values. - Culture often needs to be changed to ensure - NUWHRAIN: National Union of Workers in organizational success. Hotel Restaurants and Allied Industries - Merging cultures through symbolic leaders. ARTIFACTS: STRUCTURES/SPACE ADAPTIVE ORGANIZATIONAL CULTURES - Oakley’s Inc. protective & competitive - External Focus: firm’s success depends on corporate culture is apparent in its building continuous change. design & workspace. The building looks like a - Focus on purposes more than goals. vault to protect its cherished product designs - Strong sense of ownership. (eyewear, footwear, apparel, & watches). - Proactive: seek out opportunities. ARTIFACTS – THE INDUSTRY BICULTURAL AUDIT - Part of “due diligence” in merger. HOW ORGANIZATIONAL CULTURES FORM - Cross-cultural concept. - Minimizes risk of cultural collision by diagnosing companies before merger. - 3 steps in bicultural audit: 1. Collect artifact 2. Analyze data for cultural conflict/compatibility 3. Recommend solutions - “People always remember, how you made them feel.” MERGING ORGANIZATIONAL CULTURES DO ORGANIZATION HAVE UNIFORM CULTURES? - Assimilation: acquired company embraces acquiring firm’s culture. - Deculturation: acquiring firm imposes its culture on unwilling acquired firm.  - Integration: both cultures combined into a ▪ Viewed as effective if they new composite culture. have harmonious internal - Separation: merging companies remain characteristic. (IBM) separate with their own culture. External Focus, Differentiation, & Rivalry STRENGTHENING ORGANIZATIONAL CULTURES ▪ Judged as effective if they are focused on interacting or competing with others outside their boundaries. (Toyota & honda) HIERARCHY CULTURE (CONTROL) - Characterized by a controlling environment, formalized & structured workplace, procedures and controls govern what people do. - Leaders are coordinators, organizers, & monitors. - Success is defined in clear lines decision making authority, control, & accountability. - McDonald’s & Government Agencies MARKET CULTURE (COMPETE) - Characterized by a competing environment. - A result-oriented workplace where the external environment is hostile rather than benign. - Leaders are producers, competitors, & hard drivers. - Studies show that culture is closely related to - Success is defined in terms of market share & the effectiveness of organization. penetration. - EFFECTIVENESS is related to: - Furniture chain IKEA & Retail chain Walmart Involvement: Participation Consistency: Shared beliefs and CLAN CULTURE (COLLABORATE) values. - Characterized by a collaborating environment Adaptability: ability to recognize the and typified by a friendly workplace. need for change and the willingness - Leaders are mentors, facilitators, & to change. teambuilders. Mission: Shared purpose - Success is defined in terms of internal - Starbucks = 3rd Place Concept climate & concern for people. - Family-owned companies & Wikipedia MODEL OF ORGANIZATIONAL CULTURE TYPES ADHOCRACY CULTURE (CREATE) - Characterized by a creative environment. - A dynamic, entrepreneurial, & creative place to work. - Leaders are innovators, visionaries, & entrepreneurs. - Success means producing a unique and original products and services. - Competing Values Framework (CVF) - Start-ups, mostly entrepreneurial ventures Diagnosing and changing organizational culture. RELATIONSHIPS BETWEEN THE 4 QUARTERS - Diagonal: Diagnose and initiate change. ▪ OCAI Clan VS Market ▪ The clan identifies values that THE CVF MODEL emphasize an internal organic - Vertical 2 Dimensions: purpose. ▪ The market identifies values Flexibility, Discretion, & Dynamism that emphasize an external ▪ Viewed as effective if they are control focus. changing, adaptable, & organic. (google & nike) Adhocracy VS Hierarchy ▪ The adhocracy identifies Stability, Order, & Control values that emphasize an ▪ Viewed as effective if they are external organic purpose. stable, predictable, & ▪ The Hierarchy emphasize an mechanistic. (universities, internal control values. agencies, & boeing or VW) - OCAI: Organizational Culture Assessment - Horizontal 2 Dimensions: Test Internal Focus, Integration & Unity  Change Culture: 3 Questions ▪ What should we do MORE of? ▪ What should we START? ▪ What should we STOP? - Culture Profiles: Adhocracy – Dominant Culture (High- Tech Manufacturer) Hierarchy – Dominant Culture (Government Agencies) - 4 Culture Types: ORGANIZATIONAL CULTURE IN THE PHILIPPINES - Espouses a reorientation in the organization to 3 values: Kaugnayan: Identity Karangalan: Pride Katapatan: Commitment - To accentuate these core values, leaders emphasize: Paternalism: Pagkabahala and Pananagutan Personalism or Pakikipagkapwa: Treating a person as a fellow human being. Familism: Giving importance to the family as a social unity.